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7 LONG TITLE
8 Committee Note:
9 The Judiciary Interim Committee recommended this bill.
10 General Description:
11 This bill modifies provisions related to powers of appointment.
12 Highlighted Provisions:
13 This bill:
14 ▸ addresses compliance with specific reference requirements;
15 ▸ enacts the Uniform Powers of Appointment Act, including:
16 • general provisions, definitions, governing law, and the relationship of common
17 law and principles of equity;
18 • providing for the creation, revocation, and amendment of the power of
19 appointment;
20 • addressing the exercise of a power of appointment;
21 • addressing disclaimer or release and the contract to appoint or not appoint;
22 • addressing the rights of a powerholder's creditors in appointive property; and
23 • miscellaneous provisions; and
24 ▸ makes technical and conforming amendments.
25 Money Appropriated in this Bill:
26 None
27 Other Special Clauses:
28 None
29 Utah Code Sections Affected:
30 AMENDS:
31 75-2-208, as last amended by Laws of Utah 1999, Chapter 142
32 75-7-505, as enacted by Laws of Utah 2004, Chapter 89
33 ENACTS:
34 75-10-101, Utah Code Annotated 1953
35 75-10-102, Utah Code Annotated 1953
36 75-10-103, Utah Code Annotated 1953
37 75-10-104, Utah Code Annotated 1953
38 75-10-201, Utah Code Annotated 1953
39 75-10-202, Utah Code Annotated 1953
40 75-10-203, Utah Code Annotated 1953
41 75-10-204, Utah Code Annotated 1953
42 75-10-205, Utah Code Annotated 1953
43 75-10-206, Utah Code Annotated 1953
44 75-10-301, Utah Code Annotated 1953
45 75-10-302, Utah Code Annotated 1953
46 75-10-303, Utah Code Annotated 1953
47 75-10-304, Utah Code Annotated 1953
48 75-10-305, Utah Code Annotated 1953
49 75-10-306, Utah Code Annotated 1953
50 75-10-307, Utah Code Annotated 1953
51 75-10-308, Utah Code Annotated 1953
52 75-10-309, Utah Code Annotated 1953
53 75-10-310, Utah Code Annotated 1953
54 75-10-311, Utah Code Annotated 1953
55 75-10-312, Utah Code Annotated 1953
56 75-10-313, Utah Code Annotated 1953
57 75-10-314, Utah Code Annotated 1953
58 75-10-401, Utah Code Annotated 1953
59 75-10-402, Utah Code Annotated 1953
60 75-10-403, Utah Code Annotated 1953
61 75-10-404, Utah Code Annotated 1953
62 75-10-405, Utah Code Annotated 1953
63 75-10-406, Utah Code Annotated 1953
64 75-10-407, Utah Code Annotated 1953
65 75-10-501, Utah Code Annotated 1953
66 75-10-502, Utah Code Annotated 1953
67 75-10-503, Utah Code Annotated 1953
68 75-10-601, Utah Code Annotated 1953
69 75-10-602, Utah Code Annotated 1953
70 75-10-603, Utah Code Annotated 1953
71 REPEALS:
72 75-2-608, as repealed and reenacted by Laws of Utah 1998, Chapter 39
73 75-2-704, as enacted by Laws of Utah 1998, Chapter 39
74
75 Be it enacted by the Legislature of the state of Utah:
76 Section 1. Section 75-2-208 is amended to read:
77 75-2-208. Exclusions, valuation, and overlapping application.
78 (1) The value of any separate property of the decedent or the decedent's surviving
79 spouse is excluded from the augmented estate even if it otherwise would be included in the
80 augmented estate under Sections 75-2-204, 75-2-205, 75-2-206, and 75-2-207. Property is
81 separate property if it was:
82 (a) owned at the date of the most recent marriage of the decedent and the decedent's
83 surviving spouse;
84 (b) acquired by gift or disposition at death from a person other than the decedent or the
85 decedent's surviving spouse;
86 (c) subject to a presently exercisable power of appointment not created by the decedent
87 or the decedent's spouse that is exempt under Section 75-10-502;
88 [
89 [
90 [
91 expenses paid or otherwise satisfied from separate property.
