A power of appointment (POA) is a power that a trust beneficiary has to direct to or for whom trust property will pass, representing a non-fiduciary power. When conferring a POA, it is important to use clear language that specifies when the power is exercisable, to or for whom it is exercisable, what property may be disposed of, and what procedure must be followed. There are also several important estate and gift tax consequences that follow based on the type of POA identified. Ultimately, a POA is the most direct and efficient way for a property owner to confer power on another to determine the destination of property.
See Charles A. Redd, Tips from the Pros: Don’t Overlook the Power of Powers, Wealth Management, August 25, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
