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7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to powers of appointment.
10 Highlighted Provisions:
11 This bill:
12 ▸ addresses compliance with specific reference requirements;
13 ▸ enacts the Uniform Powers of Appointment Act, including:
14 • general provisions, definitions, governing law, and the relationship of common
15 law and principles of equity;
16 • providing for the creation, revocation, and amendment of the power of
17 appointment;
18 • addressing the exercise of a power of appointment;
19 • addressing disclaimer or release and the contract to appoint or not appoint;
20 • addressing the rights of a powerholder's creditors in appointive property; and
21 • miscellaneous provisions; and
22 ▸ makes technical and conforming amendments.
23 Money Appropriated in this Bill:
24 None
25 Other Special Clauses:
26 None
27 Utah Code Sections Affected:
28 AMENDS:
29 75-2-208, as last amended by Laws of Utah 1999, Chapter 142
30 75-7-505, as enacted by Laws of Utah 2004, Chapter 89
31 ENACTS:
32 75-10-101, Utah Code Annotated 1953
33 75-10-102, Utah Code Annotated 1953
34 75-10-103, Utah Code Annotated 1953
35 75-10-104, Utah Code Annotated 1953
36 75-10-201, Utah Code Annotated 1953
37 75-10-202, Utah Code Annotated 1953
38 75-10-203, Utah Code Annotated 1953
39 75-10-204, Utah Code Annotated 1953
40 75-10-205, Utah Code Annotated 1953
41 75-10-206, Utah Code Annotated 1953
42 75-10-301, Utah Code Annotated 1953
43 75-10-302, Utah Code Annotated 1953
44 75-10-303, Utah Code Annotated 1953
45 75-10-304, Utah Code Annotated 1953
46 75-10-305, Utah Code Annotated 1953
47 75-10-306, Utah Code Annotated 1953
48 75-10-307, Utah Code Annotated 1953
49 75-10-308, Utah Code Annotated 1953
50 75-10-309, Utah Code Annotated 1953
51 75-10-310, Utah Code Annotated 1953
52 75-10-311, Utah Code Annotated 1953
53 75-10-312, Utah Code Annotated 1953
54 75-10-313, Utah Code Annotated 1953
55 75-10-314, Utah Code Annotated 1953
56 75-10-401, Utah Code Annotated 1953
57 75-10-402, Utah Code Annotated 1953
58 75-10-403, Utah Code Annotated 1953
59 75-10-404, Utah Code Annotated 1953
60 75-10-405, Utah Code Annotated 1953
61 75-10-406, Utah Code Annotated 1953
62 75-10-407, Utah Code Annotated 1953
63 75-10-501, Utah Code Annotated 1953
64 75-10-502, Utah Code Annotated 1953
65 75-10-503, Utah Code Annotated 1953
66 75-10-601, Utah Code Annotated 1953
67 75-10-602, Utah Code Annotated 1953
68 75-10-603, Utah Code Annotated 1953
69 REPEALS:
70 75-2-608, as repealed and reenacted by Laws of Utah 1998, Chapter 39
71 75-2-704, as enacted by Laws of Utah 1998, Chapter 39
72
73 Be it enacted by the Legislature of the state of Utah:
74 Section 1. Section 75-2-208 is amended to read:
75 75-2-208. Exclusions, valuation, and overlapping application.
76 (1) The value of any separate property of the decedent or the decedent's surviving
77 spouse is excluded from the augmented estate even if it otherwise would be included in the
78 augmented estate under Sections 75-2-204, 75-2-205, 75-2-206, and 75-2-207. Property is
79 separate property if it was:
80 (a) owned at the date of the most recent marriage of the decedent and the decedent's
81 surviving spouse;
82 (b) acquired by gift or disposition at death from a person other than the decedent or the
83 decedent's surviving spouse;
84 (c) subject to a presently exercisable power of appointment not created by the decedent
85 or the decedent's spouse that is exempt under Section 75-10-502;
86 [
87 [
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89 expenses paid or otherwise satisfied from separate property.
90 (2) Income attributable to investment, rental, licensing or other use of separate property
91 during the most recent marriage of the decedent and the decedent's surviving spouse is separate
92 property.
93 (3) Appreciation in the value of separate property during the most recent marriage of
94 the decedent and the decedent's surviving spouse is separate property.
