Estate of Stafford CA2/7 ( 2020 )

Filed 11/25/20 Estate of Stafford CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
Estate of ALISON H. STAFFORD, B301208
Deceased.
(Los Angeles County
Super. Ct. No. 18STPB06599)
ESTEBAN D. PEREZ,
Petitioner and Appellant,
v.
RICHARD STAFFORD,
Objector and Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, Deborah L. Christian, Judge. Reversed with
directions.
Jay Oberholtzer, for Petitioner and Appellant.
Hess Verdon & Associates and Keith Van Dyke, for
Objector and Respondent.
INTRODUCTION
After Alison H. Stafford died in November 2017, her friend,
Esteban Perez, filed a petition in the probate court to validate her
trust, claiming that Alison intended to leave the residue of her
trust to him through a limited liability company and to give him
a power of appointment to name the beneficiary of the trust.
Alison’s trust, created three days before her death, named Perez
as the trustee to administer and distribute trust property and
described the beneficiary as “[LLC to be named].” Perez alleged
that, based on the drafting attorney’s recommendation, Alison
decided to distribute the trust’s assets to a limited liability
company controlled by Perez, rather than to Perez directly, to
avoid challenges she anticipated her brothers would make to her
estate plan. Perez alleged, among other things, that Alison gave
him a power of appointment to select the LLC and that extrinsic
evidence of the circumstances surrounding Alison’s creation of
the trust helped prove she did.
After providing Perez with one opportunity to amend his
petition, the probate court sustained without leave to amend a
demurrer by Alison’s brother and intestate heir, Richard
Stafford.1 We reverse.
1 Because Alison Stafford and Richard Stafford share a
surname, we refer to them by their first names.
2
FACTUAL AND PROCEDURAL BACKGROUND
A. Alison Creates the Alison H. Stafford Revocable
Living Trust
On October 29, 2017, three days before she died, Alison
executed four estate planning documents, all prepared by the
same attorney, including the Alison H. Stafford Revocable Living
Trust, which named Perez as the trustee. Paragraph 5.1 of the
trust stated: “Upon the Grantor’s death, the Trustee shall hold,
manage, administer and distribute the remaining principal of the
Trust, together with all property distributable to the Trustee as a
result of the Grantor’s death, whether by Will or otherwise . . . .”
Paragraph 5.3 of the trust stated: “Upon the death of the
Grantor and completion of the payments described in Paragraph
5.2 hereof,[2] 100% of the membership interest in [LLC to be
named] shall go to [LLC to be named] and then the Trustee shall
distribute the remaining principal and any undistributed net
income of the Trust Fund in full to the sole beneficiary [LLC to be
named] . . . .”3 The trust also stated that, if anyone initiated
2 Paragraph 5.2 described payments for, among other
expenses, funeral expenses, costs of administering Alison’s estate,
costs of packing and storing Alison’s assets, and certain estate
taxes.
3 The parties agree the version of the trust executed by
Alison is the one that describes the beneficiary as “[LLC to be
named].” The record includes two other versions of the trust that
name the beneficiary as “Countess Dis Series 1, LLC” and “The
Perez Family Irrevocable Spendthrift Trust.” According to Perez,
the version naming “Countess Dis Series 1, LLC” was created
after Alison’s death. Perez claims he created that version at the
direction of the drafting attorney, who instructed him “to
3
guardianship proceedings, Alison appointed Perez her legal
guardian. Alison signed a memorandum of trust confirming she
had created a trust naming Perez as trustee and a durable power
of attorney for health care decisions that designated Perez as her
health care agent.
Alison also executed a pour-over will naming Perez as the
personal representative and giving him, as trustee of the trust,
her personal property, with directions to distribute it pursuant to
the terms of the trust.4 The will gave Perez “absolute discretion”
to “acquire, encumber and dispose of real and personal property”
and to “make distributions (including the satisfaction of any
pecuniary devise) in cash or in specific property, real or personal .
. . .” Alison devised the residue of her estate to her trust. The
will stated: “If for any reason a court of competent jurisdiction
shall declare this testamentary transfer to the Trustee of said
Trust or said Trust itself to be invalid, I devise the residue of my
estate to the Trustee named in my Trust instrument, as
amended, IN TRUST, for the uses and purposes and subject to
substitute pages to reflect that the disposition of the residue of
the Trust was to be in favor of ‘Countess Dis, LLC.’” The version
of the trust naming “The Perez Family Irrevocable Spendthrift
Trust” as the beneficiary appears to have been created by the
drafting attorney on or around December 6, 2017.
