District Of Columbia 2023 2023-2024 Regular Session

District Of Columbia Council Bill B25-0219 Introduced / Bill

Filed 03/16/2023

Government of the District of Columbia
UNIFORM LAW COMMISSION

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March 16, 2023

The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
The John A. Wilson Building,
1350 Pennsylvania Avenue, NW
Washington, DC 20004

RE: Request for introduction of the Uniform Powers of Appointment Act of 2023.

Dear Chairman Mendelson:

Pursuant to Rule 401(b)(1) of the Rules of Organization and Procedure for the
Council, this is to request, on behalf of the District of Columbia Uniform Law
Commission, that you introduce the proposed “Uniform Powers of Appointment Act.”
This Act is one of three related uniform acts concerning trusts that are being transmitted
today.

The Uniform Powers of Appointment Act codifies the existing patchwork of court
cases that constitute the common law on powers of appointment. Estate planning
attorneys will already be familiar with the act’s provisions because it is based on the
Restatement (Third) of Property: Wills and Other Donative Transfers. The uniform act
provides clear statutory authority, which is now lacking, for the creation, revocation, and
use of powers of appointment. The adoption of this uniform act will be of considerable
benefit to estate planning practitioners who must draft enforceable provisions, and also
will provide needed guidance to the courts that must interpret the powers of appointment
granted by wills and trusts. The uniform act was drafted with extensive input from the
American College of Trust and Estate Counsel and the American Bar Association Section
on Real Property, Trust and Estate Law.

The Uniform Powers of Appointment Act was completed by the National
Conference of Commissioners on Uniform State Laws in 2013. It has been enacted, thus
far, in 12 states, including Virginia.

A proposed “Uniform Powers of Appointment Act of 2023” is being filed with
this letter. In addition, the following documents have been filed: (1) a summary of the
Uniform Powers of Appointment Act; (2) a statement as to why the Uniform Powers of 2

Appointment Act should be adopted; (3) a list of examples and applications of powers of
appointment, and (4) the official version of the Uniform Powers of Appointment Act with
comments.

I would be pleased to answer any questions and to provide any additional
information requested.

Sincerely,

James C. McKay, Jr.
Chair
D.C. Uniform Law Commission

cc: Uniform Law Commissioners ~obtmmtnt of tbt Jaf•trftt of qco[umbfa
UNIFORM LAW COMMISSION
The Honorable Phil Mendelson
Chairman
Council
of the District of Columbia
The John
A. Wilson Building,
13 50 Pennsylvania A venue, NW
Washington, DC 20004
***
March 16, 2023
RE: Request for introduction
of the Uniform Powers of Appointment Act of 2023.
Dear Chairman Mendelson:
Pursuant to Rule 401 (b )(
1) of the Rules of Organization and Procedure for the
Council, this
is to request, on behalf of the District of Columbia Uniform Law
Commission, that you introduce the proposed "Uniform Powers
of Appointment Act."
This Act is one
of three related uniform acts concerning trusts that are being transmitted
today.
The Uniform Powers
of Appointment Act codifies the existing patchwork of court
cases that constitute the common law on powers
of appointment. Estate planning
attorneys will already be familiar with the act's provisions because it
is based on the
Restatement (Third)
of Property: Wills and Other Donative Transfers. The uniform act
provides clear statutory authority, which is now lacking, for the creation, revocation, and
use
of powers of appointment. The adoption of this uniform act will be of considerable
benefit to estate planning practitioners who must draft enforceable provisions, and also
will provide needed guidance to the courts that must interpret the powers
of appointment
granted by wills and trusts. The uniform act was drafted with extensive input from the
American College
of Trust and Estate Counsel and the American Bar Association Section
on Real Property, Trust and Estate Law.
The Uniform Powers
of Appointment Act was completed by the National
Conference
of Commissioners on Uniform State Laws in 2013. It has been enacted, thus
far, in
12 states, including Virginia.
A proposed "Uniform Powers
of Appointment Act of 2023" is being filed with
this letter. In addition, the following documents have been filed: (1) a summary
of the
Uniform Powers
of Appointment Act; (2) a statement as to why the Uniform Powers of Appointment Act should be adopted; (3) a list of examples and applications of powers of
appointment, and (4) the official version of the Uniform Powers of Appointment Act with
comments.
I would be pleased to answer any questions and to provide any additional
information requested.
cc: Uniform Law Commissioners
2
Sincerely,
James
C. McKay, Jr.
Chair
D.C. Uniform Law Commission 2
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Chai an Phil Mendelson at the request of the
District
of Columbia Uniform Law Commission
A BILL
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
17 To amend Title 19 of the District of Columbia Official Code by adding a new Chapter 17 enact
18 the Uniform Powers of Appointment Act, to provide a statutory framework for the
19 creation, amendment, revocation, and exercise of powers of appointment, including rules
20 governing appointments to deceased or impermissible appointees, disposition of
21 unappointed property, releasing powers of appointment, a powerholder's ability to revoke
22 or amend an exercise of power, contracts to exercise or not to exercise powers of
23 appointment, and creditors' claims on appointive property.
24
25 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
26 act may be cited as the "Uniform Powers of Appointment Act of 2023 ".
27 Sec. 2. Title 19 of the District of Columbia Official Code is amended as follows:
28 (a) The table of contents is amended by adding the following new chapter reference:
29 "17. Uniform Powers of Appointment Act."
30 (b) The following new chapter is added to read as follows:
31 "Chapter 17. Uniform Powers of Appointment Act.
32 "Subchapter I. General Provisions
33 "Sec.
34 "19-1701.01. Short title.
'35 "19-1701.02. Definitions. 36 "19-1701.03. Governing law.
37 "19-1701.04. Common law and principles of equity.
38 "Subchapter II. Creation, Revocation, and Amendment of Power of Appointment
39 "19-1702.01. Creation of power of appointment.
40 "19-1702.02. Nontransferability.
41 "19-1702.03. Presumption of unlimited authority.
42 "19-1702.04. Exception to presumption of unlimited authority.
43 "19-1702.05. Rules of classification.
44 "19-1702.06. Power to revoke or amend.
45 "Subchapter III. Exercise of Power of Appointment
46 "19-1703.01. Requisites for exercise of power of appointment.
47 "19-1703.02. Intent to exercise: determining intent from residuary clause.
48 "19-1703.03. Intent to exercise: after-acquired power.
49 "19-1703.04. Substantial compliance with donor-imposed formal requirement.
50 "19-1703.05. Permissible appointment.
51 "19-1703.06. Appointment to deceased appointee or permissible appointee's descendant.
52 "19-1703.07. Impermissible appointment.
53 "19-1703.08. Selective allocation doctrine.
54 "19-1703.09. Capture doctrine: disposition of ineffectively appointed property under general
55 power.
56 "19-170.310. Disposition of unappointed property under released or unexercised general power.
57 "19-1703 .11. Disposition of unappointed property under released or unexercised nongeneral
58 power.
2 59 "19-1703.12. Disposition ofunappointed property if partial appointment to taker in default.
60 "19-1703.13. Appointment to taker in default.
61 "19-1703.14. Powerholder's authority to revoke or amend exercise.
62 "Subchapter IV. Disclaimer or Release; Contract to Appoint or Not to Appoint.
63 " 19-1 7 04. 0 1. Disclaimer.
64 "19-1704.02. Authority to release.
65 "19-1704.03. Method of release.
66 "19-1704.04. Revocation or amendment of release.
67 "19-1704.05. Power to contract: presently exercisable power of appointment.
68 "19-1704.06. Power to contract: power of appointment not presently exercisable.
69 "19-1704.07. Remedy for breach of contract to appoint or not to appoint.
70 "Subchapter V. Rights of Powerholder 's Creditors in Appointive Property
71 "19-1705.01. Creditor claim: general power created by powerholder.
72 "19-1705.02. creditor claim: general power not created by powerholder.
73 "19-1705.03. Power to withdraw.
74 "19-1705.04. Creditor claim: nongeneral power.
75 "Subchapter VI. Miscellaneous Provisions
76 "19-1706.01. Uniformity of application and construction.
77 "19-1706.02. Relation to electronic signatures in global and national commerce act.
78 "19-1706.03. Application to existing relationships."
79 "Chapter 17. Uniform Powers of Appointment Act.
80 "Subchapter I. General Provisions
81 "§ 19-1701.01. Short title.
3 82 "This chapter may be cited as the Uniform Powers of Appointment Act.
83 "§ 19-1701.02. Definitions.
84 "In this chapter:
85 "( 1) "Appointee" means a person to which a powerholder makes an appointment of
86 appointive property.
87 "(2) "Appointive property" means the property or property interest subject to a power of
88 appointment.
89 "(3) "Blanket-exercise clause" means a clause in an instrument which exercises a power
90 of appointment and is not a specific-exercise clause. The term includes a clause that:
91 "(A) Expressly uses the words "any power" in exercising any power of
92 appointment the powerholder has;
93 "(B) Expressly uses the words "any property" in appointing any property over
94 which the powerholder has a power of appointment; or
95 "(C) Disposes of all property subject to disposition by the powerholder.
96 "( 4) "Donor" means a person that creates a power of appointment.
97 "( 5) "Exclusionary power of appointment" means a power of appointment exercisable in
98 favor of any one or more of the permissible appointees to the exclusion of the other permissible
99 appointees.
100 "( 6) "General power of appointment" means a power of appointment exercisable in favor
101 of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the
102 powerholder' s estate.
103 "(7) "Gift-in-default clause" means a clause identifying a taker in default of appointment.
104 "(8) "Impermissible appointee" means a person that is not a permissible appointee.
4 105 "(9) "Instrument" means a writing.
106 "(10) "Nongeneral power of appointment" means a power of appointment that is not a
107 general power of appointment.
108 "( 11) "Permissible appointee" means a person m whose favor a powerholder may
109 exercise a power of appointment.
110 "(12) "Person" means an individual, estate, trust, business or nonprofit entity, public
111 corporation, government or governmental subdivision, agency, or instrumentality, or other legal
112 entity.
113 "(13) "Power of appointment" means a power that enables a powerholder acting in a
114 nonfiduciary capacity to designate a recipient of an ownership interest in or another power of
115 appointment over the appointive property. The term does not include a power of attorney.
116 "( 14) "Powerholder" means a person in which a donor creates a power of appointment.
117 "( 15) "Presently exercisable power of appointment" means a power of appointment
118 exercisable by the powerholder at the relevant time.
119 "(A) The term includes a power of appointment not exercisable until the
120 occurrence of a specified event, the satisfaction of an ascertainable standard, or the passage of a
121 specified time only after:
122 "(i) The occurrence of the specified event;
123 "(ii) The satisfaction of the ascertainable standard; or
124 "(iii) The passage of the specified time.
125 "(B) The term does not include a power of appointment exercisable only at the
126 powerholder's death.
5 127 "(16) "Record" means information that is inscribed on a tangible medium or that is stored
128 in an electronic or other medium and is retrievable in perceivable form.
129 "(17) "Specific-exercise clause" means a clause in an instrument which specifically refers
130 to and exercises a particular power of appointment.
131 "( 18) "Taker in default of appointment" means a person that takes all or part of the
132 appointive property to the extent the powerholder does not effectively exercise the power of
133 appointment.
134 "(19) "Terms of the instrument" means the manifestation of the intent of the maker of the
135 instrument regarding the instrument's provisions as expressed in the instrument or as may be
136 established by other evidence that would be admissible in a legal proceeding.
137 "§ 19-1701.03. Governing law.
138 "Unless the terms of the instrument creating a power of appointment manifest a contrary
139 intent, the law of the powerholder's domicile at the relevant time governs:
140 "(l) The creation, revocation, or amendment of the power is governed by the law of the
141 donor's domicile at the relevant time; and
142 "(2) The exercise, release, or disclaimer of the power, or the revocation or amendment of
143 the exercise, release, or disclaimer of the power.
144 "§ 19-1701.04. Common law and principles of equity.
145 "The common law and principles of equity supplement this chapter, except to the extent
146 modified by this chapter or law of the District of Columbia other than this chapter.
147 "Subchapter II. Creation, Revocation, and Amendment of Power of Appointment
148 "§ 19-1702.01. Creation of power of appointment.
149 "(a) A power of appointment is created only if:
6 150 "( 1) The instrument creating the power:
151 "(A) Is valid under applicable law; and
152 "(B) Except as otherwise provided m subsection (b ), transfers the
153 appointive property; and
154 "(2) The terms of the instrument creating the power manifest the donor's intent to
155 create in a powerholder a power of appointment over the appointive property exercisable in favor
156 of a permissible appointee.
157 "(b) Subsection ( a)( 1 )(B) does not apply to the creation of a power of appointment by the
158 exercise of a power of appointment.
159 "( c) A power of appointment may not be created in a deceased individual.
160 "( d) Subject to an applicable rule against perpetuities, a power of appointment may be
161 created in an unborn or unascertained powerholder.
162 "§ 19-1702.02. Nontransferability.
163 "A powerholder may not transfer a power of appointment. If a powerholder dies without
164 exercising or releasing a power, the power lapses.
165 "§ 19-1702.03. Presumption of unlimited authority.
166 "Subject to § 19-1702.05, and unless the terms of the instrument creating a power of
167 appointment manifest a contrary intent, the power is:
168 "( 1) Presently exercisable;
169 "(2) Exclusionary; and
170 "(3) Except as otherwise provided in § 19-1702.04, general.
171 "§ 19-1702.04. Exception to presumption of unlimited authority.
7 172 "Unless the terms of the instrument creating a power of appointment manifest a contrary
173 intent, the power is nongeneral if:
174 "(1) The power is exercisable only at the powerholder's death; and
175 "(2) The permissible appointees of the power are a defined and limited class that does not
176 include the powerholder's estate, the powerholder's creditors, or the creditors of the
177 powerholder's estate.
178 "§ 19-1702.05. Rules of classification.
179 "(a) In this section, "adverse party" means a person with a substantial beneficial interest
180 in property which would be affected adversely by a powerholder's exercise or nonexercise of a
181 power of appointment in favor of the powerholder, the powerholder's estate, a creditor of the
182 powerholder, or a creditor of the powerholder's estate.
183 "(b) If a powerholder may exercise a power of appointment only with the consent or
184 joinder of an adverse party, the power is nongeneral.
185 "( c) If the permissible appointees of a power of appointment are not defined and limited,
186 the power is exclusionary.
187 "§ 19-1702.06. Power to revoke or amend.
188 " A donor may revoke or amend a power of appointment only to the extent that:
189 "( 1) The instrument creating the power is revocable by the donor; or
190 "(2) The donor reserves a power of revocation or amendment in the instrument creating
191 the power of appointment.
192 "Subchapter III. Exercise of Power of Appointment
193 "§ 19-1703.01. Requisites for exercise of power of appointment.
194 " A power of appointment is exercised only:
8 195 "( 1) If the instrument exercising the power is valid under applicable law;
196 "(2) If the terms of the instrument exercising the power:
197 "(A) Manifest the powerholder's intent to exercise the power; and
198 "(B) Subject to§ 19-1703.04, satisfy the requirements of exercise, if any, imposed
199 by the donor; and
200 "(3) To the extent the appointment is a permissible exercise of the power.
201 "§ 19-1703.02. Intent to exercise: determining intent from residuary clause.
202 "(a) In this section:
203 "(1) "Residuary clause" does not include a residuary clause containing a blanket-
204 exercise clause or a specific-exercise clause.
205 "(2) "Will" includes a codicil and a testamentary instrument that revises another
206 will.
207 "(b) A residuary clause in a powerholder's will, or a comparable clause in the
208 powerholder's revocable trust, manifests the powerholder's intent to exercise a power of
209 appointment only if:
21 o "(l) The terms of the instrument containing the residuary clause do not manifest a
211 contrary intent;
212 "(2) The power is a general power exercisable in favor of the powerholder's
213 estate;
214 "(3) There is no gift-in-default clause or the clause is ineffective; and
215 "(4) The powerholder did not release the power.
216 "§ 19-1703.03. Intent to exercise: after-acquired power.
9 217 "Unless the terms of the instrument exerc1smg a power of appointment manifest a
218 contrary intent:
219 "(1) Except as otherwise provided in paragraph (2), a blanket-exercise clause extends to a
220 power acquired by the powerholder after executing the instrument containing the clause; and
221 "(2) If the powerholder is also the donor of the power, the clause does not extend to the
222 power unless there is no gift-in-default clause or the gift-in-default clause is ineffective.
223 "§ 19-1703.04. Substantial compliance with donor-imposed formal requirement.
224 "A powerholder's substantial compliance with a formal requirement of appointment
225 imposed by the donor, including a requirement that the instrument exercising the power of
226 appointment make reference or specific reference to the power, is sufficient if:
227 "(1) The powerholder knows of and intends to exercise the power; and
228 "(2) The powerholder's manner of attempted exercise of the power does not impair a
229 material purpose of the donor in imposing the requirement.
230 "§ 19-1703.05. Permissible appointment.
231 "(a) A powerholder of a general power of appointment that permits appointment to the
232 powerholder or the powerholder's estate may make any appointment, including an appointment
233 in trust or creating a new power of appointment, that the powerholder could make in disposing of
234 the powerholder's own property.
235 "(b) A powerholder of a general power of appointment that permits appointment only to
236 the creditors of the powerholder or of the powerholder's estate may appoint only to those
237 creditors.
238 "( c) Unless the terms of the instrument creating a power of appointment manifest a
239 contrary intent, the powerholder of a nongeneral power may: 240 "( 1) Make an appointment in any form, including an appointment in trust, in favor
241 of a permissible appointee;
242 "(2) Create a general power in a permissible appointee; or
243 "(3) Create a nongeneral power in any person to appoint to one or more of the
244 permissible appointees of the original nongeneral power.
245 "§ 19-1703.06. Appointment to deceased appointee or permissible appointee's
246 descendant.
247 "(a) Subject to § 18-308, an appointment to a deceased appointee is ineffective.
248 "(b) Unless the terms of the instrument creating a power of appointment manifest a
249 contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or
250 create a new power of appointment in, a descendant of a deceased permissible appointee whether
251 or not the descendant is described by the donor as a permissible appointee.
252 "§ 19-1703.07. Impermissible appointment.
253 "(a) Except as otherwise provided in § 19-1703.06, an exercise of a power of
254 appointment in favor of an impermissible appointee is ineffective.
255 "(b) An exercise of a power of appointment in favor of a permissible appointee 1s
· 256 ineffective to the extent the appointment is a fraud on the power.
257 "§ 19-1703 .08. Selective allocation doctrine.
258 "If a powerholder exercises a power of appointment in a disposition that also disposes of
259 property the powerholder owns, the owned property and the appointive property must be
260 allocated in the permissible manner that best carries out the powerholder's intent.
261 "§ 19-1703.09. Capture doctrine: disposition of ineffectively appointed property under
262 general power.
11 263 "To the extent a powerholder of a general power of appointment, other than a power to
264 withdraw property from, revoke, or amend a trust, makes an ineffective appointment:
265 "(1) The gift-in-default clause controls the disposition of the ineffectively appointed
266 property; or
267 "(2) If there is no gift-in-default clause or to the extent the clause is ineffective, the
268 ineffectively appointed property:
269 "(A) Passes to:
270 "(i) The powerholder if the powerholder is a permissible appointee and
271 living; or
272 "(ii) If the powerholder is an impermissible appointee or deceased, the
273 powerholder's estate if the estate is a permissible appointee; or
274 "(B) If there is no taker under subparagraph (A), passes under a reversionary
275 interest to the donor or the donor's transferee or successor in interest.
276 "§ 19-1703.10. Disposition of unappointed property under released or unexercised
277 general power.
278 "To the extent a powerholder releases or fails to exercise a general power of appointment
279 other than a power to withdraw property from , revoke, or amend a trust:
280 "(l) The gift-in-default clause controls the disposition of the unappointed property; or
281 "(2) Ifthere is no gift-in-default clause or to the extent the clause is ineffective:
282 "(A) Except as otherwise provided in subparagraph (B), the unappointed property
283 passes to:
284 "(i) The powerholder if the powerholder is a permissible appointee and
285 living; or
12 286 "(ii) If the powerholder is an impermissible appointee or deceased, the
287 powerholder's estate if the estate is a permissible appointee; or
288 "(B) To the extent the powerholder released the power, or if there is no taker
289 under subparagraph (A), the unappointed property passes under a reversionary interest to the
290 donor or the donor's transferee or successor in interest.
291 "§ 19-1 703 .11. Disposition of unappointed property under released or unexercised
292 nongeneral power.
293 "To the extent a powerholder releases, ineffectively exercises, or fails to exercise a
294 nongeneral power of appointment:
295 "(1) The gift-in-default clause controls the disposition of the unappointed property; or
296 "(2) If there is no gift-in-default clause or to the extent the clause is ineffective, the
297 unappointed property:
298 "(A) Passes to the permissible appointees if:
299 "(i) The permissible appointees are defined and limited; and
300 "(ii) The terms of the instrument creating the power do not manifest a
301 contrary intent; or
302 "(B) If there is no taker under subparagraph (A), passes under a reversionary
303 interest to the donor or the donor's transferee or successor in interest.
304 "§ 19-1703.12. Disposition ofunappointed property if partial appointment to taker in
305 default.
306 "Unless the terms of the instrument creating or exerc1smg a power of appointment
307 manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in
13 308 default of appointment, the taker in default of appointment may share fully in unappointed
309 property.
310 "§ 19-1703. 13. Appointment to taker in default.
311 "If a powerholder makes an appointment to a taker in default of appointment and the
312 appointee would have taken the property under a gift-in-default clause had the property not been
313 appointed, the power of appointment is deemed not to have been exercised and the appointee
314 takes under the clause.
315 "§ 19-1703.14. Powerholder's authority to revoke or amend exercise.
316 "A powerholder may revoke or amend an exercise of a power of appointment only to the
317 extent that:
318 "(1) The powerholder reserves a power of revocation or amendment in the instrument
319 exercising the power of appointment and, if the power is nongeneral, the terms of the instrument
320 creating the power of appointment do not prohibit the reservation; or
321 "(2) The terms of the instrument creating the power of appointment provide that the
322 exercise is revocable or amendable.
323 "Subchapter IV. Disclaimer or Release; Contract to Appoint or Not to Appoint.
324 "§ 19-1704.01. Disclaimer.
325 "As provided by Chapter 15 of this title:
326 "( 1) A powerholder may disclaim all or part of a power of appointment.
327 "(2) A permissible appointee, appointee, or taker in default of appointment may disclaim
328 all or part of an interest in appointive property.
329 "§ 19-1704.02. Authority to release.
14 330 "A powerholder may release a power of appointment, in whole or in part, except to the
331 extent the terms of the instrument creating the power prevent the release.
332 "§ 19-1704.03. Method ofrelease.
333 "(a) In this section, "record" means information that is inscribed on a tangible medium or
334 that is stored in an electronic or other medium and is retrievable in perceivable form.
335 "(b) A powerholder of a releasable power of appointment may release the power in whole
336 or in part:
337 "(l) By substantial compliance with a method provided m the terms of the
338 instrument creating the power; or
339 "(2) If the terms of the instrument creating the power do not provide a method or
340 the method provided in the terms of the instrument is not expressly made exclusive, by a record
341 manifesting the powerholder's intent by clear and convincing evidence.
342 "§ 19-1704.04. Revocation or amendment of release.
343 "A powerholder may revoke or amend a release of a power of appointment only to the
344 extent that:
345 "(l) The instrument of release is revocable by the powerholder; or
346 "(2) The powerholder reserves a power of revocation-or amendment in the instrument of
347 release.
348 "§ 19-1704.05. Power to contract: presently exercisable power of appointment.
349 "A powerholder of a presently exercisable power of appointment may contract:
350 "(l) Not to exercise the power; or
351 "(2) To exercise the power if the contract when made does not confer a benefit on an
352 impermissible appointee.
15 353 "§ 19-1704.06. Power to contract: power of appointment not presently exercisable.
354 "A powerholder of a power of appointment that is not presently exercisable may contract
355 to exercise or not to exercise the power only if the powerholder:
356 "(1) Is also the donor of the power; and
357 "(2) Has reserved the power in a revocable trust.
358 "§ 19-1704.07. Remedy for breach of contract to appoint or not to appoint.
359 "The remedy for a powerholder's breach of a contract to appoint or not to appoint
360 appointive property is limited to damages payable out of the appointive property or, if
361 appropriate, specific performance of the contract.
362 "Subchapter V Rights of Powerholder 's Creditors in Appointive Property
363 "§ 19-1705.01. Creditor claim: general power created by powerholder.
364 "(a) In this section, "power of appointment created by the powerholder" includes a power
365 of appointment created in a transfer by another person to the extent the powerholder contributed
366 value to the transfer.
367 "(b) Appointive property subject to a general power of appointment created by the
368 powerholder is subject to a claim of a creditor of the powerholder or of the powerholder's estate
369 to the extent provided in § § 28-3101 to 28-3111.
370 "( c) Subject to subsection (b ), appointive property subject to a general power of
371 appointment created by the powerholder is not subject to a claim of a creditor of the powerholder
372 or the powerholder's estate to the extent the powerholder irrevocably appointed the property in
373 favor of a person other than the powerholder or the powerholder's estate.
374 "(d) Subject to subsections (b) and (c), and notwithstanding the presence of a spendthrift
375 provision or whether the claim arose before or after the creation of the power of appointment,
16 376 appointive property subject to a general power of appointment created by the powerholder is
377 subject to a claim of a creditor of:
378 "(1) The powerholder, to the same extent as if the powerholder owned the
379 appointive property, if the power is presently exercisable; and
380 "(2) The powerholder's estate, to the extent the estate is insufficient to satisfy the
381 claim and subject to the right of a decedent to direct the source from which liabilities are paid, if
382 the power is exercisable at the powerholder's death.
383 "§ 19-1705.02. Creditor claim: general power not created by powerholder.
384 "(a) Except as otherwise provided in subsection (b), appointive property subject to a
385 general power of appointment created by a person other than the powerholder is subject to a
386 claim of a creditor of:
387 "(1) The powerholder, to the extent the powerholder's property is insufficient, if
388 the power is presently exercisable; and
389 "(2) The powerholder's estate, to the extent the estate is insufficient, subject to the
390 right of a decedent to direct the source from which liabilities are paid.
391 "(b) Subject to § 19-1705 .04( c ), a power of appointment created by a person other than
392 the powerholder which is subject to an ascertainable standard relating to an individual's health,
393 education, support, or maintenance within the meaning of 26 U.S.C. § 2041(b)(l)(A) or 26
394 U.S.C. § 2514(c)(l), is treated for purposes of this subchapter as a nongeneral power.
395 "§ 19-1705.03. Power to withdraw.
396 "(a) For purposes of this subchapter, and except as otherwise provided in subsection (b ),
397 a power to withdraw property from a trust is treated, during the time the power may be exercised,
17 398 as a presently exercisable general power of appointment to the extent of the property subject to
399 the power to withdraw.
400 "(b) On the lapse, release, or waiver of a power to withdra~ property from a trust, the
401 power is treated as a presently exercisable general power of appointment only to the extent the
402 value of the property affected by the lapse, release, or waiver exceeds the greater of the amount
403 specified in 26 U.S.C. § 2041(b)(2) and 26 U.S.C. § 2514(e) or the amount specified in 26
404 U.S.C. § 2503(b), on the effective date of this chapter.
405 "§ 19-1705.04. Creditor claim: nongeneral power.
406 "(a) Except as otherwise provided in subsections (b) and (c), appointive property subject
407 to a nongeneral power of appointment is exempt from a claim of a creditor of the powerholder or
408 the powerholder' s estate.
409 "(b) Appointive property subject to a nongeneral power of appointment is subject to a
410 claim of a creditor of the powerholder or the powerholder's estate to the extent that the
411 powerholder owned the property and, reserving the nongeneral power, transferred the property in
412 violation of§§ 28-3101 to 28-3111.
413 "(c) If the initial gift in default of appointment is to the powerholder or the powerholder's
414 estate, a nongeneral power of appointment is treated for purposes of this subchapter as a general
415 power.
416 "Subchapter VI. Miscellaneous Provisions
417 "§ 19-1706.01. Uniformity of application and construction.
418 "In applying and construing this uniform act, consideration must be given to the need to
419 promote uniformity of the law with respect to its subject matter among states that enact it.
420 "§ 19-1706.02. Relation to Electronic Signatures in Global and National Commerce act.
18 421 "This chapter modifies, limits, or supersedes the Electronic Signatures in Global and
422 National Commerce Act, 15 U.S.C. § 7001 et seq., but does not modify, limit, or supersede §
423 l0l(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices
424 described in§ 103(b) of that act, 15 U.S.C. § 7003(b).
425 "§ 19-1706.03. Application to existing relationships.
426 "(a) Except as otherwise provided in this chapter, on and after the effective date of this
427 chapter, the following rules apply:
428 "(1) This chapter applies to a power of appointment created before, on, or after
429 the effective date of this chapter.
430 "(2) This chapter applies to a judicial proceeding concemmg a power of
431 appointment commenced on or after the effective date of this chapter.
432 "(3) This chapter applies to a judicial proceeding concemmg a power of
433 appointment commenced before the effective date of this chapter unless the court finds that
434 application of a particular provision of this chapter would interfere substantially with the
435 effective conduct of the judicial proceeding or prejudice a right of a party, in which case the
436 particular provision of this chapter does not apply and the superseded law applies.
437 "(4) A rule of construction or presumption provided in this chapter applies to an
438 instrument executed before the effective date of this chapter unless there is a clear indication of a
439 contrary intent in the terms of the instrument.
440 "( 5) Except as otherwise provided in paragraphs ( 1) through ( 4 ), an action done
441 before the effective date of this chapter is not affected by this chapter.
19 442 "(b) If a right is acquired, extinguished, or barred on the expiration of a prescribed period
443 that commenced under law of the District of Columbia other than this chapter before the
444 effective date of this chapter, the law continues to apply to the right."
445 Sec. 3. Fiscal impact statement.
446 The Council adopts the fiscal impact statement in the committee report as the fiscal
447 impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act,
448 approved December 24, 1973 (87 Stat. 813; D.C. Official Code§ 1-206.02(c)(3))
449 Sec. 4. Effective date.
450 This act shall take effect following approval by the Mayor ( or in the event of veto by the
451 Mayor, action by the Council to override the veto), a 30-day period of Congressional review as
452 provided in section 602(c)(l) of the District of Columbia Home Rule Act, approved December
453 24, 1973 (87 Stat. 813; D.C. Official Code§ 1-206.02(c)(l)), and publication in the District of
454 Columbia Register.
20