95 (4) Except as provided in this Subsection (4), any increase in the value of separate
96 property due to improvements to or the reduction in debt owed against separate property during
97 the most recent marriage of the decedent and the decedent's surviving spouse is separate
98 property. An amount equal to any payment for improvements to or the reduction in debt owed
99 against separate property of the decedent made during the most recent marriage of the decedent
100 and the decedent's surviving spouse from the joint or commingled funds of the decedent and
101 the decedent's surviving spouse, or from the separate property of the surviving spouse, shall not
102 be separate property to the extent of the amount actually paid for the improvements or the
103 amount actually paid for the reduction in debt, including principal, interest, and other payments
104 under the note, owed against separate property. The amount that is determined not to be
105 separate property may not exceed the value of the separate property.
106 (5) All property of the decedent or the decedent's surviving spouse, whether or not
107 commingled, is rebuttably presumed not to be separate property.
108 (6) The value of any property is excluded from the decedent's nonprobate transfers to
109 others:
110 (a) to the extent the decedent received adequate and full consideration in money or
111 money's worth for a transfer of the property; or
112 (b) if the property was transferred with the written joinder of, or if the transfer was
113 consented to in writing by, the surviving spouse.
114 (7) The value of property:
115 (a) included in the augmented estate under Section 75-2-205, 75-2-206, or 75-2-207 is
116 reduced in each category by enforceable claims against the included property; and
117 (b) includes the commuted value of any present or future interest and the commuted
118 value of amounts payable under any trust, life insurance settlement option, annuity contract,
119 public or private pension, disability compensation, death benefit or retirement plan, or any
120 similar arrangement, exclusive of the federal Social Security system.
121 (8) In case of overlapping application to the same property of the section or subsections
122 of Section 75-2-205, 75-2-206, or 75-2-207, the property is included in the augmented estate
123 under the provision yielding the greatest value, and under only one overlapping provision if
124 they all yield the same value.
125 Section 2. Section 75-7-505 is amended to read:
126 75-7-505. Creditor's claim against settlor.
127 [
128 rules apply:
129 [
130 the claims of the settlor's creditors. If a trust has more than one settlor, the amount the creditor
131 or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion
132 of the trust attributable to that settlor's contribution.
133 [
134 the requirements of Section 25-6-14, a creditor or assignee of the settlor may reach the
135 maximum amount that can be distributed to or for the settlor's benefit. If the trust has more
136 than one settlor, the amount the creditor or assignee of a particular settlor may reach may not
137 exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.
138 [
139 from which liabilities will be paid, the property of a trust that was revocable at the settlor's
140 death, but not property received by the trust as a result of the death of the settlor which is
141 otherwise exempt from the claims of the settlor's creditors, is subject to claims of the settlor's
142 creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and
143 disposal of remains, and statutory allowances to a surviving spouse and children to the extent
144 the settlor's probate estate is inadequate to satisfy those claims, costs, expenses, and
145 allowances.
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153
154 Section 3. Section 75-10-101 is enacted to read:
155
156
157 75-10-101. Title.
158 This chapter is known as the "Uniform Powers of Appointment Act."
159 Section 4. Section 75-10-102 is enacted to read:
160 75-10-102. Definitions.
161 As used in this chapter:
162 (1) "Appointee" means a person to which a powerholder makes an appointment of
163 appointive property.
164 (2) "Appointive property" means the property or property interest subject to a power of
165 appointment.
166 (3) "Blanket-exercise clause" means a clause in an instrument that exercises a power of
167 appointment and is not a specific-exercise clause. The term includes a clause that:
168 (a) expressly uses the words "any power" in exercising any power of appointment the
169 powerholder has;
170 (b) expressly uses the words "any property" in appointing any property over which the
171 powerholder has a power of appointment; or
172 (c) disposes of all property subject to disposition by the powerholder.
173 (4) "Donor" means a person that creates a power of appointment.
174 (5) "Exclusionary power of appointment" means a power of appointment exercisable in
175 favor of any one or more of the permissible appointees to the exclusion of the other permissible
176 appointees.
177 (6) "General power of appointment" means a power of appointment exercisable in
178 favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor
179 of the powerholder's estate.
180 (7) "Gift-in-default clause" means a clause identifying a taker in default of
181 appointment.
182 (8) "Impermissible appointee" means a person that is not a permissible appointee.
183 (9) "Instrument" means a record.
