UNIFORM POWERS OF APPOINTMENT ACT

KRS tit. XXXIII, ch. 390

in effect

KRS 390.010 Short title

390.010. Short title This chapter may be cited as the Uniform Powers of Appointment Act. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 37, effective July 15, 2020.

KRS 390.020 Definitions

390.020. Definitions As used in this chapter: (1) "Appointee" means a person to whom a powerholder makes an appointment of appointive property; (2) "Appointive property" means the property or property interest subject to a power of appointment; (3) "Blanket-exercise clause" means a clause in an instrument which exercises a power of appointment and is not a specific-exercise clause. The term includes a clause that: (a) Expressly uses the words "any power" in exercising any power of appointment the powerholder has; (b) Expressly uses the words "any property" in appointing any property over which the powerholder has a power of appointment; or (c) Disposes of all property subject to disposition by the powerholder; (4) "Donor" means a person who creates a power of appointment; (5) "Exclusionary power of appointment" means a power of appointment exercisable in favor of any one (1) or more of the permissible appointees to the exclusion of the other permissible appointees; (6) "General power of appointment" means a power of appointment exercisable in favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the powerholder's estate; (7) "Gift-in-default clause" means a clause identifying a taker in default of appointment; (8) "Impermissible appointee" means a person who is not a permissible appointee; (9) "Instrument" means a writing; (10) "Nongeneral power of appointment" means a power of appointment that is not a general power of appointment; (11) "Permissible appointee" means a person in whose favor a powerholder may exercise a power of appointment; (12) "Person" means an individual, estate, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity; (13) "Power of appointment" means a power that enables a powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over the appointive property. The term does not include a power of attorney; (14) "Powerholder" means a person in whom a donor creates a power of appointment; (15) "Presently exercisable power of appointment" means a power of appointment exercisable by the powerholder at the time in question. The term: (a) Includes a power of appointment not exercisable until the occurrence of a specified event, the satisfaction of an ascertainable standard, or the passage of a specified time only after: 1. The occurrence of the specified event; 2. The satisfaction of the ascertainable standard; or 3. The passage of the specified time; and (b) Does not include a power exercisable only at the powerholder's death; (16) "Specific-exercise clause" means a clause in an instrument which specifically refers to and exercises a particular power of appointment; (17) "Taker in default of appointment" means a person who takes part or all of the appointive property to the extent the powerholder does not effectively exercise the power of appointment; and (18) "Terms of the instrument" means the manifestation of the intent of the maker of the instrument regarding the instrument's provisions as expressed in the instrument or as may be established by other evidence that would be admissible in a legal proceeding. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 1, effective July 15, 2020.

KRS 390.030 Governing law

390.030. Governing law Unless the terms of the instrument creating a power of appointment manifest a contrary intent: (1) The creation, revocation, or amendment of the power is governed by the law of the donor's domicile at the relevant time; and (2) The exercise, release, or disclaimer of the power, or the revocation or amendment of the exercise, release, or disclaimer, is governed by the law of the powerholder's domicile at the relevant time. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 2, effective July 15, 2020.

KRS 390.040 Common law and principles of equity

390.040. Common law and principles of equity The common law principles of equity supplement this chapter, except to the extent modified by this chapter or law of the Commonwealth other than this chapter. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 3, effective July 15, 2020.

KRS 390.050 Creation of power of appointment

390.050. Creation of power of appointment (1) A power of appointment is created only if: (a) The instrument creating the power: 1. Is valid under applicable law; and 2. Except as otherwise provided in subsection (2) of this section, transfers the appointive property; and (b) The terms of the instrument creating the power manifest the donor's intent to create, in a powerholder, a power of appointment over the appointive property exercisable in favor of a permissible appointee. (2) Subsection (1)(a)2. of this section does not apply to the creation of a power of appointment by the exercise of a power of appointment. (3) A power of appointment may not be created in a deceased individual. (4) Subject to an applicable rule against perpetuities, a power of appointment may be created in an unborn or unascertained powerholder. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 4, effective July 15, 2020.

