What is POWER OF APPOINTMENT?

A power or authority conferred by one person by deed or will upon another (called the “donee”) to appoint, that is, to select and nominate, the person or persons who are to receive and enjoy an estate or an income therefrom or from a fund, after the testator’s death, or the donee’s death, or after the termination of an existing right or interest. See Heinemann v. De Wolf, 25 It. I. 243, 55 Atl. 707. Powers are either: Collateral, which are given to strangers; i. e., to persons who have neither a present nor future estate or interest in the land. These are also called simply “collateral,” or powers not coupled with an interest, or powers not being interests. These terms have been adopted to obviate the confusion arising from the circumstance that powers in gross have been by many called powers collateral. Or they are powers relating to the land. These are called “appendant” or “appurtenant,” because they strictly depend upon the estate limited to the person to whom they are given. Thus, where an estate for life is limited to a man, with a power to grant leases in possession, a lease granted under the power may operate wholly out of the life-estate of the party executing it, and must in every’ case have its operation out of his estate during his life. Such an estate must be created, which will attach on an interest actually vested in himself. Or they are called “in gross,” if given to a person who had an interest in the estate at the execution of the deed creating the power, or to whom an estate is given by the deed, but which enabled him to create such estates only as will not attach on the interest limited to him. Of necessity, therefore, where a man seised in fee settles his estate on others, reserving to himself only a particular power, the power is in gross. A power to a tenant for life to appoint the estate after his death among his children, a power to jointure a wife after his death, a power to raise a term of years to commence from his death, for securing younger children’s portions, are all powers in gross. An important distinction is established between general and particular powers. By a general power we understand a right to appoint to whomsoever the donee pleases. By a particular power it is meant that the donee is restricted to some objects designated in the deed creating the power, as to his own children. Wharton. We have seen that a general power is beneficial when no person other than the grantee has, by the terms of its creation, any interest in its execution. A general power is in trust when any person or class of persons, other than the grantee of such power, is designated as entitled to the proceeds, or any portion of the proceeds, or other benefits to result from the alienation. Cutting v. Cutting, 20 Hun (N. Y.) 364. When a power of appointment among a class requires that each shall have a share, it is called a “distributive” or “non-exclusive” power; when it authorizes, but does not direct, a selection of one or more to the exclusion of the others, it is called an “exclusive” power, and is also distributive; when it gives the power of appointing to a certain number of the class, but not to all, it is exclusive only, and not distributive. Leake. 3S9. A power authorizing the donee either to give the whole to one of a class or to give it equally among such of them as he may select (but not to give one a larger share than the others’) is called a “mixed” power. Sugd. Powers, 448. Sweet.

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