Also known as: general testamentary powers of appointment
Written by attorneys · grounded in primary & secondary sources — see below
A power that permits the donee to appoint property by will to the donee, the donee's estate, the donee's creditors, or any other person or entity. The power is treated as the equivalent of ownership for purposes such as creditor claims when the donee created the power and for the surviving spouse's elective share when the donee was also the donor.
Gregory Gates created an irrevocable trust and retained a general testamentary power of appointment over the assets. At his death the trust held securities worth $800,000. His surviving spouse Gwen Gallagher elects against the will and claims a share of the appointive property. The court treats the securities as owned by Gregory at death and includes them in the augmented estate for the elective share calculation.
Gabriel Gonzalez held a general testamentary power over a marital trust created by his late wife. After his death the estate claimed the trust assets qualified for the marital deduction. The IRS challenged the deduction on the ground that state law might treat the power differently. The Supreme Court held that the federal tax outcome depends on the state court's authoritative determination of the power's validity and effect under state law.
Select any source to read its text and confirm it supports the definition.
Yes. The Restatement treats property subject to a self-created general testamentary power as owned by the donee for creditor purposes to the same extent as if the donee had retained outright ownership.
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Yes. Because the donee may appoint to the donee or the donee's estate, the donee may structure the appointment exactly as an outright owner could, including by creating a trust and granting sub-powers, provided the result stays within the permissible class.
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The property passes to the donee or the donee's estate. Modern doctrine rejects any automatic reversion to the donor when a general power is involved and no valid gift in default exists.
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Yes. The Restatement expressly provides that such property is treated as owned by the donee at death when the donee was also the donor, so the surviving spouse may reach it in the elective-share calculation.
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…the time of his death. In July of 1958, the decedent executed a codicil to his will, the pertinent part of which gave his wife a general testamentary power of appointment over the corpus of the trust provided for her. This qualified it for the marital deduction as provided by the Internal Revenue Code of 1954, § 2056 (b) (5). In the federal estate tax return…