92 (2) Income attributable to investment, rental, licensing or other use of separate property
93 during the most recent marriage of the decedent and the decedent's surviving spouse is separate
94 property.
95 (3) Appreciation in the value of separate property during the most recent marriage of
96 the decedent and the decedent's surviving spouse is separate property.
97 (4) Except as provided in this Subsection (4), any increase in the value of separate
98 property due to improvements to or the reduction in debt owed against separate property during
99 the most recent marriage of the decedent and the decedent's surviving spouse is separate
100 property. An amount equal to any payment for improvements to or the reduction in debt owed
101 against separate property of the decedent made during the most recent marriage of the decedent
102 and the decedent's surviving spouse from the joint or commingled funds of the decedent and
103 the decedent's surviving spouse, or from the separate property of the surviving spouse, shall not
104 be separate property to the extent of the amount actually paid for the improvements or the
105 amount actually paid for the reduction in debt, including principal, interest, and other payments
106 under the note, owed against separate property. The amount that is determined not to be
107 separate property may not exceed the value of the separate property.
108 (5) All property of the decedent or the decedent's surviving spouse, whether or not
109 commingled, is rebuttably presumed not to be separate property.
110 (6) The value of any property is excluded from the decedent's nonprobate transfers to
111 others:
112 (a) to the extent the decedent received adequate and full consideration in money or
113 money's worth for a transfer of the property; or
114 (b) if the property was transferred with the written joinder of, or if the transfer was
115 consented to in writing by, the surviving spouse.
116 (7) The value of property:
117 (a) included in the augmented estate under Section 75-2-205, 75-2-206, or 75-2-207 is
118 reduced in each category by enforceable claims against the included property; and
119 (b) includes the commuted value of any present or future interest and the commuted
120 value of amounts payable under any trust, life insurance settlement option, annuity contract,
121 public or private pension, disability compensation, death benefit or retirement plan, or any
122 similar arrangement, exclusive of the federal Social Security system.
123 (8) In case of overlapping application to the same property of the section or subsections
124 of Section 75-2-205, 75-2-206, or 75-2-207, the property is included in the augmented estate
125 under the provision yielding the greatest value, and under only one overlapping provision if
126 they all yield the same value.
127 Section 2. Section 75-7-505 is amended to read:
128 75-7-505. Creditor's claim against settlor.
129 [
130 rules apply:
131 [
132 the claims of the settlor's creditors. If a trust has more than one settlor, the amount the creditor
133 or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion
134 of the trust attributable to that settlor's contribution.
135 [
136 the requirements of Section 25-6-14, a creditor or assignee of the settlor may reach the
137 maximum amount that can be distributed to or for the settlor's benefit. If the trust has more
138 than one settlor, the amount the creditor or assignee of a particular settlor may reach may not
139 exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.
140 [
141 from which liabilities will be paid, the property of a trust that was revocable at the settlor's
142 death, but not property received by the trust as a result of the death of the settlor which is
143 otherwise exempt from the claims of the settlor's creditors, is subject to claims of the settlor's
144 creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and
145 disposal of remains, and statutory allowances to a surviving spouse and children to the extent
146 the settlor's probate estate is inadequate to satisfy those claims, costs, expenses, and
147 allowances.
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154
155
156 Section 3. Section 75-10-101 is enacted to read:
157
158
159 75-10-101. Title.
160 This chapter is known as the "Uniform Powers of Appointment Act."
161 Section 4. Section 75-10-102 is enacted to read:
162 75-10-102. Definitions.
163 As used in this chapter:
164 (1) "Appointee" means a person to which a powerholder makes an appointment of
165 appointive property.
