Written by attorneys · grounded in primary & secondary sources — see below
A power of appointment that permits the donee to allocate appointive property among a defined class of permissible appointees. The donee has no duty to exercise the power at all. If the donee chooses to exercise it, the appointment must confer a genuine benefit on each member of the class and cannot exclude any member entirely, even through nominal or illusory shares.
Sources & Authorities
How it applies
Common Examples
2
Trustee Challenges Nominal Allocation
Derek placed company shares in trust and granted his sister Carla a power to appoint dividends among all surviving children and stepchildren, with no one to be excluded. Carla later directed nearly all dividends to Derek's two biological children and one dollar each to the stepchildren. The stepchildren sued the trustee, claiming the appointment violated the power's terms. The court set aside the exercise because the nominal payments functioned as an exclusion in substance.
Court Voids Selective Distribution
Grandfather's trust gave Father a nonexclusionary power to appoint among all grandchildren. Father awarded substantial trust assets to most grandchildren but gave Thomas Jr. nothing from the trust, though Father later transferred $25,000 of his own money to Thomas Jr. Thomas Jr. challenged the appointment. The court held the exercise invalid because the power required a genuine share from the appointive property itself for every permissible appointee.
Put it into practice
Test Yourself
8
Practice Questions5
· 5 sources
Select any source to read its text and confirm it supports the definition.
Restatements
Casebooks
Sefton v. Sefton187 Cal.Rptr.3d 421 (Cal. Ct. App. 2015)
Common questions
Frequently Asked
4
Does the donee of a nonexclusionary power have a duty to exercise it?+
No. The donee may decline to exercise the power entirely, in which case the appointive property passes under the default provisions of the instrument. The nonexclusionary limitation applies only when the donee chooses to make an appointment.
Supporting sources
What happens if a donee exercises a nonexclusionary power but gives only nominal amounts to some class members?+
The appointment is invalid. Courts examine substance rather than form. A token sum such as one dollar, when the bulk of the property goes to others, constitutes an exclusion in fact and violates the requirement that each permissible appointee receive a genuine benefit.
Supporting sources
Can the donee favor some class members with larger shares under a nonexclusionary power?+
Yes. The donee retains discretion to vary the size of shares among class members. The only restriction is that no member of the defined class may be left with nothing when the power is exercised.
Supporting sources
How does a court determine whether language creates a nonexclusionary power?+
Courts look for explicit direction that the appointment must benefit each member of a defined class or that no appointee may be excluded. Phrases such as "all and every one" or statements requiring that each permissible appointee receive some share indicate a nonexclusionary power.
Supporting sources
Trusts and Estates Trusts and Future InterestsFuture interests · Powers of appointmentUBEIntermediate