A grantor's spouse has a power to appoint in her will that references this power in the grantor's trust. This is an example of which power?

• A. A limited power of appointment
• B. A general power of appointment
• C. Durable power of attorney
• D. General power of attorney

Answer: (A)

The main idea here is how a power of appointment works in trusts and estates. A power of appointment lets someone designate who will receive trust property. A general power of appointment is broad and allows the appointer to direct the property to themselves, their estate, or their creditors. A limited (or special) power is restricted to a defined class or purpose and isn’t exercisable in favor of the appointer themselves or their estate.

In this scenario, the spouse can exercise the power by making a provision in her will, which means the appointment is to be made in a testamentary manner and is governed by the terms of the grantor’s trust. Because the appointment is constrained to the terms set in the trust and is not a broad, unrestricted ability to appoint to herself or her estate, it’s a limited power of appointment. The other options refer to authorities to act for someone during their lifetime (powers of attorney), which are not powers of appointment in a trust or will.