166 (2) "Appointive property" means the property or property interest subject to a power of
167 appointment.
168 (3) "Blanket-exercise clause" means a clause in an instrument that exercises a power of
169 appointment and is not a specific-exercise clause. The term includes a clause that:
170 (a) expressly uses the words "any power" in exercising any power of appointment the
171 powerholder has;
172 (b) expressly uses the words "any property" in appointing any property over which the
173 powerholder has a power of appointment; or
174 (c) disposes of all property subject to disposition by the powerholder.
175 (4) "Donor" means a person that creates a power of appointment.
176 (5) "Exclusionary power of appointment" means a power of appointment exercisable in
177 favor of any one or more of the permissible appointees to the exclusion of the other permissible
178 appointees.
179 (6) "General power of appointment" means a power of appointment exercisable in
180 favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor
181 of the powerholder's estate.
182 (7) "Gift-in-default clause" means a clause identifying a taker in default of
183 appointment.
184 (8) "Impermissible appointee" means a person that is not a permissible appointee.
185 (9) "Instrument" means a record.
186 (10) "Nongeneral power of appointment" means a power of appointment that is not a
187 general power of appointment. The terms "special power of appointment," "limited power of
188 appointment," or similar terminology used in an instrument creating a power that does not grant
189 powers making it a general power of appointment as defined in this chapter mean the same as
190 and may be used interchangeably with the term nongeneral power of appointment.
191 (11) "Permissible appointee" means a person in whose favor a powerholder may
192 exercise a power of appointment.
193 (12) "Person" means an individual, estate, trust, business or nonprofit entity, public
194 corporation, government or governmental subdivision, agency, instrumentality, or other legal
195 entity.
196 (13) "Powerholder" means a person in whom a donor creates a power of appointment.
197 (14) "Power of appointment" means a power that enables a powerholder acting in a
198 nonfiduciary capacity to designate a recipient of an interest in, or another power of appointment
199 over, the appointive property. The term does not include a power of attorney.
200 (15) "Presently exercisable power of appointment" means a power of appointment
201 exercisable by the powerholder at a relevant time. The term:
202 (a) includes a power of appointment not exercisable until the occurrence of a specified
203 event, the satisfaction of an ascertainable standard, or the passage of a specified time only after:
204 (i) the occurrence of the specified event;
205 (ii) the satisfaction of the ascertainable standard; or
206 (iii) the passage of the specified time; and
207 (b) does not include a power exercisable only at the powerholder's death.
208 (16) "Record" means information that is inscribed on a tangible medium or that is
209 stored in an electronic or other medium and is retrievable in perceivable form.
210 (17) "Specific-exercise clause" means a clause in an instrument that specifically refers
211 to and exercises a particular power of appointment.
212 (18) "Taker in default of appointment" means a person that takes all or part of the
213 appointive property to the extent the powerholder does not effectively exercise the power of
214 appointment.
215 (19) "Terms of the instrument" means the manifestation of the intent of the maker of
216 the instrument regarding the instrument's provisions as expressed in the instrument or as may
217 be established by other evidence that would be admissible in a legal proceeding.
218 Section 5. Section 75-10-103 is enacted to read:
219 75-10-103. Governing law.
220 (1) Unless the terms of the instrument creating a power of appointment manifest a
221 contrary intent:
222 (a) the creation, revocation, amendment, interpretation and definition of terms, or the
223 determination of the rights of the appointee of the power is governed by the law of the donor's
224 domicile at the relevant time; and
225 (b) the formalities for the exercise, release, or disclaimer of the power, or the
226 revocation or amendment of the exercise, release, or disclaimer of the power is governed by the
227 law of the powerholder's state of domicile at the relevant time.
228 (2) The law of the powerholder's state of domicile may not govern the interpretation
229 and definition of terms, or the determination of the rights of the appointee of the power, which
230 shall be governed by the law of the donor's domicile at the relevant time.
