Chapter 8 - § 8.6 • POWERS OF APPOINTMENT

• Jurisdiction: Colorado

§ 8.6 • POWERS OF APPOINTMENT

§ 8.6.1—Definitions

Power of appointment: A power of appointment is any power, except a power held in a fiduciary capacity, that is created or reserved by a person, institution, or corporation that has property to dispose of, and that allows the property owner or another to designate, within the limits prescribed, the appointees of the property or of any right, interest, or estate in the property or the shares in which it will be received. Regardless of the language used in its creation, a power of appointment includes all powers that are substantively and effectively powers of appointment.²¹⁰ A power of appointment can be created or reserved in a donee regardless of whether he or she possesses any other right, interest, or estate in the subject property.²¹¹ A power to merely convey real estate does not give the donee any right, title, or interest in those premises.²¹²

Donor: The donor of a power of appointment is the person, institution, or corporation who or which creates or reserves the power of appointment.²¹³

Donee: The person, institution, or corporation in whom or in which the power of appointment is created or reserved is the donee of a power of appointment.²¹⁴

Objects: The objects of a power of appointment are the persons, institutions, or corporations among whom the donee is given the power to appoint.²¹⁵

Appointees: The persons, institutions, or corporations, to whom property or any right, interest, or estate in property is appointed by the donee, are the appointees of a power of appointment.²¹⁶

Takers in default: The takers in default of appointment are the persons, institutions, or corporations who will receive the property that is not effectively appointed.²¹⁷

§ 8.6.2—Classification of Powers of Appointment

General power of appointment: A general power of appointment is a power of appointment that can be exercised in favor of the donee, the donee's estate, his or her creditors, or creditors of his or her estate.²¹⁸

Special power of appointment: Any power of appointment that is not a general power of appointment is a special power of appointment.²¹⁹

Power of appointment by will: A power of appointment by will is any power of appointment, created or reserved in an individual, that may be exercised by the donee either through a will or another instrument that takes effect only at death (by its terms or by law).²²⁰ The instrument by which the power of appointment is exercised must satisfy the Statute of Wills and be probated.²²¹

Power of appointment by deed: Any power of appointment that is not a power of appointment by will is a power of appointment by deed.²²²

§ 8.6.3—Power of Appointment as Vested or Contingent

A power of appointment is vested when at or after its creation the donee has or obtains a present right to exercise the power by deed or by will. This right may not be divested or defeated by the occurrence of any contingency, condition, or event, nor when the donee has a present right to exercise the power (on or after its creation), where the exercise becomes effective only after the termination of other rights, interests, or estate in the subject property, and the donee's present right to exercise the power cannot later be divested or defeated by the occurrence or nonoccurrence of any contingency, condition, or event.²²³ Any power of appointment that is not vested is contingent.²²⁴

§ 8.6.4—Disclaimer of Power of Appointment or Other Power Not Held in Fiduciary Capacity

If a holder disclaims a power of appointment or other power not held in a fiduciary capacity, the disclaimer applies only to that holder, and:

• If the holder has not exercised the power, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable;
• If the holder has exercised the power and the disclaimer is of a power other than a presently exercisable general power of appointment, the disclaimer takes effect immediately after the last exercise of the power; and
• The instrument creating the power is construed as if the power expired when the disclaimer became effective.²²⁵

For disclaimers generally, see § 23.5.2.

§ 8.6.5—Disclaimer of by Appointee, Object, or Taker in Default of Exercise of Power of Appointment

A disclaimer of an interest in property by an...