Monday, January 14, 2008
Ira Mark Bloom (Justice David Josiah Brewer Distinguished Professor of Law, Albany Law School) has recently published his article entitled Powers of Appointment under the Restatement (Third) of Property, 33 Ohio N.U. L. Rev. 755 (2007).
Here is an excerpt from the conclusion to his article:
The Tentative Draft on powers of appointment is a major and important piece of work. It provides many lessons for estate planners, both in the planning and drafting areas. In connection with planning, estate planners must understand that tax concepts of powers may differ in important ways from the policy concepts adopted in the Tentative Draft. For example, although a power subject to an ascertainable standard is not a general power for transfer tax purposes, the power is a general power for property purposes with the potential adverse creditors' rights. Because the Tentative Draft greatly expands creditors' rights for general powers not created by the donor, serious consideration should be given to releasing or disclaiming such powers. ***
I have one final suggestion for ensuring acceptance of the Restatement's principles and policies for powers of appointment that otherwise may be rejected. A Uniform Powers of Appointment Law based on the Restatement (Third) of Property should be undertaken. Unfortunately, if experience is any guide, even a Uniform Powers of Appointment Law will not succeed in the enactment of principled rules in all states as too many states in a relentless race to the bottom are more interested in securing trust business.