In re Passmore

Charles Passmore created a trust that he called Trust A and that took effect at his death. Charles made his wife, Laura Passmore, the sole beneficiary of this trust and appointed National Bank and Trust Company of Central Pennsylvania (the bank) (defendant) as trustee. Charles also gave Laura a power of appointment to distribute whatever was left in Trust A at Laura’s death through her own will by “making specific reference to Trust A.” The provision then said that Laura’s power to make the appointment, choose beneficiaries, and place conditions on the appointment in her will were “without restriction or qualification of any kind.” In her will, Laura stated that she was exercising her power of appointment “under any Will or trust agreement executed by my husband, Charles F. Passmore” to put any property she owned as a trust beneficiary or otherwise into a new trust for her sisters. Laura’s trust also named a church (plaintiff) and a charity as beneficiaries of whatever remained in the trust after her sisters died. When Laura died, the bank decided that Laura’s attempt to exercise her power of appointment in her will was not effective because she made only a general reference to a trust agreement created by Charles and did not specifically refer to Trust A. Laura’s estate (plaintiff) and the church petitioned to have the exercise of the power of appointment in Laura’s will declared valid and effective. The trial court agreed with the bank and found that the exercise was invalid. Laura’s estate and the church appealed.