The ULC is a nonprofit formed in 1892 to create nonpartisan state legislation. Over 350 volunteer commissioners—lawyers,
judges, law professors, legislative staff, and others—work together to draft laws ranging from the Uniform Commercial Code to
acts on property, trusts and estates, family law, criminal law and other areas where uniformity of state law is desirable.
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS
Uniform Law Commission
111 N. Wabash Ave.
Suite 1010
Chicago, IL 60602
(312) 450- 6600 tel
(312) 450- 6601 fax
www.uniformlaws.org

T
HE UNIFORM POWERS OF APPOINTMENT ACT

- A Summary -

Powers of Appointment are routinely included in trusts drafted throughout the United States, but
there is little statutory law governing their use. Instead, estate planning attorneys rely on a
patchwork of common- law decisions. The Uniform Powers of Appointment Act codifies the law
on powers of appointment, relying heavily on the Restatement (Third) of Property: Wills and
Other Donative Transfers, published in 2011 by the American Law Institute. Therefore, estate
planners will already be familiar with the provisions of this uniform act.

Article 1 includes definitions and other general provisions. Article 2 provides rules for the
creation, revocation, and amendment of powers of appointment. Article 3 governs the exercise
of powers by the powerholder and the distribution of appointive property. Article 4 is concerned
with disclaimers, releases, and contracts between a powerholder and permissible beneficiary to
appoint or not to appoint property. Article 5 outlines the rights of a powerholder’s creditors in
appointive property. Finally, Article 6 contains boilerplate provisions common to uniform acts.
The act’s highlights are summarized below.

Article 1

The Uniform Powers of Appointment Act defines three specific roles: The person who creates a
power of appointment is the “Donor.” The person who may exercise the power is the
“Powerholder” (rather than the more confusing term “donee”). A person who may receive
appointive property is a “Permissible appointee” (or just an “Appointee” following receipt).

The uniform act defines a “Power of appointment” as “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.” Other definitions describe different types of powers
and different methods of exercising a power.

Article 2

Section 201 provides a permissive standard governing creation of powers of appointment: the
power must be in a valid governing instrument that transfers the appointive property and must
use terms showing the donor’s intent to create a power to appoint property. Other provisions
state that a power is nontransferable and provide rules and presumptions as to the extent of the
power, which are applicable if the terms of the power are not sufficiently clear. Finally, Section
206 states that a power may not be revoked or amended unless either i) the instrument creating
the power is revocable, or ii) the donor reserves a power of revocation or amendment.

Article 3

Section 301 sets out the rules for exercising a power of appointment, and sections 302 - 304
apply if the powerholder’s intent is unclear. Section 305 clarifies that a powerholder may, unless
otherwise prohibited, make an appointment to a permissible appointee in any form, including in
trust or by creating a general power of appointment. Other sections govern appointments to
deceased or impermissible appointees, disposition of unappointed property, and a powerholder’s
ability to revoke or amend an exercise of power.

Article 4

Section 401 provides that a state’s general law on disclaimers applies to both powerholders and
permissible appointees. Sections 402 gives a powerholder authority to release a power unless
prohibited by the donor, Section 403 provides a method for releasing powers of appointment, and
Section 404 provides rules for revoking or amending a release. Finally, Sections 405 and 406
govern contracts to exercise, or not to exercise, a power of appointment.

Article 5

This article governs creditor claims on appointive property. The rules depend on whether the
powerholder also created the power, and whether the powerholder has a power to withdraw
property from a trust.

Conclusion

Nothing in the Uniform Powers of Appointment Act should be new or controversial. Estate
planning attorneys will already be familiar with most provisions. Both attorneys and their clients
will benefit from the certainty provided by this codification of common la w decisions. The act
should be considered by the legislature in every jurisdiction as soon as feasible.

For further information about the Uniform Powers of Appointment Act, please contact ULC
Chief Counsel Benjamin Orzeske at 312- 450-6621 or borzeske@uniformlaws.org
.

• UPAA clarifies and codifies the common law. Powers of appointment are commonly used
by estate planners to give a third party the authority to direct the disposition of a donor’s
property to specified eligible recipients. The uniform act does not change the law, but
rather codifies the existing patchwork of state court cases that constitute the common law
on powers of appointment.

• UPAA is easily understood by estate planners. The act is based on the Restatement
(Third) of Property: Wills and Other Donative Transfers, and estate planning attorneys will
already be familiar with most of the act’s provisions.

• UPAA reduces unnecessary and expensive litigation. The uniform act provides the clear
statutory authority that is now lacking for the creation, revocation, and use of powers of appointment. Its adoption will benefit estate planning practitioners who must draft
enforceable provisions, and also provide needed guidance to the courts that must interpret
the powers of appointment granted by wills and trusts.

• UPAA encompasses the best ideas from the country’s leading trust law experts. The
uniform act was drafted with extensive input from the American College of Trust and
Estate Counsel (ACTEC) and the American Bar Association Section on Real Property,
Trust and Estate Law (ABA-RPTE).

• UPAA will help eliminate jurisdictional conflicts. In our modern mobile society,
American citizens frequently move from state to state and own property in multiple states.
Uniformity of the law will ensure that powers of appointment granted by a resident of one
state will be enforced similarly by the courts of every other state.

For further information about the Uniform Powers of Appointment Act, please contact ULC
Chief Counsel Benjamin Orzeske at 312-450-6621 or borzeske@uniformlaws.org
.

The ULC is a nonprofit formed in 1892 to create nonpartisan state legislation. Over 350 volunteer commissioners— lawyers,
judges, law professors, legislative staff, and others—work together to draft laws ranging from the Uniform Commercial Code to
acts on property, trusts and estates, family law, criminal law and other areas where uniformity of state law is desirable.
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS
Uniform Law Commission
111 N. Wabash Ave.
Suite 1010
Chicago, IL 60602
(312) 450- 6600 tel
(312) 450- 6601 fax
www.uniformlaws.org
THE UNIFORM POWERS OF APPOINTMENT ACT

- Examples and Applications -

A power of appointment is an estate planning tool. A good estate planning attorney can help
clients plan to distribute wealth in accordance with their goals, but even the best attorneys cannot
predict the future. A power of appointment allows clients to avoid naming specific beneficiaries
to receive specific property, and instead name a trusted third party to direct the distribution of
property after the donor’s death taking all future conditions into account. Harvard Law Professor
W. Barton Leach once described the power of appointment as “the most efficient dispositive
device that the ingenuity of Anglo- American lawyers has ever worked out.”

To illustrate its use, imagine a client who wants to minimize estate taxes by using a generation
skipping trust (GST). The GST would pay income to the client’s children, but the principal
would be reserved for eventual distribution to the client’s grandchildren. The trust instrument
could simply direct the trustee to distribute the principal to the donor’s grandchildren in equal
shares after the death of the last income beneficiary. However, that fails to account for the
grandchildren’s actual needs. What if one grandchild shows great academic promise and needs
to access the principal sooner to pay for a postgraduate education? What if one grandchild
becomes a substance abuser and wants to spend the inherited funds on illegal drugs? In either
case, distributing the assets in equal shares probably would not conform to the donor’s actual
wishes.

A more effective plan would grant a power to appoint the GST principal to a trusted family
member or advisor. The powerholder would have discretionary authority to direct distributions
of principal to any of the client’s grandchildren in any amount, with appropriate restrictions to
prevent tax disqualification. By using a power of appointment rather than a rigid formula for
distribution of principal, the donor greatly increases the likelihood that the inherited funds will
be put to good use.

Types of Powers

A power of appointment may be general or non- general, presently exercisable or testamentary.

General powers of appointment permit the powerholder to appoint himself or herself as the
recipient of the property, or one of the powerholder’s creditors. For example, a will or trust
might contain the following term: “I grant to my son Alan the power to distribute my collection
of antique cars as he sees fit.” Alan might love antique cars and decide to appoint the entire
collection to himself. Or, Alan may have no interest in antique cars and decide to donate the
collection to a museum, or give it to a relative who loves cars. Finally, Alan might give the
collection to one of his creditors in satisfaction of a debt. Alan has a general power of
appointment over the car collection.
2

Non-general powers of appointment prevent the powerholder from appointing property to
himself or herself, or to any of the powerholder’s creditors. For example, a will or trust might
contain the following language: “I grant to my wife Barbara the power to distribute all assets in
the family trust to any or all of our descendants as she determines is appropriate.” The restrictive
clause “to any or all of our descendants” precludes the distribution of trust property to Barbara or
to any of her creditors. Barbara has a non-general power of appointment over the assets in the
family trust.

Similarly, a will or trust might state: “I leave my private jet to a charitable organization that will
use it to transport wounded veterans, my sister Connie to choose the recipient.” The class of
permissible appointees is restricted to a certain type of charity; therefore, Connie has a non-
general power of appointment over the private jet.

A presently exercisable power of appointment allows the powerholder to appoint the recipient of
the property at the time in question. For example, a term that states: “I leave $100,000 to my
nieces and nephews for the sole purpose of funding their college educations, my brother Daniel
to distribute the gift to any or all of them as he sees fit” is a presently exercisable power of
appointment, even if none of the nieces and nephews are of college age at the time of the gift.
The relevant time is the time of the appointment to a recipient. Whenever one of the nieces or
nephews incurs college expenses, Daniel may pay for them out of the gifted funds. Moreover,
the eligible recipients are the donor’s nieces and nephews, and not Daniel or his creditors. Thus,
Daniel has a presently exercisable, non-general power of appointment over the $100,000 gift.

In contrast, a will or trust might state, “My wife Ellen may use any income generated by the
marital trust assets during her lifetime. When Ellen dies, all of the marital trust assets shall be
distributed for the benefit of any or all of our descendants as directed by Ellen in her will.” In
that case, Ellen holds a testamentary power of appointment over the assets in the marital trust,
because she may not direct distribution of the trust assets during her lifetime.

It should now be evident that the power of appointment is an extremely flexible tool that can be
used to produce many different outcomes.

Powerholder versus Trustee

One could, of course, entirely forego the use of powers of appointment and instead grant a
trustee the discretionary authority to distribute trust property. However, it is often preferable to
split the authority and give a non- trustee the power to direct distributions. For instance, when a
corporate trustee is employed to manage personal wealth, it makes good sense to grant powers of
appointment to a family member or confidant who has a closer relationship to the permissible
appointees. The family member is likely to be in a better position than the trustee to judge the
relative needs of those who are eligible to receive the property.

Furthermore, a trustee is a fiduciary, and subject to all of the fiduciary duties imposed by law.
The uniform act clearly states that the holder of a power of appointment acts in a nonfiduciary
capacity to designate the recipient of appointive property. Therefore, a person without the skill 3

to manage financial assets and with no special knowledge of fiduciary duties still may be
qualified to hold a power of appointment.

The Need for a Uniform Law

Although powers of appointment are common, there is very little statutory law governing their
use; practitioners instead rely on a patchwork of state court decisions. The Uniform Powers of
Appointment Act codifies major provisions of the common law as expressed in the Restatement
(Third) of Property: Wills and Other Donative Transfers.

