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6. (law) The exercise of the power of designating (under a power of appointment) a person to enjoy
an estate or other specific property; also, the instrument by which the designation is made.
to have an appointment.
A general power of appointment is a key element of a type of marital deductiontax law as prescribed
in Internal Revenue Code §2056(b)(5). It is a trust that qualifies for the marital deduction, provided that
the surviving spouse is given the income at least annually and the surviving spouse has a general power
of appointment over the trust property remaining at his death.
Most general powers of appointment are exercisable under a will. The holder of the power refers to the
document creating the power in his or her will and designates who among the permissible objects of the
power should receive the property. The power could be exercised by creating further trusts.
If the power of appointment is not exercised, the default provision of the document that created the power
takes over.
A special power of appointment allows the recipient to distribute the designated property among a
specified group or class of people, not including donee, donee's estate, creditors of donee, or creditors of
donee's estate.[2] For example, a testator might grant his brother the special power to distribute property
among the testator's three children. The brother would then have the authority to choose which of the
testator's children gets which property. Unlike a general power of appointment, the refusal of the
appointed party to exercise a specific power of appointment causes the designated property to revert as a
gift to the members of a group or a class.
A special power of appointment may be exclusive or nonexclusive. If exclusive, the donee can appoint all
the property to one or more members of the class of permissible appointees to the exclusion of the other
members of the class. If nonexclusive, the donee must appoint some property to each object. [3]
Special powers of appointment also appear in the context of a trust and are primarily used to reduce
liability for generation-skipping transfer tax, or to provide asset protection trust features without fraudulent
conveyance liability. Such trusts are referred to as SPA Trusts.