## Facts

- Arthur H. Tilley died in 1959; his will created a marital-deduction trust with Industrial National Bank as trustee.
- The trust paid income to his wife, Mary M. Tilley, for life and permitted her to withdraw principal for her comfort and support without accounting to a court or remaindermen.
- Arthur granted Mary a general testamentary power of appointment over the remaining trust corpus at her death.
- Mary died in 1963; her will exercised the power by appointing the corpus to a new trust administered by the same bank.
- Mary’s appointed trust directed income to her granddaughters (Aline C. Lathan and Evelyn M. Barrett), then to their issue, and provided for termination twenty-one years after the death of the last survivor of the younger granddaughter or any issue of either granddaughter living at Mary’s death.
- The executors and trustee filed an equity action seeking construction of Mary’s will and instructions, including whether the appointed trust violated the Rule Against Perpetuities (RAP).
- The Superior Court certified questions of law to the Rhode Island Supreme Court on an undisputed record.

## Issues

1. For RAP purposes, when property is appointed under a general testamentary power of appointment, does the perpetuities period run from the donor’s creation of the power or from the donee’s exercise of the power?
2. If the period runs from the donee’s exercise, is the trust created by Mary’s appointment valid under the RAP?

## Decision

- The court held the perpetuities period for interests created by the exercise of a general testamentary power of appointment is measured from the time the donee exercises the power.
- Because Mary held and exercised a general power (including the ability to appoint to anyone or her estate), she was treated as the practical owner for RAP purposes.
- Measured from Mary’s death and the lives in being then identified in her will, the appointed trust necessarily terminated within lives in being plus twenty-one years.
- The court answered the certified questions to uphold the validity of the appointed trust and instructed administration in accordance with Mary’s will.

## Legal Principles

- When a general power of appointment is exercised by will, the donee is treated as the practical owner of the appointive property for applying the RAP.
- For a general testamentary power, the RAP period runs from the donee’s exercise of the power, not from the donor’s creation of the power.
- The RAP limits restraints on alienation beyond lives in being plus twenty-one years; arrangements tied to identifiable lives in being at the measuring date and terminating within the additional period are valid.
- Courts may construe dispositions to sustain testamentary intent when consistent with RAP requirements, particularly where the donee’s broad power makes the donee the effective transferor.

## Conclusion

The Rhode Island Supreme Court treated the donee of a general testamentary power of appointment as the effective owner for perpetuities analysis, measured the perpetuities period from the donee’s exercise at death, and upheld the appointed trust as compliant with the Rule Against Perpetuities.


Industrial Nat'l Bank of R.I. v. Barrett, 101 R.I. 89, 220 A.2d 517 (R.I. 1966)