Article 1 of the uniform act contains general provisions and definitions. Article 2 governs the
creation, revocation, and amendment of powers of appointment. Article 3 provides rules for
exercising the authority granted by a power of appointment. Article 4 governs disclaimers and
releases, and the use of contracts to appoint or not to appoint property. Article 5 addresses the
rights of a powerholder’s creditors in appointive property. Finally, Article 6 contains
miscellaneous boilerplate provisions common to uniform acts.

The goal of the drafters was not to change the law, but to provide both practitioners and courts
with a statute that is clear, consistent, and easy to reference. Estate planners will already be
comfortable with the concepts in the uniform act, and are likely to welcome the legal certainty
that will result from its enactment.

Conclusion

Powers of appointment are already widely used by estate planning attorneys in every state. The
Uniform Powers of Appointment Act codifies the existing common law rules governing the
creation and use of powers of appointment and provides statutory authority that is currently
lacking. The drafting committee for the uniform act received helpful input from the American
College of Trust and Estate Counsel (ACTEC) and the ABA Section of Real Property, Trusts,
and Estates, both of which strongly supported the project. The Uniform Powers of Appointment
Act is appropriate for enactment in every jurisdiction and should be strongly considered by each
state legislature.

For more information on the Uniform Powers of Appointment Act, please contact:

Benjamin Orzeske, Chief Counsel
Direct Line: (312) 450- 6621
borzeske@uniformlaws.org

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

WITH PREFATORY NOTE AND COMMENTS

January 11, 2019
ABOUT ULC

The Uniform Law Commission (ULC), also known as National Conference of Commissioners
on Uniform State Laws (NCCUSL), now in its 122nd year, provides states with non-partisan,
well-conceived and well-drafted legislation that brings clarity and stability to critical areas of
state statutory law.

ULC members must be lawyers, qualified to practice law. They are practicing lawyers, judges,
legislators and legislative staff and law professors, who have been appointed by state
governments as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands to
research, draft and promote enactment of uniform state laws in areas of state law where
uniformity is desirable and practical.

• ULC strengthens the federal system by providing rules and procedures that are consistent
from state to state but that also reflect the diverse experience of the states.

• ULC statutes are representative of state experience, because the organization is made up
of representatives from each state, appointed by state government.

• ULC keeps state law up-to-date by addressing important and timely legal issues.

• ULC’s efforts reduce the need for individuals and businesses to deal with different laws
as they move and do business in different states.

• ULC’s work facilitates economic development and provides a legal platform for foreign
entities to deal with U.S. citizens and businesses.

• Uniform Law Commissioners donate thousands of hours of their time and legal and
drafting expertise every year as a public service, and receive no salary or compensation
for their work.

• ULC’s deliberative and uniquely open drafting process draws on the expertise of
commissioners, but also utilizes input from legal experts, and advisors and observers
representing the views of other legal organizations or interests that will be subject to the
proposed laws.

ULC is a state-supported organization that represents true value for the states, providing services
that most states could not otherwise afford or duplicate. DRAFTING COMMITTEE ON POWERS OF APPOINTMENT ACT
The Committee appointed by and representing the National Conference of Commissioners on
Uniform State Laws in preparing this Act consists of the following individuals:
TURNEY P. BERRY, 500 W. Jefferson St., Suite 2800, Louisville, KY 40202, Chair
DAVID J. CLARK, 353 Bel Marin Keys Blvd., Suite 1, Novato, CA 94949
E. EDWIN ECK, II, University of Montana School of Law, 32 Campus Dr. #6552, Missoula,
MT 59812-6552
DAVID M. ENGLISH, University of Missouri-Columbia School of Law, 203 Hulston Hall,
Columbia, MO 65211
STANLEY C. KENT, 90 S. Cascade Ave., Suite 1210, Colorado Springs, CO 80903
ROBERT H. SITKOFF, Harvard Law School, 1575 Massachusetts Ave., Cambridge, MA 02138
SUZANNE BROWN WALSH, P.O. Box 271820, West Hartford, CT 06127
KAREN ROBERTS WASHINGTON, 2214 Main St., Dallas, TX 75201
STEVE WILBORN, 306 Tower Dr., Shelbyville, KY 40065
THOMAS P. GALLANIS, University of Iowa College of Law, Boyd Law Bldg. - 454, Iowa
City, IA 52242, Reporter

EX OFFICIO
HARRIET LANSING, 1 Heather Pl., St. Paul, MN 55102-2615, President
BRIAN K. FLOWERS, 1350 Pennsylvania Ave. NW, Suite 300, Washington, DC 20004,
Division Chair

AMERICAN BAR ASSOCIATION ADVISOR
AMY MORRIS HESS, University of Tennessee College of Law, 1505 W. Cumberland Ave.,
Knoxville, TN 37996-0001, ABA Advisor

EXECUTIVE DIRECTOR
JOHN A. SEBERT, 111 N. Wabash Ave., Suite 1010, Chicago, IL 60602, Executive Director

Copies of this Act may be obtained from:

NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
111 N. Wabash Ave., Suite 1010
Chicago, Illinois 60602
312/450-6600
www.uniformlaws.org UNIFORM POWERS OF APPOINTMENT ACT

TABLE OF CONTENTS

PREFATORY NOTE.......................................................................................................................1

[ARTICLE] 1
GENERAL PROVISIONS
SECTION 101. SHORT TITLE .....................................................................................................2
SECTION 102. DEFINITIONS ......................................................................................................2
SECTION 103. GOVERNING LAW. ............................................................................................9
SECTION 104. COMMON LAW AND PRINCIPLES OF EQUITY .........................................10

[ARTICLE] 2
CREATION, REVOCATION, AND AMENDMENT OF POWER OF APPOINTMENT
SECTION 201. CREATION OF POWER OF APPOINTMENT ................................................11
SECTION 202. NONTRANSFERABILITY................................................................................13
SECTION 203. PRESUMPTION OF UNLIMITED AUTHORITY. ..........................................14
SECTION 204. EXCEPTION TO PRESUMPTION OF UNLIMITED AUTHORITY. .............15
SECTION 205. RULES OF CLASSIFICATION. .......................................................................15
SECTION 206. POWER TO REVOKE OR AMEND .................................................................17

[ARTICLE] 3
EXERCISE OF POWER OF APPOINTMENT
SECTION 301. REQUISITES FOR EXERCISE OF POWER OF APPOINTMENT. ..............18
SECTION 302. INTENT TO EXERCISE: DETERMINING INTENT FROM RESIDUARY
CLAUSE. ...........................................................................................................................21
SECTION 303. INTENT TO EXERCISE: AFTER-ACQUIRED POWER ................................22
SECTION 304. SUBSTANTIAL COMPLIANCE WITH DONOR -IMPOSED FORMAL
REQUIREMENT. ..............................................................................................................24
SECTION 305. PERMISSIBLE APPOINTMENT ......................................................................25
SECTION 306. APPOINTMENT TO DECEASED APPOINTEE OR PERMISSIBLE
APPOINTEE’S DESCENDANT .......................................................................................28
SECTION 307. IMPERMISSIBLE APPOINTMENT .................................................................29
SECTION 308. SELECTIVE ALLOCATION DOCTR INE .......................................................31
SECTION 309. CAPTURE DOCTRINE: DISPOSITION OF INEFFECTIVELY APPOINTED
PROPERTY UNDER GENER AL POWER ......................................................................32
SECTION 310. DISPOSITION OF UNAPPOINTED PROPERTY UNDER RELE ASED OR
UNEXERCISED GENERAL POWER .............................................................................34
SECTION 311. DISPOSITION OF UNAPPOINTED PROPERTY UNDER RELEASED OR
UNEXERCISED NONGENER AL POWER ....................................................................36
SECTION 312. DISPOSITION OF UNAPPOINTED PROPERTY IF PARTIAL
APPOINTMENT TO TAKER IN DEFAULT ..................................................................37 SECTION 313. APPOINTMENT TO TAKER IN DEFAULT ...................................................38
SECTION 314. POWERHOLDER’S AUTHORITY TO REVOKE OR AMEND EXE RCISE .39

[ARTICLE] 4
DISCLAIMER OR RELEASE; CONTRACT TO APPOINT OR NOT TO APPOINT.
SECTION 401. DISCLAIMER ....................................................................................................40
SECTION 402. AUTHORITY TO RELEASE ............................................................................41
SECTION 403. METHOD OF RELEASE ...................................................................................41
SECTION 404. REVOCATION OR AMENDMENT OF RELEASE ........................................42
SECTION 405. POWER TO CONTRACT: PRESENTLY EXERCISABLE POWER OF
APPOINTMENT ...............................................................................................................43
SECTION 406. POWER TO CONTRACT: POWER OF APPOINTMENT NOT PRESENTLY
EXERCISABLE ................................................................................................................44
SECTION 407. REMEDY FOR BREACH OF CONTRACT TO APPOINT OR NOT TO
APPOINT ...........................................................................................................................45

[ARTICLE] 5
RIGHTS OF POWERHOLDER’S CREDITORS IN APPOINTIVE PROPERTY
SECTION 501. CREDITOR CLAIM: GENERAL POWER CREATE D BY
POWERHOLDER .............................................................................................................45
SECTION 502. CREDITOR CLAIM: GENERAL POWER NOT CR EATED BY
POWERHOLDER .............................................................................................................47
SECTION 503. POWER TO WITHDRAW. .................................................................................48
SECTION 504. CREDITOR CLAIM: NONGENERAL POWER. .............................................49

[ARTICLE] 6
MISCELLANEOUS PROVISIONS
SECTION 601. UNIFORMITY OF APPLICATION AND CONSTRUCTION .........................50
SECTION 602. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND
NATIONAL COMMERCE ACT ......................................................................................50
SECTION 603. APPLICATION TO EXISTING RELATIONSHIPS. ........................................51
SECTION 604. REPEALS; CONFORMING AMENDMENTS. ................................................52
SECTION 605. EFFECTIVE DATE ............................................................................................52 1
UNIFORM POWERS OF APPOINTMENT ACT

PREFATORY NOTE
Professor W. Barton Leach described the power of appointment as “the most efficient
dispositive device that the ingenuity of Anglo-American lawyers has ever worked out.” 24
A.B.A. J. 807 (1938). Powers of appointment are routinely included in trusts to add flexibility to
the arrangement.

A power of appointment is the authority, acting in a nonfiduciary capacity, to designate
recipients of beneficial ownership interests in, or powers of appointment over, the appointive
property. An owner, of course, has this authority with respect to the owner’s property. By
creating a power of appointment, the owner typically confers this authority on someone else.

The power of appointment is a staple of modern estate-planning practice. However, many
jurisdictions within the United States have very little statutory or case law on powers of
appointment.

A comprehensive restatement of the law of powers of appointment was approved in 2010
and published in 2011 by the American Law Institute. See chapters 17-23 of the Restatement
Third of Property: Wills and Other Donative Transfers.

This act draws heavily on that Restatement. The aim of this act is to codify the law of
powers of appointment, or at least the portions of the law that are most amenable to codification.

The act is divided into six articles. Article 1 contains general provisions. Article 2
contains provisions concerning the creation, revocation, and amendment of a power of
appointment. Article 3 addresses the exercise of a power of appointment. Article 4 contains
provisions on the disclaimer or release of a power of appointment and on contracts to appoint or
not to appoint. Article 5 concerns the rights of the powerholder’s creditors in appointive
property. Article 6 contains miscellaneous provisions.

After each section, there is a detailed Comment. The Comments explain, and should be
read in conjunction with, the statutory text. The Comments also provide information and
guidance about best practices in creating and exercising powers of appointment.

2
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 powerholder’s estate, a creditor of the powerholder, or a creditor of the 3
powerholder’s 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 relevant time. 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 4
(B) does not include a power exercisable only at the powerholder’s 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.
(18) “Taker in default of appointment” means a person that takes all or part of the
appointive property to the extent the powerholder does not effectively exercise the power of
appointment.
(19) “Terms of the instrument” means the manifestation of the intent of the maker of the
instrument regarding the instrument’s 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).

Comment

Paragraph (1) defines an appointee as the person to which a powerholder makes an
appointment of appointive property. For the definition of the related term, “permissible
appointee,” see paragraph 11.

Paragraph (2) defines appointive property as the property or property interest subject to a
power of appointment. The effective creation of a power of appointment requires that there be
appointive property. See Section 201.

Paragraphs (3) and (17) introduce the distinction between blanket-exercise and specific-
exercise clauses. A specific-exercise clause exercises and specifically refers to the particular
power of appointment in question, using language such as the following: “I exercise the power of
appointment conferred upon me by my father’s will as follows: I appoint [fill in details of
appointment].” In contrast, a blanket-exercise clause exercises “any” power of appointment the
powerholder may have, appoints “any” property over which the powerholder may have a power
of appointment, or disposes of all property subject to disposition by the powerholder. The use of
specific-exercise clauses is encouraged; the use of blanket-exercise clauses is discouraged. See
Section 301 and the accompanying Comment. 5
Paragraphs (4) and (14) define the donor and the powerholder. The donor is the person
who created the power of appointment. The powerholder is the person in whom the power of
appointment was conferred or in whom the power was reserved. The traditional, but potentially
confusing, term for powerholder is “donee.” See Restatement of Property § 319 (1940);
Restatement Second of Property: Donative Transfers § 11.2 (1986); Restatement Third of
Property: Wills and Other Donative Transfers § 17.2 (2011). In the case of a reserved power, the
same person is both the donor and the powerholder.

Paragraph (5) introduces the distinction between exclusionary and nonexclusionary
powers of appointment. An exclusionary power is one in which the donor has authorized the
powerholder to appoint to any one or more of the permissible appointees to the exclusion of the
other permissible appointees. For example, a power to appoint “to such of my descendants as the
powerholder may select” is exclusionary, because the powerholder may appoint to any one or
more of the donor’s descendants to the exclusion of the other descendants. In contrast, a
nonexclusionary power is one in which the powerholder cannot make an appointment that
excludes any permissible appointee, or one or more designated permissible appointees, from a
share of the appointive property. An example of a nonexclusionary power is a power “to appoint
to all and every one of my children in such shares and proportions as the powerholder shall
select.” Here, the powerholder is not under a duty to exercise the power; but, if the powerholder
does exercise the power, the appointment must abide by the power’s nonexclusionary nature. See
Sections 301 and 305. An instrument creating a power of appointment is construed as creating an
exclusionary power unless the terms of the instrument manifest a contrary intent. See Section
203. The typical power of appointment is exclusionary. And in fact, only a power of appointment
whose permissible appointees are “defined and limited” can be nonexclusionary. For elaboration
of the well-accepted term of art “defined and limited,” see Section 205 and the accompanying
Comment.

Paragraphs (6) and (10) explain the distinction between general and nongeneral powers of
appointment. A general power of appointment enables the powerholder to exercise the power in
favor of one or more of the following: the powerholder, the powerholder’s estate, the creditors of
the powerholder, or the creditors of the powerholder’s estate, regardless of whether the power is
also exercisable in favor of others. A nongeneral power of appointment—sometimes called a
“special” power of appointment—cannot be exercised in favor of the powerholder, the
powerholder’s estate, the creditors of the powerholder, or the creditors of the powerholder’s
estate. Estate planners often classify nongeneral powers as being either “broad” or “limited,”
depending on the range of permissible appointees. A power to appoint to anyone in the world
except the powerholder, the powerholder’s estate, and the creditors of either would be an
example of a broad nongeneral power. In contrast, a power in the donor’s spouse to appoint
among the donor’s descendants would be an example of a limited nongeneral power.

An instrument creating a power of appointment is construed as creating a general power
unless the terms of the instrument manifest a contrary intent. See Section 203. A power to
revoke, amend, or withdraw is a general power of appointment if it is exercisable in favor of the
powerholder, the powerholder’s estate, or the creditors of either. If the settlor of a trust
empowers a trustee or another person to change a power of appointment from a general power
into a nongeneral power, or vice versa, the power is either general or nongeneral depending on 6
the scope of the power at any particular time.

Paragraph (7) defines the gift-in-default clause. In an instrument creating a power of
appointment, the clause that identifies the taker in default is called the gift-in-default clause. A
gift-in-default clause is not mandatory but is included in a well-drafted instrument.

Paragraphs (8) and (11) explain the distinction between impermissible and permissible
appointees. The permissible appointees—known at common law as the “objects” —of a power of
appointment may be narrowly defined (for example, “to such of the powerholder’s descendants
as the powerholder may select”), broadly defined (for example, “to such persons as the
powerholder may select, except the powerholder, the powerholder’s estate, the powerholder’s
creditors, or the creditors of the powerholder’s estate”), or unlimited (for example, “to such
persons as the powerholder may select”). A permissible appointee of a power of appointment
does not, in that capacity, have a property interest that can be transferred to another. Otherwise, a
permissible appointee could transform an impermissible appointee into a permissible appointee,
exceeding the intended scope of the power and thereby violating the donor’s intent. An
appointment cannot benefit an impermissible appointee. See Section 307.

Paragraph (9) defines the term “instrument” as either a writing or a record, depending on
the choice made by the enacting jurisdiction. The drafting committee had no clear preference
between the two options. Interestingly, there is no pre-existing Uniform Law definition of
“instrument” outside the commercial context. See Uniform Commercial Code §§ 3-104(b), 9-
102(a)(47). The term is used without definition in, for example, the Uniform Probate Code, the
Uniform Trust Code, and the Uniform Power of Attorney Act.

Paragraphs (12) and (16) contain the definitions of “person” and “record”. With one
exception, these are standard definitions approved by the Uniform Law Commission. The
exception is that the word “trust” has been added to the definition of “person”. Trust law in the
United States is moving in the direction of viewing the trust as an entity, see Restatement Third
of Trusts Introductory Note to Chapter 21, but does not yet do so.

Paragraph (13) defines a power of appointment. A power of appointment is a power
enabling the powerholder, acting in a nonfiduciary capacity, to designate recipients of ownership
interests in or powers of appointment over the appointive property. (Powers held in a fiduciary
capacity, such a trustee’s power to “decant” property from one trust to another, are the subject of
other uniform legislation.)

A power to revoke or amend a trust or a power to withdraw income or principal from a
trust is a power of appointment, whether the power is reserved by the transferor or conferred on
another. See Restatement Third of Trusts § 56, Comment b. A power to withdraw income or
principal subject to an ascertainable standard is a postponed power, exercisable upon the
satisfaction of the ascertainable standard. See the Comment to paragraph (15), below.

A power to direct a trustee to distribute income or principal to another is a power of
appointment.
7
In this act, a fiduciary distributive power is not a power of appointment. Fiduciary
distributive powers include a trustee’s power to distribute principal to or for the benefit of an
income beneficiary, or for some other individual, or to pay income or principal to a designated
beneficiary, or to distribute income or principal among a defined group of beneficiaries. Unlike
the exercise of a power of appointment, the exercise of a fiduciary distributive power is subject
to fiduciary standards. Unlike a power of appointment, a fiduciary distributive power does not
lapse upon the death of the fiduciary, but survives in a successor fiduciary. Nevertheless, a
fiduciary distributive power, like a power of appointment, cannot be validly exercised in favor of
or for the benefit of someone who is not a permissible appointee.

A power over the management of property, sometimes called an administrative power, is
not a power of appointment. For example, a power of sale coupled with a power to invest the
proceeds of the sale, as commonly held by a trustee of a trust, is not a power of appointment but
is an administrative power. A power of sale merely authorizes the person to substitute money for
the property sold but does not authorize the person to alter the beneficial interests in the
substituted property.

A power to designate or replace a trustee or other fiduciary is not a power of
appointment. A power to designate or replace a trustee or other fiduciary involves property
management and is a power to designate only the nonbeneficial holder of property.

A power of attorney is not a power of appointment. See Restatement of Property § 318,
Comment h: “A power of attorney, in the commonest sense of that term, creates the relationship
of principal and agent … and is terminated by the death of the [principal]. In both of these
characteristics such a power differs from a power of appointment. The latter does not create an
agency relationship and, except in the case of a power reserved in the donor, it is usually
expected that it will be exercised after the donor’s death.” The distinction is carried forward in
Restatement Third of Property: Wills and Other Donative Transfers § 17.1, Comment j. See also
Uniform Power of Attorney Act §§ 102(7) (defining the holder of a power of attorney as an
agent), 110(a)(1) (providing that the principal’s death terminates a power of attorney).

A power to create or amend a beneficiary designation, for example with respect to the
proceeds of a life insurance policy or of a pension plan, is not a power of appointment. An
instrument creating a power of appointment must, among other things, transfer the appointive
property. See Section 201; Restatement Third of Property: Wills and Other Donative Transfers §
18.1.

