Permissible Delegation of Testamentary Authority

June 28, 2011 Hull & Hull LLP Estate & Trust Tags: , , 0 Comments

Although decided over twenty years ago, Re Nicholls 57 O.R.(2d) 763 remains a leading case and is a fascinating decision of the Ontario Court of Appeal that goes to great lengths to defend testamentary freedom and the fundamental distinction between a trust and a power of appointment.  In that case, the testator gave her estate to her executor in trust and directed the executor "to follow the dictates and directions given to him from time to time by Carson Cowan as to the distribution of the rest and residue of my estate."  Mr. Cowan was a "minister" of a "religious group" that the testator had been a member of for some fifty years.  After the testator’s death, Cowan gave the executor written directions to distribute to six member of the religious group.  The executor sought directions.  When the lower Court accepted the validity of Mr. Cowan’s authority, the executor appealed.

The Court of Appeal dismissed the appeal. The general power of appointment given to Mr. Carson was deemed to be equivalent to property.  Unlike a trustee, Carson could have appointed himself as donee. The Court of Appeal approved of the lower court’s distinction between the case at bar and the prohibition against an estate trustee selecting beneficiaries that would have been void for uncertainty.  The testator in Re Nicholls chose to create a Will where the trustee was subject to the exercise of the power of appointment by Carson. This the testator was free to do. 

David M. Smith – Click here for more information on David Smith

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