Power of Appointment Act

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UNIFORM POWERS OF APPOINTMENT ACT*

Drafted by the

NATIONAL CONFERENCE OF COMMISSIONERS


ON UNIFORM STATE LAWS

and by it

APPROVED AND RECOMMENDED FOR ENACTMENT


IN ALL THE STATES

at its

ANNUAL CONFERENCE
MEETING IN ITS ONE-HUNDRED-AND-TWENTY-SECOND YEAR
BOSTON, MASSACHUSETTS
JULY 6 - JULY 12, 2013

WITHOUT PREFATORY NOTE OR COMMENTS

COPYRIGHT 2013
By
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS

July 16, 2013

*The following text is subject to revision by the Committee on Style of the National Conference of Commissioners on Uniform State Laws.

UNIFORM POWERS OF APPOINTMENT ACT


[ARTICLE] 1
GENERAL PROVISIONS
SECTION 101. SHORT TITLE. This [act] may be cited as the Uniform Powers of
Appointment Act.
SECTION 102. DEFINITIONS. In this [act]:
(1) Appointee means a person to which a powerholder makes an appointment of
appointive property.
(2) Appointive property means the property or property interest subject to a power of
appointment.
(3) Blanket-exercise clause means a clause in an instrument which exercises a power of
appointment and is not a specific-exercise clause. The term includes a clause that:
(A) expressly uses the words any power in exercising any power of
appointment the powerholder has;
(B) expressly uses the words any property in appointing any property over
which the powerholder has a power of appointment; or
(C) disposes of all property subject to disposition by the powerholder.
(4) Donor means a person that creates a power of appointment.
(5) Exclusionary power of appointment means a power of appointment exercisable in
favor of any one or more of the permissible appointees to the exclusion of the other permissible
appointees.
(6) General power of appointment means a power of appointment exercisable in favor
of the powerholder, the powerholders estate, a creditor of the powerholder, or a creditor of the

powerholders estate.
(7) Gift-in-default clause means a clause identifying a taker in default of appointment.
(8) Impermissible appointee means a person that is not a permissible appointee.
(9) Instrument means a [writing][record].
(10) Nongeneral power of appointment means a power of appointment that is not a
general power of appointment.
(11) Permissible appointee means a person in whose favor a powerholder may exercise
a power of appointment.
(12) Person means an individual, estate, trust, business or nonprofit entity, public
corporation, government or governmental subdivision, agency, or instrumentality, or other legal
entity.
(13) Power of appointment means a power that enables a powerholder acting in a
nonfiduciary capacity to designate a recipient of an ownership interest in or another power of
appointment over the appointive property. The term does not include a power of attorney.
(14) Powerholder means a person in which a donor creates a power of appointment.
(15) Presently exercisable power of appointment means a power of appointment
exercisable by the powerholder at the time in question. The term:
(A) includes a power of appointment not exercisable until the occurrence of a
specified event, the satisfaction of an ascertainable standard, or the passage of a specified time
only after:
(i) the occurrence of the specified event;
(ii) the satisfaction of the ascertainable standard; or
(iii) the passage of the specified time; and

(B) does not include a power exercisable only at the powerholders death.
(16) [Record means information that is inscribed on a tangible medium or that is stored
in an electronic or other medium and is retrievable in perceivable form.]
[(17)] Specific-exercise clause means a clause in an instrument which specifically
refers to and exercises a particular power of appointment.
[(17)] [(18)] Taker in default of appointment means a person that takes part or all of the
appointive property to the extent the powerholder does not effectively exercise the power of
appointment.
[(18)] [(19)] Terms of an instrument means the manifestation of the intent of the maker
of the instrument regarding the instruments provisions as expressed in the instrument or as may
be established by other evidence that would be admissible in a legal proceeding.
Legislative Note: A state should choose in paragraph (9) whether to define instrument as a
writing or as a record. The choice will determine what kind of instruments may be used to
create, revoke, amend, or exercise a power of appointment. If a state defines instrument as a
record, the state should include the definition of record as paragraph (16) and renumber the
subsequent paragraphs as paragraphs 17-19.
SECTION 103. GOVERNING LAW. Unless the terms of the instrument creating a
power of appointment manifest a contrary intent:
(1) the creation, revocation, or amendment of the power is governed by the law of the
donors domicile at the relevant time; and
(2) the exercise, release, or disclaimer of the power, or the revocation or amendment of
the exercise, release, or disclaimer of the power, is governed by the law of the powerholders
domicile at the relevant time.
SECTION 104. COMMON LAW AND PRINCIPLES OF EQUITY. The common
law and principles of equity supplement this [act], except to the extent modified by this [act] or

law of this state other than this [act].