On the authority of a powerholder to exercise the power of appointment by creating a
new power of appointment, see Section 305. If a powerholder exercises a power by creating
another power, the powerholder of the first power is the donor of the second power, and the
powerholder of the second power is the appointee of the first power.

Paragraph (15) introduces the distinctions among powers of appointment based upon
when the power can be exercised. (A power is exercised when the instrument of exercise is
effective. Thus, a power exercised by deed is exercised when the deed is effective. The law of
deeds typically requires, among other things, intent, delivery, and acceptance. A power exercised 8
by will is exercised when the will is effective—at the testator’s death, not when the will is
executed.)

There are three categories here: a power of appointment is presently exercisable,
postponed, or testamentary.

A power of appointment is presently exercisable if it is exercisable at the time in
question. Typically, a presently exercisable power of appointment is exercisable at the time in
question during the powerholder’s life and also at the powerholder’s death, e.g., by the
powerholder’s will. Thus, a power of appointment that is exercisable “by deed or will” is a
presently exercisable power. To take another example, a power of appointment exercisable by
the powerholder’s last unrevoked instrument in writing is a presently exercisable power, because
the powerholder can make a present exercise irrevocable by explicitly so providing in the
instrument exercising the power. See Restatement Third of Property: Wills and Other Donative
Transfers § 17.4, Comment a.

A power of appointment is presently exercisable even though, at the time in question, the
powerholder can only appoint an interest that is revocable or subject to a condition. For example,
suppose that a trust directs the trustee to pay the income to the powerholder for life, then to
distribute the principal by representation to the powerholder’s surviving descendants. The trust
further provides that, if the powerholder leaves no surviving descendants, the principal is to be
distributed “to such individuals as the powerholder shall appoint.” The powerholder has a
presently exercisable power of appointment, but the appointive property is a remainder interest
that is conditioned on the powerholder leaving no surviving descendants.

A power is a postponed power—sometimes known as a deferred power—if it is not yet
exercisable until the occurrence of a specified event, the satisfaction of an ascertainable standard,
or the passage of a specified time. A postponed power becomes presently exercisable upon the
occurrence of the specified event, the satisfaction of the ascertainable standard, or the passage of
the specified time. The second sentence in paragraph (15) is modeled on Uniform Power of
Attorney Act § 102(8).

A power is testamentary if it is not exercisable during the powerholder’s life but only in
the powerholder’s will or in a nontestamentary instrument that is functionally similar to the
powerholder’s will, such as the powerholder’s revocable trust that remains revocable until the
powerholder’s death. On the ability of a powerholder to exercise a testamentary power of
appointment in such a revocable trust, see Section 304 and the accompanying Comment. See also
Restatement Third of Property: Wills and Other Donative Transfers § 19.9, Comment b.

Paragraph (18) defines a taker in default of appointment. A taker in default of
appointment—often called the “taker in default” —has a property interest that can be transferred
to another. If a taker in default transfers the interest to another, the transferee becomes a taker in
default.

Paragraph (19) defines the “terms of the instrument” as the manifestation of the intent of
the maker of the instrument regarding the instrument’s provisions as expressed in the instrument 9
or as may be established by other evidence that would be admissible in a legal proceeding. The
maker of an instrument creating a power of appointment is the donor. The maker of an
instrument exercising a power of appointment is the powerholder. This definition is a slightly
modified version of the definition of “terms of a trust” in Uniform Trust Code § 103(18).

The definitions in this section are substantially consistent with, and this Comment draws
on, Restatement Third of Property: Wills and Other Donative Transfers §§ 17.1 to 17.5 and the
accompanying Commentary.

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
donor’s 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 powerholder’s
domicile at the relevant time.
Comment

This section provides default rules for determining the law governing the creation and
exercise of, and related matters concerning, a power of appointment.

Unless the terms of the instrument creating the power provide otherwise, the actions of
the donor—the creation, revocation, or amendment of the power—are governed by the law of the
donor’s domicile; and the actions of the powerholder—the exercise, release, or disclaimer, or the
revocation or amendment thereof—are governed by the law of the powerholder’s domicile.

In each case, the domicile is determined at the relevant time. For example, a donor’s
creation of a power is governed by the law of the donor’s domicile at the time of the power’s
creation; and a donor’s amendment of a power is governed by the law of the donor’s domicile at
the time of the amendment. Similarly, a powerholder’s exercise of a power is governed by the
law of the powerholder’s domicile at the time of the exercise.

The standard “public policy” rules of choice of law naturally continue to apply. See, for
example, Restatement Second of Conflict of Laws § 187.

Paragraph (2) is a departure from older law. The older position was that the law of the
donor’s domicile governs acts both of the donor (such as the creation of the power) and of the
powerholder (such as the exercise of the power). See, e.g., Beals v. State Street Bank & Trust
Co., 326 N.E.2d 896 (Mass. 1975); Bank of New York v. Black, 139 A.2d 393 (N.J. 1958). 10
Paragraph (2) adopts the modern view that acts of the powerholder should be governed
by the law of the powerholder’s domicile, because that is the law the powerholder (or the
powerholder’s lawyer) is likely to know. This approach is supported by Restatement Third of
Property: Wills and Other Donative Transfers § 19.1, Comment e; Restatement Second of
Conflict of Laws § 275, Comment c. It is also supported by Estate of McMullin, 417 A.2d 152
(Pa. 1980); White v. United States, 680 F.2d 1156 (7th Cir. 1982).

See generally, Restatement Third of Property: Wills and Other Donative Transfers § 19.1,
Comment e; Restatement Second of Conflict of Laws § 275, Comment c.

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].
Comment
This act codifies those portions of the law of powers of appointment that are most
amenable to codification. The act is supplemented by the common law and principles of equity.
To determine the common law and principles of equity in a particular state, a court might look
first to prior case law in the state and to more general sources, such as the Restatement Third of
Property: Wills and Other Donative Transfers. The common law is not static but includes the
contemporary and evolving rules of decision developed by the courts in exercise of their power
to adapt the law to new situations and changing conditions. It also includes the traditional and
broad equitable jurisdiction of the court, which the act in no way restricts.

The statutory text of the act is also supplemented by these Comments, which, like the
Comments to any Uniform Act, may be relied on as a guide for interpretation. See Stern Oil Co.
v. Brown, 817 N.W.2d 395 (S.D. 2012) (interpreting Uniform Commercial Code); Isbell v.
Commercial Investment Associates, Inc., 644 S.E.2d 72 (Va. 2007) (interpreting Uniform
Residential Landlord Tenant Act); Yale University v. Blumenthal, 621 A.2d 1304, 1307 (Conn.
1993) (interpreting Uniform Management of Institutional Funds Act); GMAC v. Anaya, 703 P.2d
169, 172 (N.M. 1985) (interpreting Uniform Commercial Code and describing the Comments as
“persuasive” though “not binding”); Jack Davies, Legislative Law and Process in a Nutshell §
59-4 (3d ed. 2007).

The text of and Comment to this section are based on Uniform Trust Code § 106 and its
accompanying Comment.
11
[ARTICLE] 2
CREATION, REVOCATION , AND AMENDMENT OF P OWER 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 donor’s 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.
Comment

An instrument can only create a power of appointment if, under applicable law, the
instrument itself is valid (or partially valid, see the next paragraph). Thus, for example, a will
creating a power of appointment must be valid under the law—including choice of law (see
Section 103)—applicable to wills. An inter vivos trust creating a power of appointment must be
valid under the law—including choice of law (see Section 103)—applicable to inter vivos trusts.
In part, this requirement of validity means that the instrument must be properly executed to the
extent other law imposes requirements of execution. In addition, the creator of the instrument
must have the capacity to execute the instrument and be free from undue influence and other
wrongdoing. On questions of capacity, see Restatement Third of Property: Wills and Other
Donative Transfers §§ 8.1 (Mental Capacity) and 8.2 (Minority). On freedom from undue
influence and other wrongdoing, see, e.g., Restatement Third of Property §§ 8.3 (Undue
Influence, Duress, or Fraud). The ability of an agent or guardian to create a power of 12
appointment on behalf of a principal or ward is determined by other law, such as the Uniform
Power of Attorney Act or the Uniform Guardianship and Protective Proceedings Act.

The instrument need not be entirely valid. A partially valid instrument creates a power of
appointment if the provisions creating the power are valid.

In addition to being valid in the relevant provisions, an instrument creating a power of
appointment must transfer the appointive property. The creation of a power of appointment—
unlike the creation of a power of attorney—requires a transfer. See Restatement Third of Property:
Wills and Other Donative Transfers § 18.1 (“A power of appointment is created by a transfer that
manifests an intent to create a power of appointment.”). The term “transfer” includes a declaration
by an owner of property that the owner holds the property as trustee. Such a declaration necessarily
entails a transfer of legal title from the owner-as-owner to the owner-as-trustee; it also entails a
transfer of all or some of the equitable interests in the property from the owner to the trust’s
beneficiaries. See Restatement Third of Property: Wills and Other Donative Transfers § 7.1,
Comment a.

The requirement of a transfer presupposes that the donor has the right to transfer the
property. An ordinary individual cannot create a power of appointment over the Brooklyn Bridge.
Less fancifully, a donor cannot create a power of appointment if doing so would circumvent a
valid restriction on the transfer of the property. For example, interests in unincorporated business
organizations may have transfer restrictions arising from statute, contract, or both. A donor cannot
use the creation of a power of appointment to circumvent a valid restriction on transfer.

The one exception to the requirement of a transfer is stated in subsection (b): by necessity,
the requirement of a transfer does not apply to the creation of a power of appointment by the
exercise of a power of appointment. On the ability of a powerholder to exercise the power by
creating a new power of appointment, see Section 305.

In addition to the aforementioned requirements, an instrument creating a power of
appointment must manifest the donor’s intent to create in one or more powerholders a power of
appointment over appointive property. This manifestation of intent does not require the use of
particular words or phrases (such as “power of appointment”), but careful drafting should leave no
doubt about the transferor’s intent.

Sometimes the instrument is poorly drafted, raising the question whether the donor
intended to create a power of appointment. In such a case, determining the donor’s intent is a
process of construction. On construction generally, see Chapters 10, 11, and 12 of the
Restatement Third of Property: Wills and Other Donative Transfers. See also, more specifically,
Restatement Third of Property: Wills and Other Donative Transfers § 18.1, Comments b-g,
containing many illustrations of language ambiguous about whether a power of appointment was
intended and, for each illustration, offering guidance about how to construe the language.

The creation of a power of appointment requires that there be a donor, a powerholder
(who may be the same as the donor), and appointive property. There must also be one or more
permissible appointees, though these need not be restricted; a powerholder can be authorized to 13
appoint to anyone. A donor is not required to designate a taker in default of appointment,
although a well-drafted instrument will specify one or more takers in default.

Subsection (c) states the well-accepted rule that a power of appointment cannot be
created in an individual who is deceased. If the powerholder dies before the effective date of an
instrument purporting to confer a power of appointment, the power is not created, and an
attempted exercise of the power is ineffective. (The effective date of a power of appointment
created in a donor’s will is the donor’s death, not when the donor executes the will. The effective
date of a power of appointment created in a donor’s inter vivos trust is the date the trust is
established, even if the trust is revocable. See Restatement Third of Property: Wills and Other
Donative Transfers § 19.11, Comments b and c.)

Nor is a power of appointment created if all the possible permissible appointees of the
power are deceased when the transfer that is intended to create the power becomes legally
operative. If all the possible permissible appointees of a power die after the power is created and
before the powerholder exercises the power, the power terminates.

A power of appointment is not created if the permissible appointees are so indefinite that it
is impossible to identify any person to whom the powerholder can appoint. If the description of the
permissible appointees is such that one or more persons are identifiable, but it is not possible to
determine whether other persons are within the description, the power is validly created, but an
appointment can only be made to persons who can be identified as within the description of the
permissible appointees.

Subsection (d) explains that a power of appointment can be conferred on an unborn or
unascertained powerholder, subject to any applicable rule against perpetuities. This is a postponed
power. The power arises on the powerholder’s birth or ascertainment. The language creating the
power as well as other factors such as the powerholder’s capacity under applicable law determine
whether the power is then presently exercisable, postponed, or testamentary.

The rules of this section are consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers §§ 18.1 and 19.9 and the accompanying
Commentary.

SECTION 202. NONTRANSFERABILITY . A powerholder may not transfer a power
of appointment. If a powerholder dies without exercising or releasing a power, the power lapses.
Comment

A power of appointment is nontransferable. The powerholder may not transfer the power
to another person. (On the ability of the powerholder to exercise the power by conferring on a
permissible appointee a new power of appointment over the appointive property, see Section
305.) If the powerholder dies without exercising or releasing the power, the power lapses. (If a
power is held by multiple powerholders, which is rare, on the death of one powerholder that
individual’s power lapses but the power continues to be held by the surviving powerholders.) If 14
the powerholder partially releases the power and dies without exercising the remaining part, the
unexercised part of the power lapses. The power does not pass through the powerholder’s estate
to the powerholder’s successors in interest.

The ability of an agent or guardian to create, revoke, exercise, or revoke the exercise of a
power of appointment on behalf of a principal or ward is determined by other law, such as the
Uniform Power of Attorney Act or the Uniform Guardianship and Protective Proceedings Act.

The rule of this section is consistent with, and this Comment draws on, the Restatement
Third of Property: Wills and Other Donative Transfers § 17.1, Comment b.

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.
Comment

In determining which type of power of appointment is created, the general principle of
construction, articulated in this section, is that a power falls into the category giving the
powerholder the maximum discretionary authority except to the extent the terms of the instrument
creating the power restrict the powerholder’s authority. Maximum discretion confers on the
powerholder the flexibility to alter the donor’s disposition in response to changing conditions.

In accordance with this presumption of unlimited authority, a power is general unless the
terms of the creating instrument specify that the powerholder cannot exercise the power in favor of
the powerholder, the powerholder’s estate, or the creditors of either. A power is presently
exercisable unless the terms of the creating instrument specify that the power can only be exercised
at some later time or in some document such as a will that only takes effect at some later time. A
power is exclusionary unless the terms of the creating instrument specify that a permissible
appointee must receive a certain amount or portion of the appointive assets if the power is
exercised.

This general principle of construction applies, unless the terms of the instrument creating
the power of appointment provide otherwise. A well-drafted instrument intended to create a
nongeneral or testamentary or nonexclusionary power will use clear language to achieve the
desired objective. Not all instruments are well-drafted, however. A court may have to construe the
terms of the instrument to discern the donor’s intent. For principles of construction applicable to
the creation of a power of appointment, see Restatement Third of Property: Wills and Other 15
Donative Transfers Chapters 17 and 18, and the accompanying Commentary, containing many
examples.

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 powerholder’s death; and
(2) the permissible appointees of the power are a defined and limited class that does not
include the powerholder’s estate, the powerholder’s creditors, or the creditors of the powerholder’s
estate.
Comment

This section is designed to remedy a recurring drafting mistake. A testamentary power of
appointment created in a defined and limited class that happens to include the powerholder is
usually intended to be a nongeneral power. For example, a testamentary power created in one of
the donor’s descendants (such as the donor’s child or grandchild) to appoint among the donor’s
“descendants” or “issue” is typically intended to be a nongeneral power. See, for example, PLR
201229005 (stating the ruling of the Internal Revenue Service that a testamentary power of
appointment in the donor’s son, exercisable in favor of the donor’s “issue,” is a nongeneral power
for purposes of 26 U.S.C. § 2041). Accordingly, the presumption of this Section is that such a
power is nongeneral.

On the meaning of the well-accepted term of art “defined and limited,” see the Comment to
Section 205. See also Restatement Third of Property: Wills and Other Donative Transfers § 17.5,
Comment c.

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 powerholder’s exercise or nonexercise of a
power of appointment in favor of the powerholder, the powerholder’s estate, a creditor of the
powerholder, or a creditor of the powerholder’s 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. 16
(c) If the permissible appointees of a power of appointment are not defined and limited,
the power is exclusionary.
Comment

Subsection (b) states a well-accepted and mandatory exception to the presumption of
unlimited authority articulated in Section 203. If a power of appointment can be exercised only
with the consent or joinder of an adverse party, the power is not a general power. An adverse party
is an individual who has a substantial beneficial interest in the trust or other property arrangement
that would be adversely affected by the exercise or nonexercise of the power in favor of the
powerholder, the powerholder’s estate, or the creditors of either. In this context, the word
“substantial” is not subject to precise definition but must be determined in light of all the facts and
circumstances. Consider the following examples.

Example 1. D transferred property in trust, directing the trustee “to pay the income to D’s
son S for life, remainder in corpus to such person or persons as S, with the joinder of X, shall
appoint; in default of appointment, remainder to X.” S’s power is not a general power because X
meets the definition of an adverse party.

Example 2. Same facts as Example 1, except that S’s power is exercisable with the joinder
of Y rather than with the joinder of X. Y has no property interest that could be adversely affected
by the exercise of the power. Because Y is not an adverse party, S’s power is general.

Whether the party whose consent or joinder is required is adverse or not is determined at
the time in question. Consider the following example.

Example 3. Same facts as Example 2, except that, one month after D’s creation of the trust,
X transfers the remainder interest to Y. Before the transfer, Y is not an adverse party and S’s
power is general. After the transfer, Y is an adverse party and S’s power is nongeneral.

Subsection (c) also states a longstanding mandatory rule. Only a power of appointment
whose permissible appointees are defined and limited can be nonexclusionary. “Defined and
limited” in this context is a well-accepted term of art. For elaboration and examples, see
Restatement Third of Property: Wills and Other Donative Transfers § 17.5, Comment c. In general,
permissible appointees are “defined and limited” if they are defined and limited to a reasonable
number. Typically, permissible appointees who are defined and limited are described in class-gift
terms: a single-generation class such as “children,” “grandchildren,” “brothers and sisters,” or
“nieces and nephews,” or a multiple-generation class such as “issue” or “descendants” or “heirs.”
Permissible appointees need not be described in class-gift terms to be defined and limited,
however. The permissible appointees are also defined and limited if one or more permissible
appointees are designated by name or otherwise individually identified.

If the permissible appointees are not defined and limited, the power is exclusionary
irrespective of the donor’s intent. A power exercisable, for example, in favor of “such person or
persons other than the powerholder, the powerholder’s estate, the creditors of the powerholder, and 17
the creditors of the powerholder’s estate” is an exclusionary power. An attempt by the donor to
require the powerholder to appoint at least $X to each permissible appointee of the power is
ineffective, because the permissible appointees of the power are so numerous that it would be
administratively impossible to carry out the donor’s expressed intent. The donor’s expressed
restriction is disregarded, and the powerholder may exclude any one or more of the permissible
appointees in exercising the power.

In contrast, a power to appoint only to the powerholder’s creditors or to the creditors of the
powerholder’s estate is a power in favor of a defined and limited class. Such a power could be
nonexclusionary if, for example, the terms of the instrument creating the power provide that the
power is a power to appoint “to such of the powerholder’s estate creditors as the powerholder shall
by will appoint, but if the powerholder exercises the power, the powerholder must appoint $X to a
designated estate creditor or must appoint in full satisfaction of the powerholder’s debt to a
designated estate creditor.”

If a power is determined to be nonexclusionary, it is to be inferred that the donor intends
to require an appointment to confer a reasonable benefit upon each mandatory appointee. An
appointment under which a mandatory appointee receives nothing, or only a nominal sum,
violates this requirement and is forbidden. This doctrine is known as the doctrine forbidding
illusory appointments. For elaboration, see Restatement Third of Property: Wills and Other
Donative Transfers § 17.5, Comment j.

The terms of the instrument creating a power of appointment sometimes provide that no
appointee shall receive any share in default of appointment unless the appointee consents to
allow the amount of the appointment to be taken into account in calculating the fund to be
distributed in default of appointment. This “hotchpot” language is used to minimize unintended
inequalities of distribution among permissible appointees. Such a clause does not make the
power nonexclusionary, because the terms do not prevent the powerholder from making an
appointment that excludes a permissible appointee. See Restatement Third of Property: Wills and
Other Donative Transfers § 17.5, Comment k.

The rules of this section are consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers §§ 17.3 to 17.5 and the accompanying
Introductory Note and Commentary.

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. 18
Comment

The donor of a power of appointment has the authority to revoke or amend the power
only to the extent the instrument creating the power is revocable by the donor or the donor
reserves a power of revocation or amendment in the instrument creating the power.

For example, the donor’s power to revoke or amend a revocable inter vivos trust carries
with it the authority to revoke or amend any power of appointment created in the trust. However,
to the extent an exercise of the power removes appointive property from the trust, the donor’s
authority to revoke or amend the power is eliminated, unless the donor expressly reserved
authority to revoke or amend any transfer from the trust after the transfer is completed.