231 (3) Claims of creditors, including creditor claims regarding a power not created by a
232 powerholder as set forth in Section 75-10-502, and other parties claiming an interest in
233 property or rights subject to a power will be governed by the laws of the donor's domicile at the
234 time of the creation of the power and not the powerholder's state of domicile either at the time
235 of the creation of the power or at the time of exercise of the power.
236 Section 6. Section 75-10-104 is enacted to read:
237 75-10-104. Common law and principles of equity.
238 The common law and principles of equity supplement this chapter, except to the extent
239 modified by this chapter or laws of this state other than this chapter.
240 Section 7. Section 75-10-201 is enacted to read:
241
242 75-10-201. Creation of power of appointment.
243 (1) A power of appointment is created only if:
244 (a) the instrument creating the power:
245 (i) is valid under applicable law; and
246 (ii) except as otherwise provided in Subsection (2), transfers the appointive property;
247 and
248 (b) the terms of the instrument creating the power manifest the donor's intent to create
249 in a powerholder a power of appointment over the appointive property exercisable in favor of a
250 permissible appointee.
251 (2) Subsection (1)(a)(ii) does not apply to the creation of a power of appointment by
252 the exercise of a power of appointment.
253 (3) A power of appointment may not be created in a deceased individual.
254 (4) Subject to an applicable rule against perpetuities, a power of appointment may be
255 created in an unborn or unascertained powerholder.
256 Section 8. Section 75-10-202 is enacted to read:
257 75-10-202. Nontransferability.
258 A powerholder may not transfer a power of appointment. If a powerholder dies without
259 exercising or releasing a power, the power lapses.
260 Section 9. Section 75-10-203 is enacted to read:
261 75-10-203. Presumption of unlimited authority.
262 Subject to Section 75-10-205, and unless the terms of the instrument creating a power
263 of appointment manifest a contrary intent, the power is:
264 (1) presently exercisable;
265 (2) exclusionary; and
266 (3) except as otherwise provided in Section 75-10-204, general.
267 Section 10. Section 75-10-204 is enacted to read:
268 75-10-204. Exception to presumption of unlimited authority.
269 Unless the terms of the instrument creating a power of appointment manifest a contrary
270 intent, the power is nongeneral if:
271 (1) the power is exercisable only at the powerholder's death; and
272 (2) the permissible appointees of the power are a defined and limited class that does
273 not include the powerholder's estate, the powerholder's creditors, or the creditors of the
274 powerholder's estate.
275 Section 11. Section 75-10-205 is enacted to read:
276 75-10-205. Rules of classification.
277 (1) In this section, "adverse party" means a person with a substantial beneficial interest
278 in property that would be affected adversely by a powerholder's exercise or nonexercise of a
279 power of appointment in favor of the powerholder, the powerholder's estate, a creditor of the
280 powerholder, or a creditor of the powerholder's estate.
281 (2) If a powerholder may exercise a power of appointment only with the consent or
282 joinder of an adverse party, the power is nongeneral.
283 (3) If the permissible appointees of a power of appointment are not defined and
284 limited, the power is exclusionary.
285 Section 12. Section 75-10-206 is enacted to read:
286 75-10-206. Donor's power to revoke or amend.
287 A donor may revoke or amend a power of appointment unless or to the extent the
288 instrument creating the power is made irrevocable by the donor or the exercise of a presently
289 exercisable power has been irrevocably made or effected.
290 Section 13. Section 75-10-301 is enacted to read:
291
292 75-10-301. Requisites for exercise of power of appointment.
293 A power of appointment is exercised only:
294 (1) if the instrument exercising the power is valid under applicable law;
295 (2) if the terms of the instrument exercising the power:
296 (a) manifest the powerholder's intent to exercise the power; and
297 (b) satisfy the requirements of exercise, if any, imposed by the donor; and
298 (3) to the extent the appointment is a permissible exercise of the power.