4 A pour-over will causes any portion of a decedent’s estate
not already included in the trust to become a trust asset and to be
distributed to the trust beneficiaries under the trust. (See, e.g.,
Wilkin v. Nelson (2020) 45 Cal. App. 5th 802, 804; Conservatorship
of Davidson (2003) 113 Cal. App. 4th 1035, 1043, disapproved on
another ground in Bernard v. Foley (2006) 39 Cal. 4th 794, 816,
fn. 14.)
4
the terms and conditions set forth in the Trust instrument, as
amended, for the period beginning with the date of my death.”
B. Alison Dies, and Richard and Perez File Petitions in
the Probate Court
On December 7, 2017 Richard filed a petition for letters of
administration, alleging Alison died intestate. On January 3,
2018 Perez objected to Richard’s petition and filed a petition for
probate of Alison’s will, asking the court to appoint him the
executor of her estate. On January 18, 2018 Richard filed an
objection and contest to the will Perez was seeking to probate,
claiming that Perez, whom Richard described as Alison’s
“gardener and occasional driver,” obtained it by undue influence
and fraud and that Alison “was not mentally competent” and
lacked capacity to make the will. Richard alleged that the will
“was drafted just days before [Alison’s] death and solely at the
request of” Perez, that “the drafting attorney prepared the [w]ill
based solely on his discussions with [Perez] and without ever
speaking with” Alison, and that the will did “not reflect the
wishes of [Alison] but rather reflects solely the wishes of” Perez.
On July 16, 2018 Richard filed a petition to invalidate the
trust. Richard argued that the trust failed to name a beneficiary
and that the limited liability company that purported to be the
beneficiary of the trust was not created until eight days after
Alison died.
On November 19, 2018 Perez filed a petition to confirm the
validity of the trust. Perez alleged that Alison’s “intention was
manifestly to give her estate to [Perez] and not to her intestate
heirs. The intention of [Alison] was equally manifest that
[Perez], as Trustee, was empowered to name an LLC to receive
5
the Trust estate upon her death. . . . Perez is ready, willing and
able to offer clear and convincing evidence that the intention of
[Alison] was that he be the sole beneficiary of her Trust and that
this Trust was intended to fulfill that intention.” Richard
demurred to Perez’s petition, arguing that the trust was invalid
because, at the time of Alison’s death, there was no beneficiary
and that there was no basis to reform the trust. The probate
court sustained the demurrer with leave to amend.
C. Perez Files an Amended Petition To Confirm the
Validity of the Trust
On March 11, 2019 Perez filed an amended petition to
confirm the validity of the trust. He alleged that Alison was
unmarried and had no children, that her only intestate heirs
were two brothers with whom she had been engaged in prolonged
litigation, and that Perez was Alison’s “long time, and close,
friend.” Perez further alleged that, near the end of October 2017,
Alison’s health deteriorated rapidly; that, because Alison’s death
was imminent, the drafting attorney emailed the estate planning
documents to Alison on October 24, 2017; and that she executed
them five days later.
As discussed, the executed version of the trust provided
that the beneficiary was “[LLC to be named].” Perez alleged that
Alison’s “overall intention . . . was always that the residue of her
Trust” would pass to Perez and that the “disposition to a Nevada
Limited Liability Company was selected by [Alison] as the
attorney had advised that to be the best method to
insulate . . . Perez from problems expected from her two
brothers.” Perez further alleged that, “[a]fter discussing the
matter with the attorney who was preparing the estate planning
6
documents, [Alison] approved the proposal that the residue of the
Trust be distributed to a Limited Liability Company controlled
entirely by . . . Perez, rather than a distribution, outright,
to . . . Perez.” Perez also claimed that “a general power of
appointment was granted” to Perez, as trustee, when Alison
“directed that an LLC ‘be named’” and that, approximately three
weeks after Alison’s death, Perez received documents from the
drafting attorney “reflecting that a Limited Liability Company
named ‘Countess Dis’ had been formed in Nevada on November 8,
2017.”5
D. The Probate Court Sustains Richard’s Demurrer to
Perez’s Amended Petition Without Leave To Amend
Richard demurred to the amended petition, again arguing
that the trust was invalid because it did not name a beneficiary
and that there was no beneficiary at the time of Alison’s death.
