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LSDefine
Simple English definitions for legal terms
enabling power
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A quick definition of enabling power:
An enabling power is a legal term that refers to a person's ability to choose who will receive their property or income. This power can be given to someone else through a will or deed, and it allows them to decide who will inherit the property or shares. If the power is given before the person's death, the person with the power can choose who receives the property. If the power is given after the person's death, the person with the power can choose who receives the property on behalf of the person's estate. There are different types of enabling powers, including general powers that allow the person with the power to choose anyone to inherit the property, and limited powers that restrict who can inherit the property.
A more thorough explanation:
An enabling power, also known as a power of appointment, is a legal term that refers to a power created or reserved by a person who has property subject to disposition. This power allows the donee (the person receiving the power) to designate transferees of the property or shares in which it will be received.
- General Power of Appointment: A power of appointment that allows the donee to appoint anyone, including oneself or one's own estate, as the recipient of the donor's property.
- Limited Power of Appointment: A power of appointment that either does not allow the entire estate to be conveyed or restricts to whom the estate may be conveyed. For example, the donee can appoint to only the person or class specified in the instrument creating the power, but cannot appoint to oneself or one's own estate.
- Testamentary Power of Appointment: A power of appointment created by a will.
For instance, if a person creates a trust and reserves an enabling power, they can appoint the beneficiaries of the trust. If the power is exercisable before the donee's death, it is exercisable wholly in favor of the donee. If the power is testamentary, it is exercisable wholly in favor of the donee's estate.
Overall, an enabling power is a useful tool for estate planning and allows the donor to have control over the distribution of their property after their death.