Power of Appointment

There are two primary types of powers of appointment, a general power of appointment and a limited (or special) power of appointment. A power of appointment allows a beneficiary (also known as a donee or power holder) to direct where their interest in an estate or trust may go. A general power of appointment enables a donee to direct their share in a will or trust to any individual or organization, including the donee, the donee’s estate, and creditors of the donee and the donee’s estate. A limited power of appointment enables a donee to direct their share to a specific class of beneficiaries (frequently their descendants) but not to the donee, the donee’s estate, the creditors of the donee, nor the creditors of their estate.