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A general power of appointment (GPA) is one that may be exercised in favor of the holder, the holder's estate, or the creditors of either. A GPA causes inclusion in the holder's taxable estate. As a result, the assets subject to the power get a step-up (or -down) in basis at the death of the holder.
The general rule is that a power of appointment must be exercised as specified in the Trust that creates the power. Typically, the Trust language requires the power to be exercised by a writing, other than a Will, signed by the power holder and delivered to the Trustee.
Lifetime General Power of Appointment The ability for a beneficiary to take any or all of the assets of the trust at any time and for any reason. Whether the power is exercised or not, the assets are included in the power holder's estate. Also used primarily in marital trusts.
A disclaimer or renunciation of a general power of appointment created in a taxable transfer before January 1, 1977, in the person disclaiming is not considered a release of the power. If effective under local law, the power may be disclaimed or renounced without disclaiming or renouncing such other interests.
The terms, power of appointment and power of attorney, sound similar but mean something very different. They are both estate planning terms. A power of appointment is a legal right to determine who gets assets after you (i.e. at your death.) It's granted in a will or trust and must be exercised in a will or trust.
(a) A power of appointment can be exercised only by a done having the capacity to transfer the interest in property to which the power relates. (b) Unless the creating instrument otherwise provides, a done who is a minor may not exercise a power of appointment during minority.
A general power of appointment is a broad power that enables the beneficiary to allocate all or part of his or her share of the estate or trust among any individuals or organizations selected by the beneficiary.
Power of appointment is a right given in a written instrument allowing an individual to decide to distribute property. The holder of the limited power of appointment can transfer property to anyone other than himself/ herself. The holder cannot transfer the property to his/ her creditors, or his or her estate.
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