Powers of appointment.

Existing law provides a statutory body of law relating to powers of appointment, including the creation and exercise of, and the revocability of the creation, exercise, or release of, a power of appointment. Existing law provides that a power of appointment can be created only by a donor having the capacity to transfer the interest in property to which the power relates. Existing law for these purposes defines a person to whom a power of appointment is given or in whose favor a power of appointment is reserved as a "donee." This bill would revise and recast those provisions. The bill would impose additional requirements on the creation of a power of appointment, including the existence of a legally valid creating instrument that manifests the donor's intent to create a power of appointment and that transfers the appointive property, except as specified. The bill would define the term "power of appointment" for those purposes. The bill would instead define a person to whom a power of appointment is given or in whose favor a power of appointment is reserved as a "powerholder." The bill would require, if a powerholder exercises a power of appointment in a disposition that also disposes of property the powerholder owns, the owned property and the appointive property to be allocated in the permissible manner in accordance with the terms of the creating instrument and to carry out the intent of the powerholder. The bill would require, if a powerholder makes a valid partial appointment to a taker in default of appointment, the taker in default of appointment to share fully in unappointed property. The bill would make property subject to a special power of appointment subject to the claims of creditors of the powerholder or of the powerholder's estate or the expenses of administration of the powerholder's estate under specified circumstances. The bill would make conforming changes to related provisions, and would make changes to provisions related to an unexercised general power of appointment, as specified.