184 (10) "Nongeneral power of appointment" means a power of appointment that is not a
185 general power of appointment. The terms "special power of appointment," "limited power of
186 appointment," or similar terminology used in an instrument creating a power that does not grant
187 powers making it a general power of appointment as defined in this chapter mean the same as
188 and may be used interchangeably with the term nongeneral power of appointment.
189 (11) "Permissible appointee" means a person in whose favor a powerholder may
190 exercise a power of appointment.
191 (12) "Person" means an individual, estate, trust, business or nonprofit entity, public
192 corporation, government or governmental subdivision, agency, instrumentality, or other legal
193 entity.
194 (13) "Powerholder" means a person in whom a donor creates a power of appointment.
195 (14) "Power of appointment" means a power that enables a powerholder acting in a
196 nonfiduciary capacity to designate a recipient of an interest in, or another power of appointment
197 over, the appointive property. The term does not include a power of attorney.
198 (15) "Presently exercisable power of appointment" means a power of appointment
199 exercisable by the powerholder at a relevant time. The term:
200 (a) includes a power of appointment not exercisable until the occurrence of a specified
201 event, the satisfaction of an ascertainable standard, or the passage of a specified time only after:
202 (i) the occurrence of the specified event;
203 (ii) the satisfaction of the ascertainable standard; or
204 (iii) the passage of the specified time; and
205 (b) does not include a power exercisable only at the powerholder's death.
206 (16) "Record" means information that is inscribed on a tangible medium or that is
207 stored in an electronic or other medium and is retrievable in perceivable form.
208 (17) "Specific-exercise clause" means a clause in an instrument that specifically refers
209 to and exercises a particular power of appointment.
210 (18) "Taker in default of appointment" means a person that takes all or part of the
211 appointive property to the extent the powerholder does not effectively exercise the power of
212 appointment.
213 (19) "Terms of the instrument" means the manifestation of the intent of the maker of
214 the instrument regarding the instrument's provisions as expressed in the instrument or as may
215 be established by other evidence that would be admissible in a legal proceeding.
216 Section 5. Section 75-10-103 is enacted to read:
217 75-10-103. Governing law.
218 (1) Unless the terms of the instrument creating a power of appointment manifest a
219 contrary intent:
220 (a) the creation, revocation, amendment, interpretation and definition of terms, or the
221 determination of the rights of the appointee of the power is governed by the law of the donor's
222 domicile at the relevant time; and
223 (b) the formalities for the exercise, release, or disclaimer of the power, or the
224 revocation or amendment of the exercise, release, or disclaimer of the power is governed by the
225 law of the powerholder's state of domicile at the relevant time.
226 (2) The law of the powerholder's state of domicile may not govern the interpretation
227 and definition of terms, or the determination of the rights of the appointee of the power, which
228 shall be governed by the law of the donor's domicile at the relevant time.
229 (3) Claims of creditors, including creditor claims regarding a power not created by a
230 powerholder as set forth in Section 75-10-502, and other parties claiming an interest in
231 property or rights subject to a power will be governed by the laws of the donor's domicile at the
232 time of the creation of the power and not the powerholder's state of domicile either at the time
233 of the creation of the power or at the time of exercise of the power.
234 Section 6. Section 75-10-104 is enacted to read:
235 75-10-104. Common law and principles of equity.
236 The common law and principles of equity supplement this chapter, except to the extent
237 modified by this chapter or laws of this state other than this chapter.
238 Section 7. Section 75-10-201 is enacted to read:
239
240 75-10-201. Creation of power of appointment.
241 (1) A power of appointment is created only if:
242 (a) the instrument creating the power:
243 (i) is valid under applicable law; and
244 (ii) except as otherwise provided in Subsection (2), transfers the appointive property;
245 and
246 (b) the terms of the instrument creating the power manifest the donor's intent to create
247 in a powerholder a power of appointment over the appointive property exercisable in favor of a
248 permissible appointee.
249 (2) Subsection (1)(a)(ii) does not apply to the creation of a power of appointment by
250 the exercise of a power of appointment.
251 (3) A power of appointment may not be created in a deceased individual.
252 (4) Subject to an applicable rule against perpetuities, a power of appointment may be
253 created in an unborn or unascertained powerholder.
254 Section 8. Section 75-10-202 is enacted to read:
255 75-10-202. Nontransferability.
256 A powerholder may not transfer a power of appointment. If a powerholder dies without
257 exercising or releasing a power, the power lapses.
258 Section 9. Section 75-10-203 is enacted to read:
259 75-10-203. Presumption of unlimited authority.
