## Facts

- Cecil H. Rich was the mother of Frances Rich and Jack Rich.
- Cecil’s will placed one-fourth of her estate into a trust and granted Frances a special (limited) power of appointment over the trust property.
- Cecil’s will allowed Frances to exercise the power either (a) during life by a signed written instrument delivered to the trustees, or (b) at death by her will “making express reference to this power.”
- The power permitted Frances to “direct the Trustees to turn over any part or all of the property in this Trust” to a limited group: Frances’s brothers or sisters, nieces and nephews, or descendants of deceased nieces and nephews.
- The power expressly barred any appointment to Frances, her estate, her creditors, or the creditors of her estate.
- In her own will, Frances stated: “It is specifically my intent to exercise that certain power of appointment granted to me pursuant to Item III (B) (4) of the Last Will and Testament of Cecil H. Rich in favor of Frances Ann Hargrove.”
- Frances’s will named only one niece, Frances Ann Hargrove, and made no provision for Frances’s other nieces and nephews.
- After Frances died, Jack Rich filed a declaratory judgment action asserting that Frances’s attempted exercise of the power of appointment was ineffective and that, if the power was not effectively exercised, he had an interest in the trust property under Cecil’s will.
- The trial court entered declaratory judgment for Jack Rich, and Hargrove appealed to the Supreme Court of Georgia.

## Issues

1. Whether the quoted clause in Frances Rich’s will was a valid and effective exercise of the special power of appointment granted by Cecil H. Rich’s will.
2. Whether a special power to appoint among “brothers or sisters or … nieces and nephews” allowed Frances to appoint the entire trust property to one niece to the exclusion of all other permissible appointees.

## Decision

- The Supreme Court of Georgia affirmed the trial court’s declaratory judgment for Jack Rich.
- The court held that Frances’s will language was not a valid and effective exercise of the special power of appointment created by Cecil’s will.
- The court applied the rule that a power of appointment may be exercised only in the manner specified by the donor and construed Cecil’s will to require compliance with the donor’s stated method and limitations.
- The court construed the class-based special power as nonexclusive and held that Frances could not exercise it by appointing the entire trust property solely to one niece while excluding the other nieces and nephews.

## Legal Principles

- A power of appointment may be exercised only in the manner specified by the donor; donor-imposed directions and limits are conditions on the donee’s authority.
- The donor’s intent, determined from the instrument as a whole under ordinary rules of construction, governs the scope of a power of appointment.
- A limited (special) power to appoint among a defined family class will be treated as nonexclusive unless the donor clearly authorizes exclusion; without such authorization, the donee may not give all the property to one class member and omit the others.
- If a special power of appointment is not effectively exercised, the appointive property passes under the donor’s will as it would have passed had the power not been exercised.

## Conclusion

In Hargrove v. Rich, the Supreme Court of Georgia affirmed a declaratory judgment that Frances Rich’s attempt to exercise a special testamentary power of appointment in favor of only one niece, Frances Ann Hargrove, was ineffective because the power had to be exercised as Cecil H. Rich specified and, as construed by the court, the class-based power was nonexclusive and could not be used to exclude all other nieces and nephews.


Hargrove v. Rich, 604 S.E.2d 475 (2004)