Richard also argued that the Supreme Court in Estate of Duke
(2015) 61 Cal. 4th 871 “sanctioned reformation only where there is
a manifest mistake in the drafting of Settlor’s actual specific
intent” and that, “[b]ecause no such mistake is manifest or can be
alleged in our case, [Perez] cannot state a claim for reformation
under [Estate of] Duke.” Richard also argued Perez’s allegations
were not sufficient to reform the trust to name a beneficiary or to
create a power of appointment in Perez to name one.
5 According to Perez, he and Alison chose the name
“Countess Dis” because the two of them “jokingly referred to
[Alison] as the ‘Queen of Discounts’ because she was always
trying to obtain the lowest price possible for anything she
purchased.”
7
The probate court sustained Richard’s demurrer to Perez’s
amended petition without leave to amend and dismissed the
petition. The probate court also granted Richard’s petition to
invalidate the trust. Perez timely appealed.
DISCUSSION
A. Standard of Review
Probate Code section 17200, subdivision (a),6 authorizes a
trustee or beneficiary of a trust to petition the probate court
“concerning the internal affairs of the trust,” which include
determining “questions of construction of a trust instrument,”
“[d]etermining the validity of a trust provision,” and
“[a]scertaining beneficiaries and determining to whom property
shall pass or be delivered . . . to the extent the determination is
not made by the trust instrument.” (§ 17200, subd. (b).) A
petition under section 17200 is subject to demurrer. (See § 1000
[except to the extent the Probate Code provides applicable rules,
the rules of practice applicable to civil actions apply to probate
proceedings].) On appeal from a dismissal after an order
sustaining a demurrer without leave to amend, we review “‘the
complaint de novo to determine whether it alleges facts sufficient
to state a cause of action. For purposes of review, we accept as
true all material facts alleged in the complaint, but not
contentions, deductions or conclusions of fact or law.’” (Dudek v.
Dudek (2019) 34 Cal. App. 5th 154, 163-164.) We also consider any
exhibits attached to the complaint. (Paul v. Patton (2015)
235 Cal. App. 4th 1088, 1091.)
6 Statutory references are to the Probate Code.
8
B. Perez’s Petition Stated Facts Constituting a Cause of
Action To Confirm the Validity of the Trust
“The essential necessary elements of a valid trust are (1) a
trust intent [citation]; (2) trust property [citation]; (3) trust
purpose [citation]; and (4) a beneficiary.” (Dudek v. Dudek,
supra, 34 Cal.App.5th at p. 164.) Section 15205, subdivision (a),
states that a trust “is created only if there is a beneficiary.” A
trustor can satisfy this requirement by either naming a
beneficiary or by granting someone the power to select a
beneficiary. Under section 15205, subdivision (b), the
requirement of a beneficiary “is satisfied if the trust instrument
provides for either of the following: [¶] (1) A beneficiary or class
of beneficiaries that is ascertainable with reasonable certainty or
that is sufficiently described so it can be determined that some
person meets the description or is within the class. [¶] (2) A
grant of a power to the trustee or some other person to select the
beneficiaries based on a standard or in the discretion of the
trustee or other person.” The failure to name a beneficiary
invalidates a trust. (§ 15205, subd. (a); see, e.g., Estate of Gaines
(1940) 15 Cal. 2d 255, 266 [“The most that can possibly be
inferred from the evidence is that the decedent may have
intended to create a trust, for some purpose, or for someone’s
benefit, but failed to disclose that purpose, or the beneficiary, and
therefore failed to create the trust.”].)
At oral argument counsel for Perez clarified that Perez’s
sole contention is that the trust contained an ambiguity about
who was to select the “[LLC to be named]” and that the probate
court should have given Perez the opportunity to present
extrinsic evidence Alison intended to give him a power of
appointment to name the beneficiary. Contrary to the argument
9
in his briefs, counsel for Perez conceded at oral argument Alison
could not have intended for “[LLC to be named]” to mean
Countess Dis, LLC because that entity did not exist at the time of
Alison’s death. In other words, Perez now relies on section
15205, subdivision (b)(2), and not section 15205, subdivision
(b)(1), to prove Alison created a valid trust. Counsel for Richard
argued that the trust is not ambiguous and that Alison intended
to select the LLC to be named, but failed to do so before she died.
Counsel for Richard further argued that the trust did not give
Perez a power of appointment to name the beneficiary and that
the court could not reform the trust to insert a power of
appointment because doing so would violate the statutory
requirements for creating a power of appointment.
