Power of Appointment Act
Power of Appointment Act
Power of Appointment Act
Drafted by the
and by it
at its
ANNUAL CONFERENCE
MEETING IN ITS ONE-HUNDRED-AND-TWENTY-SECOND YEAR
BOSTON, MASSACHUSETTS
JULY 6 - JULY 12, 2013
COPYRIGHT 2013
By
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
*The following text is subject to revision by the Committee on Style of the National Conference of Commissioners on Uniform State Laws.
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
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
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
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