Also known as: nongeneral powers · special power · limited power
Written by attorneys · grounded in primary & secondary sources — see below
A power of appointment that cannot be exercised in favor of the donee, the donee's estate, or the creditors of either.
Nathan Nguyen created a trust directing that the trustee hold assets for his children and grant his spouse Natalie Norris a power to appoint the remainder among their descendants. Natalie exercised the power by appointing the assets to their son only. Because the power could not reach Natalie or her estate, it qualified as nongeneral and the appointment remained valid under the instrument's terms.
Nobel Dynamics settled assets in trust and gave Neville Norton a power to appoint among his siblings. Neville's creditors sought to attach the trust property after he incurred large debts. The power's restriction to family members other than Neville prevented the creditors from reaching the assets.
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Nordic Ventures funded a trust granting Nathaniel Newman a power to appoint income among his grandchildren. Nathaniel died without exercising the power. The assets passed to the surviving grandchildren under the default rules applicable to nongeneral powers rather than reverting to the donor's estate.
National Trust created a trust giving Nia Nkosi a power to appoint principal among her nieces and nephews. The power was required to terminate within a life in being plus twenty-one years. Because the power was nongeneral, its validity was measured from the date of the trust's creation.
Nova Pharmaceuticals placed assets in trust and conferred on Nikhil Narayan a power to appoint among designated charities. Nikhil attempted to release the power to accelerate distribution to the default beneficiaries. The nongeneral character of the power permitted the release under applicable rules.
Natalie Norris received a power from her late spouse to appoint trust assets among their children. Upon her death the assets were excluded from her taxable estate. The power's nongeneral status prevented inclusion under federal estate tax rules.
A nongeneral power cannot be exercised in favor of the donee, the donee's estate, or the creditors of either, so the appointive property is excluded from the donee's taxable estate. A general power reaches those persons and causes inclusion. The distinction controls whether the power is treated as equivalent to ownership for estate tax purposes.
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Creditors generally cannot reach the appointive property when the power is nongeneral because the donee lacks the ability to appoint to the donee or the donee's creditors. This protection follows from the definition that excludes the donee and the donee's creditors from the class of permissible appointees.
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Unappointed property passes under an implied gift to the permissible appointees if they form a defined and limited class and the donor did not intend appointment to be the sole means of distribution. Otherwise the property reverts to the donor or the donor's successors.
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No. The donee of a nongeneral power acts only as a conduit filling blanks left by the donor and cannot treat the property as the donee's own. This relation-back principle distinguishes nongeneral powers from general powers that approximate ownership.
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…powers granted (such as the authority to regulate commerce), for he took care in The Federalist No. 46 to hedge his argument for limited power by explaining the importance of national politics in protecting the States' interests. The National Government "will partake sufficiently of the spirit [of the States], to be disinclined to…