299 Section 14. Section 75-10-302 is enacted to read:
300 75-10-302. Intent to exercise -- Determining intent from residuary clause.
301 (1) As used in this section:
302 (a) "Residuary clause" does not include a residuary clause containing a
303 blanket-exercise clause or a specific-exercise clause.
304 (b) "Will" includes a codicil and a testamentary instrument that revises another will.
305 (2) A residuary clause in a powerholder's will, or a comparable clause in the
306 powerholder's revocable trust, manifests the powerholder's intent to exercise a power of
307 appointment only if:
308 (a) the terms of the instrument containing the residuary clause do not manifest a
309 contrary intent;
310 (b) the power is a general power exercisable in favor of the powerholder's estate;
311 (c) there is no gift-in-default clause or the clause is ineffective; and
312 (d) the powerholder did not release the power.
313 Section 15. Section 75-10-303 is enacted to read:
314 75-10-303. Intent to exercise -- After-acquired power.
315 Unless the terms of the instrument exercising a power of appointment manifest a
316 contrary intent:
317 (1) except as otherwise provided in Subsection (2), a blanket-exercise clause extends to
318 a power acquired by the powerholder after executing the instrument containing the clause; and
319 (2) if the powerholder is also the donor of the power, the clause does not extend to the
320 power unless there is no gift-in-default clause or the gift-in-default clause is ineffective.
321 Section 16. Section 75-10-304 is enacted to read:
322 75-10-304. Compliance with donor-imposed formal requirements.
323 (1) A powerholder's compliance with formal requirements of appointment imposed by
324 the donor is sufficient only if the powerholder substantially complies with the conditions,
325 requirements, and formalities set forth in the power of appointment, including complying with
326 all the requirements for making specific reference to the power, that the power shall be
327 exercised in a specific document such as a will, or that the document exercising the power shall
328 be witnessed or notarized. If the donor limited the powerholder's exercise to a validly executed
329 will, substantial compliance may not include the exercise of the power by a trust or another
330 document not meeting the requirements of a properly executed will.
331 (2) Unless required by the instrument creating the power, the probate of a properly
332 executed will is not required for the exercise of a power to be valid and complete.
333 Section 17. Section 75-10-305 is enacted to read:
334 75-10-305. Permissible appointment.
335 (1) A powerholder of a general power of appointment that permits appointment to the
336 powerholder or the powerholder's estate may make any appointment, including an appointment
337 in trust or creating a new power of appointment, that the powerholder could make in disposing
338 of the powerholder's own property.
339 (2) A powerholder of a general power of appointment that permits appointment only to
340 the creditors of the powerholder or of the powerholder's estate may appoint only to those
341 creditors.
342 (3) Unless the terms of the instrument creating a power of appointment manifest a
343 contrary intent, the powerholder of a nongeneral power may:
344 (a) make an appointment in any form, including an appointment in trust, in favor of a
345 permissible appointee;
346 (b) create a general power in a permissible appointee; or
347 (c) create a nongeneral power in any person to appoint one or more of the permissible
348 appointees of the original nongeneral power.
349 Section 18. Section 75-10-306 is enacted to read:
350 75-10-306. Appointment to deceased appointee or permissible appointee's
351 descendant.
352 (1) Subject to Sections 75-2-603 and 75-2-604, an appointment to a deceased appointee
353 is ineffective.
354 (2) Unless the terms of the instrument creating a power of appointment manifest a
355 contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or
356 create a new power of appointment in, a descendant of a deceased permissible appointee
357 whether or not the descendant is described by the donor as a permissible appointee.
358 Section 19. Section 75-10-307 is enacted to read:
359 75-10-307. Impermissible appointment.
360 (1) Except as otherwise provided in Section 75-10-306, an exercise of a power of
361 appointment in favor of an impermissible appointee is ineffective.
