Also known as: permissible appointees · valid appointee
Written by attorneys · grounded in primary & secondary sources — see below
A person to whom appointive property may be assigned under a power of appointment. An appointment to a permissible appointee becomes ineffective to the extent it is conditioned on conferring a benefit on an impermissible appointee or is otherwise motivated to benefit a nonobject.
Pearl Porter held a nongeneral power to appoint trust income among her three siblings. She executed an instrument appointing the income to her brother Parker Phillips on the condition that he pay half the funds to her estranged cousin. The trustee refused to honor the appointment because the condition diverted value to an impermissible appointee outside the sibling class.
Cabot Jackson Morse held a power to appoint remainder interests in the Marian Hovey Trust only among his siblings and their descendants. After his death the trustees faced competing claims because one purported appointment directed principal to an estate outside the permitted class. The court determined that the transfer could reach only those who qualified as permissible appointees living at the donee's death.
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A fiduciary compares the recipient against the class expressly named in the creating instrument. If the recipient falls inside that class the transfer is to a permissible appointee. If the recipient lies outside the class the transfer is to an impermissible appointee.
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The appointment is ineffective to the extent of the improper condition. The property passes as though the power had not been exercised with respect to that portion.
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Yes. A trustee commits a breach of trust when it carries out a direct appointment to a person or entity outside the class authorized by the instrument, regardless of any good-faith belief that the transfer serves the trust's purposes.
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Yes. A fiduciary that transfers property to a person within the permitted class commits no breach unless it knows or has reason to know that the appointment itself violated the donee's authority under the governing instrument.
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…death of Cabot Jackson Morse; (b) in equal shares to the estates of Cabot Jackson Morse, Jr. and Anna Braden Morse as the only permissible appointees living at the death of Cabot Jackson Morse; (c) to the estate of Anna Braden Morse as the only actual appointee living at the death of Cabot Jackson Morse; (d) to the intestate takers of…