Also known as: testamentary powers of appointment · power of appointment by will
Written by attorneys · grounded in primary & secondary sources — see below
A power of appointment that the donee may exercise only by a provision in the donee's will. The donor creates the power to ensure the donee retains discretion until death. Exercise requires compliance with both the donor's formal requirements and applicable will formalities.
Thomas Thompson funded an irrevocable trust with his own assets and retained a general testamentary power of appointment over the corpus. He died survived by his spouse Tori Taylor. The property subject to the power is treated as owned by Thomas at death for purposes of Tori's elective share because Thomas was both donor and donee of the general testamentary power.
Tristan Thompson held a general testamentary power of appointment over family business assets in trust. He described his desired appointment to his attorney but never signed or executed any will or codicil. After his death the default takers receive the assets because no effective testamentary instrument exercised the power.
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A testamentary power may be exercised only by will at the donee's death. A presently exercisable power may be exercised during life by deed or other lifetime instrument. The creating instrument controls the classification.
Supporting sources
The appointive property passes to the donee or the donee's estate rather than reverting to the donor. Modern doctrine treats the general power as the functional equivalent of ownership for this purpose.
The majority rule holds that a residuary clause without specific reference to the power does not exercise it. The donor may impose a specific-reference requirement that must be satisfied for valid exercise.
Supporting sources
Any inter vivos contract to exercise a testamentary power is void. The donor intends the donee to retain discretion until death, so an earlier contract would improperly convert the power into an inter vivos exercise.
Supporting sources
…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…