limited power of appointment

limited power of appointment

A power granted by will,authorizing the recipient to choose who among a group of named or described persons may receive property.
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A limited power of appointment is a powerful tool for building flexibility into an ILIT.
The terms of the trust confer upon the beneficiary a testamentary limited power of appointment (LPOA).
In some statutes, such as those in place in New York and Delaware, the power to invade the first trust and decant to a second trust is described as the exercise of a limited power of appointment.
37) Because Child had a limited power of appointment, a so-called special power, Child's creditors could not reach the trust property under current New York law.
Therefore, the IRS held it to be a limited power of appointment.
A testamentary limited power of appointment (LPOA) allows the beneficiary to change the disposition that would otherwise occur at the beneficiary's death.
The limited power of appointment provision might specify the class of individuals or entities (such as Tom's spouse, Tom's descendants, Bill and Laura's descendants, and/or charities) who could be included but should specifically exclude Tom's estate and Tom's creditors.
An intervivos special or limited power of appointment, however, is one power of appointment that could result in tax consequences to the agent.
If the res is removed to a new trust or a beneficiary exercises a limited power of appointment to create a new trust, the original trust no longer exists.
He said to one of my clients, "Why not gift your home to your children through a quit claim deed and then retain a limited power of appointment to transfer ownership between children?
QTIP Trusts Containing Limited Power of Appointment
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