362 (2) An exercise of a power of appointment in favor of a permissible appointee is
363 ineffective to the extent the appointment is a fraud on the power.
364 Section 20. Section 75-10-308 is enacted to read:
365 75-10-308. Elective allocation doctrine.
366 If a powerholder exercises a power of appointment in a disposition that also disposes of
367 property the powerholder owns, the owned property and the appointive property shall be
368 allocated in the permissible manner that best carries out the powerholder's intent.
369 Section 21. Section 75-10-309 is enacted to read:
370 75-10-309. Capture doctrine -- Disposition of ineffectively appointed property
371 under general power.
372 To the extent a powerholder of a general power of appointment, other than a power to
373 withdraw property from, revoke, or amend a trust, makes an ineffective appointment:
374 (1) the gift-in-default clause controls the disposition of the ineffectively appointed
375 property; or
376 (2) if there is no gift-in-default clause or to the extent the clause is ineffective, the
377 ineffectively appointed property:
378 (a) passes to:
379 (i) the powerholder if the powerholder is a permissible appointee and is living; or
380 (ii) if the powerholder is an impermissible appointee or is deceased, the powerholder's
381 estate if the estate is a permissible appointee; or
382 (b) if there is no taker under Subsection (2)(a), passes under a reversionary interest to
383 the donor or the donor's transferee or successor in interest.
384 Section 22. Section 75-10-310 is enacted to read:
385 75-10-310. Disposition of unappointed property under released or unexercised
386 general power.
387 To the extent a powerholder releases or fails to exercise a general power of appointment
388 other than a power to withdraw property from, revoke, or amend a trust:
389 (1) the gift-in-default clause controls the disposition of the unappointed property; or
390 (2) if there is no gift-in-default clause or to the extent the clause is ineffective:
391 (a) except as otherwise provided in Subsection (2)(b), the unappointed property passes
392 to:
393 (i) the powerholder if the powerholder is a permissible appointee and is living; or
394 (ii) if the powerholder is an impermissible appointee or is deceased, the powerholder's
395 estate if the estate is a permissible appointee; or
396 (b) to the extent the powerholder released the power, or if there is no taker under
397 Subsection (2)(a), the unappointed property passes under a reversionary interest to the donor or
398 the donor's transferee or successor in interest.
399 Section 23. Section 75-10-311 is enacted to read:
400 75-10-311. Disposition of unappointed property under released or unexercised
401 nongeneral power.
402 To the extent a powerholder releases, ineffectively exercises, or fails to exercise a
403 nongeneral power of appointment:
404 (1) the gift-in-default clause controls the disposition of the unappointed property; or
405 (2) if there is no gift-in-default clause or to the extent the clause is ineffective, the
406 unappointed property:
407 (a) passes to the permissible appointees if:
408 (i) the permissible appointees are defined and limited; and
409 (ii) the terms of the instrument creating the power do not manifest a contrary intent; or
410 (b) if there is no taker under Subsection (2)(a), passes under a reversionary interest to
411 the donor or the donor's transferee or successor in interest.
412 Section 24. Section 75-10-312 is enacted to read:
413 75-10-312. Disposition of unappointed property if partial appointment to taker in
414 default.
415 Unless the terms of the instrument creating or exercising a power of appointment
416 manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in
417 default of appointment, the taker in default of appointment may share fully in unappointed
418 property.
419 Section 25. Section 75-10-313 is enacted to read:
420 75-10-313. Appointment to taker in default.
421 If a powerholder makes an appointment to a taker in default of appointment and the
422 appointee would have taken the property under a gift-in-default clause had the property not
423 been appointed, the power of appointment is considered not to have been exercised and the
424 appointee takes under the clause.
425 Section 26. Section 75-10-314 is enacted to read:
426 75-10-314. Powerholder's authority to revoke or amend exercise.