KRS 390.060 Nontransferability

390.060. Nontransferability A powerholder may not transfer a power of appointment. If the powerholder dies without exercising or releasing the power, the power lapses. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 5, effective July 15, 2020.

KRS 390.070 Presumption of unlimited authority

390.070. Presumption of unlimited authority Subject to KRS 390.090, and unless the terms of the instrument creating a power of appointment manifest a contrary intent, the power is: (1) Presently exercisable; (2) Exclusionary; and (3) Except as otherwise provided in KRS 390.080, general. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 6, effective July 15, 2020.

KRS 390.080 Exception to presumption of unlimited authority

390.080. Exception to presumption of unlimited authority Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the power is nongeneral if: (1) The power is exercisable only at the powerholder's death; and (2) The permissible appointees of the power are a defined and limited class that does not include the powerholder's estate, the powerholder's creditors, or the creditors of the powerholder's estate. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 7, effective July 15, 2020.

KRS 390.090 Rules of classification

390.090. Rules of classification (1) As used in this section, "adverse party" means a person with a substantial beneficial interest in property which would be affected adversely by a powerholder's exercise or nonexercise of a power of appointment in favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the powerholder's estate. (2) If a powerholder may exercise a power of appointment only with the consent or joinder of an adverse party, the power is nongeneral. (3) If the permissible appointees of a power of appointment are not defined and limited, the power is exclusionary. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 8, effective July 15, 2020.

KRS 390.100 Power to revoke or amend

390.100. Power to revoke or amend A donor may revoke or amend a power of appointment only to the extent that: (1) The instrument creating the power is revocable by the donor; or (2) The donor reserves a power of revocation or amendment in the instrument creating the power of appointment. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 9, effective July 15, 2020.

KRS 390.110 Requisites for exercise of power of appointment

390.110. Requisites for exercise of power of appointment A power of appointment is exercised only: (1) If the instrument exercising the power is valid under applicable law; (2) If the terms of the instrument exercising the power: (a) Manifest the powerholder's intent to exercise the power; and (b) Subject to KRS 390.150, satisfy the requirements of exercise, if any, imposed by the donor; and (3) To the extent the appointment is a permissible exercise of power. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 10, effective July 15, 2020.

KRS 390.120 Intent to exercise -- Determining intent from residuary clause

390.120. Intent to exercise -- Determining intent from residuary clause (1) As used in this section: (a) "Residuary clause" does not include a residuary clause containing a blanket- exercise clause or a specific-exercise clause; and (b) "Will" includes a codicil and a testamentary instrument that revises another will. (2) A residuary clause in a powerholder's will, or a comparable clause in the powerholder's revocable trust, manifests the powerholder's intent to exercise a power of appointment only if: (a) The terms of the instrument containing the residuary clause do not manifest a contrary intent; (b) The power is a general power exercisable in favor of the powerholder's estate; (c) There is no gift-in-default clause or it is ineffective; and (d) The powerholder did not release the power. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 11, effective July 15, 2020.

KRS 390.130 Intent to exercise -- After-acquired power

390.130. Intent to exercise -- After-acquired power Unless the terms of the instrument exercising a power of appointment manifest a contrary intent: (1) Except as otherwise provided in subsection (2) of this section, a blanket-exercise clause extends to a power acquired by the powerholder after executing the instrument containing the clause; and (2) If the powerholder is also the donor of the power, the clause does not extend to the power unless there is no gift-in-default clause or it is ineffective. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 12, effective July 15, 2020.

KRS 390.140 Substantial compliance with donor-imposed formal requirement

390.140. Substantial compliance with donor-imposed formal requirement A powerholder's substantial compliance with a formal requirement of an appointment imposed by the donor, including a requirement that the instrument exercising the power of appointment make reference or specific reference to the power, is sufficient if: (1) The powerholder knows of and intends to exercise the power; and (2) The powerholder's manner of attempted exercise of the power does not impair a material purpose of the donor in imposing the requirement. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 13, effective July 15, 2020.

