Power of Appointment and Power of Attorney Flashcards
Power of Appointment Definitions: PoA, Donor, Donee, Objects, Takers in Default of Appointment and Appointees
Power of appointment : power/authority conferred by one person upon another to appoint the person(s) to receive an interest or estate in property.
Donor : one who creates the power
Donee : one who holds the power
Objects : persons in whose favor power may be exercised
Appointees : persons in whose favor power is exercised.
Takers in default of appointment : persons designated by donor to take in event power is not exercised by donee
Types and Categories of Powers
Powers are described both by reference to the persons to whom the property can be appointed and by reference to when the power can be exercised. Typically, a power will be described by the combination of these two characteristics.
(1) General power: a power exercisable in favor of the donee, his creditors, his estate, or the creditors of his estate
(2) Special power: a power not exercisable in favor of the donee, his creditors, his estate, or the creditors of his estate
(3) Testamentary power: a power exercisable only by the will of the donee
(4) Presently exercisable power: a power exercisable during the lifetime of a donee.
Discretionary Exercise
Whether to exercise a power is within the discretion of a donee. If the donee decides not to exercise, the property subject to the power passes to:
(1) the takers in default; OR
(2) the donor (or his heirs) if there are no takers in default.
Relationback
(1) For tax purposes, property subject to a general power is treated as if owned by the donee.
(2) With a special power, the donee is not typically treated as the owner of the appointive property. The exercise of a special power is said to relate back to the instrument creating the power, filling in a blank left by the donor; thus a creditor of the donee cannot attach property subject to the special power.
Creation of Power
(1) Donor’s intent: no magic words are required to create the power.
(2) Power to consume: when power is given to a person to use as much of the subject property as necessary for his own purpose, this is a general power.
Power of Attorney - Basic Definitions
(1) Power of attorney: document appointing another person as the agent of the principal to handle all or some of the principal’s affairs during the principal’s lifetime.
(2) Attorney in fact: the agent holding the power of attorney is the principal’s attorney in fact.
(3) Durable power of attorney: a power created with express language evidencing an intent that the power will continue to be effective after the incapacity of the principal.
Limitations of Power of an Attorney in Fact
(1) Power to make gifts: an attorney in fact can make inter vivos gifts of the principal’s property under a power of attorney only if the power to make gifts is expressly given in the instrument itself. It is very unlikely that an attorney-in-fact can ever execute or revoke the principal’s will in the principal’s absence.
(2) Springing power: a power may be made effective only after some subsequent event (such as the principal’s metal incapacity or physical disability).
(3) Intervening appointment of guardian or conservator: unless the power specifically provides otherwise, the appointment of a guardian or conservator terminates any authority of the attorneyin-fact that relates to matters within the scope of the guardianship or conservatorship.
Durable powers of attorney
(1) Execution: a durable power of attorney must be executed with the same formalities as pertain to the execution of a will.
(2) Recording: a durable power must be recorded in the land records of the county of the principal’s residence at the time the instrument is recorded.
Intentional interference with inheritance
A tort action that has neither been adopted nor expressly rejected in South Carolina.
Simultaneous Death Act
If the distribution of property (other than by intestacy) depends on the order in which two or more persons died, and it cannot be proven which died first,
(1) the property of each person is distributed as though that person had survived.
(2) if all joint tenants with right of survivorship die, the joint tenancy is divided into as many shares as there were joint tenants, and each estate gets a share.
