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The Law in Effect at Time of Will Execution and During Executor's Death Governs the Terms of A Will

There are many instances when the law changes from the time a will is executed up to the time it is exercised. The question then becomes, which law must govern? The law existing at the time the will was executed or at the time it was exercised? This matter is addressed in Sefton v. Sefton (---Cal.Rptr.3d ---, Cal.App. 4 Dist., May 31, 2012).

In Sefton v. Sefton, Joseph w. Sefton, Jr., a prominent banker from San Diego, executed a will in 1955. Joseph established a trust and designated his son, Thomas W. Sefton ("Thomas Sr."), the lifetime beneficiary of income from the Trust estate. Joseph further stated in his will that he has three grandchildren from Thomas Sr. namely: Thomas Sefton, Jr. ("Thomas Jr."), Laurie Marilyn Sefton ("Laurie"), and Harley Knox Sefton ("Harley"). The will stipulates that if Thomas Sr. died with any children, then a portion of the estate was to be distributed among those children. Joseph later died in 1966.

In 1994, Thomas Sr. executed a will that appointed his estate to his two children from his second marriage, Laurie and Harley. Thomas Jr. was excluded from Thomas Sr.'s will. At the time Thomas Sr. exercised his power of appointment, the law had already been changed to make the power of appointment "exclusive," meaning Thomas Sr. could exclude one or more of his children if Joseph's will did not specify that he was to give one or more of them a minimum or maximum share of the estate. However, at the time Joseph executed his will up to the time of his death, the power of appointment was generally considered "nonexclusive," meaning that when a will designates a class of appointees (in this case, Joseph's grandchildren), and does not expressly include any right of inclusion, that no member of that class "may be entirely excluded by the donee of the power from at least a substantial participation in the distribution" of the property.

In 2010, Thomas Jr. filed a suit alleging that his exclusion from Thomas Sr.'s estate violated the scope of authority granted by Joseph to Thomas Sr. Harley and Laurie countered that the California Powers of Appointment Act of 1970 ("CPAA") gave Thomas Sr. the legal authority to change the distribution of the trust assets. The court sustained Laurie and Harley's demurrer and dismissed Thomas Jr.'s petition. Thomas Jr. appealed.

More on this topic on subsequent blog.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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