What is a testamentary power of appointment and who is the appointee?
Short Answer
A “testamentary power of attorney” is generally a misnomer: a power of attorney authorizes an agent to act for a principal during the principal’s life and ordinarily does not operate as a will. The concept usually intended is a testamentary power of appointment—a power exercisable at death, often through a will.
Key Terms
| Term | Meaning |
|---|---|
| Power of appointment | Authority granted by one person—the donor—to another—the powerholder—to designate who receives specified property or an interest in it. Wis. Stat. § 702.102(15) (2025) |
| Grantor | More precisely, the donor: the person who creates the power of appointment. Wis. Stat. § 702.102(5) (2025) |
| Powerholder | The person who receives and may exercise the power. Wis. Stat. § 702.102(14) (2025) |
| Appointee | The person or entity designated to receive the property when the powerholder exercises the power. Wis. Stat. § 702.102(1) (2025) |
| Taker in default | The person who receives the property if the powerholder does not effectively exercise the power. Wis. Stat. § 702.102(18) (2025) |
Testamentary Power of Appointment
A testamentary power of appointment is exercisable only at the powerholder’s death, commonly by a provision in the powerholder’s will. For example:
“I give my daughter a power to appoint the trust property, by her will, among her descendants.”
Here:
- The donor is the person who created the power.
- The powerholder is the daughter.
- The people eligible to receive the property are the permissible appointees.
- The person ultimately designated in the daughter’s will is the appointee.
- Anyone designated to receive the property if she fails to exercise the power is the taker in default.
A power exercisable only at death is generally a nongeneral power when it is limited to a defined class that excludes the powerholder, the powerholder’s estate, and their creditors. Wis. Stat. § 702.204 (2025) By contrast, a power exercisable in favor of the powerholder, the powerholder’s estate, or their creditors is a general power of appointment. Wis. Stat. § 702.102(7) (2025)
“Appointee in a Will”
The appointee in a will is the person or entity named in the will to receive property subject to a power of appointment. The will must generally manifest the powerholder’s intent to exercise the power and comply with any exercise requirements imposed by the donor. Wis. Stat. § 702.301(1) (2025)
A will may also contain a blanket-exercise clause, such as “I exercise all powers of appointment I possess,” or a specific-exercise clause identifying the particular power. Wis. Stat. § 702.102(3), (17) (2025)
Important Distinction
A power of attorney is different from a power of appointment:
- A power of attorney is an agency authorization to act for another person; it is not itself a testamentary disposition.
- A power of appointment concerns who will receive property and is a property-law concept. Wis. Stat. § 702.102(15) (2025)
- The Restatement treats powers of appointment separately from powers of attorney and includes distinct topics concerning their creation and exercise.[1]
The precise rules depend on the governing state law and the language of the trust, will, or other governing instrument.