power of appointment

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Related to power of appointment: General Power Of Appointment

Appointment, Power of

A power that is conferred upon a donee to dispose of the donor's property by nominating and selecting one or more third-parties to receive it. The property may consist of tangible items like cars, boats, and household items, or it may consist of an intangible interest in property, such as the right to receive dividend income from stocks.

A power of appointment may be transferred only in writing, such as by deed, trust, or will. Donees who receive an oral promise to be given a power of appointment, however, may bring an action for Promissory Estoppel if they have relied to their detriment on that promise. In no case will a court find that a power of appointment had been created unless the donor's intent to create the power is demonstrated; the person who would hold the power is indicated; the circumstances under which the power could be exercised are identified; and the property that is subject to the power is specified.

No particular semantic formula is necessary for the creation of a power of appointment. Any written expression, however informal, will suffice so long as it clearly indicates an intention to create such a power. Thus, a power of appointment may be created by implication. For example, a devise or bequest of property to a person as he or she may designate to receive it or subsequently transfer it gives that person a power of appointment. A testamentary gift to a donee for life, to be at his or her disposal, or with a right to dispose of it at the donor's death, confers a power of appointment. For example, if a donor gives the donee an automobile to use as the donee sees fit during the donee's lifetime, the donor has given the donee a power of appointment over the automobile. Similarly, if a donor gives the donee authority to dispose of the automobile upon the donor's death, the donor has given the donee a power of appointment over the automobile.

There are three classes of powers of appointment. General powers of appointment give donees the power to dispose of the property in any way they see fit. Limited powers of appointment, also known as special powers of appointment, give donees the power to transfer the property to a specified class of persons identified in the instrument creating the power. Testamentary powers of appointment are powers of appointment that typically are created by wills.

power of appointment

n. the right to leave property by will, transfer, gift or distribution under a trust. Such a power is often found in a trust in which each of the trustors (the creators of the trust, usually a husband and wife) is empowered to write a will leaving his or her share (or some part) to someone. If the power of appointment is not used then it expires on the death of the person with the power.

power of appointment

in property law, authority to appoint persons either from a particular class ‘special power’ or selected by the donee of the power ‘general power’ to take an estate or interest in property.
References in periodicals archive ?
The 76/77 rulings addressed whether any trust assets were includible in a deceased trustee's gross estate as being subject to a general power of appointment under [section]2041.
Upon reaching forty (40) years of age, each Beneficiary shall have the power to appoint during his or her lifetime all or any part of the principal of the GST Nonexempt Trust held for his or her benefit (but not the GST Exempt Trust (if any) held for his or her benefit) to and among one or more of Trustor's descendants (other than the Beneficiary, his or her estate, his or her creditors, and creditors of his or her estate), in trust or otherwise, in any proportion and manner, upon such terms and conditions, and without regard to equality and to the exclusion of any, as the Beneficiary may appoint by a signed writing that is acknowledged before a notary public specifically referring to this power of appointment.
The purpose for this article is to recommend updated power of appointment legislation for New York.
The power of appointment in this case could be exercised only in favor of a limited class of people, which did not include any of the groups described in Section 2041.
The judgments had great bearing over the Judicial appointing process, though it provided effective mechanism of checks and control over the executive power in appointments, by specifying the role of the President, it otherwise allowed the Chief Justice to have final say in the whole process, and inadvertently or otherwise, the whole power of appointment fall into the hands of the Chief Justice of the Supreme Court (Khan, Hamid 2007 p.
Otherwise, the grantor's spouse will possess a general power of appointment over the trust property, causing it to be included in the spouse's estate.
However, termination may be delayed for custodianships established by a revocable nomination of a custodian (not later than age 25), an irrevocable lifetime gift (not later than age 21), an irrevocable exercise of a power of appointment (not later than age 25), a transfer authorized in a will or trust (not later than age 25), or any other transfer (not later than age 25 or earlier termination).
22) When he died, his will purported to exercise the power of appointment by devising his wife's quarter section, along with his own three quarter sections, to a trust for his children to extend as long as the rule against perpetuities would permit.
Subject to the exceptions noted below, the income beneficiary would be deemed to hold a general power of appointment if she had the power to invade the trust corpus for the benefit of herself, her estate, her creditors, or the creditors of her estate (any one of the foregoing is sufficient).
6) One type of marital deduction trust is also referred to as a "power of appointment" trust, in that the surviving spouse is given a general power of appointment over the trust during lifetime or at death.
The limitation permitted her to exercise her power of appointment only in favor of Max's descendants, that is, Max and Erla's children and grandchildren.
It amends the definition of "beneficiary" to clarify that a permissible appointee is not a beneficiary unless the power of appointment is irrevocably exercised in favor of the appointee.