APPOINTMENT, POWER OF
A power that is conferred upon a donee to dispose of the donor’s property by nominating and selecting one or more third-parties to receive it. The property may consist of tangible items like cars, boats, and household items, or it may consist of an intangible interest in property, such as the right to receive dividend income from stocks.
A power of appointment may be transferred
only in writing, such as by deed, trust, or will.
Donees who receive an oral promise to be given
a power of appointment, however, may bring an
action for PROMISSORY ESTOPPEL if they have
relied to their detriment on that promise. In no
case will a court find that a power of appoint-
ment had been created unless the donor’s intent
to create the power is demonstrated; the person
who would hold the power is indicated; the cir-
cumstances under which the power could be
exercised are identified; and the property that is
subject to the power is specified.
No particular semantic formula is necessary for the creation of a power of appointment. Any written expression, however informal, will suffice
so long as it clearly indicates an intention to
create such a power. Thus, a power of appointment
may be created by implication. For example,
a devise or bequest of property to a person
as he or she may designate to receive it or subsequently
transfer it gives that person a power of
appointment. A testamentary gift to a donee for
life, to be at his or her disposal, or with a right to
dispose of it at the donor’s death, confers a
power of appointment. For example, if a donor
gives the donee an automobile to use as the
donee sees fit during the donee’s lifetime, the
donor has given the donee a power of appointment
over the automobile. Similarly, if a donor
gives the donee authority to dispose of the automobile
upon the donor’s death, the donor has
given the donee a power of appointment over
the automobile.
There are three classes of powers of appointment.
General powers of appointment give
donees the power to dispose of the property in
any way they see fit. Limited powers of appointment,
also known as special powers of appointment,
give donees the power to transfer the
property to a specified class of persons identified
in the instrument creating the power. Testamentary
powers of appointment are powers of
appointment that typically are created by wills.