If an irrevocable inter vivos trust confers a presently exercisable power on someone who
is not the settlor of the trust (the settlor being the donor of the power), the donor lacks authority
to revoke or amend the power, except to the extent the donor reserved the authority to do so. If
the donor did reserve the authority to revoke or amend the power, that authority is only effective
until the powerholder irrevocably exercises the power.

If the same individual is both the donor and the powerholder, the donor in his or her
capacity as powerholder can indirectly revoke or amend the power by a partial or total release of
the power. See Section 402. After the power has been irrevocably exercised, however, the donor
as donor is in no different position in regard to revoking or amending the exercise of the power
than the donor would be if the donor and powerholder were different individuals.

The ability of an agent or guardian to revoke or amend a power of appointment on behalf
of a principal or ward is determined by other law, such as the Uniform Power of Attorney Act or
the Uniform Guardianship and Protective Proceedings Act.

Other law of the state may permit the reformation of an otherwise irrevocable instrument.
See, for example, Uniform Probate Code § 2-805; Uniform Trust Code § 415.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 18.2 and the accompanying
Commentary.

[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: 19
(A) manifest the powerholder’s 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.
Comment

Paragraph (1) states the fundamental principle that an instrument can only exercise a
power of appointment if the instrument, under applicable law, is valid (or partially valid, see the
next paragraph). Thus, for example, a will exercising a power of appointment must be valid
under the law—including choice of law (see Section 103)—applicable to wills. An inter vivos
trust exercising a power of appointment must be valid under the law—including choice of law
(see Section 103)—applicable to inter vivos trusts. In part, this means that the instrument must
be properly executed to the extent other law imposes requirements of execution. In addition, the
creator of the instrument must have the capacity to execute the instrument and be free from
undue influence and other wrongdoing. On questions of capacity, see Restatement Third of
Property: Wills and Other Donative Transfers §§ 8.1 (Mental Capacity) and 8.2 (Minority). On
freedom from undue influence and other wrongdoing, see, e.g., Restatement Third of Property §§
8.3 (Undue Influence, Duress, or Fraud). The ability of an agent or guardian to exercise a power
of appointment on behalf of a principal or ward is determined by other law, such as the Uniform
Power of Attorney Act or the Uniform Guardianship and Protective Proceedings Act.

The instrument need not be entirely valid. A partially valid instrument can exercise a
power of appointment if the provisions exercising the power are valid.

Paragraph (2) requires the terms of the instrument exercising the power of appointment to
manifest the powerholder’s intent to exercise the power of appointment. Whether a powerholder
has manifested an intent to exercise a power of appointment is a question of construction. See
generally Restatement Third of Property: Wills and Other Donative Transfers § 19.2. For
example, a powerholder’s disposition of appointive property may manifest an intent to exercise
the power even though the powerholder does not refer to the power. See Restatement Third of
Property: Wills and Other Donative Transfers § 19.3. Paragraph (2) also requires that the terms
of the instrument exercising the power must, subject to Section 304, satisfy the requirements of
exercise, if any, imposed by the donor.

Language expressing an intent to exercise a power is clearest if it makes a specific
reference to the creating instrument and exercises the power in unequivocal terms and with
careful attention to the requirements of exercise, if any, imposed by the donor.

The recommended method for exercising a power of appointment is by a specific-
exercise clause, using language such as the following: “I exercise the power of appointment
conferred upon me by [my father’s will] as follows: I appoint [fill in details of appointment].”
20
Not recommended is a blanket-exercise clause, which purports to exercise “any” power
of appointment the powerholder may have, using language such as the following: “I exercise any
power of appointment I may have as follows: I appoint [fill in details of appointment].” Although
a blanket-exercise clause does manifest an intent to exercise any power of appointment the
powerholder may have, such a clause raises the often-litigated question of whether it satisfies the
requirement of specific reference imposed by the donor in the instrument creating the power.

A blending clause purports to blend the appointive property with the powerholder’s own
property in a common disposition. The exercise portion of a blending clause can take the form of
a specific exercise or, more commonly, a blanket exercise. For example, a clause providing “All
the residue of my estate, including the property over which I have a power of appointment under
my mother’s will, I devise as follows” is a blending clause with a specific exercise. A clause
providing “All the residue of my estate, including any property over which I may have a power
of appointment, I devise as follows” is a blending clause with a blanket exercise.

This act aims to eliminate any significance attached to the use of a blending clause. A
blending clause has traditionally been regarded as significant in the application of the doctrines
of “selective allocation” and “capture.” This act eliminates the significance of such a clause
under those doctrines. See Sections 308 (selective allocation) and 309 (capture). The use of a
blending clause is more likely to be the product of the forms used by the powerholder’s lawyer
than a deliberate decision by the powerholder to facilitate the application of the doctrines of
selective allocation or capture.

If the powerholder decides not to exercise a specific power or any power that the
powerholder might have, it is important to consider whether to depend on mere silence to
produce a nonexercise or to take definitive action to assure a nonexercise. Definitive action can
take the form of a release during life (see Section 402) or a nonexercise clause in the
powerholder’s will or other relevant instrument. A nonexercise clause can take the form of a
specific-nonexercise clause (for example, “I do not exercise the power of appointment conferred
on me by my father’s trust”) or the form of a blanket-nonexercise clause (for example, “I do not
exercise any power of appointment I may have”).

In certain circumstances, different consequences depend on the powerholder’s choice.
Under Section 302, a residuary clause in the powerholder’s will is treated as manifesting an
intent to exercise a general power in certain limited circumstances if the powerholder silently
failed to exercise the power, but not if the powerholder released the power or refrained in a
record from exercising it. Under Section 310, unappointed property passes to the powerholder’s
estate in certain limited circumstances if the powerholder silently failed to exercise a general
power, but passes to the donor or to the donor’s successors in interest if the powerholder released
the power.

Paragraph (3) provides that the exercise is valid only to the extent the exercise is
permissible. On permissible and impermissible exercise, see Sections 305 to 307.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers §§ 19.1, 19.8, and 19.9 and the 21
accompanying Commentary.

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 blanket-
exercise 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 powerholder’s will, or a comparable clause in the
powerholder’s revocable trust, manifests the powerholder’s 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 powerholder’s estate;
(3) there is no gift-in-default clause or the clause is ineffective; and
(4) the powerholder did not release the power.
Comment

This section addresses a question arising under Section 301(2)(A)—namely, whether the
powerholder’s intent to exercise a power of appointment is manifested by a garden-variety
residuary clause such as “All the residue of my estate, I devise to ...” or “All of my estate, I
devise to ....” (The section also applies to a comparable provision in the powerholder’s revocable
trust, such as a provision providing for the distribution of the trust corpus.) This section does not
address the effect of a residuary clause that contains a blanket exercise or a specific exercise of a
power of appointment. On blanket-exercise and specific-exercise clauses, see the Comment to
Section 301.

The rule of this section is that in most circumstances a garden-variety residuary clause
does not manifest an intent to exercise a power of appointment.
22
Such a clause manifests an intent to exercise a power of appointment only in the rare
circumstance when (1) the terms of the instrument containing the residuary clause do not
manifest a contrary intent, (2) the power in question is a general power exercisable in favor of
the powerholder’s estate, (3) there is no gift-in-default clause or it is ineffective, and (4) the
powerholder did not release the power.

In a well-planned estate, a power of appointment, whether general or nongeneral, is
accompanied by a gift in default. In a less carefully planned estate, on the other hand, there may
be no gift-in-default clause. Or, if there is such a clause, the clause may be wholly or partly
ineffective. To the extent the donor did not provide for takers in default or the gift-in-default
clause is ineffective, it is more efficient to attribute to the powerholder the intent to exercise a
general power in favor of the powerholder’s residuary devisees. The principal benefit of
attributing to the powerholder the intent to exercise a general power is that it allows the property
to pass under the powerholder’s will instead of as part of the donor’s estate. Because the donor’s
death would normally have occurred before the powerholder died, some of the donor’s
successors might themselves have predeceased the powerholder. It is more efficient to avoid
tracing the interest through multiple estates to determine who are the present successors.
Moreover, to the extent the donor did not provide for takers in default, it is also more in accord
with the donor’s probable intent for the powerholder’s residuary clause to be treated as
exercising the power.

A gift-in-default clause can be ineffective or partially ineffective for a variety of reasons.
The clause might cover only part of the appointive property. The clause might be invalid because
it violates a rule against perpetuities or some other rule, or it might be ineffective because it
conditioned the interest of the takers in default on an uncertain event that did not happen, the
most common of which is an unsatisfied condition of survival.

Under no circumstance does a residuary clause manifest an intent to exercise a
nongeneral power. A residuary clause disposes of the powerholder’s own property, and a
nongeneral power is not an ownership-equivalent power. Similarly, a residuary clause does not
manifest an intent to exercise a general power which is general only because it is exercisable in
favor of the creditors of the powerholder or the creditors of the powerholder’s estate.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 19.4 and the accompanying
Commentary.

SECTION 303. INTENT TO EXERCISE: AFTER-ACQUIRED POWE R. 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 23
power unless there is no gift-in-default clause or the gift-in-default clause is ineffective.
Comment

Nothing in the law prevents a powerholder from exercising an after-acquired power—in
other words, from exercising a power in an instrument executed before acquiring the power. The
only question is one of construction: whether the powerholder intended by the earlier instrument
to exercise the after-acquired power. (The term “after-acquired power” in this section refers only
to an after-acquired power acquired before the powerholder’s death. A power of appointment
cannot be conferred on a deceased powerholder. See Section 201.)

If the instrument of exercise specifically identifies the power to be exercised, then the
question of construction is readily answered: the specific-exercise clause expresses an intent to
exercise the power, whether the power is after-acquired or not. However, if the instrument of
exercise uses only a blanket-exercise clause, the question of whether the powerholder intended to
exercise an after-acquired power is often harder to answer. The presumptions in this section
provide default rules of construction on the powerholder’s likely intent.

Paragraph (1) states the general rule of this section. Unless the terms of the instrument
indicate that the powerholder had a different intent, a blanket-exercise clause extends to a power
of appointment acquired after the powerholder executed the instrument containing the blanket-
exercise clause. General references to then-present circumstances, such as “all the powers I
have” or similar expressions, are not a sufficient indication of an intent to exclude an after-
acquired power. In contrast, more precise language, such as “all powers I have at the date of
execution of this will,” does indicate an intent to exclude an after-acquired power.

It is important to remember that even if the terms of the instrument manifest an intent to
exercise an after-acquired power, the intent may be ineffective, for example if the terms of the
donor’s instrument creating the power manifest an intent to preclude such an exercise. In the
absence of an indication to the contrary, however, it is inferred that the time of the execution of
the powerholder’s exercising instrument is immaterial to the donor. Even if the donor declares
that the property shall pass to such persons as the powerholder “shall” or “may” appoint, these
terms do not suffice to indicate an intent to exclude exercise by an instrument previously
executed, because these words may be construed to refer to the time when the exercising
document becomes effective.

Paragraph (2) states an exception to the general rule of paragraph (1). If the powerholder
is also the donor, a blanket-exercise clause in a preexisting instrument is rebuttably presumed not
to manifest an intent to exercise a power later reserved in another donative transfer, unless the
donor/powerholder did not provide for a taker in default of appointment or the gift-in-default
clause is ineffective.

The black-letter of this section is consistent with, and this Comment draws on,
Restatement Third of Property: Wills and Other Donative Transfers § 19.6 and the
accompanying Commentary. 24
SECTION 304. SUBSTANTIAL COMPLIANCE WITH DONOR -IMPOSED
FORMAL REQUIREMENT. A powerholder’s substantial compliance with a formal
requirement of 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 powerholder’s manner of attempted exercise of the power does not impair a
material purpose of the donor in imposing the requirement.
Comment

This section adopts a substantial-compliance rule for donor-imposed formal
requirements. This section only applies to formal requirements imposed by the donor. It does not
apply to formal requirements imposed by law, such as the requirement that a will must be signed
and attested. The section also does not apply to substantive requirements imposed by the donor,
for example a requirement that the powerholder attain a certain age before the power is
exercisable.

Whenever the donor imposes formal requirements with respect to the instrument of
appointment that exceed the requirements imposed by law, the donor’s purpose in imposing the
additional requirements is relevant to whether the powerholder’s attempted exercise satisfies the
rule of this section. To the extent the powerholder’s failure to comply with the additional
requirements will not impair the accomplishment of a material purpose of the donor, the
powerholder’s attempted appointment in a manner that substantially complies with a donor-
imposed requirement does not fail for lack of perfect compliance with that requirement.

For example, a donor’s formal requirement that the power of appointment is exercisable
“by will” may be satisfied by the powerholder’s attempted exercise in a nontestamentary
instrument that is functionally similar to a will, such as the powerholder’s revocable trust that
remains revocable until the powerholder’s death. See Restatement Third of Property: Wills and
Other Donative Transfers § 19.9, Comment b (“Because a revocable trust operates in substance
as a will, a power of appointment exercisable “by will” can be exercised in a revocable-trust
document, as long as the revocable trust remained revocable at the [powerholder]’s death.”).

A formal requirement commonly imposed by the donor is that, in order to be effective,
the powerholder’s attempted exercise must make specific reference to the power. Specific-
reference clauses were a pre-1942 invention designed to prevent an inadvertent exercise of a
general power. The federal estate tax law then provided that the value of property subject to a
general power was included in the powerholder’s gross estate if the general power was exercised. 25
The idea of requiring specific reference was designed to thwart unintended exercise and, hence,
estate taxation.

The federal estate tax law has changed. For a general power created after October 21,
1942, estate tax consequences do not depend on whether the power is exercised.

Nevertheless, donors continue to impose specific-reference requirements. Because the
original purpose of the specific-reference requirement was to prevent an inadvertent exercise of
the power, it seems reasonable to presume that that this is still the donor’s purpose in doing so.
Consequently, a specific-reference requirement still overrides any applicable state law that
presumes that an ordinary residuary clause was intended to exercise a general power. Put
differently: An ordinary residuary clause may manifest the powerholder’s intent to exercise
(under Section 301(2)(A)) but does not satisfy the requirements of exercise if the donor imposed
a specific-reference requirement (this section and Section 301(2)(B)).

A more difficult question is whether a blanket-exercise clause satisfies a specific-
reference requirement. If it could be shown that the powerholder had knowledge of and intended
to exercise the power, the blanket-exercise clause would be sufficient to exercise the power,
unless it could be shown that the donor’s intent was not merely to prevent an inadvertent exercise
of the power but instead that the donor had a material purpose in insisting on the specific-
reference requirement. In such a case, the possibility of applying Uniform Probate Code § 2-805
or Restatement Third of Property: Wills and Other Donative Transfers § 12.1 to reform the
powerholder’s attempted appointment to insert the required specific reference should be
explored.

This rule of this section is consistent with, but an elaboration of, Uniform Probate Code §
2-704: “If a governing instrument creating a power of appointment expressly requires that the
power be exercised by a reference, an express reference, or a specific reference, to the power or
its source, it is presumed that the donor’s intent, in requiring that the [powerholder] exercise the
power by making reference to the particular power or to the creating instrument, was to prevent
an inadvertent exercise of the power.”

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 19.10 and the accompanying
Commentary.

SECTION 305. PERMISSIBLE APPOINTMENT .
(a) A powerholder of a general power of appointment that permits appointment to the
powerholder or the powerholder’s 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 powerholder’s own property. 26
(b) A powerholder of a general power of appointment that permits appointment only to
the creditors of the powerholder or of the powerholder’s estate may appoint only 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;
(3) create a nongeneral power in any person to appoint to one or more of the
permissible appointees of the original nongeneral power; or
(4) create a nongeneral power in a permissible appointee to appoint to one or
more persons if the permissible appointees of the new nongeneral power include the permissible
appointees of the original nongeneral power.
Comment

When a donor creates a general power under which an appointment can be made outright
to the powerholder or the powerholder’s estate, the necessary implication is that the powerholder
may accomplish by an appointment to others whatever the powerholder could accomplish by
first appointing to himself and then disposing of the property, including a disposition in trust or
in the creation of a further power of appointment.

A general power to appoint only to the powerholder (even though it says “and to no one
else”) does not prevent the powerholder from exercising the power in favor of others. There is no
reason to require the powerholder to transform the appointive assets into owned property and
then, in a second step, to dispose of the owned property. Likewise, a general power to appoint
only to the powerholder’s estate (even though it says “and to no one else”) does not prevent an
exercise of the power by will in favor of others. There is no reason to require the powerholder to
transform the appointive assets into estate property and then, in a second step, to dispose of the
estate property by will.

Similarly, a general power to appoint to the powerholder may purport to allow only one
exercise of the power, but such a restriction is ineffective and does not prevent multiple partial
exercises of the power. To take another example, a general power to appoint to the powerholder 27
or to the powerholder’s estate may purport to restrict appointment to outright interests not in
trust, but such a restriction is ineffective and does not prevent an appointment in trust.

An additional example will drive home the point. A general power to appoint to the
powerholder or to the powerholder’s estate may purport to forbid the powerholder from
imposing conditions on the enjoyment of the property by the appointee. Such a restriction is
ineffective and does not prevent an appointment subject to such conditions.

As stated in subsection (b), however, a general power to appoint only to the
powerholder’s creditors or the creditors of the powerholder’s estate permits an appointment only
to those creditors.

Except to the extent the terms of the instrument creating the power manifest a contrary
intent, the powerholder of a nongeneral power has the same breadth of discretion in appointment
to permissible appointees that the powerholder has in the disposition of the powerholder’s owned
property to permissible appointees of the power.

Thus, unless the terms of the instrument creating the power manifest a contrary intent, the
powerholder of a nongeneral power has the authority to exercise the power by an appointment in
trust. In order to manifest a contrary intent, the terms of the instrument creating the power must
specifically prohibit an appointment in trust. So, for example, a power to appoint “to” the
powerholder’s descendants includes the authority to appoint in trust for the benefit of one or
more of those descendants.

Similarly, unless the terms of the instrument creating the power manifest a contrary
intent, the powerholder of a nongeneral power has the authority to exercise the power by creating
a general power in a permissible appointee. The rationale for this rule is a straightforward
application of the maxim that the greater includes the lesser. A powerholder of a nongeneral
power may appoint outright to a permissible appointee, so the powerholder may instead create in
a permissible appointee a general power.

Likewise, unless the terms of the instrument creating the power manifest a contrary
intent, the powerholder of a nongeneral power may exercise the power by creating a new
nongeneral power in any person, whether or not a permissible appointee, to appoint to some or
all of the permissible appointees of the original nongeneral power. In order to manifest a contrary
intent, the terms of the instrument creating the power must prohibit the creation of such powers.
Language merely conferring the power of appointment on the powerholder does not suffice.

And finally, unless the terms of the instrument creating the power manifest a contrary
intent, the powerholder of a nongeneral power may exercise the power by creating a new
nongeneral power in a permissible appointee to appoint to one or more persons if the permissible
appointees of the new nongeneral power include all of the permissible appointees of the original
nongeneral power (other than the new powerholder, of course, given that the new power
authorized by subsection (c)(4) is nongeneral). Subsection (c)(4), which was added in 2018, is
designed to give the holder of the original nongeneral power additional flexibility.
28
The rules of subsection (c) are default rules. The terms of the instrument creating the
power may manifest a contrary intent.

The rules of this section, other than subsection (c)(4), are consistent with, and this
Comment draws on, Restatement Third of Property: Wills and Other Donative Transfers §§
19.13 and 19.14 and the accompanying Commentary.

2018 Amendment. Subsection (c)(4) was added in 2018 in order to provide additional
flexibility to a holder of a nongeneral power. Two jurisdictions that had enacted this section
sought additional flexibility by amending the word “general” in subsection (c)(2) to read
“general or nongeneral”; see Colo. Stat. §15.2.5-305; Va Code §64.2-2717. However, such an
amendment would be too broad and potentially inconsistent with other sections of the act.
Instead, the Uniform Law Commission amended this section in 2018 to add subsection (c)(4).
This Comment was amended accordingly.

SECTION 306. APPOINTMENT TO DECEASED APPOINTEE OR
PERMISSIBLE APPOINTEE’S 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).

Comment

Just as property cannot be transferred to an individual who is deceased (see Restatement
Third of Property: Wills and Other Donative Transfers § 1.2), a power of appointment cannot be
effectively exercised in favor of a deceased appointee.

However, an antilapse statute may apply to trigger the substitution of the deceased
appointee’s descendants (or other substitute takers), unless the terms of the instrument creating
or exercising the power of appointment manifest a contrary intent. Antilapse statutes typically
provide, as a default rule of construction, that devises to certain relatives who predecease the 29
testator pass instead to specified substitute takers, usually the descendants of the predeceased
devisee who survive the testator. See generally Restatement Third of Property: Wills and Other
Donative Transfers § 5.5.

