Wilmington Trust Company v. Mills, C.A. No. 2019-0690-JTL

Background

In 1934 Felix du Pont created Trust No. 2108, granting his daughter Alice a limited power of appointment (Original Limited Power) limited to her widower and her lawful issue, with a default distribution if she failed to appoint.
Alice exercised that power several times (1973, 1976, 1983, 1986). The 1986 exercise created separate one‑third trusts for each child (including Phyllis) and added a proviso allowing Phyllis to appoint her share “to the extent permissible” to charitable organizations (Second Charitable Proviso) and a Final Default Provision for ineffective appointments.
In 2006 Phyllis executed an instrument purporting to appoint her one‑third outright to The Wyeth Foundation (2006 Exercise), relying on the Second Charitable Proviso; the trustee acknowledged the instrument.
Phyllis died in 2019 without issue; James Mills (sibling) challenged the validity of the 2006 Exercise as exceeding the scope of the Original Limited Power; the trustee filed for instructions and parties filed cross‑motions for judgment on the pleadings.
The court concluded that under the common‑law rule (codified in Delaware until 2019) a holder of a limited power cannot add new objects; therefore Phyllis’s 2006 appointment to a charity was invalid. Because the 1986 exercise itself was valid and contained a Final Default Provision for ineffective appointments, Phyllis’s share passes to her then‑surviving issue (James and Mary).

Issues

Issue	Plaintiff's Argument (James)	Defendant's Argument (Foundation / Executor)	Held
Whether Phyllis could lawfully appoint her trust to a charity (i.e., add an appointee outside the Original Limited Power)	2006 Exercise invalid — a limited power cannot be used to add appointees beyond the original class	2006 Exercise valid under the 1986 Second Charitable Proviso; language permits charitable appointment	Held for James: common‑law rule bars adding appointees; 2006 appointment to charity invalid
Validity of the 1986 Exercise that created the Second Charitable Proviso	1986 valid; phrase “to the extent permissible” makes charitable appointment conditional and lawful only if permissible at exercise	1986 ambiguous or insufficient; alternatively invalid	Held for defendants in part: 1986 Exercise is valid and its “to the extent permissible” language permits only permissive future exercises; it does not validate Phyllis’s 2006 charity appointment
Disposition of the Phyllis Trust after invalid appointment	Trust property should pass under 1986 Final Default Provision to Alice’s then‑surviving issue (James and Mary)	Foundation/Executor: property should follow original default or pass to estate/Foundation	Held for James: Final Default Provision in 1986 controls — Phyllis’s share vests in James and Mary per stirpes
Whether equitable defenses (laches, estoppel, waiver) bar James’s challenge	Timely: James raised challenge promptly after Phyllis’s death; no undue delay or prejudice	James knew or should have known earlier and unreasonably delayed; equities bar relief	Held for James: pleadings insufficient to establish laches or related defenses; claims not barred

Key Cases Cited

Equitable Tr. Co. v. Foulke, 40 A.2d 713 (Del. Ch. 1945) (limited power holder may not add new objects; excess appointment invalid but courts may consider donor's scheme to resolve disposition)
Norton v. K‑Sea Transp. P’rs L.P., 67 A.3d 354 (Del. 2013) (contract and instrument interpretation governed by plain meaning of unambiguous terms)
AT&T Corp. v. Lillis, 953 A.2d 241 (Del. 2008) (use plain meaning of words to ascertain parties’ intent; extrinsic evidence excluded for unambiguous instruments)
In re Peierls Fam. Inter Vivos Tr., 77 A.3d 249 (Del. 2013) (court’s trust interpretation goal is to effectuate settlor’s intent using instrument language)
Wilmington Tr. Co. v. Annan, 531 A.2d 1209 (Del. Ch. 1987) (extrinsic evidence not admissible to vary clear, unambiguous trust provisions)