When a Will Exercises a Power of Appointment in Arizona

What It Takes to Exercise a Power of Appointment Through a Will

A power of appointment gives someone the authority to direct where certain property goes. But when the powerholder dies with a will, the question becomes: did the will actually exercise that power? Arizona law says a general residuary clause, one that leaves "all my property" to someone, does not automatically include property covered by a power of appointment.

Two conditions must be satisfied. First, the power must be a general power, meaning the powerholder could appoint the property to themselves, their estate, their creditors, or the creditors of their estate. Second, the instrument that created the power must not include a default gift for when the power goes unexercised. If a default gift exists, the will's general language is not enough to override it.

Why This Rule Protects Everyone Involved

This statute prevents accidental exercises of a power of appointment. Without this safeguard, a standard residuary clause could sweep up property the testator never intended to redirect. The person who created the power may have carefully chosen a default beneficiary, and a generic clause in someone else's will should not override that planning.

For anyone who holds a power of appointment, the practical lesson is clear: if you want to exercise it, say so directly in your will. Reference the power specifically. Name the property or trust it covers. Relying on a general "everything I own" clause may not be enough to carry out your wishes.