KRS 390.150 Permissible appointment

390.150. Permissible appointment (1) A powerholder of a general power of appointment that permits appointment to the powerholder or the powerholder’s estate may make any appointment, including an appointment in trust or creating a new power of appointment, that the powerholder could make in disposing of the powerholder’s own property. (2) A powerholder of a general power of appointment that permits appointment only to the creditors of the powerholder or of the powerholder's estate is restricted to appointing to those creditors. (3) Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the powerholder of a nongeneral power may: (a) Make an appointment in any form, including an appointment in trust, in favor of a permissible appointee; (b) Create a general power in a permissible appointee; or (c) Create a nongeneral power in any permissible appointee to appoint to such persons as the powerholder chooses, including persons who are not permissible appointees of the original nongeneral power. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 14, effective July 15, 2020.

KRS 390.160 Appointment to deceased appointee or permissible appointee’s descendant

390.160. Appointment to deceased appointee or permissible appointee’s descendant (1) An appointment to a deceased appointee is ineffective. (2) Unless the terms of the instrument creating a power of appointment manifest a contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or create a new power of appointment in, a descendant of a deceased permissible appointee whether or not the descendant is described by the donor as a permissible appointee. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 15, effective July 15, 2020.

KRS 390.170 Impermissible appointment

390.170. Impermissible appointment (1) Except as provided in KRS 390.160, an exercise of a power of appointment in favor of an impermissible appointee is ineffective. (2) An exercise of a power of appointment in favor of a permissible appointee is ineffective to the extent the appointment is a fraud on the power. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 16, effective July 15, 2020.

KRS 390.180 Selective allocation doctrine

390.180. Selective allocation doctrine If a powerholder exercises a power of appointment in a disposition that also disposes of property the powerholder owns, the owned and appointive property shall be allocated in the permissible manner that best carries out the powerholder's intent. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 17, effective July 15, 2020.

KRS 390.190 Capture doctrine -- Disposition of ineffectively appointed property under general power

390.190. Capture doctrine -- Disposition of ineffectively appointed property under general power To the extent a powerholder of a general power of appointment, other than a power to revoke, amend, or withdraw property from a trust, makes an ineffective appointment: (1) The gift-in-default clause controls the disposition of the ineffectively appointed property; or (2) If there is no gift-in-default clause or to the extent the clause is ineffective, the ineffectively appointed property: (a) Passes to: 1. The powerholder if the powerholder is a permissible appointee and living; or 2. If the powerholder is an impermissible appointee or not living, the powerholder's estate if the estate is a permissible appointee; or (b) If there is no taker under paragraph (a) of this subsection, passes under a reversionary interest to the donor or the donor's transferee or successor in interest. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 18, effective July 15, 2020.

KRS 390.200 Disposition of unappointed property under released or unexercised general power

390.200. Disposition of unappointed property under released or unexercised general power To the extent a powerholder releases or fails to exercise a general power of appointment other than a power to revoke, amend, or withdraw property from a trust: (1) The gift-in-default clause controls the disposition of the unappointed property; or (2) If there is no gift-in-default clause or to the extent the clause is ineffective: (a) Except as otherwise provided in paragraph (b) of this subsection, the unappointed property passes to: 1. The powerholder if the powerholder is a permissible appointee and living; or 2. If the powerholder is an impermissible appointee or not living, the powerholder's estate if the estate is a permissible appointee; or (b) To the extent the powerholder released the power, or if there is no taker under paragraph (a) of this subsection, the unappointed property passes under a reversionary interest to the donor or the donor's transferee or successor in interest. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 19, effective July 15, 2020.