1. Interpretation of Trusts
“‘[T]he primary rule in construction of trusts is that the
court must, if possible, ascertain and effectuate the intention of
the trustor or settlor.’ [Citation.] ‘The intention of the transferor
as expressed in the [trust] instrument controls the legal effect of
the dispositions made in the instrument.’” (Crook v. Contreras
(2002) 95 Cal. App. 4th 1194, 1206.) The following rules of
construction “apply where the intention of the transferor is not
indicated by the instrument.” (§ 21102; see § 21101 [“this part
applies to a . . . trust”].) “The words of an instrument are to
receive an interpretation that will give every expression some
effect, rather than one that will render any of the expressions
inoperative. Preference is to be given to an interpretation of an
instrument that will prevent intestacy or failure of a transfer,
rather than one that will result in an intestacy or failure of a
transfer.” (§ 21120; see Estate of Goyette (2004) 123 Cal. App. 4th
10
67, 74 [courts favor an interpretation of a provision in a will that
avoids intestacy].) “All parts of an instrument are to be
construed in relation to each other and so as, if possible, to form a
consistent whole. If the meaning of any part of an instrument is
ambiguous or doubtful, it may be explained by any reference to or
recital of that part in another part of the instrument.” (§ 21121.)
Where the language of a trust is ambiguous, meaning it is
reasonably susceptible to more than one interpretation, extrinsic
evidence is admissible to determine the meaning of that language
and to determine whether the document constitutes a trust.
(§§ 6111.5, 21102; see Estate of Dodge (1971) 6 Cal. 3d 311, 318
[“we may utilize extrinsic evidence to aid in construing the will if
we find that the will is ‘ambiguous’ or, more precisely, that in the
light of both the language of the will and the circumstances under
which it was made, the will is reasonably susceptible of more
than one interpretation”]; Estate of Russell (1968) 69 Cal. 2d 200,
206 [“[w]hen the language of a will is ambiguous or uncertain
resort may be had to extrinsic evidence in order to ascertain the
intention of the testator,” and “extrinsic evidence is admissible ‘to
explain any ambiguity arising on the face of a will, or to resolve a
latent ambiguity which does not so appear’”]; Estate of Dye (2001)
92 Cal. App. 4th 966, 976 [“portions of a will can be deemed
ambiguous, permitting resort to extrinsic evidence of a testator’s
knowledge and purpose”]; Ike v. Doolittle (1998) 61 Cal. App. 4th
51, 57 [court properly admitted and considered extrinsic evidence
to resolve the ambiguities in a trust].) Extrinsic evidence,
however, is not admissible to give a trust “a meaning to which it
is not reasonably susceptible.” (Ike, at p. 73; see Trolan v. Trolan
(2019) 31 Cal. App. 5th 939, 949 [“The court can . . . consider
extrinsic evidence regarding the circumstances under which the
11
trust was made, in order to interpret the trust instrument, but
not to give it a meaning to which it is not reasonably
susceptible.”].) The issue here is whether Alison’s trust is
reasonably susceptible to Perez’s interpretation that Alison
created and gave him a power of appointment to select the
beneficiary.
2. Powers of Appointment
“‘“‘A power of appointment is a power conferred by the
owner of property (the “donor”) upon another person (the “donee”)
to designate the persons (“appointees”) who will receive the
property [(“appointive property”)] at some time in the future.’”
[Citations.] Such a power can be general—exercisable in favor of
anyone, including the holder of the power or that person’s
estate—or limited—exercisable only in favor of the person or
class specified in the instrument creating the power. [Citation.]
A trust can be the “creating instrument” that “creates or reserves
the power of appointment.”’” (Tubbs v. Berkowitz (2020)
47 Cal. App. 5th 548, 554; see § 611, subd. (a); Estate of O’Connor
(2018) 26 Cal. App. 5th 871, 879.) A power of appointment enables
a donee or “powerholder” to “designate a recipient of an
ownership interest in or another power of appointment over the
appointive property.” (§ 610, subd. (f); see Estate of Kuttler (1958)
160 Cal. App. 2d 332, 337.) “‘Powerholder’ means the person to
whom a power of appointment is given or in whose favor a power
of appointment is reserved.” (§ 610, subd. (g).)
Section 621 lists the requirements for creating a power of
appointment: “(1) There is a creating instrument. [¶] (2) The
creating instrument is valid under applicable law. [¶] (3) . . .
[T]he creating instrument transfers the appointive property.
