Trusts & Estates
Using Powers of Appointment to Increase the Period Assets are Held in Trust
This Article discusses a number of strategies to use powers of appointment to extend the period assets will be held in trust. Specifically, this Article explores three fundamental scenarios and the various tax and state law issues involved with those scenarios: (1) the exercise of a nongeneral power of appointment to extend the term of a trust for a period that does not exceed the currently applicable perpetuities period, (2) the exercise of a nongeneral power of appointment to extend the term of a trust for a period beyond the currently applicable perpetuities period, and (3) the exercise of a general testamentary power of appointment. This Article also addresses the effect of perpetuities savings provisions on the availability and efficacy of the strategies presented.