In California, a trustor (person who creates a trust) can confer a “power of appointment” on trust beneficiaries, empowering them to designate to whom they want to give their shares of the trust. The trustor can require trust beneficiaries to specifically exercise and refer to the power of appointment in any will they create to
Many California will and trust disputes arise from ambiguity in the document with respect to who is entitled to an asset. Maybe the document was hazy from the start or perhaps circumstances have changed such that the rightful recipient is no longer clear.
Two cases decided in the California Court of Appeal last year illustrate the conflicts that surface over interpreting wills and trusts. In both cases, coincidentally involving 35 percent shares, the appellate courts overruled the trial courts, nicely illustrating the complexities of will and trust interpretation. California Probate Code sections 21101-21118, though obscure, can be pivotal in the analysis.