KRS 390.210 Disposition of unappointed property under released or unexercised nongeneral power

390.210. Disposition of unappointed property under released or unexercised nongeneral power To the extent a powerholder releases, ineffectively exercises, or fails to exercise a nongeneral power of appointment: (1) The gift-in-default clause controls the disposition of the unappointed property; or (2) If there is no gift-in-default clause or to the extent the clause is ineffective, the unappointed property: (a) Passes to the permissible appointees if: 1. The permissible appointees are defined and limited; and 2. The terms of the instrument creating the power do not manifest a contrary intent; or (b) If there is no taker under paragraph (a) of this subsection, passes under a reversionary interest to the donor or the donor's transferee or successor in interest. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 20, effective July 15, 2020.

KRS 390.220 Disposition of unappointed property if partial appointment to taker in default

390.220. Disposition of unappointed property if partial appointment to taker in default Unless the terms of the instrument creating or exercising a power of appointment manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in default of appointment, the taker in default of appointment may share fully in unappointed property. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 21, effective July 15, 2020.

KRS 390.230 Appointment to taker in default

390.230. Appointment to taker in default If a powerholder makes an appointment to a taker in default of appointment and the appointee would have taken the property under a gift-in-default clause had the property not been appointed, the power of appointment is deemed not to have been exercised, and the appointee takes under the clause. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 22, effective July 15, 2020.

KRS 390.240 Powerholder’s authority to revoke or amend exercise

390.240. Powerholder’s authority to revoke or amend exercise A powerholder may revoke or amend an exercise of a power of appointment only to the extent that: (1) The powerholder reserves a power of revocation or amendment in the instrument exercising the power of appointment and, if the power is nongeneral, the terms of the instrument creating the power of appointment do not prohibit the reservation; or (2) The terms of the instrument creating the power of appointment provide that the exercise is revocable or amendable. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 23, effective July 15, 2020.

KRS 390.250 Disclaimer

390.250. Disclaimer As provided in KRS 394.035 and 394.610 to 394.670: (1) A powerholder may disclaim all or part of a power of appointment; and (2) A permissible appointee, appointee, or taker in default of appointment may disclaim all or part of an interest in appointive property. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 24, effective July 15, 2020.

KRS 390.260 Authority to release

390.260. Authority to release A powerholder may release a power of appointment, in whole or in part, except to the extent the terms of the instrument creating the power prevent the release. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 25, effective July 15, 2020.

KRS 390.270 Method of release

390.270. Method of release A powerholder of a releasable power of appointment may release the power in whole or in part: (1) By substantial compliance with a method provided in the terms of the instrument creating the power; or (2) If the terms of the instrument creating the power do not provide a method or the method provided in the terms of the instrument is not expressly made exclusive, by a record manifesting the powerholder's intent by clear and convincing evidence. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 26, effective July 15, 2020.

KRS 390.280 Revocation or amendment of release

390.280. Revocation or amendment of release A powerholder may revoke or amend a release of a power of appointment only to the extent that: (1) The instrument of release is revocable by the powerholder; or (2) The powerholder reserves a power of revocation or amendment in the instrument of release. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 27, effective July 15, 2020.

KRS 390.290 Power to contract -- Presently exercisable power of appointment

390.290. Power to contract -- Presently exercisable power of appointment A powerholder of a presently exercisable power of appointment may contract: (1) Not to exercise the power; or (2) To exercise the power if the contract when made does not confer a benefit on an impermissible appointee. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 28, effective July 15, 2020.

KRS 390.300 Power to contract -- Power of appointment not presently exercisable

390.300. Power to contract -- Power of appointment not presently exercisable A powerholder of a power of appointment that is not presently exercisable may contract to exercise or not to exercise the power only if the powerholder: (1) Is also the donor of the power; and (2) Has reserved the power in a revocable trust. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 29, effective July 15, 2020.

KRS 390.310 Remedy for breach of contract to appoint or not to appoint

390.310. Remedy for breach of contract to appoint or not to appoint The remedy for a powerholder's breach of a contract to appoint or not to appoint is limited to damages payable out of the appointive property or, if appropriate, specific performance of the contract. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 30, effective July 15, 2020.

