Trust Deed - Gift Inter Vivos. § 220 said Isabel Hart, and that she shall be forthwith entitled thereto. The deed also provided that if the said Isabel Hart died during the lifetime of Benjamin Hart, leaving issue, the corpus of the trust fund was subject to her power of appointment, and in default thereof the said fund" shall forthwith be transferred and conveyed to the said issue equally; " that if the said Isabel Hart died during the lifetime of the said Benjamin Hart, leaving no issue, then the whole fund "shall forthwith upon her death be transferred and conveyed unto the said Benjamin Hart, his heirs, executors, administrators, and assigns absolutely and forever." It was further provided that should the projected marriage between Isabel Hart and the Frenchman not take place within three months from the execution of the deed of trust, the deed shall at once become void and of no effect and the corpus of the trust shall immediately revert and belong to the said Benjamin Hart in fee simple absolute. The trust deed was signed by all the interested parties (including the Frenchman) and the projected marriage took place within the prescribed time, and thereafter the parties executed, on December 17, 1894, an instrument reciting the fact of the marriage and ratifying and confirming the said deed of trust as of the 14th day of November, 1894, the date of the marriage. Isabel Hart survived the said Benjamin Hart, hence the conditions of the deed providing that the corpus of the trust fund shall forthwith upon the death of Benjamin Hart, vest in Isabel Hart, came into effect. It also appears that the said Isabel Hart had two children living at the time Benjamin Hart died. The surrogate entered an order declaring the transfer exempt, holding that " The transfer effected by the deed of trust was not intended to take effect in posses § 220 Id.; Not Evidence to Evade Statute. sion or enjoyment at or after the death of Benjamin Hart, and is therefore not subject to tax." The Appellate Division affirmed the order of the surrogate without opinion, 129 App. Div. 906. The provisions of the trust deed whereby the trust was to terminate and the title to the fund vest absolutely in the appointees of, or the issue of Isabel Hart if she died in the lifetime of the donor, leaving issue, or if she died in his lifetime leaving no issue, then the corpus of the fund to revert to the donor, were doubtless considered by the surrogate, although no reference thereto is made in his opinion. The fact that the said Isabel Hart survived the donor, so that neither of the foregoing provisions could become operative, cannot be considered alone in determining the effect of this trust deed and the nature of the transfers thereunder. By the terms of this deed an absolute gift to the appointees or issue of Isabel Hart, or a reversion of the title to the donor, was provided for if the said Isabel Hart died in the lifetime of the donor, and it would seem, therefore, in view of all the provisions of this trust deed, that it was not, at the time of its execution, a gift or grant intended to take effect at or after the donor's death, although the happening of subsequent events might, when considered alone, give it that effect. 180. Trust Deed When Not Evidence of Devise to Evade the Statute. Where a decedent disposed of his property by trust deed executed in 1869 and lived and enjoyed the net income therefrom until 1906, it cannot be suggested that the conveyance was a device to evade the Transfer Tax Law not then enacted. Matter of La Farge, N. Y. Law Journal, November 17, 1908. CHAPTER VI. TAXABLE TRANSFERS - § 220, TAX LAW-POWER OF APPOINTMENT. 181. Source of title by exercise of power of appointment. 182. Effect of general power of ap- 183. Transfers by exercise of. 185. Powers created by will. 187. Powers created by deed. 190. Erroneous payment cannot be 191. When the power is deemed to have been exercised. 192. Exercise of power, which merely continues the remainder where it was vested under the will creating the power, is not a taxable transfer. 193. Taxability of transfer where funds over which power is exercised are without this State. 194. When remaindermen not 199. The Cooksey and Lansing cases, 182 N. Y., pp. 92 and 238-right of appointee to elect. 200. Distinction between the Cooksey and Lansing cases. 201. Appointee should be notified 202. Election by appointee. 205. Effect of diminishing vested bound by acts of life ten- 206. When power is exercised by ant-failing to exercise a resident, situs of prop power. erty immaterial. 207. Power exercised by nonresi- 211. When power of donee to ap dent decedent over funds in point is limited. 212. Transfers by appointment under various wills considered. 213. Decision affecting transfers upon the exercise of power of appointment. 214. Decisions prior to the amendment of 1897. 181. Source of Title, by Exercise of Power of Appointment. Notwithstanding the common-law rule that estates created by the execution of a power take effect as if created by the original deed, for some purposes, the execution of the power is considered the source of title, and the United States Supreme Court will follow the decision of the State court in determining that the essential thing to transfer an estate is the exercise of a power of appointment. The imposition of a transfer or inheritance tax under chapter 284, Laws of New York 1897, on the exercise of a power of appointment in the same manner as though the estate passing thereby belonged absolutely to the person exercising the power, does not, although the power was created prior to the act, deprive the person taking by appointment, and who would not otherwise have taken the estate, of his property without due process of law in violation of the Fourteenth Amendment; nor does it violate any contract within the protection of the impairment clause of the Federal Constitution. Chanler v. Kelsey, 205 U. S. 466. 182. Effect of General Power of Appointment. The effect of conferring a general power of appointment is to invest its donee with a power of disposition Effect of Transfers by. § 220 as broad as though she was disposing of her own property. In its exercise she, in fact, makes the gift or bequest to persons of her own selection. Isham v N. Y. Assn. for Poor, 177 N. Y. 218. Under the Real Property Law," a power is an authority to do an act in relation to real property, or to the creation or revocation of an estate therein, or a charge thereon, which the owner, granting or reserving the power, might himself lawfully perform." (Laws of 1896, chap. 547, § 111. Now § 131 of art. 5, chap. 50, of the Consolidated Laws, being chap. 52 of the Laws of 1909.) This provision applies also to powers concerning personal property. Matter of Moehring, 154 N. Y. 423-427; Matter of Cooksey, 182 N. Y. 92. As to what is a sufficient execution by will of a power of appointment, see note to Lane v. Lane, 64 L. R. A. 849-919, where this subject is discussed under the following headings: (a) How Intent to Exercise Power Evidenced, (b) Validity of Attempt to Exercise Power, (c) Relief in Equity Against Defective Exercise of Power, (d) When Power in Effect an Absolute Gift, and (e) Miscellaneous Cases. 183. Transfers, by the Exercise of. Subdivision 5, now subdivision 6, of section 220, Tax Law, provides that Whenever any person or corporation shall exercise a power of appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by |