Legal Definitions - appointive property

Appointive property refers to assets—such as real estate, money, or investments—that a person (known as the donee or powerholder) has been given the legal authority to distribute or transfer to others. This authority, called a power of appointment, is granted by another person (the donor), typically through a will or trust. The donee does not own the appointive property themselves but holds the power to "appoint" or designate who will ultimately receive it.

• Example 1: Family Trust Distribution

  A wealthy grandmother establishes a trust for her grandchildren and names her daughter, Susan, as the trustee. The trust document grants Susan a "power of appointment" over a specific portion of the trust's assets, allowing Susan to decide how to distribute $1 million among the grandchildren, either equally or based on their individual needs, as Susan deems appropriate. If Susan does not exercise this power, the trust specifies the funds will be divided equally.

  In this scenario, the $1 million in the trust that Susan can distribute is appointive property. The grandmother is the donor, who created the power. Susan is the donee, holding the power to appoint which grandchildren (the potential appointees) will receive the funds and in what amounts. Susan does not personally own the $1 million, but she controls its ultimate distribution to the beneficiaries.

• Example 2: Charitable Foundation Grants

  A philanthropist creates a large charitable foundation with an endowment of $50 million. The foundation's charter names a board of directors and grants them a "power of appointment" to select specific non-profit organizations to receive grants from the foundation's principal each year. The charter specifies that these grants must support environmental conservation efforts, but the board has full discretion to choose which specific organizations within that category receive funding.

  Here, the $50 million endowment, which the board can distribute as grants, represents appointive property. The philanthropist is the donor. The board of directors acts as the donee, holding the power to appoint specific charitable organizations as recipients of the funds. The board does not own the foundation's principal, but they have the authority to decide its distribution to eligible charities.

• Example 3: Real Estate Inheritance

  Mr. Davies owns a vacation cabin. In his will, he leaves his wife, Mrs. Davies, a "life estate" in the cabin, meaning she can live there for the rest of her life. He also grants Mrs. Davies a "power of appointment" to designate which of their three children will inherit the cabin outright after her death. If she does not exercise this power, the will specifies that the cabin will go to their youngest child.

  The vacation cabin, specifically the future ownership interest after Mrs. Davies's life estate, is appointive property. Mr. Davies is the donor. Mrs. Davies is the donee, holding the power to appoint which of their children (the potential appointees) will ultimately own the cabin. She does not own the cabin outright to sell it, but she controls who receives the full ownership after her passing.