Legal Definitions - appointive assets

Appointive assets refer to specific property or funds that are designated to be distributed by someone other than the original owner. These assets are not directly owned by the person making the distribution decision (who holds a "power of appointment"), but rather they are subject to that person's authority to decide who will ultimately receive them.

Once the individual with this authority makes their decision (known as exercising a "power of appointment"), the ownership of these assets transfers to the designated recipients, who are called "appointees." Essentially, appointive assets are property waiting for a specific instruction from a designated decision-maker before their final ownership is determined.

• Example 1: Trust Fund Distribution

  A wealthy grandmother establishes a trust fund for her grandchildren. The trust document specifies that the principal amount of the fund (the money and investments) will be distributed among her three grandchildren when the youngest turns 25. However, she grants her daughter, Sarah, a "power of appointment" to decide the exact percentage of the fund each grandchild will receive, based on their individual needs at that time.

  In this scenario, the money and investments within the trust fund are the appointive assets. Sarah holds the power of appointment, meaning she has the authority to determine the specific distribution. When Sarah makes her decision, the ownership of those funds will transfer to the grandchildren (the appointees) according to her instructions.

• Example 2: Family Heirloom Collection

  Mr. Davies owns a valuable collection of antique maps. In his will, he states that the map collection should pass to his son, Robert. However, he also grants Robert the power to decide which specific maps from the collection will go to Robert's own two children, Emily and Thomas, upon Robert's death.

  Here, the entire antique map collection represents the appointive assets. Robert possesses the power of appointment, allowing him to designate individual maps to Emily or Thomas. When Robert exercises this power, the ownership of those specific maps will transfer to Emily and Thomas (the appointees).

• Example 3: Real Estate Designation

  A couple owns a vacation condo. In their estate plan, they specify that the condo should eventually go to one of their nieces or nephews, but they grant their trusted attorney the power to decide which specific niece or nephew will inherit the property, based on who they believe would use it most responsibly or benefit from it most.

  The vacation condo is the appointive asset. The attorney holds the power of appointment to choose the ultimate recipient. Once the attorney makes that decision, the condo's ownership will transfer to the chosen niece or nephew (the appointee).