Also known as: permissible appointee · permitted appointees
Written by attorneys · grounded in primary & secondary sources — see below
The persons to whom an appointment under a power of appointment is authorized. The donor determines the permissible appointees by expressly designating them in the instrument creating the power.
Pablo Perez created a trust granting his daughter Phoebe a nongeneral power to appoint trust assets among her siblings. Phoebe executed an instrument appointing the assets to her brother Paul on the condition that Paul first pay a sum to their cousin Pierre. The appointment to Paul is ineffective because it was conditioned on conferring a benefit on an impermissible appointee.
A settlor created a trust naming his son as holder of a testamentary power of appointment exercisable in favor of a class of descendants that includes the holder. The holder may represent and bind the permissible appointees in a proceeding concerning the trust because the class falls within the statutory definition of persons whose interests are subject to the power.
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The donor determines the permissible appointees by expressly designating them in the instrument creating the power. If the donor does not expressly designate permissible appointees, the powerholder is free in almost all states to appoint in favor of anyone in the world.
Supporting sources
An appointment to a permissible appointee is ineffective to the extent that it was conditioned on the appointee conferring a benefit on an impermissible appointee, subject to a charge in favor of an impermissible appointee, upon a trust for the benefit of an impermissible appointee, or motivated in any other way to benefit an impermissible appointee.
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A fiduciary must look to the class expressly designated by the donor in the instrument creating the power. Transfer to a person outside that class constitutes a direct appointment to an impermissible appointee and exposes the fiduciary to breach liability.
Supporting sources
A person who would otherwise be a permissible appointee can avoid acquiring that status by filing a disclaimer. If all members of a definite class of permissible appointees disclaim, the effect is to extinguish the power of appointment.
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…death of Cabot Jackson Morse; (b) in equal shares to the estates of Cabot Jackson Morse, Jr. and Anna Braden Morse as the only permissible appointees living at the death of Cabot Jackson Morse; (c) to the estate of Anna Braden Morse as the only actual appointee living at the death of Cabot Jackson Morse; (d) to the intestate takers of…