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Duties of the Donee of a mere power - Coggle Diagram
Duties of the Donee of a mere power
No duty to exercise power
Donee of mere power of appointment is under no duty to exercise the power and make appointments if favour of potential objects.
No duty to consider width of field
If donee of mere power does decide to exercise it, has no duty to survey and consider the range of potential objects of the power before exercising his discretion in favour of any one object.
May appoint to whomsoever they wish provided that they are within the class
Duty not to delegate the exercise of the power
The donee must not delegate the power of appointment to others except in so far as this is authorized by the terms of the grant: delegatus non potest delegare (a delegate has no power to delegate).
Duty not to exercise the power excessively
The donee of the power is under a duty to make appointments only to those who are objects of the power. Any appointments which are excessive, i.e. appointments to those outside of the class of objects, will be void.
Failure to exercise a mere power
Since a mere power of appointment is purely discretionary in nature, donee under no obligation to exercise it, and the objects have no rights to the fund unless it is appointed to them.
If power is not exercised, fund passes to those entitled in default.
Usually happens where donee been granted a power but has died without making any valid appointments
The power of appointment may itself contain an express stipulation of who is to receive the fund if no appointments are made. Such an express provision will determine how the fund should be distributed.
This will result in either
An express gift over in default
Or if there is no express gift over in default it may result in an implied trust in default
Duty not to exercise power fraudulently
Even if the donee exercises the power and makes appointments which appear to be within the scope of the power, they will be void if the exercise amounts to a ‘fraud on the power’.