What are limited powers of appointment
There are two main forms of power of appointment, namely; general powers of appointment and limited (sometimes referred to as special) powers of appointment. These powers are typically given to an individual by a testator for the purpose of disposing of the estate left in a will. However depending on the type of power of appointment given, the levels of discretion will vary.
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Limited powers of appointment explained
Limited powers of appointment differ to general powers of appointment in that they pose a level of restriction t to the done (person given the powers of appointment) with regards to how the estate can be disposed of. General powers on the other hand allow the donee to exercise full discretion in disposing and distributing the property in a will.
Limited powers of appointment provide the nominated individual receiving the power a level of right to distribute specified property held in a will among a specific group of people as mentioned in the will by the testator. Although the limited power of appointment will allow the individual to dispose of the designated property as they see fit, they are still restricted as to whom receives the property, and this will usually be decided by the testator before death.
Under limited powers of appointment are two categories, namely; exclusive and non exclusive. Exclusive powers give the donee the right to dispose of property to one or a select few members of the chosen group of people, while if the powers are non exlucisve, the donee must dispose of the property by including every member of the chosen group.
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