Legal Definitions - Testamentary power of appointment

A testamentary power of appointment is a type of power of appointment that can only be exercised by the recipient through their will. This is different from a presently exercisable power of appointment, which can be exercised immediately.

For example, if a wealthy individual creates a trust and gives their child a testamentary power of appointment over the trust assets, the child can only exercise that power by including instructions in their will. They cannot make changes to the trust during their lifetime.

Another example would be if a grandparent creates a trust for their grandchildren and gives their daughter a testamentary power of appointment over the trust assets. The daughter can only exercise that power by including instructions in her will, which will determine how the trust assets are distributed among the grandchildren.

These examples illustrate how a testamentary power of appointment can provide flexibility and control over the distribution of assets after the donor's death, while still allowing the donor to maintain some level of control during their lifetime.