[ARTICLE] 2
CREATION, REVOCATION, AND AMENDMENT OF POWER OF APPOINTMENT
SECTION 201. CREATION OF POWER OF APPOINTMENT.
(a) A power of appointment is created only if:
(1) the instrument creating the power:
(A) is valid under applicable law; and
(B) except as otherwise provided in subsection (b), transfers the
appointive property; and
(2) the terms of the instrument creating the power manifest the donors intent to
create, in a powerholder, a power of appointment over the appointive property exercisable in
favor of a permissible appointee.
(b) Subsection (a)(1)(B) does not apply to the creation of a power of appointment by the
exercise of a power of appointment.
(c) A power of appointment may not be created in a deceased individual.
(d) Subject to an applicable rule against perpetuities, a power of appointment may be
created in an unborn or unascertained powerholder.
SECTION 202. NONTRANSFERABILITY. A powerholder may not transfer a power
of appointment. If the powerholder dies without exercising or releasing the power, the power
lapses.
SECTION 203. PRESUMPTION OF UNLIMITED AUTHORITY. Subject to
Section 205, and unless the terms of the instrument creating a power of appointment manifest a
contrary intent, the power is:

(1) presently exercisable;


(2) exclusionary; and
(3) except as otherwise provided in Section 204, general.
SECTION 204. EXCEPTION TO PRESUMPTION OF UNLIMITED AUTHORITY.
Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the
power is nongeneral if:
(1) the power is exercisable only at the powerholders death; and
(2) the permissible appointees of the power are a defined and limited class that does not
include the powerholders estate, the powerholders creditors, or the creditors of the powerholders
estate.
SECTION 205. RULES OF CLASSIFICATION.
(a) In this section, adverse party means a person with a substantial beneficial interest in
property which would be affected adversely by a powerholders exercise or nonexercise of a
power of appointment in favor of the powerholder, the powerholders estate, a creditor of the
powerholder, or a creditor of the powerholders estate.
(b) If a powerholder may exercise a power of appointment only with the consent or
joinder of an adverse party, the power is nongeneral.
(c) If the permissible appointees of a power of appointment are not defined and limited,
the power is exclusionary.
SECTION 206. POWER TO REVOKE OR AMEND. A donor may revoke or amend
a power of appointment only to the extent that:
(1) the instrument creating the power is revocable by the donor; or
(2) the donor reserves a power of revocation or amendment in the instrument creating the

power of appointment.

[ARTICLE] 3
EXERCISE OF POWER OF APPOINTMENT
SECTION 301. REQUISITES FOR EXERCISE OF POWER OF
APPOINTMENT. A power of appointment is exercised only:
(1) if the instrument exercising the power is valid under applicable law;
(2) if the terms of the instrument exercising the power:
(A) manifest the powerholders intent to exercise the power; and
(B) subject to Section 304, satisfy the requirements of exercise, if any, imposed
by the donor; and
(3) to the extent the appointment is a permissible exercise of the power.
SECTION 302. INTENT TO EXERCISE: DETERMINING INTENT FROM
RESIDUARY CLAUSE.
(a) In this section:
(1) Residuary clause does not include a residuary clause containing a blanketexercise clause or a specific-exercise clause.
(2) Will includes a codicil and a testamentary instrument that revises another
will.
(b) A residuary clause in a powerholders will, or a comparable clause in the
powerholders revocable trust, manifests the powerholders intent to exercise a power of
appointment only if:
(1) the terms of the instrument containing the residuary clause do not manifest a
contrary intent;

(2) the power is a general power exercisable in favor of the powerholders estate;
(3) there is no gift-in-default clause or it is ineffective; and
(4) the powerholder did not release the power.
SECTION 303. INTENT TO EXERCISE: AFTER-ACQUIRED POWER. Unless
the terms of the instrument exercising a power of appointment manifest a contrary intent:
(1) except as otherwise provided in paragraph (2), a blanket-exercise clause extends to a
power acquired by the powerholder after executing the instrument containing the clause; and
(2) if the powerholder is also the donor of the power, the clause does not extend to the
power unless there is no gift-in-default clause or it is ineffective.
SECTION 304. SUBSTANTIAL COMPLIANCE WITH DONOR-IMPOSED
FORMAL REQUIREMENT. A powerholders substantial compliance with a formal
requirement of an appointment imposed by the donor, including a requirement that the
instrument exercising the power of appointment make reference or specific reference to the
power, is sufficient if:
(1) the powerholder knows of and intends to exercise the power; and
(2) the powerholders manner of attempted exercise of the power does not impair a
material purpose of the donor in imposing the requirement.
SECTION 305. PERMISSIBLE APPOINTMENT.
(a) A powerholder of a general power of appointment that permits appointment to the
powerholder or the powerholders estate may make any appointment, including an appointment
in trust or creating a new power of appointment, that the powerholder could make in disposing of
the powerholders own property.
(b) A powerholder of a general power of appointment that permits appointment only to

