Is A General Power of Appointment in a Self-Settled Trust a Property Interest?
The American Law Institute has abandoned any distinction between ownership and a power finding instead that an unexercised general power of appointment is an ownership equivalent power. Restatement (Third) of Trusts, § 74, Comment A (PD) (4-2005). This is in contrast to earlier court decisions where it was held that unexercised general powers of appointment are not property and cannot be reached by the creditors of the power holder. See Nat’l Shawmut Bank v. Joy, 53 N.E.2d 113, 315 Mass. 457 (Mass. 1944). Using General Power of Appointment Trusts PLR 200101021 (January 8, 2001), PLR 200210051 (March 8, 2002), PLR 200403094 (January 16, 2004), and PLR 200604028 (January 27, 2006). In each of these rulings, the taxpayer proposed to establish a single revocable trust and fund it with his own assets, but giving his wife a general power of appointment over a portion of the assets in the husband’s trust equal to the value of the wife’s remaining applicable exclusion amount less the value of
The American Law Institute has abandoned any distinction between ownership and a power finding instead that an unexercised general power of appointment is an ownership equivalent power. Restatement (Third) of Trusts, § 74, Comment A (PD) (4-2005). This is in contrast to earlier court decisions where it was held that unexercised general powers of appointment are not property and cannot be reached by the creditors of the power holder. See Nat’l Shawmut Bank v. Joy, 53 N.E.2d 113, 315 Mass. 457 (Mass. 1944). Using General Power of Appointment Trusts PLR 200101021 (January 8, 2001), PLR 200210051 (March 8, 2002), PLR 200403094 (January 16, 2004), and PLR 200604028 (January 27, 2006). In each of these rulings, the taxpayer proposed to establish a single revocable trust and fund it with his own assets, but giving his wife a general power of appointment over a portion of the assets in the husband’s trust equal to the value of the wife’s remaining applicable exclusion amount less the value of
