## Facts

- Stanton P. Kettler created three trusts dated July 30, 1970, in which his daughter, Sally K. Christiansen, was a beneficiary: (1) the Stanton P. Kettler Trust, FBO Sally Christiansen, (2) the Inter Vivos Trust, and (3) the Irrevocable Inter Vivos Trust.
- Each trust gave Christiansen a testamentary power of appointment over her share and permitted distribution at her death “to or for the benefit of” persons or entities she selected **by her will**, **making specific reference to the power herein granted**.
- Each trust also contained a default distribution: if Christiansen died without exercising the power as required, her share would be distributed equally to her two children, Marcia Stevens and Christopher Evans.
- Christiansen died in January 2011. Her Florida will left $5,000 to Sharon Peeples and devised the residue of her estate to Joanne K. Cessac.
- The will included a clause stating that Christiansen’s assets included “the STANTON P. KETTLER TRUST, FBO, SALLY CHRISTIANSEN … currently held at the Morgan Stanley Trust offices in Scottsdale, Arizona, and two (2) currently being held at Northern Trust of Florida in Miami, Florida.”
- The will did not mention any “power of appointment,” did not state that Christiansen was exercising any power, and did not use language matching the trusts’ “specific reference” requirement.
- After the will was admitted to probate in Florida, Stevens sought declaratory relief that Christiansen failed to properly exercise the powers of appointment and that the trust assets therefore were not part of Christiansen’s probate estate.
- The probate court agreed with Stevens and ruled that the powers were not properly exercised; the trust assets passed under the trusts’ default provisions to Stevens and Evans.
- Cessac and Hal A. Airth, as personal representative of Christiansen’s estate, appealed to Florida’s First District Court of Appeal.

## Issues

1. Whether Christiansen’s will validly exercised the trusts’ testamentary powers of appointment when it identified the trusts as part of her “estate assets” but did not specifically refer to the powers of appointment.
2. Whether Florida Statutes § 732.607 (regarding exercise of powers of appointment by general testamentary dispositions) treated Christiansen’s residuary clause or trust identification as an effective exercise despite the trusts’ specific-reference requirement.

## Decision

- The First District Court of Appeal affirmed the probate court’s order.
- The court held that the donor (settlor) may require a particular method for exercising a power of appointment, including a requirement that the will make “specific reference to the power herein granted.”
- The will’s statement that the Kettler trusts were “included in my estate assets” did not satisfy the requirement because it did not specifically refer to the powers of appointment or clearly state that Christiansen was exercising them.
- Because the powers of appointment were not exercised in the manner required by the trust instruments, the trust assets did not become part of Christiansen’s probate estate and instead passed to Stevens and Evans under the trusts’ default terms.
- Section 732.607 did not change the result because the donor’s instruments expressly imposed a specific-reference condition for a valid exercise.

## Legal Principles

- The creator of a power of appointment may set express conditions on how the power must be exercised, and courts enforce those conditions when clearly stated in the creating instrument.
- When the creating instrument requires exercise “by will” with a “specific reference” to the power, a will that does not mention the power (or otherwise expressly state it is being exercised) fails to exercise the power.
- A will’s general residuary clause, or a clause merely listing a trust as an “estate asset,” is not the same as a specific reference to a power of appointment when the trust requires that form of reference.
- Florida Statutes § 732.607 supplies a default rule for exercising certain powers by general testamentary language, but it does not override a donor’s express requirement that the will contain specific-reference language.
- Apparent intent to benefit a residuary devisee cannot substitute for compliance with the exercise requirements imposed by the donor of the power.

## Conclusion

The First District affirmed that Sally Christiansen’s will did not exercise the Kettler trusts’ testamentary powers of appointment because it did not make the specific reference required by the trust instruments; as a result, the trust assets stayed outside the probate estate and passed to her children as default beneficiaries under the trusts.


Cessac v. Stevens, 127 So. 3d 675 (2013)