Power of Appointment Flashcards
Power of Appointment
The Authority created in a person, called the power holder, to choose the individuals who shall take certain property and the manner in which they will take it.
Donor
Creator of the power of appointment - they may prescribe limits on the power
Power Holder
May not transfer a power of appointment. If a power holder dies without exercising or releasing a power, it lapses.
- The power holder is acting like the donor’s agent in appointing the property.
Permissible Appointees
Those whom may receive property from a power of appointment.
Takers in Default of Appointment
Persons designated to take the property if the power holder fails to effectively exercise the power.
General Power of Appointment
A general power of appointment is one that is exercisable in favor of the power holder themselves, their estate, their creditors, or the creditors of their estate.
Nongeneral Power of Appointment
A non general power is one that is exercisable in favor of a specified class of persons that does not include the power holder, their estate, their creditors, or the creditors of their estate.
Can Creditors Reach Appointive Assets
Under the theory that the power holder does not own the appointive property, if the power holder does not exercise their general power, their creditors cannot reach the property.
However, once the power holder exercises the power, their creditors can reach the appointive property as if the power holder were the owner.
Exclusionary Powers
A non general power is exclusionary if it may be exercised in favor of some permissible appointees to the exclusion of others.
Nonexclusionary Powers
A non general power is non exclusionary if it must be exercised in favor of all the permissible appointees.
Residuary Clause
A residuary clause includes any real or personal property over which the testator held a general power of appointment, unless a contrary intention appears in the will.
