What is a Power of Appointment?
By Phillip B. Rarick, Weston Estate Planning and Trust Attorney
A Power of Appointment is a valuable legal power that a parent may give a child in a will or trust that allows the child to control who will ultimately receive the child’s inheritance. A person who holds a Power of Appointment usually wants to make sure that they exercise it in their will or trust or otherwise this valuable power may be lost.
For example, let’s say a widowed wife in Weston through her living trust gives one-half of her estate to each of her adult daughters and gives each a POA for their share. Both daughters are married and have children. The mother’s will states that if one child dies, that child’s share will go to the surviving child unless the child who dies first has exercised her POA in her will. Therefore if one daughter dies and fails to exercise her POA, her share will not go down to her children but rather go to the children of her sister.
The major Take Away Point here is this: If you have a Power of Appointment given to you under your father’s or mother’s trust or will make sure you exercise it in your will or trust.
There are numerous types of Power of Appointments. Such powers require analysis by an experienced Weston estate planning and trust attorney. Let us know if we can help.