When an antilapse statute does not expressly address whether it applies to the exercise of
a power of appointment, a court should construe it to apply to such an exercise. See Restatement
Third of Property: Wills and Other Donative Transfers § 5.5, Comment l. The rationale
underlying antilapse statutes, that of presumptively attributing to the testator the intent to
substitute the descendants of a predeceased devisee, applies equally to the exercise of a power of
appointment.

The substitute takers provided by an antilapse statute (typically the descendants of the
deceased appointee) are treated as permissible appointees even if the description of permissible
appointees provided by the donor does not expressly cover them. This rule corresponds to the
rule applying antilapse statutes to class gifts. Antilapse statutes substitute the descendants of
deceased class members, even if the class member’s descendants are not members of the class.
See Restatement Third of Property: Wills and Other Donative Transfers § 19.12, Comment e.

The donor of a power, general or nongeneral, can prohibit the application of an antilapse
statute to the powerholder’s appointment and, in the case of a nongeneral power, can prohibit an
appointment to the descendants of a deceased permissible appointee, but must manifest an intent
to do so in the terms of the instrument creating the power of appointment. A traditional gift-in-
default clause does not manifest a contrary intent in either case, unless the clause provides that it
is to take effect instead of the descendants of a deceased permissible appointee.

Subsection (b) provides that the descendants of a deceased permissible appointee are
treated as permissible appointees of a nongeneral power of appointment. This rule is a logical
extension of the application of antilapse statutes to appointments. If an antilapse statute can
substitute the descendants of a deceased appointee, the powerholder should be allowed to appoint
in favor of, or to create a new power of appointment in, a descendant (meaning, one or more
descendants; the Uniform Law Commission uses the singular to include the plural) of a deceased
permissible appointee.

Who qualifies as a “descendant” is defined by state law. See, for example, Uniform
Probate Code §§ 1-201(9), 2-103, 2-115 to 2-122, 2-705.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 19.12 and the accompanying
Commentary.

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. 30
(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.
Comment

The rules of this section apply to the extent the powerholder attempts to confer a
beneficial interest in the appointive property on an impermissible appointee. For example, a
nongeneral power may not be exercised in favor of the powerholder. And a nongeneral power in
favor of the donor’s descendants may not be exercised in favor of the donor’s spouse (assuming
the usual scenario wherein the spouse is not also a descendant).

To the extent an appointment is ineffective, it is invalid. But it bears emphasizing that an
appointment that is partially valid remains partially valid. Partial invalidity does not doom the
entire appointment.

The rules of this section do not apply to an appointment of a nonbeneficial interest—for
example, the appointment of legal title to a trustee—if the beneficial interest is held by
permissible appointees.

Nor do the rules of this section prohibit beneficial appointment to an impermissible
appointee if the intent to benefit the impermissible appointee is not the powerholder’s but rather
is the intent of a permissible appointee in whose favor the powerholder has decided to exercise
the power. In other words, if the powerholder makes a decision to exercise the power in favor of
a permissible appointee, the permissible appointee may request the powerholder to transfer the
appointive assets directly to an impermissible appointee. The appointment directly to the
impermissible appointee in this situation is effective, being treated for all purposes as an
appointment first to the permissible appointee followed by a transfer by the permissible
appointee to the impermissible appointee.

The donor of a power of appointment sets the range of permissible appointees by
designating the permissible appointees of the power. The rules of this section are concerned with
attempts by the powerholder to exceed that authority. Such an attempt is called a fraud on the
power and is ineffective. The term “fraud on the power” is a well-accepted term of art. See
Restatement Third of Property: Wills and Other Donative Transfers §§ 19.15 and 19.16.

Among the most common devices employed to commit a fraud on the power are: an
appointment conditioned on the appointee conferring a benefit on an impermissible appointee; an
appointment subject to a charge in favor of an impermissible appointee; an appointment upon a
trust for the benefit of an impermissible appointee; an appointment in consideration of a benefit
to an impermissible appointee; and an appointment primarily for the benefit of the permissible
appointee’s creditor if the creditor is an impermissible appointee. Each of these appointments is
impermissible and ineffective.

The rules of this section are consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers §§ 19.15 and 19.16 and the 31
accompanying Commentary.

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 property and the appointive property must be allocated in the permissible
manner that best carries out the powerholder’s intent.
Comment

The rule of this section is commonly known as the doctrine of selective allocation. This
doctrine applies if the powerholder uses the same instrument to exercise a power of appointment
and to dispose of property that the powerholder owns. For purposes of this section, the
powerholder’s will, any codicils to the powerholder’s will, and any revocable trust created by the
powerholder that did not become irrevocable before the powerholder’s death are treated as the
same instrument.

The doctrine of selective allocation provides that the owned property and the appointive
property shall be allocated in the permissible manner that best carries out the powerholder’s
intent.

One situation that often calls for selective allocation is when the powerholder disposes of
property to permissible and impermissible appointees. By allocating owned assets to the
dispositions favoring impermissible appointees and allocating appointive assets to permissible
appointees, the appointment is rendered effective. Consider the following example, drawn from
the Restatement Third of Property: Wills and Other Donative Transfers.

Example. D died, leaving a will that devised property worth $100,000 to T in trust. T is
directed to pay the net income to S (Donor’s son) for life and then “to pay the principal to S’s
descendants as S shall by will appoint, and in default of appointment to pay the principal by
representation to S’s descendants then living, and if no descendant of S is then living, to pay the
principal to X-Charity.” S dies. The property over which S has the nongeneral power is worth
$200,000 at his death. S’s owned property at his death is worth $800,000. S’s will provides as
follows: “All property I own or over which I have any power of appointment shall be used first
to pay my debts, expenses of administration, and death taxes, and the balance I give outright to
my daughters.” S’s debts plus the death taxes payable on S’s death plus the expenses of
administering S’s estate total $200,000. If S’s owned property is allocated ratably to the payment
of such $200,000, one-fifth of the $200,000 would be an ineffective appointment, because it
would be to impermissible appointees. That one-fifth of $200,000 ($40,000 of the appointive
assets) would pass in default of appointment, and the owned property would have to pick up the
full payment of the debts, taxes, and expenses of administration. A selective allocation in the first
instance of owned assets to the payment of debts, taxes, and expenses of administration leaves
the appointive assets appointed only to permissible appointees of the nongeneral power and
nothing passes in default of appointment. 32

The result of applying selective allocation is always one that the powerholder could have
provided for in specific language, and one that the powerholder most probably would have
provided for had he or she been aware of the difficulties inherent in the dispositive scheme. By
the rule of selective allocation, courts undertake to prevent the dispositive plan from being
frustrated by the ineptness of the powerholder or the powerholder’s lawyer. For an early case
adopting selective allocation, see Roe v. Tranmer, 2 Wils. 75, 95 Eng. Rep. 694 (C.P. 1757).

For further discussion of selective allocation, and illustrations of its application to various
fact-patterns, see Restatement Third of Property: Wills and Other Donative Transfers § 19.19
and the accompanying Commentary. This rule of this Section is consistent with, and this
Comment draws on, that Restatement.

On the distinction between selective allocation (a rule of construction based on the
assumed intent of the powerholder) and the process sometimes known as “marshaling” (an
outgrowth of general equitable principles), see the Restatement Second of Property: Donative
Transfers, especially the Introductory Note to Chapter 22.

SECTION 309. CAPTURE DOCTRINE: DISPOSITION OF INEFFECTIVELY
APPOINTED PROPERTY U NDER GENERAL POWER . To the extent a powerholder of a
general power of appointment, other than a power to withdraw property from, revoke, or amend
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 deceased, the
powerholder’s estate if the estate is a permissible appointee; or
(B) if there is no taker under subparagraph (A), passes under a reversionary 33
interest to the donor or the donor’s transferee or successor in interest.
Comment

This section applies when the powerholder of a general power makes an ineffective
appointment. This section does not apply when the powerholder of a general power fails to
exercise or releases the power. (On such fact-patterns, see instead Section 310.)

Nor does this section apply to an ineffective exercise of a power of revocation,
amendment, or withdrawal—in each case, a power pertaining to a trust. To the extent a
powerholder of one of these types of powers makes an ineffective appointment, the ineffectively
appointed property remains in the trust.

The central rule of this section—in paragraph (1) and subparagraph (2)(A)—is a modern
variation of the so-called “capture doctrine” adopted by a small body of case law and followed in
Restatement Second of Property: Donative Transfers § 23.2. Under that doctrine, the
ineffectively appointed property passed to the powerholder or the powerholder’s estate, but only
if the ineffective appointment manifested an intent to assume control of the appointive property
“for all purposes” and not merely for the limited purpose of giving effect to the attempted
appointment. If the ineffective appointment manifested such an intent, the ineffective
appointment was treated as an implied alternative appointment to the powerholder or the
powerholder’s estate, and thus took effect even if the donor provided for takers in default and
one or more of the takers in default were otherwise entitled to take.

The capture doctrine was developed at a time when the donor’s gift-in-default clause was
considered an afterthought, inserted just in case the powerholder failed to exercise the power.
Today, the donor’s gift-in-default clause is typically carefully drafted and intended to take effect,
unless circumstances change that would cause the powerholder to exercise the power.
Consequently, if the powerholder exercises the power effectively, the exercise divests the interest
of the takers in default. But if the powerholder makes an ineffective appointment, the
powerholder’s intent regarding the disposition of the ineffectively appointed property is
problematic.

Whether or not the ineffective appointment manifested an intent to assume control of the
appointive property “for all purposes” often depended on nothing more than whether the
ineffective appointment was contained in a blending clause. The use of a blending clause rather
than a direct-exercise clause, however, is typically the product of the drafting lawyer’s forms
rather than a deliberate choice of the powerholder.

This section alters the traditional capture doctrine in two ways: (1) the gift-in-default
clause takes precedence over any implied alternative appointment to the powerholder or the
powerholder’s estate deduced from the use of a blending clause or otherwise; and (2) the
ineffectively appointed property passes to the powerholder or the powerholder’s estate only if
there is no gift-in-default clause or to the extent the gift-in-default clause is ineffective. Nothing
turns on whether the powerholder used a blending clause or somehow otherwise manifested an
intent to assume control of the appointive property “for all purposes.” 34
Subparagraph (2)(B) addresses the special case of a power of appointment that is general
only because it is exercisable in favor of creditors, but not exercisable in favor of the
powerholder or the powerholder’s estate. This type of general power is sometimes used in
generation-skipping transfer tax planning. However, this type of general power should not trigger
the capture doctrine, because the powerholder and the powerholder’s estate are impermissible
appointees. Instead, ineffectively appointed property should pass under the gift-in-default clause
(paragraph (1)) or, if there is no gift-in-default clause or it is ineffective, under a reversionary
interest to the donor or the donor’s transferee or successor in interest (subparagraph (2)(B)).

The rule of this section is essentially consistent with, and this Comment draws on,
Restatement Third of Property: Wills and Other Donative Transfers § 19.21 and the
accompanying Commentary.

SECTION 310. DISPOSITION OF UNAPPOINTED PROPERTY U NDER
RELEASED OR UNEXERCI SED GENERAL POWER. To the extent a powerholder
releases or fails to exercise a general power of appointment other than a power to withdraw
property from, revoke, or amend 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 deceased, the
powerholder’s 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 donor’s transferee or successor in interest.
Comment

The rules of this section apply to unappointed property under a general power of 35
appointment. The rules do not apply to unappointed property under a power of revocation,
amendment, or withdrawal—powers pertaining to a trust. If the powerholder releases or dies
without exercising a power of revocation or amendment, the power to revoke expires and, unless
someone else continues to have a power of revocation or amendment, the trust becomes
irrevocable and unamendable. If the powerholder releases or dies without exercising a power to
withdraw principal of a trust, the principal that the powerholder could have withdrawn, but did
not, remains part of the trust.
The rationale for the rules of this section runs as follows. The gift-in-default clause
controls the disposition of unappointed property to the extent the clause is effective. To the
extent the gift-in-default clause is nonexistent or ineffective, the disposition of the unappointed
property depends on whether the powerholder merely failed to exercise the power or whether the
powerholder released the power. If the powerholder merely failed to exercise the power, the
unappointed property passes to the powerholder or to the powerholder’s estate (if these are
permissible appointees). The rationale is the same as when the powerholder makes an ineffective
appointment. If, however, the powerholder released the power, the powerholder has
affirmatively chosen to reject the opportunity to gain ownership of the property, hence the
unappointed property passes under a reversionary interest to the donor or to the donor’s
transferee or successor in interest.

These rules are illustrated by the following examples.

Example 1. D transfers property to T in trust, directing T to pay the income to S (D’s son)
for life, with a general testamentary power in S to appoint the principal of the trust, and in default
of appointment the principal is to be distributed “to S’s descendants who survive S, by
representation, and if none, to X-Charity.” S dies leaving a will that does not exercise the power.
The principal passes under the gift-in-default clause to S’s descendants who survive S, by
representation.

Example 2. Same facts as Example 1, except that D’s gift-in-default clause covered only
half of the principal, and S died intestate. Half of the principal passes under the gift-in-default
clause. The other half of the principal passes to S’s estate for distribution to S’s intestate heirs.

Example 3. Same facts as Example 2, except that S released the power before dying
intestate. Half of the principal passes under the gift-in-default clause. The other half of the
principal passes to D or to D’s transferee or successor in interest.

In addition to governing a released general power, subparagraph (2)(B) also applies to the
special case of an unexercised general power that is general only because it is exercisable in
favor of creditors, but not exercisable in favor of the powerholder or the powerholder’s estate.
This type of general power is sometimes used in generation-skipping transfer tax planning. In
such a case, unappointed property passes under the gift-in-default clause (paragraph (1)) or, if
there is no gift-in-default clause or to the extent it is ineffective, under a reversionary interest to
the donor or the donor’s transferee or successor in interest (subparagraph (2)(B)).

The rules of this section are essentially consistent with, and this Comment draws on,
Restatement Third of Property: Wills and Other Donative Transfers § 19.22 and the 36
accompanying Commentary.

SECTION 311. DISPOSITION OF UNAPPOINTED PROPERTY U NDER
RELEASED OR UNEXERCI SED 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 donor’s transferee or successor in interest.
Comment

To the extent the powerholder of a nongeneral power releases, ineffectively exercises, or
fails to exercise the power, thus causing the power to lapse, the gift-in-default clause controls the
disposition of the unappointed property to the extent the gift-in-default clause is effective.

To the extent the gift-in-default clause is nonexistent or ineffective, the unappointed
property passes to the permissible appointees of the power—including those who are substituted
for permissible appointees under an antilapse statute (see Section 306)—if the permissible
appointees are “defined and limited” (on the meaning of this term of art, see the Comment to
Section 205) and the donor has not manifested an intent that the permissible appointees shall
receive the appointive property only so far as the powerholder elects to appoint it to them. This
rule of construction is based on the assumption that the donor intends the permissible appointees
of the power to have the benefit of the property. The donor focused on transmitting the
appointive property to the permissible appointees through an appointment, but if the powerholder
fails to carry out this particular method of transfer, the donor’s underlying intent to pass the
appointive property to the defined and limited class of permissible appointees should be carried
out. Subparagraph (2)(A) effectuates the donor’s underlying intent by implying a gift in default
of appointment to the defined and limited class of permissible appointees.
37
If the defined and limited class of permissible appointees is a multigenerational class,
such as “descendants,” “issue,” “heirs,” or “relatives,” the default rule of construction is that they
take by representation. See Restatement Third of Property: Wills and Other Donative Transfers §
14.3, Comment b. If the defined and limited class is a single-generation class, the default rule of
construction is that the eligible class members take equally. See Restatement Third of Property:
Wills and Other Donative Transfers § 14.2.

No implied gift in default of appointment to the permissible appointees arises if the
permissible appointees are identified in such broad and inclusive terms that they are not defined
and limited. In such an event, the donor has no underlying intent to pass the appointive property
to such permissible appointees. Similarly, if the donor manifests an intent that the defined and
limited class of permissible appointees is to receive the appointive property only by appointment,
the donor’s manifestation of intent eliminates any implied gift in default to the permissible
appointees. Subparagraph (2)(B) responds to these possibilities by providing for a reversionary
interest to the donor or the donor’s transferee or successor in interest.

The rules are illustrated by the following examples.

Example 1. D died, leaving a will devising property to T in trust. T is directed to pay the
income to S (D’s son) for life, and then to pay the principal “to such of S’s descendants who
survive S as S may appoint by will.” D’s will contains no gift-in-default clause. S dies without
exercising the nongeneral power. The permissible appointees of the power constitute a defined
and limited class. Accordingly, the principal of the trust passes at S’s death to S’s descendants
who survive S, by representation.

Example 2. Same facts as Example 1, except that the permissible appointees of S’s power
of appointment are “such one or more persons, other than S, S’s estate, S’s creditors, or creditors
of S’s estate.” The permissible appointees do not constitute a defined and limited class.
Accordingly, the principal of the trust passes, at S’s death, under a reversionary interest to D or
D’s transferee or successor in interest.

The rules of this section are consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 19.23 and the accompanying
Commentary.

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. 38
Comment

If a powerholder makes a valid partial appointment to a taker in default, leaving some
property unappointed, there is a question about whether that taker in default may also fully share
in the unappointed property. In the first instance, the intent of the donor controls. In the absence
of any indication of the donor’s intent, it is assumed that the donor intends that the taker can take
in both capacities. This rule presupposes that the donor contemplated that the taker in default
who is an appointee could receive more of the appointive assets than a taker in default who is not
an appointee. The donor can defeat this rule by manifesting a contrary intent in the instrument
creating the power of appointment, thereby restricting the powerholder’s freedom to benefit an
appointee who is also a taker in default in both capacities. If the donor has not so manifested a
contrary intent, the powerholder is free to exercise the power in favor of a taker in default who is
a permissible appointee. Unless the powerholder manifests a contrary intent in the terms of the
instrument exercising the power, it is assumed that the powerholder does not intend to affect in
any way the disposition of any unappointed property.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 19.24 and the accompanying
Commentary.

SECTION 313. APPOINTMENT TO TAKE R 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.
Comment

This section articulates the rule that, to the extent an appointee would have taken
appointed property as a taker in default, the appointee takes under the gift-in-default clause
rather than under the appointment.

Takers in default have future interests that may be defeated by an exercise of the power
of appointment. To whatever extent the powerholder purports to appoint an interest already held
in default of appointment, the powerholder does not exercise the power to alter the donor’s
disposition but merely declares an intent not to alter it. To the extent, however, that the appointed
property is different from (e.g., is a lesser estate) or exceeds the total of the property the
appointee would receive as a taker in default, the property passes under the appointment.

Usually it makes no difference whether the appointee takes as appointee or as taker in
default. The principal difference arises in jurisdictions that follow the rule that the estate
creditors of the powerholder of a general testamentary power that was conferred on the
powerholder by another have no claim on the appointive property unless the powerholder has
exercised the power. Although this act does not follow that rule regarding creditors’ rights (see 39
Section 502), some jurisdictions do.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 19.25 and the accompanying
Commentary.

SECTION 314. POWERHOLDER ’S AUTHORITY TO REVO KE 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.
Comment

This section recognizes that a powerholder lacks the authority to revoke or amend an
exercise of the power of appointment, except to the extent (1) the powerholder reserved a power
of revocation or amendment in the instrument exercising the power of appointment and the terms
of the instrument creating the power of appointment do not effectively prohibit the reservation,
or (2) the donor provided that the exercise is revocable or amendable.

A powerholder who exercises a power of appointment is like any other transferor of
property in regard to authority to revoke or amend the transfer. Hence, unless the powerholder
(or the donor) in some appropriate manner manifests an intent that an appointment is revocable
or amendable, the appointment is irrevocable.

The ability of an agent or guardian to revoke or amend the exercise of a power of
appointment on behalf of a principal or ward is determined by other law, such as the Uniform
Power of Attorney Act or the Uniform Guardianship and Protective Proceedings Act.

Other law of the state may permit the reformation of an otherwise irrevocable instrument.
See, for example, Uniform Probate Code § 2-805; Uniform Trust Code § 415.

The rule of this section is essentially consistent with, and this Comment draws on,
Restatement Third of Property: Wills and Other Donative Transfers § 19.7 and the
accompanying Commentary.
40
[ARTICLE] 4
DISCLAIMER OR RELEASE; CONTRAC T 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.
Comment

A prospective powerholder cannot be compelled to accept the power of appointment, just
as the prospective donee of a gift cannot be compelled to accept the gift.

A disclaimer is to be contrasted with a release. A release occurs after the powerholder
accepts the power. A disclaimer prevents acquisition of the power, and consequently a
powerholder who has accepted a power can no longer disclaim.

