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.
Up until this time, the prevailing belief was that the retention of a limited power of appointment over the remainder interest in a trust was sufficient to cause a transfer to the trust to be deemed to be "incomplete." The CCA changed this assumption by stating that such retention was insufficient for the stated purpose.
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.
Another option would be to give Tom a "limited power of appointment," which would permit him in his Will to name the future beneficiaries from an identified class of individuals to receive the remaining trust assets.
One way to address this issue during the estate planning phase is to give the surviving spouse a limited power of appointment to leave the assets remaining at his or her death to charity or a limited class of persons.
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?
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