Power of Appointment Case: Delaware Chancery Court Appeals

Do you know what a power of appointment is?   Do you know how to exercise a general or specific power of appointment? Experienced Palm Beach probate litigators know the importance of a power of appointment in regards to a trust. If you have a trust that looks like it goes on forever this is probably an issue. Do you have any powers of appointment that you are not aware of; you may not be able to exercise that power through a general clause in your will.

Powers of Appointment

• A power of appointment allows you to appoint who will receive certain property.
• More often than not this has to do with property in a trust sometimes called the res of the trust.
• One common example is a trust that is set to terminate, who gets to pick where the money goes?
• The answer is whoever has the power of appointment.
• Do you know the difference between a general power of appointment and a specific power of appointment?
• In West Palm Beach a specific power of appointment limits who you can appoint the assets to.
• For example you may only be allowed to appoint the assets to your family members or a charity, not your college roommate.
• On the other hand a general power of appointment has no such strings attached.
• Technically you could appoint yourself, your estate or whoever else to get the assets, thus it is general.
• One caveat in Florida though is that your will has to expressly mention a power of appointment, merely saying you leave everything to someone is probably not going to suffice.
• When will you see a power of appointment issue raised?
• Usually when it becomes clear a trust should be terminated.
• Check out this case out of the Chancery Court of Delaware.

In the Matter of Vale Asche

• In a petition to the Court the sole remaining trustee of a trust sought instruction from the Court about whether the assets held in trust should be distributed under a power of appointment.
• The power had already been exercised in a will of a beneficiary of the trust.
• Currently the validity of that will was also being challenged in a Texas probate court.
• On appeal the court held that the optimal choice was that the trustee hold the property until the will contest in Texas was resolved.

Do you agree?

Want to learn more?

Check out the entire case by clicking here.