260 Subject to Section 75-10-205, and unless the terms of the instrument creating a power
261 of appointment manifest a contrary intent, the power is:
262 (1) presently exercisable;
263 (2) exclusionary; and
264 (3) except as otherwise provided in Section 75-10-204, general.
265 Section 10. Section 75-10-204 is enacted to read:
266 75-10-204. Exception to presumption of unlimited authority.
267 Unless the terms of the instrument creating a power of appointment manifest a contrary
268 intent, the power is nongeneral if:
269 (1) the power is exercisable only at the powerholder's death; and
270 (2) the permissible appointees of the power are a defined and limited class that does
271 not include the powerholder's estate, the powerholder's creditors, or the creditors of the
272 powerholder's estate.
273 Section 11. Section 75-10-205 is enacted to read:
274 75-10-205. Rules of classification.
275 (1) In this section, "adverse party" means a person with a substantial beneficial interest
276 in property that would be affected adversely by a powerholder's exercise or nonexercise of a
277 power of appointment in favor of the powerholder, the powerholder's estate, a creditor of the
278 powerholder, or a creditor of the powerholder's estate.
279 (2) If a powerholder may exercise a power of appointment only with the consent or
280 joinder of an adverse party, the power is nongeneral.
281 (3) If the permissible appointees of a power of appointment are not defined and
282 limited, the power is exclusionary.
283 Section 12. Section 75-10-206 is enacted to read:
284 75-10-206. Donor's power to revoke or amend.
285 A donor may revoke or amend a power of appointment unless or to the extent the
286 instrument creating the power is made irrevocable by the donor or the exercise of a presently
287 exercisable power has been irrevocably made or effected.
288 Section 13. Section 75-10-301 is enacted to read:
289
290 75-10-301. Requisites for exercise of power of appointment.
291 A power of appointment is exercised only:
292 (1) if the instrument exercising the power is valid under applicable law;
293 (2) if the terms of the instrument exercising the power:
294 (a) manifest the powerholder's intent to exercise the power; and
295 (b) satisfy the requirements of exercise, if any, imposed by the donor; and
296 (3) to the extent the appointment is a permissible exercise of the power.
297 Section 14. Section 75-10-302 is enacted to read:
298 75-10-302. Intent to exercise -- Determining intent from residuary clause.
299 (1) As used in this section:
300 (a) "Residuary clause" does not include a residuary clause containing a
301 blanket-exercise clause or a specific-exercise clause.
302 (b) "Will" includes a codicil and a testamentary instrument that revises another will.
303 (2) A residuary clause in a powerholder's will, or a comparable clause in the
304 powerholder's revocable trust, manifests the powerholder's intent to exercise a power of
305 appointment only if:
306 (a) the terms of the instrument containing the residuary clause do not manifest a
307 contrary intent;
308 (b) the power is a general power exercisable in favor of the powerholder's estate;
309 (c) there is no gift-in-default clause or the clause is ineffective; and
310 (d) the powerholder did not release the power.
311 Section 15. Section 75-10-303 is enacted to read:
312 75-10-303. Intent to exercise -- After-acquired power.
313 Unless the terms of the instrument exercising a power of appointment manifest a
314 contrary intent:
315 (1) except as otherwise provided in Subsection (2), a blanket-exercise clause extends to
316 a power acquired by the powerholder after executing the instrument containing the clause; and
317 (2) if the powerholder is also the donor of the power, the clause does not extend to the
318 power unless there is no gift-in-default clause or the gift-in-default clause is ineffective.
319 Section 16. Section 75-10-304 is enacted to read:
320 75-10-304. Compliance with donor-imposed formal requirements.
321 (1) A powerholder's compliance with formal requirements of appointment imposed by
322 the donor is sufficient only if the powerholder substantially complies with the conditions,
323 requirements, and formalities set forth in the power of appointment, including complying with
324 all the requirements for making specific reference to the power, that the power shall be
325 exercised in a specific document such as a will, or that the document exercising the power shall
326 be witnessed or notarized. If the donor limited the powerholder's exercise to a validly executed
327 will, substantial compliance may not include the exercise of the power by a trust or another
328 document not meeting the requirements of a properly executed will.
329 (2) Unless required by the instrument creating the power, the probate of a properly
330 executed will is not required for the exercise of a power to be valid and complete.
331 Section 17. Section 75-10-305 is enacted to read:
332 75-10-305. Permissible appointment.
