Beals v. State Street Bank & Trust Co. 367 Mass. 318, 326 N.E.2d 896 (1975) Hunnewell died, leaving a testamentary trust. The trust gave a life income trust to his wife, and when she died it would get portioned out, one share to each daughter and one share to each child of a deceased daughter (aka per capita). When the daughters died, the principle would go to whomever the daughters specified in their wills. Therefore the daughters had a general testamentary power of appointment. Out of the four daughters, one predeceased her mother without having any children, so the trust was split into three equal shares for the three surviving daughters (Jane, Isabella, and Margaret). The deceased daughter's share lapsed. One of Hunnewell's daughters, Isabella asked the trustees to transfer all of her share to her account to be managed by her husband. They did. Isabella later went to the Probate Court and had them release her from her general power of appointment, and instead give her a special power of appointment. A general power of appointment means that Isabella could give the money to anyone, a special power of appointment meant that should could only give the money to a specified group or class of people. In this case, her nephews and nieces. There are tax reasons for doing this. Isabella died without having any children. Her will explicitly left the remainder of her estate to the heirs of her predeceased sister Margaret (per stirpes). The will did not mention the power of appointment. If you assumed that Isabella's will implicitly exercised her power of appointment, it would mean that she would want her share of the trust to go to Margaret's heirs (Beals and Blake). On the other hand, if you conclude that Isabella's will did not exercise her power of appointment, then her unexercised share of the trust would revert back to Hunnewell's estate, and from there would be distributed according to the residuary clause of Hunnewell's will. Which in this case would give the money evenly to Margaret (or her heirs) and Jane (or her heirs, Elwell and Cabot). The bank holding the trust (State Street) went to the Probate Court to ask who they should give the money to. The Massachusetts Supreme Court found that Isabella did exercise her power of appointment. The Massachusetts Supreme Court decided that the law of Massachusetts should apply. The Massachusetts Supreme Court found that the residuary clause of Isabella's will should be presumed to have exercised her power of appointment. The Court felt that in ambiguous cases, they should presume that the power has been exercised. The Court had previously ruled that general powers of appointment should be presumed to be exercised by a residuary clause, and now they extended that presumption to special powers of appointment. The Court in this case changed the common law. The Massachusetts Supreme Court ordered the Bank to distribute the assets of the trust (since Hunnewell's final daughter was dead). Out of the three shares of the trust, Margaret's children would split Margaret's share and Isabella's share, while the final share would go to Jane's children. Unlike the decision in this case, in a majority of States, a residuary clause does not exercise a power of appointment. The Uniform Probate Code § 2-608, says that, unless the original donor specifies otherwise, a residuary clause is presumed to exercise a general power of appointment, but not a special power of appointment.