Estate of Smith

In general terms the issue presented is whether a power to invade corpus given the testamentary trustee in this case amounted to a general power of appointment or whether it was sufficiently circumscribed by ascertainable standards so as to be removed from that uncomfortable category.

The trial court found “that the language of the trust did set forth an ascertainable standard for determining ‘reasonable care, comfort, support and maintenance’ by using the guideline of ‘the standard of living as of date of decedent’s death.’ This is a limitation on the power of the trustee and one that could be established with sufficient certainty to limit the actions of the trustee.”

The State Controller appeals.

We are told that the will of Maude L. Smith set up a trust wherein the decedent herein was trustee and under which he was also a beneficiary; that the will and subsequent decree of distribution provided that decedent was to receive the net income from the trust estate in monthly or other convenient installments; and that he was to have a $5,000 or 5 percent power of appointment per year, noncumulative over the trust corpus. Thereafter, we are told, the will and decree…