A power is an authority that is conferred by one person, the donor, law on another person, the donor, to deal with property belonging to the donee. There are different sorts of power that can be given in the context of the trust’s module in Ohio. According to the Legal Information Institute, many people are most interested in what is known as a power of appointment.
For example, John might give $150,000 to his trustees, Chris and Andrew, to hold on trust for his children, Peter and Mary, in equal shares. This would be a trust. However, at the same time, he might also give the trustees an additional power to give up to $50,000 of that money to a charity, say the Lexx Port Children Society before distributing what’s left to his children, Peter and Mary.
ThisMatter notes that the power, without the obligation to give some of the capital from the trust to the Children’s society, would be a power of appointment. Therefore, if they choose to exercise their power, Chris and Andrew could give up to $50,000 of the trust fund to the Lexx Port Children’s Society. This would leave $100,000 in the trust fund to be shared by Peter and Mary. However, an important aspect of a power is that the trustees can choose not to exercise it all. In that case, Chris and Andrew would not give any money to the Lexx Port Children’s Society. Instead, the entire $150,000 would go to Peter and Mary under the terms of the original trust.