Power of appointment

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The Law of Wills, Trusts and Inheritance

Part of the common law series
Wills
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Joint wills and mutual wills · Will contract
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Generic Terms:
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Special needs trust: (general)/(U.S.)
Doctrines governing trusts
Pour-over will · Cy pres doctrine
Other related topics
Living Wills (advance directives)
Inheritance
Intestacy · Testator · Probate
Power of appointment
Simultaneous death · Slayer rule
Disclaimer of interest
Other areas of the Common Law
Contract law · Tort law · Property law
Criminal law · Evidence

A power of appointment is a term most frequently used in the law of wills to describe the ability of the testator (the person writing the will) to select a person who will be given the authority to dispose of certain property under the will. Although any person can exercise this power at any time during their life, its use is rare outside of a will. The power is divided into two broad categories: general powers of appointment and Special powers of appointment. The holder of a power of appointment differs from the trustee of a trust in that the former has no obligation to manage the property for the generation of income, but need only distribute it.

[edit] General power of appointment

A general power of appointment allows the holder of the power to distribute the designated property over which the power may be exercised to anyone. For example, if a donor grants their attorney a general power of appointment over their furniture, the attorney will then be able to distribute the property to anyone, including the donor and the donor's creditors. If the recipient of the power refuses to distribute any property, then the designated property will pass to the donor's residuary estate, or if none has been established, by intestacy. The donor may avoid this by including a default provision directing the property (or the power of appointment over it) to someone else if the recipient of the power refuses to exercise it.

[edit] Special power of appointment

A special power of appointment allows the recipient to distribute the designated property among a specified group or class of people. For example, a testator might grant his brother the special power to distribute property among the testator's three children. The brother would then have the authority to choose which of the testator's children gets which property. Unlike a general power of appointment, the refusal of the appointed party to exercise a specific power of appointment causes the designated property to revert as a gift to the members of the group or class.