the creditors of the powerholder or of the powerholders estate is restricted to appointing to those
creditors.
(c) Unless the terms of the instrument creating a power of appointment manifest a
contrary intent, the powerholder of a nongeneral power may:
(1) make an appointment in any form, including an appointment in trust, in favor
of a permissible appointee;
(2) create a general power in a permissible appointee; or
(3) create a nongeneral power in any person to appoint to one or more of the
permissible appointees of the original nongeneral power.
SECTION 306. APPOINTMENT TO DECEASED APPOINTEE OR
PERMISSIBLE APPOINTEES DESCENDANT.
(a) [Subject to [refer to state law on antilapse], an] [An] appointment to a deceased
appointee is ineffective.
(b) Unless the terms of the instrument creating a power of appointment manifest a
contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or
create a new power of appointment in, a descendant of a deceased permissible appointee whether
or not the descendant is described by the donor as a permissible appointee.
Legislative Note: A state that has extended antilapse protection to appointees should include the
opening clause of subsection (a) (Subject to). A state that has not extended antilapse
protection to appointees is strongly encouraged to do so. See, e.g., Uniform Probate Code
Sections 2-603(a)(5), 2-603(a)(6), and 2-707(a)(7).
SECTION 307. IMPERMISSIBLE APPOINTMENT.
(a) Except as otherwise provided in Section 306, an exercise of a power of appointment
in favor of an impermissible appointee is ineffective.
(b) An exercise of a power of appointment in favor of a permissible appointee is

ineffective to the extent the appointment is a fraud on the power.


SECTION 308. SELECTIVE ALLOCATION DOCTRINE. If a powerholder
exercises a power of appointment in a disposition that also disposes of property the powerholder
owns, the owned and appointive property must be allocated in the permissible manner that best
carries out the powerholders intent.
SECTION 309. CAPTURE DOCTRINE: DISPOSITION OF INEFFECTIVELY
APPOINTED PROPERTY UNDER GENERAL POWER. To the extent a powerholder of a
general power of appointment, other than a power to revoke, amend, or withdraw property from
a trust, makes an ineffective appointment:
(1) the gift-in-default clause controls the disposition of the ineffectively appointed
property; or
(2) if there is no gift-in-default clause or to the extent the clause is ineffective, the
ineffectively appointed property:
(A) passes to:
(i) the powerholder if the powerholder is a permissible appointee and
living; or
(ii) if the powerholder is an impermissible appointee or not living, the
powerholders estate if the estate is a permissible appointee; or
(B) if there is no taker under subparagraph (A), passes under a reversionary
interest to the donor or the donors transferee or successor in interest.
intent to assume control of the appointive property for all purposes.
SECTION 310. DISPOSITION OF UNAPPOINTED PROPERTY UNDER
RELEASED OR UNEXERCISED GENERAL POWER. To the extent a powerholder

releases or fails to exercise a general power of appointment other than a power to revoke, amend,
or withdraw property from a trust:
(1) the gift-in-default clause controls the disposition of the unappointed property; or
(2) if there is no gift-in-default clause or to the extent the clause is ineffective:
(A) except as otherwise provided in subparagraph (B), the unappointed property
passes to:
(i) the powerholder if the powerholder is a permissible appointee and
living; or
(ii) if the powerholder is an impermissible appointee or not living, the
powerholders estate if the estate is a permissible appointee; or
(B) to the extent the powerholder released the power, or if there is no taker under
subparagraph (A), the unappointed property passes under a reversionary interest to the donor or
the donors transferee or successor in interest.
SECTION 311. DISPOSITION OF UNAPPOINTED PROPERTY UNDER
RELEASED OR UNEXERCISED NONGENERAL POWER. To the extent a powerholder
releases, ineffectively exercises, or fails to exercise a nongeneral power of appointment:
(1) the gift-in-default clause controls the disposition of the unappointed property; or
(2) if there is no gift-in-default clause or to the extent the clause is ineffective, the
unappointed property:
(A) passes to the permissible appointees if:
(i) the permissible appointees are defined and limited; and
(ii) the terms of the instrument creating the power do not manifest a
contrary intent; or