KRS 390.320 Creditor claim – General power created by powerholder

390.320. Creditor claim – General power created by powerholder (1) As used in this section, "power of appointment created by the powerholder" includes a power of appointment created in a transfer by another person to the extent the powerholder contributed value to the transfer. (2) Appointive property subject to a general power of appointment created by the powerholder is subject to a claim of a creditor of the powerholder or of the powerholder's estate to the extent provided in KRS Chapter 378A. (3) Subject to subsection (2) of this section, appointive property subject to a general power of appointment created by the powerholder is not subject to a claim of a creditor of the powerholder or the powerholder's estate to the extent the powerholder irrevocably appointed the property in favor of a person other than the powerholder or the powerholder's estate. (4) Subject to subsections (2) and (3) of this section, and notwithstanding the presence of a spendthrift provision or whether the claim arose before or after the creation of the power of appointment, appointive property subject to a general power of appointment created by the powerholder is subject to a claim of a creditor of: (a) The powerholder, to the same extent as if the powerholder owned the appointive property, if the power is presently exercisable; and (b) The powerholder's estate, to the extent the estate is insufficient to satisfy the claim and subject to the right of a decedent to direct the source from which liabilities are paid, if the power is exercisable at the powerholder's death. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 31, effective July 15, 2020.

KRS 390.330 Creditor claim -- General power not created by powerholder

390.330. Creditor claim -- General power not created by powerholder (1) Appointive property subject to a general power of appointment created by a person other than the powerholder is not subject to a claim of a creditor of the powerholder or the powerholder's estate. (2) A power of appointment created by a person other than the powerholder which is subject to an ascertainable standard relating to an individual's health, education, support, or maintenance within the meaning of 26 U.S.C. sec. 2041(b)(1)(A) or 2514(c)(1), as amended, is treated for purposes of this chapter as a nongeneral power. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 32, effective July 15, 2020.

KRS 390.350 Creditor claim -- Nongeneral power

390.350. Creditor claim -- Nongeneral power (1) Except as otherwise provided in subsection (2) of this section, appointive property subject to a nongeneral power of appointment is exempt from a claim of a creditor of the powerholder or the powerholder's estate. (2) Appointive property subject to a nongeneral power of appointment is subject to a claim of a creditor of the powerholder or the powerholder's estate to the extent that the powerholder owned the property and, reserving the nongeneral power, transferred the property in violation of KRS Chapter 378A. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 33, effective July 15, 2020.

KRS 390.360 Uniformity of application and construction

390.360. Uniformity of application and construction In applying and construing the Uniform Powers of Appointment Act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 34, effective July 15, 2020.

KRS 390.370 Relation to Electronic Signatures in Global and National Commerce Act

390.370. Relation to Electronic Signatures in Global and National Commerce Act This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. secs. 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that Act, 15 U.S.C. sec. 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that Act, 15 U.S.C. sec. 7003(b). Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 35, effective July 15, 2020.

KRS 390.380 Application to existing relationships

390.380. Application to existing relationships (1) Except as otherwise provided in this chapter, on and after July 15, 2020: (a) This chapter applies to a power of appointment created before, on, or after July 15, 2020; (b) This chapter applies to a judicial proceeding concerning a power of appointment commenced on or after July 15, 2020; (c) This chapter applies to a judicial proceeding concerning a power of appointment commenced before July 15, 2020, unless the court finds that application of a particular provision of this chapter would substantially interfere with the effective conduct of the judicial proceeding or prejudice a right of a party, in which case the particular provision of this chapter does not apply and the superseded law applies; (d) A rule of construction or presumption provided in this chapter applies to an instrument executed before July 15, 2020, unless there is a clear indication of a contrary intent in the terms of the instrument; and (e) An act done before July 15, 2020, is not affected by this chapter. (2) If a right is acquired, extinguished, or barred on the expiration of a prescribed period that commenced under law of the Commonwealth other than this chapter, before July 15, 2020, the law continues to apply to the right. Effective: July 15, 2020 History: Created 2020 Ky. Acts ch. 41, sec. 36, effective July 15, 2020.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=39187Fetched: 10/20/2026