12
[and ¶] (4) The terms of the creating instrument manifest the
donor’s intent to create in a powerholder a power of appointment
over the appointive property exercisable in favor of a permissible
appointee.” “[N]o particular form of words is necessary to create
a power of appointment.” (Estate of Rosecrans (1971) 4 Cal. 3d 34,
38; see, e.g., id. at pp. 38-39 [trust created general powers of
appointment in two trustees with language that “the
trustees . . . ‘shall pay from principal . . . whatever sums they
may determine’” equally to themselves and that “‘[o]n the
termination of this trust all the property thereof . . . shall be
divided into two equal parts’” to be distributed to the heirs of
each trustee].)
3. The Trust Is Reasonably Susceptible to Perez’s
Interpretation That Alison Created a Power of
Appointment
Alison’s trust directs Perez, as trustee, to distribute the
assets of the trust. The trust provides that, after payment of
certain expenses, “the Trustee shall distribute the remaining
principal and any undistributed net income of the Trust Fund in
full to the sole beneficiary [LLC to be named] . . . .” This
language is ambiguous regarding who, Alison or Perez, was to
name the LLC. (See Ike v. Doolittle, supra, 61 Cal.App.4th at
pp. 56-57, 73 [court reviews the trust document de novo to
determine whether its terms are “ambiguous in some respect”];
Estate of Russell, supra, 69 Cal.2d at p. 211 [“an ambiguity is
said to exist when, in the light of the circumstances surrounding
the execution of an instrument, ‘the written language is fairly
susceptible of two or more constructions’”].) As discussed,
Richard interprets this language to mean Alison intended to
13
name the LLC but failed to do so. Perez interprets this language
to mean Alison intended for him to name the LLC. (See Rest.3d
Property, Wills & Other Donative Transfers § 18.1, reporter’s
notes [“The legal effect of language that allows a donee to dispose
of property may in itself manifest the intent of the donor to create
a power of appointment.”].)
Given the allegations of extrinsic evidence, Perez’s
interpretation is reasonable (as is Richard’s). Perez alleged
Alison intended to leave him the assets in the trust through a
Nevada limited liability company that she was creating for that
purpose and that Perez would control. Perez alleged that Alison’s
decision, at the recommendation of the drafting attorney, was to
leave her assets to Perez by way of a limited liability company to
avoid disputes Alison anticipated would arise involving her
brothers, with whom Perez claimed Alison had been engaged in
protracted litigation.7 Perez also alleged that “[t]he effect of
stating that an ‘LLC’ was ‘to be named’ directed that an LLC be
formed and named” and that “[t]his direction was clearly directed
to the appointed Trustee [(Perez)],” so that “[t]here would be no
need for the Settlor [(Alison)] to direct herself to form an LLC.”
Perez alleged that Alison’s “intention was manifestly to give her
estate to [Perez] and not to her intestate heirs.”
7 The record includes a petition from trust litigation among
the Stafford siblings in Orange County Superior Court, in which
Alison sought an accounting from, and surcharge against, her
brother Scott Stafford. Richard asked the probate court in this
action to take judicial notice of the document to show that,
contrary to Perez’s claim, the probate litigation was between
Alison and Scott, not him.
14
Perez also alleged and attached to his petition other estate
planning documents Alison executed, including a durable power
of attorney for her health care decisions and a pour-over will,
which as discussed gave Perez discretion to acquire, encumber,
dispose, and distribute Alison’s real property, personal property,
and cash. This evidence further supported Perez’s interpretation.
(See Ammerman v. Callender (2016) 245 Cal. App. 4th 1058, 1088
[“‘“[o]nce the testamentary scheme or general intention [of a
trust] is discovered, the meaning of particular words and phrases
is to be subordinated to this scheme, plan or dominant
purpose”’”].) Given these allegations of the extrinsic evidence,
the trust is reasonably susceptible to Perez’s proposed
interpretation that Alison intended to give Perez the power to
name the LLC that would be the beneficiary. Perez’s petition
stated facts sufficient to constitute a cause of action to determine
the validity of the trust, at least at the pleading stage, where we
accept Perez’s allegations as true. (See Osornio v. Weingarten
(2004) 124 Cal. App. 4th 304, 313; Olson v. Toy (1996)
