power of appointment

Power of appointment traces its origins back to British common law . It is the legal authority to make another person the outright owner of the property left by a decedent . A donor gives the power to a donee so that person may choose the beneficiaries of their trust or will . Most commonly found in wills , the holder of the power of appointment has the ability to divide up the testator’s estate between the beneficiaries .

The donor can either grant the donee a general power of appointment , where the donee has full discretion as to who the property should be divided among, or a special power of appointment where the list of potential beneficiaries is subject to a set of limitations. In the event a donee chooses not to exercise their power of appointment, the property will be distributed to the takers in default .

[Last reviewed in June of 2022 by the Wex Definitions Team ]

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