The Delaware Chancery Court [In re Estate of Tigani, C.A No. 7339-ML (Del. Ch. Ct. Feb. 12, 2016)] has confirmed that the donee of a limited testamentary power of appointment may not irrevocably, immediately, and effectively exercise it inter vivos by contract. Tigani was not about whether a contract-to-exercise might ultimately be enforceable but whether actual execution of the “contract” was a present exercise of the power such that the takers in default of exercise, in this case the designated trust remaindermen, lost their status as trust beneficiaries to the extent they were not also appointees. Here are the facts: Widow had three children (D1, D2, D3). She was trustee of her late husband’s trust, its current beneficiary, and donee of a limited testamentary power of appointment. The three were takers in default of exercise and permissible appointees. She and (D3) had a falling out. D3 sued widow for breach of trust. Widow “contracted” with D1 and D2 to exercise the power in their favor. If the power had been effectively and immediately exercised, D3 would no longer have been a taker in default. Being no longer a trust beneficiary as a consequence, he would lack standing to continue the equity action against widow. The Master essentially said to widow: “Nice try, but...” First, the power is not presently exercisable, it is only exercisable at the death of the donee; second, in this case enforcement of the “contract” would constitute a fraud on the power as widow though not a permissible appointee would nonetheless be benefiting from the power’s exercise, D1 and D2 having agreed as consideration for the exercise in their favor to assist widow for life with care and maintenance. Relevant sections of Loring and Rounds: A Trustee’s Handbook: §5.1 (who qualifies as a trust beneficiary); §8.1.1 (limited testamentary powers); §8.15.26 (fraud on special powers). Section 5.1 is reproduced in its entirety below.