333 (1) A powerholder of a general power of appointment that permits appointment to the
334 powerholder or the powerholder's estate may make any appointment, including an appointment
335 in trust or creating a new power of appointment, that the powerholder could make in disposing
336 of the powerholder's own property.
337 (2) A powerholder of a general power of appointment that permits appointment only to
338 the creditors of the powerholder or of the powerholder's estate may appoint only to those
339 creditors.
340 (3) Unless the terms of the instrument creating a power of appointment manifest a
341 contrary intent, the powerholder of a nongeneral power may:
342 (a) make an appointment in any form, including an appointment in trust, in favor of a
343 permissible appointee;
344 (b) create a general power in a permissible appointee; or
345 (c) create a nongeneral power in any person to appoint one or more of the permissible
346 appointees of the original nongeneral power.
347 Section 18. Section 75-10-306 is enacted to read:
348 75-10-306. Appointment to deceased appointee or permissible appointee's
349 descendant.
350 (1) Subject to Sections 75-2-603 and 75-2-604, an appointment to a deceased appointee
351 is ineffective.
352 (2) Unless the terms of the instrument creating a power of appointment manifest a
353 contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or
354 create a new power of appointment in, a descendant of a deceased permissible appointee
355 whether or not the descendant is described by the donor as a permissible appointee.
356 Section 19. Section 75-10-307 is enacted to read:
357 75-10-307. Impermissible appointment.
358 (1) Except as otherwise provided in Section 75-10-306, an exercise of a power of
359 appointment in favor of an impermissible appointee is ineffective.
360 (2) An exercise of a power of appointment in favor of a permissible appointee is
361 ineffective to the extent the appointment is a fraud on the power.
362 Section 20. Section 75-10-308 is enacted to read:
363 75-10-308. Elective allocation doctrine.
364 If a powerholder exercises a power of appointment in a disposition that also disposes of
365 property the powerholder owns, the owned property and the appointive property shall be
366 allocated in the permissible manner that best carries out the powerholder's intent.
367 Section 21. Section 75-10-309 is enacted to read:
368 75-10-309. Capture doctrine -- Disposition of ineffectively appointed property
369 under general power.
370 To the extent a powerholder of a general power of appointment, other than a power to
371 withdraw property from, revoke, or amend a trust, makes an ineffective appointment:
372 (1) the gift-in-default clause controls the disposition of the ineffectively appointed
373 property; or
374 (2) if there is no gift-in-default clause or to the extent the clause is ineffective, the
375 ineffectively appointed property:
376 (a) passes to:
377 (i) the powerholder if the powerholder is a permissible appointee and is living; or
378 (ii) if the powerholder is an impermissible appointee or is deceased, the powerholder's
379 estate if the estate is a permissible appointee; or
380 (b) if there is no taker under Subsection (2)(a), passes under a reversionary interest to
381 the donor or the donor's transferee or successor in interest.
382 Section 22. Section 75-10-310 is enacted to read:
383 75-10-310. Disposition of unappointed property under released or unexercised
384 general power.
385 To the extent a powerholder releases or fails to exercise a general power of appointment
386 other than a power to withdraw property from, revoke, or amend a trust:
387 (1) the gift-in-default clause controls the disposition of the unappointed property; or
388 (2) if there is no gift-in-default clause or to the extent the clause is ineffective:
389 (a) except as otherwise provided in Subsection (2)(b), the unappointed property passes
390 to:
391 (i) the powerholder if the powerholder is a permissible appointee and is living; or
392 (ii) if the powerholder is an impermissible appointee or is deceased, the powerholder's
393 estate if the estate is a permissible appointee; or
394 (b) to the extent the powerholder released the power, or if there is no taker under
395 Subsection (2)(a), the unappointed property passes under a reversionary interest to the donor or
396 the donor's transferee or successor in interest.
397 Section 23. Section 75-10-311 is enacted to read:
398 75-10-311. Disposition of unappointed property under released or unexercised
399 nongeneral power.
400 To the extent a powerholder releases, ineffectively exercises, or fails to exercise a
401 nongeneral power of appointment:
402 (1) the gift-in-default clause controls the disposition of the unappointed property; or
403 (2) if there is no gift-in-default clause or to the extent the clause is ineffective, the
404 unappointed property:
405 (a) passes to the permissible appointees if:
406 (i) the permissible appointees are defined and limited; and
407 (ii) the terms of the instrument creating the power do not manifest a contrary intent; or
408 (b) if there is no taker under Subsection (2)(a), passes under a reversionary interest to
409 the donor or the donor's transferee or successor in interest.
