California Legislature—2015–16 Regular Session

Assembly Bill No. 2846

Introduced by Assembly Member Maienschein

February 19, 2016

An act to amend Sections 610, 681, and 683 of, and to add Sections 675 and 676 to, the Probate Code, relating to power of appointments.

LEGISLATIVE COUNSEL’S DIGEST

AB 2846, as introduced, Maienschein. Power of appointments.

Existing law provides a statutory body of law relating to powers of appointment, including the creation and exercise of, and the revocability of the creation, exercise, or release of, a power of appointment.

This bill would revise and recast those provisions. The bill would define the term “power of appointment” for those purposes. The bill would require, if a powerholder exercises a power of appointment in a disposition that also disposes of property the powerholder owns, the owned property and the appointive property to be allocated in the permissible manner to carry out the intent of the powerholder. The bill would require, if a powerholder makes a valid partial appointment to a taker in default of appointment, the taker in default of appointment to share fully in unappointed property. The bill would make property subject to a special power of appointment subject to the claims of creditors of the powerholder or of the powerholder’s estate or the expenses of administration of the powerholder’s estate under specified circumstances. The bill would make conforming changes to related provisions, and would make changes to provisions related to an unexercised general power of appointment, as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 610 of the Probate Code is amended to
read:

610.  

As used in this part:

(a) “Appointee” means the person in whose favor a power of
appointment is exercised.

(b) “Appointive property” means the property or interest in
property that is the subject of the power of appointment.

(c) “Creating instrument” means the deed, will, trust, or other
writing or document that creates or reserves the power of
appointment.

(d) “Donee” begin insert or “powerholder end insert begin insert ” end insert means the person to whom a
power of appointment is given or in whose favor a power of
appointment is reserved.

(e) “Donor” means the person who creates or reserves a power
of appointment.

(f) “Permissible appointee” means a person in whose favor a
power of appointment can be exercised.

begin insert

(g) “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.

end insert

SEC. 2.  

Section 675 is added to the Probate Code, to read:

675.  

If a powerholder exercises a power of appointment in a
disposition that also disposes of property the powerholder owns,
the owned property and the appointive property shall be allocated
in the permissible manner that best carries out the powerholder’s
intent.

SEC. 3.  

Section 676 is added to the Probate Code, to read:

676.  

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.

SEC. 4.  

Section 681 of the Probate Code is amended to read:

681.  

begin delete Property end delete begin insert (a) end insert begin insert   end insert begin insert Except as provided in subdivision (b),
property end insert begin insert end insert covered by a special power of appointment is not subject
to the claims of creditors of the begin delete donee end delete begin insert powerholder end insert or of the
begin delete donee’s end delete begin insert powerholder’s end insert estate or to the expenses of the
administration of the begin delete donee’s end delete begin insert powerholder’s end insert estate.

begin insert

(b) Property subject to a special power of appointment shall be
subject to the claims of creditors of the powerholder or of the
powerholder’s estate or the expenses of administration of the
powerholder’s estate under either of the following circumstances:

end insert begin insert

(1) To the extent that the powerholder owned the property and,
reserving the special power, transferred the property in violation
of the Uniform Voidable Transactions Act (Chapter 1 (commencing
with Section 3439) of Title 2 of Part 2 of Division 4 of the Civil
Code).

end insert begin insert

(2) If the initial gift in default of the exercise of the power is to
the powerholder or the powerholder’s estate.

end insert

SEC. 5.  

Section 683 of the Probate Code is amended to read:

683.  

Property subject to begin delete an unexercised end delete begin insert a end insert general power of
appointment created by the begin delete donor end delete begin insert powerholder end insert in the begin delete donor’s end delete
begin insert powerholder’s end insert favor, whether or not presently exercisable, is
subject to the claims of the begin delete donor’s end delete begin insert powerholder’s end insert creditors or the
begin delete donor’s end delete begin insert powerholder’s end insert estate and to the expenses of the
administration of the begin delete donor’s estate. end delete begin insert powerholder’s estate, except
to the extent the powerholder effectively irrevocably appointed the
property subject to the general power of appointment in favor of
a person other than the powerholder or the powerholder’s estate. end insert