Also known as: withdrawal powers · power of withdrawal
Written by attorneys · grounded in primary & secondary sources — see below
A presently exercisable general power of appointment other than a power exercisable by a trustee and limited by an ascertainable standard or exercisable by another person only upon consent of the trustee or a person holding an adverse interest.
Wanda Weaver is the sole lifetime beneficiary of a trust holding shares in a growing startup. The instrument grants her the right to demand any amount of principal at any time by written notice alone. When Wanda directs the trustee to distribute half the shares to her, the demand qualifies as an exercise of her withdrawal power because it is presently exercisable without any consent requirement or ascertainable-standard limit.
Winston West holds a power to withdraw up to all principal from an irrevocable trust during a thirty-day window each year. A judgment creditor sues to attach the trust assets while the window is open. The creditor may reach the property subject to the power because Winston is treated as the settlor of a revocable trust for that period and to that extent.
Select any source to read its text and confirm it supports the definition.
The right qualifies when it is a presently exercisable general power of appointment that is not held by a trustee and limited by an ascertainable standard and is not exercisable only with consent of the trustee or an adverse-interest holder.
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Yes. The definition excludes any power exercisable only upon consent of the trustee or a person holding an adverse interest, and a remainder beneficiary's economic stake in preserving the corpus makes the consent requirement disqualifying.
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The holder is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power, allowing creditors to reach that property during the exercise period.
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No. The characterization turns on the terms of the instrument, not on a trustee's personal interpretation or attempted limitation.
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