(B) if there is no taker under subparagraph (A), passes under a reversionary


interest to the donor or the donors transferee or successor in interest.
SECTION 312. DISPOSITION OF UNAPPOINTED PROPERTY IF PARTIAL
APPOINTMENT TO TAKER IN DEFAULT. Unless the terms of the instrument creating or
exercising a power of appointment manifest a contrary intent, if the powerholder makes a valid
partial appointment to a taker in default of appointment, the taker in default of appointment may
share fully in unappointed property.
SECTION 313. APPOINTMENT TO TAKER IN DEFAULT. If a powerholder
makes an appointment to a taker in default of appointment and the appointee would have taken
the property under a gift-in-default clause had the property not been appointed, the power of
appointment is deemed not to have been exercised, and the appointee takes under the clause.
SECTION 314. POWERHOLDERS AUTHORITY TO REVOKE OR AMEND
EXERCISE. A powerholder may revoke or amend an exercise of a power of appointment only
to the extent that:
(1) the powerholder reserves a power of revocation or amendment in the instrument
exercising the power of appointment and, if the power is nongeneral, the terms of the instrument
creating the power of appointment do not prohibit the reservation; or
(2) the terms of the instrument creating the power of appointment provide that the
exercise is revocable or amendable.
[ARTICLE] 4
DISCLAIMER OR RELEASE; CONTRACT TO APPOINT OR NOT TO APPOINT
SECTION 401. DISCLAIMER. As provided by [cite state law on disclaimer or the
Uniform Disclaimer of Property Interests Act]:

(1) A powerholder may disclaim all or part of a power of appointment.


(2) A permissible appointee, appointee, or taker in default of appointment may disclaim
all or part of an interest in appointive property.
SECTION 402. AUTHORITY TO RELEASE. A powerholder may release a power
of appointment, in whole or in part, except to the extent the terms of the instrument creating the
power prevent the release.
SECTION 403. METHOD OF RELEASE.
[(a) In this section, record means information that is inscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in perceivable form.
(b)] A powerholder of a releasable power of appointment may release the power in whole
or in part:
(1) by substantial compliance with a method provided in the terms of the
instrument creating the power; or
(2) if the terms of the instrument creating the power do not provide a method or
the method provided in the terms of the instrument is not expressly made exclusive, by a record
manifesting the powerholders intent by clear and convincing evidence.
Legislative Note: A state that defines record in Section 102 should delete the bracketed
material in this section.
SECTION 404. REVOCATION OR AMENDMENT OF RELEASE. A
powerholder may revoke or amend a release of a power of appointment only to the extent that:
(1) the instrument of release is revocable by the powerholder; or
(2) the powerholder reserves a power of revocation or amendment in the instrument of
release.

SECTION 405. POWER TO CONTRACT: PRESENTLY EXERCISABLE


POWER OF APPOINTMENT. A powerholder of a presently exercisable power of
appointment may contract:
(1) not to exercise the power; or
(2) to exercise the power if the contract when made does not confer a benefit on an
impermissible appointee.
SECTION 406. POWER TO CONTRACT: POWER OF APPOINTMENT NOT
PRESENTLY EXERCISABLE. A powerholder of a power of appointment that is not
presently exercisable may contract to exercise or not to exercise the power only if the
powerholder:
(1) is also the donor of the power; and
(2) has reserved the power in a revocable trust.
SECTION 407. REMEDY FOR BREACH OF CONTRACT TO APPOINT OR
NOT TO APPOINT. The remedy for a powerholders breach of a contract to appoint or not to
appoint is limited to damages payable out of the appointive property or, if appropriate, specific
performance of the contract.
[ARTICLE] 5
RIGHTS OF POWERHOLDERS CREDITORS IN APPOINTIVE PROPERTY
SECTION 501. CREDITOR CLAIM: GENERAL POWER CREATED BY
POWERHOLDER.
(a) In this section, power of appointment created by the powerholder includes a power
of appointment created in a transfer by another person to the extent the powerholder contributed
value to the transfer.