Disclaimer statutes frequently specify the time within which a disclaimer must be made.
The Uniform Disclaimer of Property Interests Act (1999) (UDPIA) does not specify a time limit,
but allows a disclaimer until a disclaimer is barred (see UDPIA § 13).

Disclaimer statutes customarily specify the methods for filing a disclaimer. UDPIA § 12
provides that the statutory methods must be followed. In the absence of such a requirement,
statutory formalities for making a disclaimer of a power are not construed as exclusive, and any
manifestation of the powerholder’s intent not to accept the power may also suffice.

A partial disclaimer of a power of appointment leaves the powerholder possessed of the
part of the power not disclaimed.

Just as an individual who would otherwise be a powerholder can avoid acquiring the
power by disclaiming it, a person who otherwise would be a permissible appointee, appointee, or
taker in default of appointment can avoid acquiring that status by disclaiming it.
The ability of an agent or guardian to disclaim on behalf of a principal or ward is
determined by other law, such as the Uniform Power of Attorney Act or the Uniform
Guardianship and Protective Proceedings Act.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 20.4 and the accompanying
Commentary.
41
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.
Comment

Whether a power of appointment is general or nongeneral, presently exercisable or
testamentary, the powerholder has the authority to release the power in whole or in part, in the
absence of an effective restriction on release imposed by the donor. A partial release is a release
that narrows the freedom of choice otherwise available to the powerholder but does not eliminate
the power. A partial release may relate either to the manner of exercising the power or to the
persons in whose favor the power may be exercised.

If the powerholder did not create the power, so that the powerholder and donor are
different individuals, the donor can effectively impose a restraint on release, but the donor must
manifest an intent in the terms of the creating instrument to impose such a restraint.

If the powerholder created the power, so that the powerholder is also the donor, the
donor/powerholder cannot effectively impose a restraint on release. A self-imposed restraint on
release resembles a self-imposed restraint on alienation, which is ineffective. See, for example,
Restatement Third of Trusts § 58.

If the exercise of a power of appointment requires the action of two or more individuals,
each powerholder has a power of appointment. If one but not the other joint powerholder releases
the power, the power survives in the hands of the nonreleasing powerholder, unless the
continuation of the power is inconsistent with the donor’s purpose in creating the joint power.
See Restatement Third of Property: Wills and Other Donative Transfers § 20.1, Comment f.

The ability of an agent or guardian to release a power of appointment on behalf of a
principal or ward is determined by other law, such as the Uniform Power of Attorney Act or the
Uniform Guardianship and Protective Proceedings Act.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers §§ 20.1 and 20.2 and the accompanying
Commentary.

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 42
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 powerholder’s intent by clear and convincing evidence.
Legislative Note: A state that defines “record” in Section 102 should delete the bracketed
material in this section.

Comment

A powerholder may release the power of appointment by substantial compliance with the
method specified in the terms of the instrument creating the power or any other method
manifesting clear and convincing evidence of the powerholder’s intent. Only if the method
specified in the terms of the creating instrument is made exclusive is use of the other methods
prohibited. Even then, a failure to comply with a technical requirement, such as required
notarization, may be excused as long as compliance with the method specified in the terms of the
creating instrument is otherwise substantial.

Examples of methods manifesting clear and convincing evidence of the powerholder’s
intent to release include: (1) delivering (by the same method of delivery that would make an
instrument of transfer effective, see Restatement Third of Property: Wills and Other Donative
Transfers § 20.3, Comment b) an instrument declaring the extent to which the power is released
to an individual who could be adversely affected by an exercise of the power; (2) joining with
some or all of the takers in default in making an otherwise effective transfer of an interest in the
appointive property, in which case the power is released to the extent a subsequent exercise of
the power would defeat the interest transferred; (3) contracting with an individual who could be
adversely affected by an exercise of the power not to exercise the power, in which case the
power is released to the extent a subsequent exercise of the power would violate the terms of the
contract; and (4) communicating in a record an intent to release the power, in which case the
power is released to the extent a subsequent exercise of the power would be contrary to
manifested intent.

The black-letter of this section is based on Uniform Trust Code § 602(c). The rule of this
section is fundamentally consistent with, and this Comment draws on, Restatement Third of
Property: Wills and Other Donative Transfers § 20.3 and the accompanying Commentary.

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: 43
(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.
Comment

A release is typically irrevocable. If a powerholder wishes to retain the power to revoke
or amend the release, the powerholder should so indicate in the instrument executing the release.

The ability of an agent or guardian to revoke or amend the release of a power of
appointment on behalf of a principal or ward is determined by other law, such as the Uniform
Power of Attorney Act or the Uniform Guardianship and Protective Proceedings Act.

Other law of the state may permit the reformation of an otherwise irrevocable instrument.
See, for example, Uniform Probate Code § 2-805; Uniform Trust Code § 415.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers §§ 20.1 and 20.2 and the accompanying
Commentary.

SECTION 405. POWER TO CONTRACT: P RESENTLY 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.
Comment

A powerholder of a presently exercisable power may contract to make, or not to make, an
appointment if the contract does not confer a benefit on an impermissible appointee. The
rationale is that the power is presently exercisable, so the powerholder can presently enter into a
contract concerning the appointment.

The contract may not confer a benefit on an impermissible appointee. Recall that a
general power presently exercisable in favor of the powerholder or the powerholder’s estate has
no impermissible appointees. See Section 305(a). In contrast, a presently exercisable nongeneral
power, or a general power presently exercisable only in favor of one or more of the creditors of
the powerholder or the powerholder’s estate, does have impermissible appointees. See Section 44
305(b)-(c).

A contract not to appoint assures that the appointive property will pass to the taker in
default. A contract to appoint to a taker in default, if enforceable, has the same effect as a
contract not to appoint.

The ability of an agent or guardian to contract on behalf of a principal or ward is
determined by other law, such as the Uniform Power of Attorney Act or the Uniform
Guardianship and Protective Proceedings Act.
The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 21.1 and the accompanying
Commentary.

SECTION 406. POWER TO CONTRACT: POWER OF AP POINTMENT NOT
PRESENTLY EXERCISABL E. 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.
Comment

Except in the case of a power reserved by the donor in a revocable inter vivos trust, a
contract to exercise, or not to exercise, a power of appointment that is not presently exercisable is
unenforceable, because the powerholder does not have the authority to make a current
appointment. If the powerholder was also the donor of the power and created the power in a
revocable inter vivos trust, however, a contract to appoint is enforceable, because the donor-
powerholder could have revoked the trust and recaptured ownership of the trust assets or could
have amended the trust to change the power onto one that is presently exercisable.

In all other cases, the donor of a power not presently exercisable has manifested an intent
that the selection of the appointees and the determination of the interests they are to receive are
to be made in the light of the circumstances that exist on the date that the power becomes
exercisable. Were a contract to be enforceable, the donor’s intent would be defeated.

The rule of this section is consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 21.2 and the accompanying 45
Commentary.

SECTION 407. REMEDY FOR BREACH OF CONTRACT TO APPOINT OR
NOT TO APPOINT. The remedy for a powerholder’s breach of a contract to appoint or not to
appoint appointive property is limited to damages payable out of the appointive property or, if
appropriate, specific performance of the contract.
Comment

This section sets forth a rule on remedy. The remedy for a powerholder’s breach of an
enforceable contract to appoint, or not to appoint, is limited to damages payable out of the
appointive property or, if appropriate, specific performance. The powerholder’s owned assets are
not available to satisfy a judgment for damages. For elaboration and discussion, see Restatement
Third of Property: Wills and Other Donative Transfers §§ 21.1 and 21.2, and especially id., §
21.1, Comments c and d. This section does not address the amount of damages, which is
determined by other law of the state, such as contract law.

[ARTICLE] 5
RIGHTS OF POWERHOLDER ’S CREDITORS IN APPOINTIVE PROPERTY
SECTION 501. CREDITOR CLAIM: GENERAL POWER CREATE D 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 powerholder’s 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 46
or the powerholder’s estate to the extent the powerholder irrevocably appointed the property in
favor of a person other than the powerholder or the powerholder’s 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 powerholder’s 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 powerholder’s death.
Comment

Subsection (b) states a well-settled rule: a donor of a power of appointment cannot use a
fraudulent transfer to avoid creditors. If a donor fraudulently transfers appointive property,
retaining a power of appointment, the donor/powerholder’s creditors and the creditors of the
donor/powerholder’s estate may reach the appointive property as provided in the law of
fraudulent transfers.

Subsection (c) also states a well-settled rule: if there is no fraudulent transfer, and the
donor/powerholder has made an irrevocable appointment to a third party of the appointive
property, the appointed property is beyond the reach of the donor/powerholder’s creditors or the
creditors of the donor/powerholder’s estate. In other words, an irrevocable and nonfraudulent
exercise of the general power by the donor/powerholder in favor of someone other than the
powerholder or the powerholder’s estate eliminates the ability of the powerholder’s creditors or
the creditors of the powerholder’s estate to reach those assets.

Subsection (d) establishes rules governing the remaining fact-pattern: the donor has
retained a general power of appointment but has made neither a fraudulent transfer nor an
irrevocable appointment. In such a case, the following rules apply. If the donor retains a
presently exercisable general power of appointment, the appointive property is subject to a claim
of—and is reachable by—a creditor of the powerholder to the same extent as if the powerholder
owned the appointive property. If the donor retains a general power of appointment exercisable
at death, the appointive property is subject to a claim of—and is reachable by—a creditor of the
donor/powerholder’s estate (defined with reference to other law, but including costs of 47
administration, expenses of the funeral and disposal of remains, and statutory allowances to the
surviving spouse and children) to the extent the estate is insufficient, subject to the decedent’s
right to direct the source from which liabilities are paid. For the same rules in the context of a
retained power to revoke a revocable trust, see Uniform Trust Code § 505(a). The application of
these rules is not affected by the presence of a spendthrift provision or by whether the claim
arose before or after the creation of the power of appointment. See Restatement Third of
Property: Wills and Other Donative Transfers § 22.2, Comment a.

Subsection (a) enables all of these rules to apply even if the general power was not
created in a transfer made by the powerholder. The rules will apply to the extent the powerholder
contributed value to the transfer. See Restatement Third of Property: Wills and Other Donative
Transfers § 22.2, Comment d. Consider the following examples, drawn from the Restatement.

Example 1. D purchases Blackacre from A. Pursuant to D’s request, A transfers Blackacre
“to D for life, then to such person as D may by will appoint.” The rule of subsection (d) applies to
D’s general testamentary power, though in form A created the power.

Example 2. A by will transfers Blackacre “to D for life, then to such persons as D may by
will appoint.” Blackacre is subject to mortgage indebtedness in favor of X in the amount of
$10,000. The value of Blackacre is $20,000. D pays the mortgage indebtedness. The rule of
subsection (d) applies to half of the value of Blackacre, though in form A’s will creates the general
power in D.

Example 3. D, an heir of A, contests A’s will on the ground of undue influence on A by the
principal beneficiary under A’s will. The contest is settled by transferring part of A’s estate to
Trustee in trust. Under the trust, Trustee is directed “to pay the net income to D for life and, on D’s
death, the principal to such persons as D shall by will appoint.” The rule of subsection (d) applies
to the transfer in trust, though in form D did not create the general power.

The provisions of this section are designed to be consistent with Uniform Trust Code §
505(a). The provisions and this Comment also rely in part on Restatement Third of Property:
Wills and Other Donative Transfers § 22.2 and the accompanying Commentary.

SECTION 502. CREDITOR CLAIM: GENERAL POWER NOT CR EATED 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 powerholder’s property is insufficient, if the
power is presently exercisable; and 48
(2) the powerholder’s 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 individual’s 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.
Legislative Note: In states in which the constitution, or other law, does not permit the phrase
“as amended” when federal statutes are incorporated into state law, the phrase should be
deleted in subsection (b).

Comment

Subsection (a) reaffirms the fundamental principle that a presently exercisable general
power of appointment is an ownership-equivalent power. Consequently, subsection (b) provides
that property subject to a presently exercisable general power of appointment is subject to the
claims of the powerholder’s creditors, to the extent the powerholder’s property is insufficient.
Furthermore, upon the powerholder’s death, property subject to a general power of appointment
is subject to creditors’ claims against the powerholder’s estate (defined with reference to other
law, but including costs of administration, expenses of the funeral and disposal of remains, and
statutory allowances to the surviving spouse and children) to the extent the estate is insufficient,
subject to the decedent’s right to direct the source from which liabilities are paid. In each case,
whether the powerholder has or has not purported to exercise the power is immaterial.

Subsection (b) states an important exception. If the power is subject to an ascertainable
standard within the meaning of 26 U.S.C. § 2041(b)(1)(A) or 26 U.S.C. § 2514(c)(1), the power
is treated for purposes of this article as a nongeneral power, and the rights of the powerholder’s
creditors in the appointive property are governed by Sections 504(a) and (b).

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. 49
(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].
Legislative Note: In states in which the constitution, or other law, does not permit the phrase
“as amended” when federal statutes are incorporated into state law, the phrase should be
deleted in subsection (b).

Comment

Subsection (a) treats a power of withdrawal as the equivalent of a presently exercisable
general power of appointment, because the two are ownership-equivalent powers. Upon the
lapse, release, or waiver of the power of withdrawal, subsection (b) follows the lead of Uniform
Trust Code § 505(b)(2) in creating an exception for property subject to a Crummey or five and
five power: the holder of the power of withdrawal is treated as a powerholder of 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 Internal Revenue
Code §§ 2041(b)(2) and 2514(e) [greater of 5% or $5,000] or § 2503(b) [$13,000 in 2012].

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 powerholder’s estate.
(b) Appointive property subject to a nongeneral power of appointment is subject to a
claim of a creditor of the powerholder or the powerholder’s 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 powerholder’s
estate, a nongeneral power of appointment is treated for purposes of this [article] as a general
power. 50
Comment

Subsection (a) states the general rule of this section. Appointive property subject to a
nongeneral power of appointment is exempt from a claim of a creditor of the powerholder or the
powerholder’s estate. The rationale for this general rule is that a nongeneral power of
appointment is not an ownership-equivalent power, so the powerholder’s creditors have no claim
to the appointive assets.

Subsection (b) addresses an important exception: the fraudulent transfer. A fraudulent
transfer arises if the powerholder formerly owned the appointive property covered by the
nongeneral power and transferred the property in fraud of creditors, reserving the nongeneral
power. In such a case, the creditors can reach the appointive property under the rules relating to
fraudulent transfers.

Subsection (c) also addresses an important exception, arising when the initial gift in
default of appointment is to the powerholder or the powerholder’s estate. In such a case, the
power of appointment, though in form a nongeneral power, is in substance a general power, and
the rights of the powerholder’s creditors in the appointive property are governed by Sections 501
and 502.

The rules of this section are consistent with, and this Comment draws on, Restatement
Third of Property: Wills and Other Donative Transfers § 22.1 and the accompanying
Commentary.

[ARTICLE] 6
MISCELLANEOUS PROVIS IONS
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). 51
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 [the
effective date of this [act]];
(2) this [act] applies to a judicial proceeding concerning a power of appointment
commenced on or after [the effective date of this [act]];
(3) this [act] applies to a judicial proceeding concerning a power of appointment
commenced before [the effective date of this [act]] unless the court finds that application of a
particular provision of this [act] would interfere substantially 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 this [act]] unless there is a clear indication of a
contrary intent in the terms of the instrument; and
(5) except as otherwise provided in paragraphs (1) through (4), an action done
before [the effective date of this [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 this
[act]], the law continues to apply to the right.
Comment

This act is intended to have the widest possible effect within constitutional limitations.
Specifically, the act applies to all powers of appointment whenever created, to judicial
proceedings concerning powers of appointment commenced on or after its effective date, and
unless the court otherwise orders, to judicial proceedings in progress on the effective date. In 52
addition, any rules of construction or presumption provided in the act apply to preexisting
instruments unless there is a clear indication of a contrary intent in the instruments’s terms. By
applying the act to preexisting instruments, the need to know two bodies of law will quickly
lessen.
This legislation cannot be fully retroactive, however. Constitutional limitations preclude
retroactive application of rules of construction to alter property rights that became
irrevocable prior to the effective date. Also, rights already barred under former law are not
revived by a possibly more liberal rule under this act. Nor, except as otherwise provided in
paragraphs (1) through (4) of subsection (a), is an action done before the effective date of the act
affected by the act’s enactment.

For comparable Uniform Law provisions, see Uniform Trust Code § 1106 and Uniform
Probate Code § 8-101.

SECTION 604. REPEALS; CONFORMING AMENDMENT S.
(a) ….
(b) ….
(c) ….
SECTION 605. EFFECTIVE DATE. This [act] takes effect .... 2

“19-1701.03. Governing law. 36
“19-1701.04. Common law and principles of equity. 37
“Subchapter II. Creation, Revocation, and Amendment of Power of Appointment 38
“19-1702.01. Creation of power of appointment. 39
“19-1702.02. Nontransferability. 40
“19-1702.03. Presumption of unlimited authority. 41
“19-1702.04. Exception to presumption of unlimited authority. 42
“19-1702.05. Rules of classification. 43
“19-1702.06. Power to revoke or amend. 44
“Subchapter III. Exercise of Power of Appointment 45
“19-1703.01. Requisites for exercise of power of appointment. 46
“19-1703.02. Intent to exercise: determining intent from residuary clause. 47
“19-1703.03. Intent to exercise: after-acquired power. 48
“19-1703.04. Substantial compliance with donor-imposed formal requirement. 49
“19-1703.05. Permissible appointment. 50
“19-1703.06. Appointment to deceased appointee or permissible appointee’s descendant. 51
“19-1703.07. Impermissible appointment. 52
“19-1703.08. Selective allocation doctrine. 53
“19-1703.09. Capture doctrine: disposition of ineffectively appointed property under general 54
power. 55
“19-170.310. Disposition of unappointed property under released or unexercised general power. 56
“19-1703.11. Disposition of unappointed property under released or unexercised nongeneral 57
power. 58 3

“19-1703.12. Disposition of unappointed property if partial appointment to taker in default. 59
“19-1703.13. Appointment to taker in default. 60
“19-1703.14. Powerholder’s authority to revoke or amend exercise. 61
“Subchapter IV. Disclaimer or Release; Contract to Appoint or Not to Appoint. 62
“19-1704.01. Disclaimer. 63
“19-1704.02. Authority to release. 64
“19-1704.03. Method of release. 65
“19-1704.04. Revocation or amendment of release. 66
“19-1704.05. Power to contract: presently exercisable power of appointment. 67
“19-1704.06. Power to contract: power of appointment not presently exercisable. 68
“19-1704.07. Remedy for breach of contract to appoint or not to appoint. 69
“Subchapter V. Rights of Powerholder’s Creditors in Appointive Property 70
“19-1705.01. Creditor claim: general power created by powerholder. 71
“19-1705.02. creditor claim: general power not created by powerholder. 72
“19-1705.03. Power to withdraw. 73
“19-1705.04. Creditor claim: nongeneral power. 74
“Subchapter VI. Miscellaneous Provisions 75
“19-1706.01. Uniformity of application and construction. 76
“19-1706.02. Relation to electronic signatures in global and national commerce act. 77
“19-1706.03. Application to existing relationships.” 78
“Chapter 17. Uniform Powers of Appointment Act. 79
“Subchapter I. General Provisions 80
“§ 19-1701.01. Short title. 81 4

“This chapter may be cited as the Uniform Powers of Appointment Act. 82
“§ 19-1701.02. Definitions. 83
“In this chapter: 84
“(1) “Appointee” means a person to which a powerholder makes an appointment of 85
appointive property. 86
“(2) “Appointive property” means the property or property interest subject to a power of 87
appointment. 88
“(3) “Blanket-exercise clause” means a clause in an instrument which exercises a power 89
of appointment and is not a specific-exercise clause. The term includes a clause that: 90
“(A) Expressly uses the words “any power” in exercising any power of 91
appointment the powerholder has; 92
“(B) Expressly uses the words “any property” in appointing any property over 93
which the powerholder has a power of appointment; or 94
“(C) Disposes of all property subject to disposition by the powerholder. 95
“(4) “Donor” means a person that creates a power of appointment. 96
“(5) “Exclusionary power of appointment” means a power of appointment exercisable in 97
favor of any one or more of the permissible appointees to the exclusion of the other permissible 98
appointees. 99
“(6) “General power of appointment” means a power of appointment exercisable in favor 100
of the powerholder, the powerholder’s estate, a creditor of the powerholder, or a creditor of the 101
powerholder’s estate. 102
“(7) “Gift-in-default clause” means a clause identifying a taker in default of appointment. 103
“(8) “Impermissible appointee” means a person that is not a permissible appointee. 104 5

