One of the most important components of an estate plan is the power of appointment. The power of appointment is one of the fundamental tools that allows complex legal transactions to take place and be honored by courts and governmental agencies. You might be considering using power of appointment to give another individual specific privileges regarding your property, which is a common occurrence in many wills and other legal documents.
In the broadest sense, a power of appointment is a right or set of rights granted to an individual so that the individual may make decisions regarding an asset. This can take many forms, but commonly it is used to allow an individual other than the owner of an asset to dispose of the asset for the benefit of himself or others.
Powers of appointment may be more specific or have surprising recipients. The creditor of an estate, for instance, may be granted power of appointment in some cases.
There are also some derivative forms of the power of appointment. A limited power of appointment allows for the holder to exercise the implied power for anyone other than him or herself. Similarly, a special power of appointment allows for the holder to exercise the power only on the behalf of a certain person or group of persons, but still not for him or herself.
Powers of appointment have many uses in estate planning and will creation. If you are considering utilizing a power of appointment, enlisting the guidance of an experienced attorney can help you determine the best way to achieve your goals while operating within the law and protecting your rights.
Source: Findlaw.com, “Power Of Appointment,” accessed Nov. 08, 2016
