## Facts

- Henry Benjamin’s will created a marital trust for the lifetime benefit of his wife, Germaine Cromwell.
- The will granted Cromwell a testamentary general power of appointment over the remainder of the marital trust.
- Cromwell entered into an agreement with the trustee, Morgan Guaranty Trust Company of New York, concerning how she would exercise her power of appointment.
- Acting pursuant to that agreement, Cromwell exercised her power by appointing the trust remainder to two hospitals.
- Certain Benjamin family members (the plaintiffs), who claimed an interest in the remainder absent an effective appointment, sued Morgan Guaranty Trust Company to invalidate Cromwell’s exercise of the power.
- Plaintiffs argued the appointments were invalid because New York law (EPTL § 10-5.3) prohibits contracts that direct or limit the exercise of a power of appointment, and because the appointments allegedly conflicted with Henry Benjamin’s intent in creating the power.
- The Surrogate’s Court granted summary judgment for the trustee, holding Cromwell’s appointments were valid.
- Plaintiffs appealed.

## Issues

1. Whether EPTL § 10-5.3, which proscribes contracts directing the exercise of a power of appointment, invalidates an otherwise proper exercise of a testamentary general power of appointment made pursuant to such an agreement.
2. Whether the appointments should be set aside as contrary to the donor’s intent when the will granted the donee a general power of appointment over the trust remainder.

## Decision

- The Appellate Division (First Department) affirmed the Surrogate’s Court order granting summary judgment to Morgan Guaranty Trust Company.
- The court upheld Cromwell’s appointments of the marital trust remainder to the two hospitals.
- The court rejected the claim that the mere existence of a prohibited agreement, without a defect in the appointment itself, voids an exercise of a general power of appointment that otherwise falls within the power’s scope.

## Legal Principles

- EPTL § 10-5.3 renders unenforceable a contract to make, not make, or make in a specified manner an appointment under a power of appointment.
- The statute’s bar against enforcing a contract about how a power will be exercised does not, by itself, invalidate an appointment that is otherwise within the scope of the power and properly executed.
- When a donor grants a general power of appointment, the donor authorizes the donee to choose the remainder beneficiary broadly (subject to any express limits in the creating instrument); courts evaluate validity by the terms and formal requirements of the granted power, not by asserted preferences outside those terms.

## Conclusion

Benjamin v. Morgan Guaranty Trust Co. upheld a widow’s testamentary appointments to two hospitals under a marital-trust general power of appointment, holding that even if an agreement with the trustee directing the exercise of the power was proscribed and unenforceable under EPTL § 10-5.3, the agreement did not invalidate an appointment that otherwise complied with the scope of the power granted by the will.


Benjamin v. Morgan Guaranty Trust Co., 202 A.D.2d 536, 609 N.Y.S.2d 276 (1994)