410 Section 24. Section 75-10-312 is enacted to read:
411 75-10-312. Disposition of unappointed property if partial appointment to taker in
412 default.
413 Unless the terms of the instrument creating or exercising a power of appointment
414 manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in
415 default of appointment, the taker in default of appointment may share fully in unappointed
416 property.
417 Section 25. Section 75-10-313 is enacted to read:
418 75-10-313. Appointment to taker in default.
419 If a powerholder makes an appointment to a taker in default of appointment and the
420 appointee would have taken the property under a gift-in-default clause had the property not
421 been appointed, the power of appointment is considered not to have been exercised and the
422 appointee takes under the clause.
423 Section 26. Section 75-10-314 is enacted to read:
424 75-10-314. Powerholder's authority to revoke or amend exercise.
425 Unless the terms of the instrument creating the power of appointment or the instrument
426 exercising the power of appointment provide that the exercise is irrevocable or unamendable, a
427 powerholder may revoke or amend an exercise of a power of appointment made by an
428 instrument effective during the life of the powerholder where the exercise is to become
429 effective at some future time or contingency and where that future time and contingency has
430 not yet occurred, as long as the revocation or amendment is done with the same formality as the
431 original exercise of the power of appointment.
432 Section 27. Section 75-10-401 is enacted to read:
433
434 75-10-401. Disclaimer.
435 As provided by Section 75-2-801:
436 (1) A powerholder may disclaim all or part of a power of appointment.
437 (2) A permissible appointee, an appointee, or a taker in default of appointment may
438 disclaim all or part of an interest in appointive property.
439 Section 28. Section 75-10-402 is enacted to read:
440 75-10-402. Authority to release.
441 A powerholder may release a power of appointment, in whole or in part, except to the
442 extent the terms of the instrument creating the power prevent the release.
443 Section 29. Section 75-10-403 is enacted to read:
444 75-10-403. Method of release.
445 A powerholder of a releasable power of appointment may release the power in whole or
446 in part:
447 (1) by substantial compliance with a method provided in the terms of the instrument
448 creating the power; or
449 (2) if the terms of the instrument creating the power do not provide a method or the
450 method provided in the terms of the instrument is not expressly made exclusive, by a record
451 manifesting the powerholder's intent by clear and convincing evidence.
452 Section 30. Section 75-10-404 is enacted to read:
453 75-10-404. Revocation or amendment of release.
454 A powerholder may revoke or amend a release of a power of appointment only to the
455 extent that:
456 (1) the instrument of release is revocable by the powerholder; or
457 (2) the powerholder reserves a power of revocation or amendment in the instrument of
458 release.
459 Section 31. Section 75-10-405 is enacted to read:
460 75-10-405. Power to contract -- Presently exercisable power of appointment.
461 A powerholder of a presently exercisable power of appointment may contract:
462 (1) not to exercise the power; or
463 (2) to exercise the power if the contract when made does not confer a benefit on an
464 impermissible appointee.
465 Section 32. Section 75-10-406 is enacted to read:
466 75-10-406. Power to contract -- Power of appointment not presently exercisable.
467 A powerholder of a power of appointment that is not presently exercisable may contract
468 to exercise or not to exercise the power only if the powerholder:
469 (1) is also the donor of the power; and
470 (2) has reserved the power in a revocable trust.
471 Section 33. Section 75-10-407 is enacted to read:
472 75-10-407. Remedy for breach of contract to appoint or not to appoint.
473 The remedy for a powerholder's breach of a contract to appoint or not to appoint
474 appointive property is limited to damages payable out of the appointive property or, if
475 appropriate, specific performance of the contract.
476 Section 34. Section 75-10-501 is enacted to read:
477
478 75-10-501. Creditor claim -- General power created by powerholder.
479 (1) In this section, "power of appointment created by the powerholder" includes a
480 power of appointment created in a transfer by another person to the extent the powerholder
481 contributed value to the transfer.
482 (2) Appointive property subject to a general power of appointment created by the
483 powerholder is subject to a claim of a creditor of the powerholder or of the powerholder's estate
484 to the extent provided in Title 25, Chapter 6, Uniform Fraudulent Transfer Act.
