Seidel v. Werner
81 Misc.2d 220, 364 N.Y.S.2d 963 aff'd on opinion below, 50
A.D.2d 743, 376 N.Y.S.2d 139 (1975)
Werner died. He left a testamentary
trust that gave a life
income and a testamentary
power of appointment to his son
A testamentary power of
appointment means that the money in
the trust would go to whomever Steven gave it to in his will.
Werner stipulated that it
Steven failed to exercise his power, the trust assets would be
distributed to Steven's children (aka the takers in default).
Steven was married to Harriet
and had two kids, Anna and Frank. Steven went to Mexico and got a quicky
divorce. He then married Edith.
The Mexican divorce
agreement between Steven and Harriet included a clause in which Steven
promised to make, and not revoke, a will exercising his power of
appointment to establish a new trust
which gave Harriet and the kids income until the kids turned 21, and then
distributed the trust assets to them.
Four months later, Steven made
a will, but it left everything to his new wife Edith.
That included the assets in
Steven later died. Harriet
stepped forward and challenged probate on the grounds that her divorce decree
gave her the money in the trust.
The Probate Court found for
Under New York State law,
the divorce agreement amounted to a contract to exercise a testamentary
power of appointment that was not
presently exerciseable. Therefore it was invalid.
Steven could only exercise
his power of appointment by
dying. Since he was not dead, he could not make a testamentary
appointment. Therefore, the
contract was void because you can't contract to give something you don't
The donor wanted Steven to make the appointment at
death. To allow him to make that appointment to Harriet and the kids
while he was still alive defeated the intent of the testator.
Anna and Frank argued that
New York State law also allows for someone with a power of appointment to release that power. If that happened, the
Steven would not have been allowed to later exercise the power, which
meant that it would be distributed to Steven's children (aka the takers
However, the Court found
that a promise to exercise that power in a certain way did not amount to
a release of the power.
The kids would have been
better off in instead of getting Steven to promise to give them the
money he simply released the power of appointment completely.
The Probate Court did note
that Anna and Frank could sue Steven's estate for restitution for breach
of contract, but they would only be able to take Steven's assets, since
he never owned the trust assets.