A discretionary power of appointment is distinguished from a mandatory power of appointment in that its exercise is optional. The power is valid so long as there is at least one person who reasonably fits the description of the class whose favor in which the power can be exercised (the objects of the power). If the person with power of appointment (the donee) chooses to exercise the discretionary power, she must be able to do so intelligently and consistently with the decedent’s purpose. The exercise of discretionary power can either be exclusive or non-exclusive. In the case Merrill v. Lynch from New York, the court held that “a special power is discretionary if its exercise or non-exercise depends wholly on the volition of the grantee. Such a power exists when the grantor or testator has himself given remainders in default of appointment”.
[Last updated in October of 2022 by the Wex Definitions Team]
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