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 the property under the clause.
Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 779, § 1, effective July 1, 2015.
This section articulates the rule that, to the extent an appointee would have taken appointed property as a taker in default, the appointee takes under the gift-in-default clause rather than under the appointment.
Takers in default have future interests that may be defeated by an exercise of the power of appointment. To whatever extent the powerholder purports to appoint an interest already held in default of appointment, the powerholder does not exercise the power to alter the donor's disposition but merely declares an intent not to alter it. To the extent, however, that the appointed property is different from (e.g., is a lesser estate) or exceeds the total of the property the appointee would receive as a taker in default, the property passes under the appointment.
Usually it makes no difference whether the appointee takes as appointee or as taker in default. The principal difference arises in jurisdictions that follow the rule that the estate creditors of the powerholder of a general testamentary power that was conferred on the powerholder by another have no claim on the appointive property unless the powerholder has exercised the power. Although this act does not follow that rule regarding creditors' rights (see Section 502), some jurisdictions do.
The rule of this section is consistent with, and this Comment draws on, Restatement Third of Property: Wills and Other Donative Transfers § 19.25 and the accompanying Commentary.
Structure Colorado Code
Title 15 - Probate, Trusts, and Fiduciaries
Article 2.5 - Uniform Powers of Appointment Act
Part 3 - Exercise of Power of Appointment
§ 15-2.5-301. Requisites for Exercise of Power of Appointment
§ 15-2.5-302. Intent to Exercise - Determining Intent From Residuary Clause
§ 15-2.5-303. Intent to Exercise - After-Acquired Power
§ 15-2.5-304. Substantial Compliance With Donor-Imposed Formal Requirement
§ 15-2.5-305. Permissible Appointment
§ 15-2.5-306. Appointment to Deceased Appointee or Permissible Appointee's Descendant
§ 15-2.5-307. Impermissible Appointment
§ 15-2.5-308. Selective Allocation Doctrine
§ 15-2.5-309. Capture Doctrine - Disposition of Ineffectively Appointed Property Under General Power
§ 15-2.5-310. Disposition of Unappointed Property Under Released or Unexercised General Power
§ 15-2.5-311. Disposition of Unappointed Property Under Released or Unexercised Nongeneral Power
§ 15-2.5-312. Disposition of Unappointed Property if Partial Appointment to Taker in Default
§ 15-2.5-313. Appointment to Taker in Default
§ 15-2.5-314. Powerholder's Authority to Revoke or Amend Exercise