Also known as: appointive properties · appointive assets
Written by attorneys · grounded in primary & secondary sources — see below
Property or a property interest that is subject to a power of appointment. The donee may designate recipients of beneficial ownership interests in the property or further powers over it.
Anika Anand transferred shares in Avalon Pharmaceuticals into an irrevocable trust. She granted her daughter authority to select which of Anika's grandchildren would receive the shares upon the daughter's death. The shares form appointive property because the daughter holds power to designate the ultimate beneficial owners.
Antonio Alvarado's late spouse had placed downtown retail units into a trust and granted him a testamentary power to appoint the units among family members. After his death the probate estate held only modest assets. The retail units constitute appointive property that creditors may reach to the extent the estate cannot satisfy claims.
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Appointive property is held in trust or otherwise subject to a power created by a donor. The donee does not hold outright title and cannot transfer the power itself. Upon the donee's death without exercise the property passes according to the instrument's default provisions rather than through the donee's estate.
Supporting sources
Creditors may reach appointive property when the power is general and created by a third party. The property is treated as reachable to the same extent as if owned by the donee once the probate estate proves insufficient. A limited power generally shields the property from the donee's creditors.
Supporting sources
The property passes to the takers in default named in the creating instrument. If no gift-in-default clause exists and the power is nongeneral, an implied gift may arise to the permissible appointees when they form a defined and limited class. Otherwise the property reverts to the donor or the donor's successors.
Supporting sources
No. The interest subject to appointment is frequently a remainder interest in trust corpus. The power may authorize designation of beneficial interests without conveying legal title to the donee.
Supporting sources
…interested.” [^maj-3]: The reporter, Professor A. James Casner, recommended the following statement: “§ 13.7 Spousal Rights in Appointive Assets on Death of Donee. The spouse of the donee of a power of appointment is entitled to treat appointive assets as owned assets of the donee on the donee’s death, only to the extent provided by…