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LSDefine

Simple English definitions for legal terms

Mandatory Power of Appointment

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A quick definition of Mandatory Power of Appointment:

A mandatory power of appointment is a type of power that requires the person holding it to use it. This is different from a discretionary power of appointment, which allows the holder to choose whether or not to use it. If the holder of a mandatory power of appointment fails to use it, a court will step in and distribute the property to the people who were supposed to receive it. However, the power is only valid if there are clear and definite beneficiaries who can be identified. If there are no clear beneficiaries, the power is invalid and cannot be used.

A more thorough explanation:

A mandatory power of appointment is a legal term that means a person has a duty to use their power to distribute property to certain people. This is different from a discretionary power of appointment, where the person has the choice to distribute the property or not.

If the person with the mandatory power of appointment fails to use it, the court will step in and distribute the property to the people who were supposed to receive it. This is called the "objects of the power." The court must be able to identify these people in order to execute the power of appointment.

For example, let's say a wealthy person creates a trust and gives their child a mandatory power of appointment over the trust assets. The child must use their power to distribute the assets to certain family members. If the child fails to do so, the court will step in and distribute the assets to those family members.

It's important to note that the validity of a mandatory power of appointment depends on whether the beneficiaries can be clearly identified. If they cannot, the power is invalid and the trust may also be invalid. However, some states separate the power from the trust, so if the trust fails due to lack of definite beneficiaries, the power may still be valid.

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