Contact Us Today 307-200-1914

What is a Power of Appointment

A Power of Appointment is the right to designate a new owner of property.  The maker of a trust can leave property to a person and give that person the authority to select a new owner of the property.  That authority is called a "Power of Appointment".  

Why Would You Have a Power of Appointment in your Estate Documents? 

One of the decisions in making your estate plan is predicting what your family's financial situation will be when you pass away.  You can create a Will or Trust today and of course hopefully you will not die for 30 years or longer.  (One reason your documents need to be reviewed every year or so).  Over time things will change.  Changes can alter the distribution of what the person designed when the estate plan was created.  (One reason you probably need to update your plan periodically).  

Any distribution other than outright to a beneficiary if using a Will will require a Trust or a testamentary trust.  The maker of a trust can leave property to the trustee of the Revocable Living Trust to hold for the benefit of a beneficiary.  The trustee will administer the property under the terms of the Revocable Living Trust.  The administration of the trust may have the Trustee make an outright distribution to the beneficiary. 

Examples are:  If you have younger children you may be concerned about giving a young person a large lump sum distribution-- or perhaps there is a child that is disabled and incapable of managing an asset.  With a trust the assets can only be held for the benefit or use of the beneficiary during the life of the beneficiary and then pass to a remainder beneficiary.  

If the holder of the Power of Appointment does not exercise the Power of Appointment then the person who receives the property in lieu of the Power of Appointment is called the "Taker in Default".  

W.S. 4-10-101(a)(xxxii) defines a power of appointment as: 

"Power of appointment" means an inter vivos or testamentary power to direct the disposition of trust property, other than a distribution of trust property, other than a distribution decision by a trustee to a beneficiary". 

There is another option. 

A Power of Appointment is a power to dispose of property or to direct it's distribution.  The power can be as broad or as limited as the Donor desires.  

There are general powers of appointment and limited powers of appointment.  Consult with counsel regarding inserting this type of tool into your current plan or administering the trust or will documents that you have now. 

Do Not Confuse with Power of Attorney 

Powers of Appointment should not be confused with powers of attorney, which appoint another person to act for you, or durable powers of attorney, which are also a useful estate planning device.  Durable or springing powers of attorney are powers of attorney that normally arise only if a person is incapable of making his or her own decisions and are a useful tool to provide for medical care or care of assets if you are incapacitated.  The Power of Appointment is usually for the benefit of a third party and is not dependent on incapacity of the trust maker and has different requirements for creation and enforcement.  Wyoming has the Wyoming Uniform Power of Attorney Act W.S. 3-9-301.  

Please call the law offices of Gayla K. Austin for a consultation:  307.200.1914.  


I offer a consultation over the telephone. I further offer a diagnostic interview in which we will meet in person and go over your documents.