Legal Definitions - object of the power

Object of the Power

In legal terms, the object of the power refers to the specific individuals or groups of people who are eligible to receive property or benefits under a legal arrangement called a power of appointment.

A power of appointment is a right given by one person (the "donor") to another (the "donee" or "holder of the power") to decide who will ultimately receive certain assets or property. The donee does not own the property themselves but has the authority to direct its distribution.

The "object of the power" is the defined pool of potential beneficiaries from whom the donee *must* choose. The donee cannot appoint the property to anyone outside this specified group.

• Example 1: Family Trust Distribution

  A wealthy individual, Mr. Henderson, creates a trust in his will. He grants his daughter, Sarah, a power of appointment, allowing her to distribute a portion of the trust's assets among "any of Mr. Henderson's direct descendants." In this scenario, "Mr. Henderson's direct descendants" (his children, grandchildren, great-grandchildren, etc.) are the objects of the power. Sarah must choose the recipients from this specific group; she cannot, for instance, give the assets to her best friend or a charity, as they are not direct descendants.

• Example 2: Scholarship Fund

  A university alumnus establishes a scholarship fund and gives the university's scholarship committee the power to award grants from this fund. The alumnus specifies that the scholarships must be given to "students enrolled in the engineering program who demonstrate financial need and academic merit." Here, the "students enrolled in the engineering program who demonstrate financial need and academic merit" constitute the objects of the power. The committee must select scholarship recipients exclusively from this defined category of students.

• Example 3: Corporate Bonus Pool

  A company's board of directors sets aside a special bonus pool and grants the CEO the power to distribute these bonuses. The board stipulates that the bonuses are to be awarded to "employees who have achieved significant milestones in product innovation during the past fiscal year." In this case, the "employees who have achieved significant milestones in product innovation during the past fiscal year" are the objects of the power. The CEO's discretion is limited to choosing recipients only from this specific group of high-achieving innovators.