“(9) “Instrument” means a writing. 105
“(10) “Nongeneral power of appointment” means a power of appointment that is not a 106
general power of appointment. 107
“(11) “Permissible appointee” means a person in whose favor a powerholder may 108
exercise a power of appointment. 109
“(12) “Person” means an individual, estate, trust, business or nonprofit entity, public 110
corporation, government or governmental subdivision, agency, or instrumentality, or other legal 111
entity. 112
“(13) “Power of appointment” means a power that enables a powerholder acting in a 113
nonfiduciary capacity to designate a recipient of an ownership interest in or another power of 114
appointment over the appointive property. The term does not include a power of attorney. 115
“(14) “Powerholder” means a person in which a donor creates a power of appointment. 116
“(15) “Presently exercisable power of appointment” means a power of appointment 117
exercisable by the powerholder at the relevant time. 118
“(A) The term includes a power of appointment not exercisable until the 119
occurrence of a specified event, the satisfaction of an ascertainable standard, or the passage of a 120
specified time only after: 121
“(i) The occurrence of the specified event; 122
“(ii) The satisfaction of the ascertainable standard; or 123
“(iii) The passage of the specified time. 124
“(B) The term does not include a power of appointment exercisable only at the 125
powerholder’s death. 126 6

“(16) “Record” means information that is inscribed on a tangible medium or that is stored 127
in an electronic or other medium and is retrievable in perceivable form. 128
“(17) “Specific-exercise clause” means a clause in an instrument which specifically refers 129
to and exercises a particular power of appointment. 130
“(18) “Taker in default of appointment” means a person that takes all or part of the 131
appointive property to the extent the powerholder does not effectively exercise the power of 132
appointment. 133
“(19) “Terms of the instrument” means the manifestation of the intent of the maker of the 134
instrument regarding the instrument’s provisions as expressed in the instrument or as may be 135
established by other evidence that would be admissible in a legal proceeding. 136
“§ 19-1701.03. Governing law. 137
“Unless the terms of the instrument creating a power of appointment manifest a contrary 138
intent, the law of the powerholder’s domicile at the relevant time governs: 139
“(1) The creation, revocation, or amendment of the power is governed by the law of the 140
donor’s domicile at the relevant time; and 141
“(2) The exercise, release, or disclaimer of the power, or the revocation or amendment of 142
the exercise, release, or disclaimer of the power. 143
“§ 19-1701.04. Common law and principles of equity. 144
“The common law and principles of equity supplement this chapter, except to the extent 145
modified by this chapter or law of the District of Columbia other than this chapter. 146
“Subchapter II. Creation, Revocation, and Amendment of Power of Appointment 147
“§ 19-1702.01. Creation of power of appointment. 148
“(a) A power of appointment is created only if: 149 7

“(1) The instrument creating the power: 150
“(A) Is valid under applicable law; and 151
“(B) Except as otherwise provided in subsection (b), transfers the 152
appointive property; and 153
“(2) The terms of the instrument creating the power manifest the donor’s intent to 154
create in a powerholder a power of appointment over the appointive property exercisable in favor 155
of a permissible appointee. 156
“(b) Subsection (a)(1)(B) does not apply to the creation of a power of appointment by the 157
exercise of a power of appointment. 158
“(c) A power of appointment may not be created in a deceased individual. 159
“(d) Subject to an applicable rule against perpetuities, a power of appointment may be 160
created in an unborn or unascertained powerholder. 161
“§ 19-1702.02. Nontransferability. 162
“A powerholder may not transfer a power of appointment. If a powerholder dies without 163
exercising or releasing a power, the power lapses. 164
“§ 19-1702.03. Presumption of unlimited authority. 165
“Subject to § 19-1702.05, and unless the terms of the instrument creating a power of 166
appointment manifest a contrary intent, the power is: 167
“(1) Presently exercisable; 168
“(2) Exclusionary; and 169
“(3) Except as otherwise provided in § 19-1702.04, general. 170
“§ 19-1702.04. Exception to presumption of unlimited authority. 171 8

“Unless the terms of the instrument creating a power of appointment manifest a contrary 172
intent, the power is nongeneral if: 173
“(1) The power is exercisable only at the powerholder’s death; and 174
“(2) The permissible appointees of the power are a defined and limited class that does not 175
include the powerholder’s estate, the powerholder’s creditors, or the creditors of the 176
powerholder’s estate. 177
“§ 19-1702.05. Rules of classification. 178
“(a) In this section, “adverse party” means a person with a substantial beneficial interest 179
in property which would be affected adversely by a powerholder’s exercise or nonexercise of a 180
power of appointment in favor of the powerholder, the powerholder’s estate, a creditor of the 181
powerholder, or a creditor of the powerholder’s estate. 182
“(b) If a powerholder may exercise a power of appointment only with the consent or 183
joinder of an adverse party, the power is nongeneral. 184
“(c) If the permissible appointees of a power of appointment are not defined and limited, 185
the power is exclusionary. 186
“§ 19-1702.06. Power to revoke or amend. 187
“ A donor may revoke or amend a power of appointment only to the extent that: 188
“(1) The instrument creating the power is revocable by the donor; or 189
“(2) The donor reserves a power of revocation or amendment in the instrument creating 190
the power of appointment. 191
“Subchapter III. Exercise of Power of Appointment 192
“§ 19-1703.01. Requisites for exercise of power of appointment. 193
“ A power of appointment is exercised only: 194 9

“(1) If the instrument exercising the power is valid under applicable law; 195
“(2) If the terms of the instrument exercising the power: 196
“(A) Manifest the powerholder’s intent to exercise the power; and 197
“(B) Subject to § 19-1703.04, satisfy the requirements of exercise, if any, imposed 198
by the donor; and 199
“(3) To the extent the appointment is a permissible exercise of the power. 200
“§ 19-1703.02. Intent to exercise: determining intent from residuary clause. 201
“(a) In this section: 202
“(1) “Residuary clause” does not include a residuary clause containing a blanket-203
exercise clause or a specific-exercise clause. 204
“(2) “Will” includes a codicil and a testamentary instrument that revises another 205
will. 206
“(b) A residuary clause in a powerholder’s will, or a comparable clause in the 207
powerholder’s revocable trust, manifests the powerholder’s intent to exercise a power of 208
appointment only if: 209
“(1) The terms of the instrument containing the residuary clause do not manifest a 210
contrary intent; 211
“(2) The power is a general power exercisable in favor of the powerholder’s 212
estate; 213
“(3) There is no gift-in-default clause or the clause is ineffective; and 214
“(4) The powerholder did not release the power. 215
“§ 19-1703.03. Intent to exercise: after-acquired power. 216 10

“Unless the terms of the instrument exercising a power of appointment manifest a 217
contrary intent: 218
“(1) Except as otherwise provided in paragraph (2), a blanket-exercise clause extends to a 219
power acquired by the powerholder after executing the instrument containing the clause; and 220
“(2) If the powerholder is also the donor of the power, the clause does not extend to the 221
power unless there is no gift-in-default clause or the gift-in-default clause is ineffective. 222
“§ 19-1703.04. Substantial compliance with donor-imposed formal requirement. 223
“A powerholder’s substantial compliance with a formal requirement of appointment 224
imposed by the donor, including a requirement that the instrument exercising the power of 225
appointment make reference or specific reference to the power, is sufficient if: 226
“(1) The powerholder knows of and intends to exercise the power; and 227
“(2) The powerholder’s manner of attempted exercise of the power does not impair a 228
material purpose of the donor in imposing the requirement. 229
“§ 19-1703.05. Permissible appointment. 230
“(a) A powerholder of a general power of appointment that permits appointment to the 231
powerholder or the powerholder’s estate may make any appointment, including an appointment 232
in trust or creating a new power of appointment, that the powerholder could make in disposing of 233
the powerholder’s own property. 234
“(b) A powerholder of a general power of appointment that permits appointment only to 235
the creditors of the powerholder or of the powerholder’s estate may appoint only to those 236
creditors. 237
“(c) Unless the terms of the instrument creating a power of appointment manifest a 238
contrary intent, the powerholder of a nongeneral power may: 239 11

“(1) Make an appointment in any form, including an appointment in trust, in favor 240
of a permissible appointee; 241
“(2) Create a general power in a permissible appointee; or 242
“(3) Create a nongeneral power in any person to appoint to one or more of the 243
permissible appointees of the original nongeneral power. 244
“§ 19-1703.06. Appointment to deceased appointee or permissible appointee’s 245
descendant. 246
“(a) Subject to § 18-308, an appointment to a deceased appointee is ineffective. 247
“(b) Unless the terms of the instrument creating a power of appointment manifest a 248
contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or 249
create a new power of appointment in, a descendant of a deceased permissible appointee whether 250
or not the descendant is described by the donor as a permissible appointee. 251
“§ 19-1703.07. Impermissible appointment. 252
“(a) Except as otherwise provided in § 19-1703.06, an exercise of a power of 253
appointment in favor of an impermissible appointee is ineffective. 254
“(b) An exercise of a power of appointment in favor of a permissible appointee is 255
ineffective to the extent the appointment is a fraud on the power. 256
“§ 19-1703.08. Selective allocation doctrine. 257
“If a powerholder exercises a power of appointment in a disposition that also disposes of 258
property the powerholder owns, the owned property and the appointive property must be 259
allocated in the permissible manner that best carries out the powerholder’s intent. 260
“§ 19-1703.09. Capture doctrine: disposition of ineffectively appointed property under 261
general power. 262 12

“To the extent a powerholder of a general power of appointment, other than a power to 263
withdraw property from, revoke, or amend a trust, makes an ineffective appointment: 264
“(1) The gift-in-default clause controls the disposition of the ineffectively appointed 265
property; or 266
“(2) If there is no gift-in-default clause or to the extent the clause is ineffective, the 267
ineffectively appointed property: 268
“(A) Passes to: 269
“(i) The powerholder if the powerholder is a permissible appointee and 270
living; or 271
“(ii) If the powerholder is an impermissible appointee or deceased, the 272
powerholder’s estate if the estate is a permissible appointee; or 273
“(B) If there is no taker under subparagraph (A), passes under a reversionary 274
interest to the donor or the donor’s transferee or successor in interest. 275
“§ 19-1703.10. Disposition of unappointed property under released or unexercised 276
general power. 277
“To the extent a powerholder releases or fails to exercise a general power of appointment 278
other than a power to withdraw property from, revoke, or amend a trust: 279
“(1) The gift-in-default clause controls the disposition of the unappointed property; or 280
“(2) If there is no gift-in-default clause or to the extent the clause is ineffective: 281
“(A) Except as otherwise provided in subparagraph (B), the unappointed property 282
passes to: 283
“(i) The powerholder if the powerholder is a permissible appointee and 284
living; or 285 13

“(ii) If the powerholder is an impermissible appointee or deceased, the 286
powerholder’s estate if the estate is a permissible appointee; or 287
“(B) To the extent the powerholder released the power, or if there is no taker 288
under subparagraph (A), the unappointed property passes under a reversionary interest to the 289
donor or the donor’s transferee or successor in interest. 290
“§ 19-1703.11. Disposition of unappointed property under released or unexercised 291
nongeneral power. 292
“To the extent a powerholder releases, ineffectively exercises, or fails to exercise a 293
nongeneral power of appointment: 294
“(1) The gift-in-default clause controls the disposition of the unappointed property; or 295
“(2) If there is no gift-in-default clause or to the extent the clause is ineffective, the 296
unappointed property: 297
“(A) Passes to the permissible appointees if: 298
“(i) The permissible appointees are defined and limited; and 299
“(ii) The terms of the instrument creating the power do not manifest a 300
contrary intent; or 301
“(B) If there is no taker under subparagraph (A), passes under a reversionary 302
interest to the donor or the donor’s transferee or successor in interest. 303
“§ 19-1703.12. Disposition of unappointed property if partial appointment to taker in 304
default. 305
“Unless the terms of the instrument creating or exercising a power of appointment 306
manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in 307 14

default of appointment, the taker in default of appointment may share fully in unappointed 308
property. 309
“§ 19-1703.13. Appointment to taker in default. 310
“If a powerholder makes an appointment to a taker in default of appointment and the 311
appointee would have taken the property under a gift-in-default clause had the property not been 312
appointed, the power of appointment is deemed not to have been exercised and the appointee 313
takes under the clause. 314
“§ 19-1703.14. Powerholder’s authority to revoke or amend exercise. 315
“A powerholder may revoke or amend an exercise of a power of appointment only to the 316
extent that: 317
“(1) The powerholder reserves a power of revocation or amendment in the instrument 318
exercising the power of appointment and, if the power is nongeneral, the terms of the instrument 319
creating the power of appointment do not prohibit the reservation; or 320
“(2) The terms of the instrument creating the power of appointment provide that the 321
exercise is revocable or amendable. 322
“Subchapter IV. Disclaimer or Release; Contract to Appoint or Not to Appoint. 323
“§ 19-1704.01. Disclaimer. 324
“As provided by Chapter 15 of this title: 325
“(1) A powerholder may disclaim all or part of a power of appointment. 326
“(2) A permissible appointee, appointee, or taker in default of appointment may disclaim 327
all or part of an interest in appointive property. 328
“§ 19-1704.02. Authority to release. 329 15

“A powerholder may release a power of appointment, in whole or in part, except to the 330
extent the terms of the instrument creating the power prevent the release. 331
“§ 19-1704.03. Method of release. 332
“(a) In this section, “record” means information that is inscribed on a tangible medium or 333
that is stored in an electronic or other medium and is retrievable in perceivable form. 334
“(b) A powerholder of a releasable power of appointment may release the power in whole 335
or in part: 336
“(1) By substantial compliance with a method provided in the terms of the 337
instrument creating the power; or 338
“(2) If the terms of the instrument creating the power do not provide a method or 339
the method provided in the terms of the instrument is not expressly made exclusive, by a record 340
manifesting the powerholder’s intent by clear and convincing evidence. 341
“§ 19-1704.04. Revocation or amendment of release. 342
“A powerholder may revoke or amend a release of a power of appointment only to the 343
extent that: 344
“(1) The instrument of release is revocable by the powerholder; or 345
“(2) The powerholder reserves a power of revocation or amendment in the instrument of 346
release. 347
“§ 19-1704.05. Power to contract: presently exercisable power of appointment. 348
“A powerholder of a presently exercisable power of appointment may contract: 349
“(1) Not to exercise the power; or 350
“(2) To exercise the power if the contract when made does not confer a benefit on an 351
impermissible appointee. 352 16

“§ 19-1704.06. Power to contract: power of appointment not presently exercisable. 353
“A powerholder of a power of appointment that is not presently exercisable may contract 354
to exercise or not to exercise the power only if the powerholder: 355
“(1) Is also the donor of the power; and 356
“(2) Has reserved the power in a revocable trust. 357
“§ 19-1704.07. Remedy for breach of contract to appoint or not to appoint. 358
“The remedy for a powerholder’s breach of a contract to appoint or not to appoint 359
appointive property is limited to damages payable out of the appointive property or, if 360
appropriate, specific performance of the contract. 361
“Subchapter V. Rights of Powerholder’s Creditors in Appointive Property 362
“§ 19-1705.01. Creditor claim: general power created by powerholder. 363
“(a) In this section, “power of appointment created by the powerholder” includes a power 364
of appointment created in a transfer by another person to the extent the powerholder contributed 365
value to the transfer. 366
“(b) Appointive property subject to a general power of appointment created by the 367
powerholder is subject to a claim of a creditor of the powerholder or of the powerholder’s estate 368
to the extent provided in §§ 28-3101 to 28-3111. 369
“(c) Subject to subsection (b), appointive property subject to a general power of 370
appointment created by the powerholder is not subject to a claim of a creditor of the powerholder 371
or the powerholder’s estate to the extent the powerholder irrevocably appointed the property in 372
favor of a person other than the powerholder or the powerholder’s estate. 373
“(d) Subject to subsections (b) and (c), and notwithstanding the presence of a spendthrift 374
provision or whether the claim arose before or after the creation of the power of appointment, 375 17

appointive property subject to a general power of appointment created by the powerholder is 376
subject to a claim of a creditor of: 377
“(1) The powerholder, to the same extent as if the powerholder owned the 378
appointive property, if the power is presently exercisable; and 379
“(2) The powerholder’s estate, to the extent the estate is insufficient to satisfy the 380
claim and subject to the right of a decedent to direct the source from which liabilities are paid, if 381
the power is exercisable at the powerholder’s death. 382
“§ 19-1705.02. Creditor claim: general power not created by powerholder. 383
“(a) Except as otherwise provided in subsection (b), appointive property subject to a 384
general power of appointment created by a person other than the powerholder is subject to a 385
claim of a creditor of: 386
“(1) The powerholder, to the extent the powerholder’s property is insufficient, if 387
the power is presently exercisable; and 388
“(2) The powerholder’s estate, to the extent the estate is insufficient, subject to the 389
right of a decedent to direct the source from which liabilities are paid. 390
“(b) Subject to § 19-1705.04(c), a power of appointment created by a person other than 391
the powerholder which is subject to an ascertainable standard relating to an individual’s health, 392
education, support, or maintenance within the meaning of 26 U.S.C. § 2041(b)(1)(A) or 26 393
U.S.C. § 2514(c)(1), is treated for purposes of this subchapter as a nongeneral power. 394
“§ 19-1705.03. Power to withdraw. 395
“(a) For purposes of this subchapter, and except as otherwise provided in subsection (b), 396
a power to withdraw property from a trust is treated, during the time the power may be exercised, 397 18

as a presently exercisable general power of appointment to the extent of the property subject to 398
the power to withdraw. 399
“(b) On the lapse, release, or waiver of a power to withdraw property from a trust, the 400
power is treated as a presently exercisable general power of appointment only to the extent the 401
value of the property affected by the lapse, release, or waiver exceeds the greater of the amount 402
specified in 26 U.S.C. § 2041(b)(2) and 26 U.S.C. § 2514(e) or the amount specified in 26 403
U.S.C. § 2503(b), on the effective date of this chapter. 404
“§ 19-1705.04. Creditor claim: nongeneral power. 405
“(a) Except as otherwise provided in subsections (b) and (c), appointive property subject 406
to a nongeneral power of appointment is exempt from a claim of a creditor of the powerholder or 407
the powerholder’s estate. 408
“(b) Appointive property subject to a nongeneral power of appointment is subject to a 409
claim of a creditor of the powerholder or the powerholder’s estate to the extent that the 410
powerholder owned the property and, reserving the nongeneral power, transferred the property in 411
violation of §§ 28-3101 to 28-3111. 412
“(c) If the initial gift in default of appointment is to the powerholder or the powerholder’s 413
estate, a nongeneral power of appointment is treated for purposes of this subchapter as a general 414
power. 415
“Subchapter VI. Miscellaneous Provisions 416
“§ 19-1706.01. Uniformity of application and construction. 417
“In applying and construing this uniform act, consideration must be given to the need to 418
promote uniformity of the law with respect to its subject matter among states that enact it. 419
“§ 19-1706.02. Relation to Electronic Signatures in Global and National Commerce act. 420 19

“This chapter modifies, limits, or supersedes the Electronic Signatures in Global and 421
National Commerce Act, 15 U.S.C. § 7001 et seq., but does not modify, limit, or supersede § 422
101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices 423
described in § 103(b) of that act, 15 U.S.C. § 7003(b). 424
“§ 19-1706.03. Application to existing relationships. 425
“(a) Except as otherwise provided in this chapter, on and after the effective date of this 426
chapter, the following rules apply: 427
“(1) This chapter applies to a power of appointment created before, on, or after 428
the effective date of this chapter. 429
“(2) This chapter applies to a judicial proceeding concerning a power of 430
appointment commenced on or after the effective date of this chapter. 431
“(3) This chapter applies to a judicial proceeding concerning a power of 432
appointment commenced before the effective date of this chapter unless the court finds that 433
application of a particular provision of this chapter would interfere substantially with the 434
effective conduct of the judicial proceeding or prejudice a right of a party, in which case the 435
particular provision of this chapter does not apply and the superseded law applies. 436
“(4) A rule of construction or presumption provided in this chapter applies to an 437
instrument executed before the effective date of this chapter unless there is a clear indication of a 438
contrary intent in the terms of the instrument. 439
“(5) Except as otherwise provided in paragraphs (1) through (4), an action done 440
before the effective date of this chapter is not affected by this chapter. 441 20

“(b) If a right is acquired, extinguished, or barred on the expiration of a prescribed period 442
that commenced under law of the District of Columbia other than this chapter before the 443
effective date of this chapter, the law continues to apply to the right.” 444
Sec. 3. Fiscal impact statement. 445
The Council adopts the fiscal impact statement in the committee report as the fiscal 446
impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act, 447
approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)) 448
Sec. 4. Effective date. 449
This act shall take effect following approval by the Mayor (or in the event of veto by the 450
Mayor, action by the Council to override the veto), a 30-day period of Congressional review as 451
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 452
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 453
Columbia Register. 454