Powers of Appointment Flashcards
Power of appointment
allows for flexibility in estate planning by allowing for unanticipated circumstances that may occur after a will or trust has been created
Donor
creates the power of appointment in the donee
Donee
holds the power of appointment and can transfer the appointive property to objects of power
Objects
Permissible appointees selected by the donee
Inter vivos power of appointment
created by language like “the donee may appoint by deed”
Testamentary power of appointment
Created by language like “the donee may appoint by the will”
Both inter vivos + testamentary power of appointment
Created by language like “the donee may appoint by deed or by will”
Exclusive power
Donee appoints to some objects, and excludes others
Non-exclusive power
donee to appoint all permissible appointees
General power of appointment
Includes: (1) the donee, (2) the donee’s estate, (3) creditor of either
Income to the property is taxable to the donee
Appointments are gifts from donee to object
Creditors of donee COULD reach the property
Nongeneral power of appointment
Object is anyone NOT involved with the donee
Creditors cannot reach (except maybe child support)
Failure to appoint
The holder of a limited power cannot add members to the class of permitted appointees
Intent of donor overrides the intent of the donee
Default power of appointment
Nongeneral: permissible appointees take, unless too numerous
General: Donor takes
Capture doctrine
If the donee attempted to appoint by will and failed, and the will indicate a different intent to assume control of the appointive property, it can pass through residuary clause
Release
Releases the right to appoint
