Also known as: special power of appointment · nongeneral power of appointment · special power · limited power of appointment
Written by attorneys — see sources below.
A power of appointment that cannot be exercised in favor of the donee, the donee's estate, the donee's creditors, or the creditors of the donee's estate.
Sylvia Santos holds a nongeneral power to appoint trust assets among her siblings. She executes a written release surrendering her ability to appoint to her own estate while retaining the power to appoint among the siblings. The release prevents any later attempt by her will to direct assets to her estate.
Santiago Sanchez holds a presently exercisable nongeneral power to appoint among his children. He contracts with one child to appoint a specific sum in exchange for services. The contract is enforceable because the promised appointment stays within the permitted class of objects.
Simone Sanders holds a nongeneral power over a trust created by her parent. After she incurs large debts, her creditors attempt to reach the appointive property to satisfy judgments. The property remains exempt from their claims because the power does not allow appointment to her creditors.
Spencer Silver receives a nongeneral power to appoint among his parent's descendants. He attempts to direct assets outside that class. The attempted appointment fails and the property passes to the takers in default.
In 1911, United States Senator Augustus O. Bacon executed a will that devised a tract of land to the Mayor and Council of the City of Macon for use as a park and pleasure ground exclusively for white people, with control vested in a Board of Managers composed entirely of white persons, and the will expressed the Senator's view that the two races should be forever separate while providing that the property under no circumstances was to be devoted to any other purpose. The city accepted the trust and initially operated the park on a segregated basis, but after it began allowing Negroes to use the park, members of the Board of Managers sued in state court to remove the city as trustee and appoint new trustees, prompting Negro citizens to intervene in the proceedings. Following the city's resignation as trustee, the Georgia courts appointed private trustees, but in Evans v. Newton the United States Supreme Court held that the park must be operated without racial discrimination, leading the Georgia Supreme Court to determine that the purpose of the trust had become impossible to fulfill and to remand the case for further proceedings. The trial court declined to apply the cy pres doctrine, ruled that the trust had failed, and determined that the property had reverted to Senator Bacon's heirs, a decision affirmed by the Supreme Court of Georgia; petitioners, the Negro citizens of Macon who had sought integration of the park, challenged the termination of the trust, and the United States Supreme Court granted certiorari to review the case.
View caseSierra Santos holds a nongeneral power created under state law. A dispute arises over whether a particular exercise conforms to the donor's restrictions. The federal court applies the state rule to decide the validity of the appointment.
In 1930 a New York resident created a revocable trust that was amended in 1931. The trust directed income from the corpus to his wife for life. It also granted her a general power of appointment. In default of appointment half the corpus passed to the decedent's heirs and half to the wife's heirs. In 1951 the wife executed an instrument that purported to release the general power and convert it into a special power. The decedent died in 1957. His estate claimed a marital deduction for the widow's trust on the federal estate tax return. The Commissioner disallowed the deduction under section 2056(b)(5) of the 1954 Code and assessed a deficiency. The estate petitioned the Tax Court for redetermination. While that proceeding was pending the estate obtained a New York Supreme Court decree declaring the 1951 release a nullity. The Tax Court accepted the decree as controlling and allowed the deduction. A divided Second Circuit affirmed. The companion case involved the estate of a Connecticut decedent who died in 1958. His will directed payment of estate taxes without proration and created a residuary trust granting his wife a general testamentary power of appointment. The Commissioner disallowed part of the marital deduction. The executor then obtained a probate court order applying the state proration statute. The District Court refused to treat the probate decree as binding on federal tax questions. The Second Circuit agreed the decree was not conclusive. The two cases reached the Supreme Court after the Second Circuit panels reached differing conclusions on the effect of the state decrees. Certiorari was granted to resolve the conflict among the circuits.
View caseA nongeneral power cannot be exercised in favor of the donee, the donee's estate, the donee's creditors, or creditors of the donee's estate, whereas a general power permits such appointments.
The donee may release the power in whole or in part unless the donor expressly manifested an intent that the power not be releasable.
Property subject to a nongeneral power is exempt from claims of the donee's creditors and from liability for expenses of administering the donee's estate.
A contract to exercise a presently exercisable nongeneral power is enforceable unless the contract or the promised appointment confers a benefit upon an impermissible appointee.
Divorce revokes any provision in a governing instrument conferring a nongeneral power of appointment on the divorced individual's former spouse or on a relative of the former spouse.
…the Powers of Appointment Act of 1951, 65 Stat. 91, executed an instrument which purportedly converted the general power into a special power of appointment. Upon the decedent's death in 1957, his executor sought a marital deduction for the amount of the inter vivos trust; under § 2056 (b) (5), the trust would qualify for the deduction only…