46 Cal. App. 4th 818, 823.)
Of course, Perez may not be able to prove his allegations of
the extrinsic evidence. Or Richard may prove that Perez
obtained the trust and other documents by fraud or undue
influence or that Alison lacked capacity when she executed those
documents shortly before her death. But even under Richard’s
theory that Alison’s trust fails because it does not name a
beneficiary or create a power of appointment, Perez is entitled to
present extrinsic evidence showing Alison intended to give Perez
a power of appointment to name the LLC as the beneficiary so
that Perez would inherit her assets. (See Estate of Duke, supra,
61 Cal.4th at p. 886 [“[e]xtrinsic evidence is admissible not only
15
to aid in the construction of a will, but also to determine whether
a document was intended to be a will”]; Estate of Russell, supra,
69 Cal.2d at p. 207 [“[e]xtrinsic evidence always may be
introduced initially in order to show that under the
circumstances of a particular case the seemingly clear language
of a will describing either the subject of or the object of the gift
actually embodies a latent ambiguity for it is only by the
introduction of extrinsic evidence that the existence of such an
ambiguity can be shown,” and “[o]nce shown, such ambiguity may
be resolved by extrinsic evidence”]; see also § 21102, subd. (c)
[“Nothing in this section limits the use of extrinsic evidence, to
the extent otherwise authorized by law, to determine the
intention of the transferor.”].)
The sole authority on which Richard relies, Estate of
Eimers (2020) 49 Cal. App. 5th 97 (Eimers), is distinguishable.
Eimers involved sections 630, 631, and 632, which govern the
exercise of a power of appointment by trust beneficiaries who
have been empowered to designate to whom they want to give
their shares of the trust.8 In exercising this power, the trustor
8 Section 630, subdivision (a), provides that, if the
instrument “specifies requirements as to the manner, time, and
conditions of the exercise of a power of appointment, the power
can be exercised only by complying with those requirements.”
Section 632 explains the significance of a specific condition
included in some types of powers of appointment: “If the creating
instrument expressly directs that a power of appointment be
exercised by an instrument that makes a specific reference to the
power or to the instrument that created the power, the power can
be exercised only by an instrument containing the required
reference.” Section 631 addresses the circumstances in which a
court may excuse compliance with the terms of a power of
appointment. Relevant to the court’s decision in Eimers, section
16
may require the trust beneficiaries to specifically exercise and
refer to the power of appointment in any will they create to
designate who should get their trust shares. (Id. at p. 100.) The
trust in Eimers contained such a provision and required a specific
reference to the power of appointment. (Id. at p. 101.) The trust
beneficiary created a will that purported to give away his trust
shares, but that did not specifically refer to the power of
appointment, as required by the trust. (Ibid.) The court in
Eimers held that the probate court could not amend or reform the
beneficiary’s will to include a “specific reference” phrase to
preserve the validity of the gift. (Ibid.) The court concluded that
such a reformation would nullify the requirements of sections
630, 631, and 632. (Ibid.)
This case does not involve the failure of a trust beneficiary
to properly exercise his or her power of appointment, in violation
of sections 630, 631, and 632. This case involves sections 15205
and 621, and the issue is whether Alison, the trustor, created a
valid trust by naming a beneficiary, either by identifying the
beneficiary (which Perez no longer contends she did) or by
granting someone the power to name the beneficiary (which is
what Perez contends the language of the trust and the alleged
extrinsic evidence shows). And there are significant differences
between the language of sections 631 and 632, at issue in Eimers,
and language of section 621, at issue here. Sections 631 and 632
require the creating instrument to “expressly direct[ ]” that the
powerholder exercise the power of appointment by an instrument
that makes a “specific reference” to the power or the creating
631, subdivision (b), states that “[t]his section does not permit a
court to excuse compliance with a specific reference requirement
under Section 632.”
17
instrument. (§ 632.) In contrast, section 621 requires only that
the creating instrument “manifest the donor’s intent” to create a
power of appointment. (§ 621, subd. (a)(4).) Where, as here, the
trust is ambiguous, extrinsic evidence is an important
interpretive tool in determining whether the trust manifests that
intent.
Moreover, unlike the beneficiary in Eimers, Perez is not
seeking to reform the trust to add statutorily required language
to confer a power of appointment; Perez is claiming the language
of the trust and the extrinsic evidence of Alison’s intent support
his interpretation that the trust granted him that power. Perez
is not attempting to circumvent the requirements of sections
15205 or 621; he is attempting to meet them by showing, under
his (reasonable) interpretation, the trust creates a power of
appointment, and therefore is valid under section 15205,
subdivision (b)(2).
18
DISPOSITION
The order dismissing Perez’s petition is reversed. The
probate court is directed to vacate its order sustaining Richard’s
demurrer without leave to amend and to enter a new order
overruling the demurrer. Perez is entitled to recover his costs on
appeal.
SEGAL, J.
We concur:
PERLUSS, P. J.
FEUER, J.
19