IN RE CARROLL'S WILL (1937):

Carroll died and in his will he established a testamentary TRUST. It consisted of a life income
trust to his WIFE. After the death of his WIFE, the trust was to be divided equally between his
children RALPH and ELSA, also in the form of a life income trust.
→ as to ELSA, there was a special power of appointment, where she was to leave in principle
the trust “to her children or any other kindred who survive her in such a manner as she think
proper.”
→ The will also specified that IF ELSA did not exercise this power, it would go to her children,
and should there be no children, it would revert back to the estate.

Now, ELSA did not have kids and she died. She intended to leave the trust to her husband,
but the provisions of the will disallowed her from giving it to non-relatives; SO:
→ ELSA wrote a will. She left 5k USD to RALPH, 250k to her cousin PAUL, and the rest into
a trust.
→ PAUL promised to give 100k to ELSA's husband, if he were to inherit the 250k.

WHEN ELSA's will was probated, the probate court found that the promise made to Paul "so
vitiated and permeated the bequest that the appointment constituted a fraud upon the power
and made the bequest to him void." Paul appealed.
The Appellate Court partially reversed. Paul appealed.
→ The Appellate Court found that the unenforceable part of the will was the $100k that Elsa
wanted Paul to give to Foster, but that the other $150k that Elsa wanted Paul to have free and
clear was ok.

The New York Supreme Court reversed the Appellate Court and found the entire $250k gift to
Paul to be void.
→ The New York Supreme Court found that it was impossible to say how much Elsa would
have given Paul if they didn't have a deal. Therefore it is impossible to separate the $150k
from the $100k. Hence, the entire bequest must be void.
→ The Halsbury's Laws of England suggest that the exercise of a power of appointment may
be held fraudulent if:
The execution was made for a corrupt purpose,
It was made in pursuance of an antecedent agreement to benefit persons not
objects of the power, or
It was made for purposes foreign to the power.

Elsa had a complete power to give the money to any relative she wanted for any reason.
However, that power is limited when there is a bargain to benefit a non-object of the power.
IN RE PROESTLER'S WILL:

HENRY PROESTLER died testate in 1919, leaving behind only his wife MATHILDE. HENRY's
will was admitted to probate, and it stated, among other things, the following:

"All the rest, residue and remainder of the property, real, personal or mixed, of which I die
seized or possessed, or to which I may be entitled, I give, devise and bequeath to Matilda B.
Proestler and William Heuer in trust for the following uses and purposes: I direct that the net
income from this trust fund shall be paid to my wife, Matilda B. Proestler, during her lifetime. I
direct that my wife, Matilda B. Proestler, shall have the right to dispose by will of Twenty
Thousand ($20,000.00) Dollars of said trust fund. All the rest, residue and remainder of
said trust fund, after the death of my wife, Matilda B. Proestler, I give, devise and bequeath as
follows:" (following are set forth a number of bequests for the disposition of said trust fund.)

WILLIAM & MATHILDE were named executors of HENRY's will, but unfortunately both of
them died one after the other in 1935. MATHILDE died intestate, and in her will she revoked
all her previous wills, giving the estate to her nephew WERNER, and the income from said
estate to her sister, CHRISTIANE Hensen. She also named WERNER as the executor.

PAUL Tornquist, a trustee under the will of HENRY (he's succeeding WILLIAM), asked for
guidance as to how he should distribute HENRY's estate, seeing as MATHILDE did not
expressly dispose of the 20,000 USD in her will.

The lower court ruled that MATHILDE did not exercise the power given to her in HENRY's will
over the 20,000 USD, and instructed PAUL to distribbute the estate as if there had been no
provision in HENRY's will about the 20,000 USD.

WERNER appealed to this court.

RULING:
Where a power of appointment is vested in one who has become deceased, it is usually held
that the will of the decedent will constitute an exercise of the power in three classes of cases,
to wit:
(1) Where there is a reference to the power in the will;
(2) where there is a reference to the property which is the subject on which it is to be
executed; and
(3) where the provisions of the will would otherwise be ineffectual.

In the absence of any of these three requirements, it is usually held that the power of
appointment does not constitute a part of the estate and therefore a general devise of "all the
rest, residue and remainder" of the estate does not constitute an exercise of the power of
appointment. Accordingly, the will relied upon by WERNER herein was insufficient to
constitute an exercise of the power of appointment granted to Mrs. Proestler by the will of her
deceased husband.