427 Unless the terms of the instrument creating the power of appointment or the instrument
428 exercising the power of appointment provide that the exercise is irrevocable or unamendable, a
429 powerholder may revoke or amend an exercise of a power of appointment made by an
430 instrument effective during the life of the powerholder where the exercise is to become
431 effective at some future time or contingency and where that future time and contingency has
432 not yet occurred, as long as the revocation or amendment is done with the same formality as the
433 original exercise of the power of appointment.
434 Section 27. Section 75-10-401 is enacted to read:
435
436 75-10-401. Disclaimer.
437 As provided by Section 75-2-801:
438 (1) A powerholder may disclaim all or part of a power of appointment.
439 (2) A permissible appointee, an appointee, or a taker in default of appointment may
440 disclaim all or part of an interest in appointive property.
441 Section 28. Section 75-10-402 is enacted to read:
442 75-10-402. Authority to release.
443 A powerholder may release a power of appointment, in whole or in part, except to the
444 extent the terms of the instrument creating the power prevent the release.
445 Section 29. Section 75-10-403 is enacted to read:
446 75-10-403. Method of release.
447 A powerholder of a releasable power of appointment may release the power in whole or
448 in part:
449 (1) by substantial compliance with a method provided in the terms of the instrument
450 creating the power; or
451 (2) if the terms of the instrument creating the power do not provide a method or the
452 method provided in the terms of the instrument is not expressly made exclusive, by a record
453 manifesting the powerholder's intent by clear and convincing evidence.
454 Section 30. Section 75-10-404 is enacted to read:
455 75-10-404. Revocation or amendment of release.
456 A powerholder may revoke or amend a release of a power of appointment only to the
457 extent that:
458 (1) the instrument of release is revocable by the powerholder; or
459 (2) the powerholder reserves a power of revocation or amendment in the instrument of
460 release.
461 Section 31. Section 75-10-405 is enacted to read:
462 75-10-405. Power to contract -- Presently exercisable power of appointment.
463 A powerholder of a presently exercisable power of appointment may contract:
464 (1) not to exercise the power; or
465 (2) to exercise the power if the contract when made does not confer a benefit on an
466 impermissible appointee.
467 Section 32. Section 75-10-406 is enacted to read:
468 75-10-406. Power to contract -- Power of appointment not presently exercisable.
469 A powerholder of a power of appointment that is not presently exercisable may contract
470 to exercise or not to exercise the power only if the powerholder:
471 (1) is also the donor of the power; and
472 (2) has reserved the power in a revocable trust.
473 Section 33. Section 75-10-407 is enacted to read:
474 75-10-407. Remedy for breach of contract to appoint or not to appoint.
475 The remedy for a powerholder's breach of a contract to appoint or not to appoint
476 appointive property is limited to damages payable out of the appointive property or, if
477 appropriate, specific performance of the contract.
478 Section 34. Section 75-10-501 is enacted to read:
479
480 75-10-501. Creditor claim -- General power created by powerholder.
481 (1) In this section, "power of appointment created by the powerholder" includes a
482 power of appointment created in a transfer by another person to the extent the powerholder
483 contributed value to the transfer.
484 (2) Appointive property subject to a general power of appointment created by the
485 powerholder is subject to a claim of a creditor of the powerholder or of the powerholder's estate
486 to the extent provided in Title 25, Chapter 6, Uniform Fraudulent Transfer Act.
487 (3) Subject to Subsection (2), appointive property subject to a general power of
488 appointment created by the powerholder is not subject to a claim of a creditor of the
489 powerholder or the powerholder's estate to the extent the powerholder irrevocably appointed
490 the property in favor of a person other than the powerholder or the powerholder's estate.
491 (4) Subject to Subsections (2) and (3), and notwithstanding the presence of a
492 spendthrift provision or whether the claim arose before or after the creation of the power of
493 appointment, appointive property subject to a general power of appointment created by the
494 powerholder is subject to a claim of a creditor of:
495 (a) the powerholder, to the same extent as if the powerholder owned the appointive
496 property, if the power is presently exercisable; and
497 (b) the powerholder's estate, to the extent the estate is insufficient to satisfy the claim
498 and subject to the right of a decedent to direct the source from which liabilities are paid, if the
499 power is exercisable at the powerholder's death.
