General and Special Powers of Appointment
Powers of appointment offers quite an efficient technique when it comes to estate planning. That’s because they determine how your valuable assets will be distributed to your heirs. Basically, they can be divided into two main groups, limited or special and general powers of attorney. It is possible to convey them to any holder, such as your spouse or kid. You should do it through your living trust or will.
Make sure that this subject is controlled by the most experienced and reliable estate planning lawyer. If you are not aware of where to find such specialists, go to this website.
- General. Such powers of appointment include many things, such as paying tax debts. For example, it makes sense to consider this document if you want your heirs to receive your valuable assets without being exposed to credit companies. Think about creating a trust to guarantee that your spouse will get this general power of appointment over your property. You can be sure that your trust will be adapted to fit the needs of your family. It is possible to structure this document broadly if you want to protect the rights of the descendants of your children, charities, and other beneficiaries.
- Special or limited. This power of appointment won’t cause your assets to be included in the estate of your holder for any tax purposes. This document can be limited by specific standards, such as education, health, maintenance, and so on. That’s why you need to word it quite carefully. Otherwise, any mistake may lead to quite devastating effects for your holders.
- Reasons to decide on general powers of appointment. You need to make this choice if you want your spouse to have a lifetime power over your valuable assets. At times, this estate planning tool can be used to reduce overall transfer taxes. If you provide your kids with this power, their trust assets won’t be subject to transfer taxes.
- Reasons to choose limited or special powers. As soon as you decide to leave everything you have to your kids after the death of your spouse, they must receive valuable assets in a trust. This is when limited powers of appointment may come in handy.
- Creating flexibility in estate plans. Make sure that you choose the right type to benefit from it, tax liability, and other benefits. This task is a bit complicated, so that you should use the services of experienced lawyers.