Also known as: taker in default of appointment · takers in default · default takers · takers by default
Written by attorneys · grounded in primary & secondary sources — see below
Persons who receive appointive property to the extent that a power of appointment is not effectively exercised. The clause identifying those persons is the gift-in-default clause, which often designates them as a class.
Marta created a revocable trust granting her son Daniel a testamentary general power of appointment over RetailHub shares but named no takers in default. Daniel's will attempted to appoint the shares to a dissolved corporation. Because the appointment failed and no gift-in-default clause existed, the shares pass to Daniel's estate rather than reverting to Marta or her successors.
Maya created a trust granting her son Leo a general testamentary power of appointment over NovaCore shares but named no takers in default. Leo's will contained only a residuary clause that attempted an appointment to an unidentified tech incubator. The residuary clause does not exercise the power, so the shares pass to Leo or his estate under the default rule.
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The property passes to the donee or the donee's estate rather than reverting to the donor or the donor's successors. This rule applies when the power is general and the gift-in-default clause is absent or ineffective.
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No. A residuary clause does not manifest an intent to exercise the power unless the power is general and the donor failed to provide effective takers in default.
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A taker in default is any person designated to receive the appointive property when the power is not effectively exercised. The designation appears in the gift-in-default clause, which may name individuals or a class.
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The modern rule directs ineffectively appointed property to the donee or the donee's estate when no valid takers in default exist. The older capture doctrine sometimes sent the property back to the donor under a presumed reversion.
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…v. Paine , 230 Mass. 514. The theory is that at the settlor’s death the expiration of the power to divert the property from the takers in default was the same in effect as an appointment of the remainders by the settlor’s will. The reserved power is, at the very least, akin to a power of appointment. National Shawmut Bank v. Joy ,…