(b) Appointive property subject to a general power of appointment created by the


powerholder is subject to a claim of a creditor of the powerholder or of the powerholders estate
to the extent provided in [cite state law on fraudulent transfers or the Uniform Fraudulent
Transfers Act].
(c) Subject to subsection (b), appointive property subject to a general power of
appointment created by the powerholder is not subject to a claim of a creditor of the powerholder
or the powerholders estate to the extent the powerholder irrevocably appointed the property in
favor of a person other than the powerholder or the powerholders estate.
(d) Subject to subsections (b) and (c), and notwithstanding the presence of a spendthrift
provision or whether the claim arose before or after the creation of the power of appointment,
appointive property subject to a general power of appointment created by the powerholder is
subject to a claim of a creditor of:
(1) the powerholder, to the same extent as if the powerholder owned the
appointive property, if the power is presently exercisable; and
(2) the powerholders estate, to the extent the estate is insufficient to satisfy the
claim and subject to the right of a decedent to direct the source from which liabilities are paid, if
the power is exercisable at the powerholders death.
SECTION 502. CREDITOR CLAIM: GENERAL POWER NOT CREATED BY
POWERHOLDER.
(a) Except as otherwise provided in subsection (b), appointive property subject to a
general power of appointment created by a person other than the powerholder is subject to a
claim of a creditor of:
(1) the powerholder, to the extent the powerholders property is insufficient, if the

power is presently exercisable; and


(2) the powerholders estate, to the extent the estate is insufficient, subject to the
right of a decedent to direct the source from which liabilities are paid.
(b) Subject to Section 504(c), a power of appointment created by a person other than the
powerholder which is subject to an ascertainable standard relating to an individuals health,
education, support, or maintenance within the meaning of 26 U.S.C. Section 2041(b)(1)(A) or 26
U.S.C. Section 2514(c)(1), [on the effective date of this [act]][as amended], is treated for
purposes of this [article] as a nongeneral power.
SECTION 503. POWER TO WITHDRAW.
(a) For purposes of this [article], and except as otherwise provided in subsection (b), a
power to withdraw property from a trust is treated, during the time the power may be exercised,
as a presently exercisable general power of appointment to the extent of the property subject to
the power to withdraw.
(b) On the lapse, release, or waiver of a power to withdraw property from a trust, the
power is treated as a presently exercisable general power of appointment only to the extent the
value of the property affected by the lapse, release, or waiver exceeds the greater of the amount
specified in 26 U.S.C. Section 2041(b)(2) and 26 U.S.C. Section 2514(e) or the amount specified
in 26 U.S.C. Section 2503(b), [on the effective date of this [act]][as amended].
SECTION 504. CREDITOR CLAIM: NONGENERAL POWER.
(a) Except as otherwise provided in subsections (b) and (c), appointive property subject to
a nongeneral power of appointment is exempt from a claim of a creditor of the powerholder or
the powerholders estate.
(b) Appointive property subject to a nongeneral power of appointment is subject to a

claim of a creditor of the powerholder or the powerholders estate to the extent that the
powerholder owned the property and, reserving the nongeneral power, transferred the property in
violation of [cite state statute on fraudulent transfers or the Uniform Fraudulent Transfers Act].
(c) If the initial gift in default of appointment is to the powerholder or the powerholders
estate, a nongeneral power of appointment is treated for purposes of this [article] as a general
power.
[ARTICLE] 6
MISCELLANEOUS PROVISIONS
SECTION 601. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In
applying and construing this uniform act, consideration must be given to the need to promote
uniformity of the law with respect to its subject matter among states that enact it.
SECTION 602. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
AND NATIONAL COMMERCE ACT. This [act] modifies, limits, or supersedes the
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but
does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or
authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15
U.S.C. Section 7003(b).
SECTION 603. APPLICATION TO EXISTING RELATIONSHIPS.
(a) Except as otherwise provided in this [act], on and after [the effective date of this
[act]]:
(1) this [act] applies to a power of appointment created before, on, or after [its
effective date];
(2) this [act] applies to a judicial proceeding concerning a power of appointment

commenced on or after [its effective date];


(3) this [act] applies to a judicial proceeding concerning a power of appointment
commenced before [its effective date] unless the court finds that application of a particular
provision of this [act] would substantially interfere with the effective conduct of the judicial
proceeding or prejudice a right of a party, in which case the particular provision of this [act] does
not apply and the superseded law applies;
(4) a rule of construction or presumption provided in this [act] applies to an
instrument executed before [the effective date of the [act]] unless there is a clear indication of a
contrary intent in the terms of the instrument; and
(5) an act done before [the effective date of the [act]] is not affected by this [act].
(b) If a right is acquired, extinguished, or barred on the expiration of a prescribed period
that commenced under law of this state other than this [act] before [the effective date of the
[act]], the law continues to apply to the right.
SECTION 604. REPEALS; CONFORMING AMENDMENTS.
(a) .
(b) .
(c) .
SECTION 605. EFFECTIVE DATE. This [act] takes effect ....

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