485 (3) Subject to Subsection (2), appointive property subject to a general power of
486 appointment created by the powerholder is not subject to a claim of a creditor of the
487 powerholder or the powerholder's estate to the extent the powerholder irrevocably appointed
488 the property in favor of a person other than the powerholder or the powerholder's estate.
489 (4) Subject to Subsections (2) and (3), and notwithstanding the presence of a
490 spendthrift provision or whether the claim arose before or after the creation of the power of
491 appointment, appointive property subject to a general power of appointment created by the
492 powerholder is subject to a claim of a creditor of:
493 (a) the powerholder, to the same extent as if the powerholder owned the appointive
494 property, if the power is presently exercisable; and
495 (b) the powerholder's estate, to the extent the estate is insufficient to satisfy the claim
496 and subject to the right of a decedent to direct the source from which liabilities are paid, if the
497 power is exercisable at the powerholder's death.
498 Section 35. Section 75-10-502 is enacted to read:
499 75-10-502. Creditor claim -- Power not created by powerholder.
500 (1) The property subject to a general or a nongeneral power of appointment not created
501 by the powerholder, including a presently exercisable general or nongeneral power of
502 appointment, is exempt from a claim of a creditor of the powerholder or the powerholder's
503 estate. The powerholder of such a power may not be compelled to exercise the power and the
504 powerholder's creditors may not acquire the power, any rights thereto, or reach the trust
505 property or beneficial interests by any other means. A court may not exercise or require the
506 powerholder to exercise the power of appointment.
507 (2) As set forth in Section 75-10-103, the law of the donor's domicile at the time of
508 creation shall govern claims of creditors and other parties claiming an interest in property or
509 rights subject to a power of appointment.
510 Section 36. Section 75-10-503 is enacted to read:
511 75-10-503. Power to withdraw.
512 (1) For purposes of this part, and except as otherwise provided in Subsection (2), a
513 power to withdraw property from a trust is treated, during the time the power may be exercised,
514 as a presently exercisable general power of appointment to the extent of the property subject to
515 the power to withdraw.
516 (2) On the lapse, release, or waiver of a power to withdraw property from a trust, the
517 power is treated as a presently exercisable general power of appointment only to the extent the
518 value of the property affected by the lapse, release, or waiver exceeds the greater of the amount
519 specified in 26 U.S.C. Sec. 2041(b)(2) and 26 U.S.C. Sec. 2514(e) or the amount specified in
520 26 U.S.C. Sec. 2503(b).
521 Section 37. Section 75-10-601 is enacted to read:
522
523 75-10-601. Uniformity of application and construction.
524 In applying and construing this uniform act, consideration shall be given to the need to
525 promote uniformity of the law with respect to its subject matter among states that enact it.
526 Section 38. Section 75-10-602 is enacted to read:
527 75-10-602. Relation to Electronic Signatures in Global and National Commerce
528 Act.
529 This chapter modifies, limits, or supersedes the Electronic Signatures in Global and
530 National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede
531 Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the
532 notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
533 Section 39. Section 75-10-603 is enacted to read:
534 75-10-603. Application to existing relationships.
535 (1) Except as otherwise provided in this chapter, on and after May 9, 2017:
536 (a) this chapter applies to a power of appointment created before, on, or after May 9,
537 2017;
538 (b) this chapter applies to a judicial proceeding concerning a power of appointment
539 commenced on or after May 9, 2017;
540 (c) this chapter applies to a judicial proceeding concerning a power of appointment
541 commenced before May 9, 2017, unless the court finds that application of a particular
542 provision of this chapter would interfere substantially with the effective conduct of the judicial
543 proceeding or prejudice a right of a party, in which case the particular provision of this chapter
544 does not apply and the superseded law applies; and
545 (d) a rule of construction or presumption provided in this chapter applies to an
546 instrument executed before May 9, 2017, unless there is a clear indication of a contrary intent
547 in the terms of the instrument.
548 (2) Except as otherwise provided in Subsections (1)(a) through (d), an action done
549 before May 9, 2017, is not affected by this chapter.
550 (3) If a right is acquired, extinguished, or barred on the expiration of a prescribed
551 period that commenced under law of this state other than this chapter before May 9, 2017, the
552 law continues to apply to the right.
553 Section 40. Repealer.
554 This bill repeals:
555 Section 75-2-608, Exercise of power of appointment.
556 Section 75-2-704, Power of appointment -- Meaning of specific reference
557 requirement.