Using the Power of Appointment to Protect Assets

Alexander A. Bove, Jr. (attorney, Boston, MA) recently published his article entitled Using the Power of Appointment to Protect Assets–More Power than You Ever Imagined, 36 ACTEC L.J. 333 (Fall 2010).  The introduction is below:   

Of all the sophisticated tools used for asset protection planning, one of the most effective but vastly underused, except in elementary ways, is the power of appointment. Historically (and habitually), use of the power has been either to grant someone other than the original owner of that property the power to direct ownership of the property, or to reserve for the owner of the property the power to redirect the ownership of that property by exercising the reserved power. By and large, the overwhelming purpose of the use of powers of appointment by estate planners has been to affect the avoidance of the deliberate incurrence of income, gift, or estate tax liabilities. But in fact, there are so many non-tax possibilities surrounding the use of powers of appointment, particularly for asset protection purposes, that at least a volume could be written about them. This discussion offers a number of those possibilities and explains how they may be creatively used to protect assets of the grantor and her family.