If you are considering a will as your main source of estate management, you have likely been asked or read about the powers of appointment. These positions differ from trustees and are usually present in any will. Knowing the different types of power of appointments can make carrying out your final wishes easier and less stressful for your loved ones.
The power of appointment comes in three basic types including general, special and testamentary power of appointment. While your donees may understand their appointment ability, you may not. Figuring out which power of appointment works best for your specific situation and those involved can help ensure that your property is distributed properly.
General power of appointment essentially gives the donee the power to distribute or hold ownership of property as they see fit. This can be done for anyone's benefit including the donee themselves. It is like saying that your nephew Joe gets your comic book collection to distribute, sell or keep. With a special power of appointment, the donee has the ability to distribute property among a specific group of people. This is usually the case when a person dies and leaves their spouse to divide some type of property among the children. With special power of appointment, the benefit goes to the specific group and not the donee. In the comic book scenario, the doner grants their spouse the power to distribute the comic book collection as they see fit among their children.
The third type of power of appointment is testamentary. This type of power grants the donee the ability to exercise whatever distribution role was given to them upon their death. This type of power of appointment is not common and requires certain limiting language to be added to the will.
Knowing the different powers of appointment and their various abilities can help you efficiently and effectively plan your will. If you are considering a will, speaking to a trusted elder law attorney may help.