500 Section 35. Section 75-10-502 is enacted to read:
501 75-10-502. Creditor claim -- Power not created by powerholder.
502 (1) The property subject to a general or a nongeneral power of appointment not created
503 by the powerholder, including a presently exercisable general or nongeneral power of
504 appointment, is exempt from a claim of a creditor of the powerholder or the powerholder's
505 estate. The powerholder of such a power may not be compelled to exercise the power and the
506 powerholder's creditors may not acquire the power, any rights thereto, or reach the trust
507 property or beneficial interests by any other means. A court may not exercise or require the
508 powerholder to exercise the power of appointment.
509 (2) As set forth in Section 75-10-103, the law of the donor's domicile at the time of
510 creation shall govern claims of creditors and other parties claiming an interest in property or
511 rights subject to a power of appointment.
512 Section 36. Section 75-10-503 is enacted to read:
513 75-10-503. Power to withdraw.
514 (1) For purposes of this part, and except as otherwise provided in Subsection (2), a
515 power to withdraw property from a trust is treated, during the time the power may be exercised,
516 as a presently exercisable general power of appointment to the extent of the property subject to
517 the power to withdraw.
518 (2) On the lapse, release, or waiver of a power to withdraw property from a trust, the
519 power is treated as a presently exercisable general power of appointment only to the extent the
520 value of the property affected by the lapse, release, or waiver exceeds the greater of the amount
521 specified in 26 U.S.C. Sec. 2041(b)(2) and 26 U.S.C. Sec. 2514(e) or the amount specified in
522 26 U.S.C. Sec. 2503(b).
523 Section 37. Section 75-10-601 is enacted to read:
524
525 75-10-601. Uniformity of application and construction.
526 In applying and construing this uniform act, consideration shall be given to the need to
527 promote uniformity of the law with respect to its subject matter among states that enact it.
528 Section 38. Section 75-10-602 is enacted to read:
529 75-10-602. Relation to Electronic Signatures in Global and National Commerce
530 Act.
531 This chapter modifies, limits, or supersedes the Electronic Signatures in Global and
532 National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede
533 Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the
534 notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
535 Section 39. Section 75-10-603 is enacted to read:
536 75-10-603. Application to existing relationships.
537 (1) Except as otherwise provided in this chapter, on and after May 9, 2017:
538 (a) this chapter applies to a power of appointment created before, on, or after May 9,
539 2017;
540 (b) this chapter applies to a judicial proceeding concerning a power of appointment
541 commenced on or after May 9, 2017;
542 (c) this chapter applies to a judicial proceeding concerning a power of appointment
543 commenced before May 9, 2017, unless the court finds that application of a particular
544 provision of this chapter would interfere substantially with the effective conduct of the judicial
545 proceeding or prejudice a right of a party, in which case the particular provision of this chapter
546 does not apply and the superseded law applies; and
547 (d) a rule of construction or presumption provided in this chapter applies to an
548 instrument executed before May 9, 2017, unless there is a clear indication of a contrary intent
549 in the terms of the instrument.
550 (2) Except as otherwise provided in Subsections (1)(a) through (d), an action done
551 before May 9, 2017, is not affected by this chapter.
552 (3) If a right is acquired, extinguished, or barred on the expiration of a prescribed
553 period that commenced under law of this state other than this chapter before May 9, 2017, the
554 law continues to apply to the right.
555 Section 40. Repealer.
556 This bill repeals:
557 Section 75-2-608, Exercise of power of appointment.
558 Section 75-2-704, Power of appointment -- Meaning of specific reference
559 requirement.
Legislative Review Note
Office of Legislative Research and General Counsel