Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 774, § 1, effective July 1, 2015.
This section provides default rules for determining the law governing the creation and exercise of, and related matters concerning, a power of appointment.
Unless the terms of the instrument creating the power provide otherwise, the actions of the donor--the creation, revocation, or amendment of the power--are governed by the law of the donor's domicile; and the actions of the powerholder--the exercise, release, or disclaimer, or the revocation or amendment thereof--are governed by the law of the powerholder's domicile.
In each case, the domicile is determined at the relevant time . For example, a donor's creation of a power is governed by the law of the donor's domicile at the time of the power's creation; and a donor's amendment of a power is governed by the law of the donor's domicile at the time of the amendment. Similarly, a powerholder's exercise of a power is governed by the law of the powerholder's domicile at the time of the exercise.
The standard "public policy" rules of choice of law naturally continue to apply. See, for example, Restatement Second of Conflict of Laws § 187.
Subsection (1)(b) is a departure from older law. The older position was that the law of the donor's domicile governs acts both of the donor (such as the creation of the power) and of the powerholder (such as the exercise of the power). See, e.g., Beals v. State Street Bank & Trust Co. , 326 N.E.2d 896 (Mass. 1975); Bank of New York v. Black , 139 A.2d 393 (N.J. 1958).
Subsection (1)(b) adopts the modern view that acts of the powerholder should be governed by the law of the powerholder's domicile, because that is the law the powerholder (or the powerholder's lawyer) is likely to know. This approach is supported by Restatement Third of Property: Wills and Other Donative Transfers § 19.1, Comment e; Restatement Second of Conflict of Laws § 275, Comment c. It is also supported by Estate of McMullin , 417 A.2d 152 (Pa. 1980); White v. United States , 680 F.2d 1156 (7th Cir. 1982).
See generally, Restatement Third of Property: Wills and Other Donative Transfers § 19.1, Comment e; Restatement Second of Conflict of Laws § 275, Comment c.
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