Powers of Appointment and Estate Taxation

Summary

This practice note discusses the estate and gift taxation of powers of appointment (POAs). POAs represent a valuable estate and gift taxation planning tool because they empower the testator with the ability to select a person to dispose of certain property under the terms of the will. If you are drafting a will or trust instrument for your client, the will or trust can give your client’s beneficiaries a POA. Flexibility ensues because the POA assists in directing where your client’s share of their estate or trust goes after their death.