Powers of Appointment

Question 1

What is a power of appointment?

Answer 1

An authority created in a donee enabling the donee to designate the persons who will take certain property and the manner in which they will take.

Question 2

What is a general power of appointment?

Answer 2

A power of appointment where the settlor doesn’t leave any conditions or restrictions.

Exercisable in favor of the donee, her estate, her creditors, or the creditors of her estate.

Question 3

What is a special power of appointment?

Answer 3

When the settlor leaves specifications. Exercisable in favor of a specified class of persons that does not include the donee, her estate, her creditors, or the creditors of her estate.

Question 4

What is a testamentary power of appointment?

Answer 4

Can only be exercised by the donee’s will.

Power is effectively exercised in an instrument only if:

1. Instrument is valid under state law;
2. Intent to exercise the power is consistent with
   any conditions; and
3. The appointment is permissible – authorized by
   grantor (general residuary clause in a will - blanket
   exercise clause).