Key Takeaways

  • Power in law can be inherent (arising naturally) or derivative (conferred by another person or authority).
  • General power definition often refers to broad authority, such as a general power of appointment or a general power of attorney, enabling wide discretion in decision-making.
  • General vs. specific powers differ in scope: general powers cover wide authority, while specific powers are limited to defined acts.
  • Powers of appointment and revocation play central roles in estate planning, allowing control over property transfers and trust arrangements.
  • Land-related and collateral powers address how powers interact with property ownership, trusteeship, or third parties with no direct interest.
  • Misuse of power or exceeding granted authority can void actions, highlighting the importance of careful drafting and execution.

POWER

This is either inherent or derivative.

General Power Defined

The term general power refers to a broad form of authority granted to an individual, allowing them to act in a wide range of circumstances. In legal usage, the general power definition can be seen in two main contexts:

  • General Power of Appointment: A legal right allowing the holder (the donee) to dispose of property or assets, often in trusts or estates, in favor of anyone they choose, including themselves or their creditors.
  • General Power of Attorney: A legal document granting another person broad authority to act on someone’s behalf, typically over financial or legal matters. Unlike limited or specific powers, a general power of attorney can cover a wide scope of actions, though it usually ends if the grantor becomes incapacitated.

This breadth distinguishes general powers from particular or limited powers, which are confined to specific purposes.

Inherent Power

The former is the right, ability, or faculty of doing something, without receiving that right, ability, or faculty from another. The people have the power to establish a form of government, or to change one already established. A father has the legal power to chastise his son; a master, his apprentice.

Derivative Power

Derivative power, which is usually known, by the technical name of power, is an authority by which one person enables another to do an act for him. Powers of this kind were well known to the common law, and were divided into two sorts: naked powers or bare authorities, and powers coupled with an interest. There is a material difference between them. In the case of the former, if it be exceeded in the act done, it is entirely void; in the latter it is good for so much as is within the power, and void for the rest only.

General vs. Specific Powers

In practice, powers can be divided into general and specific (or special) categories.

  • General powers authorize broad actions without restriction to particular transactions or beneficiaries.
  • Specific powers limit authority to particular acts, people, or circumstances.

For example, a general power of attorney may permit an agent to manage all financial affairs of the principal, while a specific power of attorney may allow the agent only to sell one property. Similarly, a general power of appointment gives discretion to distribute property to any person, while a special power of appointment restricts distribution to a defined class of beneficiaries.

This distinction is crucial in estate planning, contract law, and fiduciary arrangements.

Powers of Revocation and Appointment

Powers derived from, the doctrine of uses may be defined to be an authority, enabling a person, through the medium of the statute of uses, to dispose of an interest, vested either in himself or another person. The N Y Revised Statutes define a power to be an authority to do some act in relation to lands, or the creation of estates therein, or of charges thereon, which the owner granting or reserving such power might himself lawfully perform. They are powers of revocation and appointment which are frequently inserted in conveyances which owe their effect to the statute of uses; when executed, the uses originally declared cease, and new uses immediately arise to the persons named in the appointment, to which uses the statute transfers the legal estate and possession. Powers being found to be much more convenient than conditions, were generally introduced into family settlements.

Although several of these powers are not usually called powers of revocation, such as powers of jointuring, leasing, and charging settled estates with the payment of money, yet all these are powers of revocation, for they operate as revocations, pro tanto, of the preceding estates. Powers of revocation and appointment may be reserved either to the original owners of the land or to strangers: hence the general division of powers into those which relate to the land, and those which are collateral to it.

Land-Related Powers

Powers relating to the land are those given to some person having an interest in the land over which they are to be exercised. These again are subdivided into powers appendant and in gross.

A power appendant is where a person has an estate in land, with a power of revocation and appointment, the execution of which falls within the compass of his estate; as, where a tenant for life has a power of making leases in possession.

A power in gross is where a person has an estate in the land, with a power of appointment, the execution of which falls out of the compass of his estate, but, notwithstanding, is annexed in privity to it, and takes effect in the appointee, out of an interest vested in the appointer; for instance, where a tenant for life has a power of creating an estate, to commence after the determination of his own, such as to settle a jointure on his wife, or to create a term of years to commence after his death, these are called powers in gross, because the estate of the person to whom they are given, will not be affected by the execution of them.

Collateral Powers

Powers collateral, are those which are given to mere strangers, who have no interest in the laud: powers of sale and exchange given to trustees in a marriage settlement are of this kind.

This classification of powers is admitted to be important only with reference to the ability of the donee to suspend, extinguish or merge the power. The general rule is that a power shall not be exercised in derogation of a prior grant by the appointer. But this whole division of powers has been condemned' as too artificial and arbitrary. Powell divides powers into general and particular powers. General powers are those to be exercised in favor of any person whom the appointer chooses. Particular powers are those which are to be exercised in favor of specific objects.

Tax and Legal Implications of General Powers

General powers carry important tax and legal consequences, particularly in estate and trust law.

  • For estate tax purposes, property subject to a general power of appointment may be included in the donee’s taxable estate, since they effectively control its distribution.
  • The exercise or release of a general power may also trigger gift tax liability if the donee transfers benefits during their lifetime.
  • Courts carefully review the scope of authority under general powers, as actions exceeding granted authority may be deemed void.

Because of these implications, the drafting and use of general powers should be handled with precision. Misuse or overly broad grants of power may expose property to unintended taxation or disputes among beneficiaries.

Frequently Asked Questions

1. What is the general power definition in law?

It refers to broad authority granted to a person, such as the right to manage all affairs under a general power of attorney or dispose of property under a general power of appointment.

2. How does a general power differ from a specific power?

A general power allows wide discretion without restrictions, while a specific power limits authority to defined actions or beneficiaries.

3. What is a general power of appointment?

It is a legal right often used in estate planning that enables the holder to transfer property to anyone, including themselves or their creditors.

4. Does a general power of attorney remain valid if the principal becomes incapacitated?

No, a standard general power of attorney usually terminates upon incapacity. A durable power of attorney must be created to remain effective.

5. Are there tax consequences to holding a general power?

Yes, property subject to a general power of appointment may be included in the donee’s taxable estate, and exercising such powers may trigger estate or gift taxes.

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