Beneficiary’s Attempt to Exercise Limited Testamentary Power of Appointment Invalid

In an action by the estate of a beneficiary of a trust and the charitable organization to which she attempted to appoint her share of the trust against the trustees for breach of fiduciary duty for failing to create a separate trust for the beneficiary so that she would have a testamentary power of appointment over the separate trust, summary judgment was not appropriate for defenses based on the statute of limitations for claims by beneficiaries against trustees, as well as the doctrine of laches, because there were genuine issues of material fact. Summary judgment was granted in favor of the trustees on the issue of whether the charitable organization created by the beneficiary was a proper appointee of trust property because the trust document defined “Charity” (with a capital “c”) as organizations selected by the trustees, and the trust document did not ever use the word “charity” without capitalization. Because the charitable organization to which the beneficiary attempted to exercise the power of appointment was not a “Charity” selected by the trustees, the attempted exercise of the power of appointment was invalid, and there can be no surcharge against the trustees for failing to create a separate trust because her charitable organization would have received nothing even if the separate trust had been created. Scaife Trust, 3 Fid.Rep.4th 223 (Allegheny O.C. 2025), on appeal, 866 WDA 2025 (Pa. Super.).

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