CHAPTER 702
POWERS OF APPOINTMENT
702.03 Manifestation of intent to exercise powers.
702.05 Exercise of powers.
702.07 Powers to be construed as exclusive.
702.08 Disclaimer of powers.
702.09 Release of powers.
702.11 Irrevocability of creation, exercise and release of powers.
702.13 Recording instruments relating to powers.
702.15 Disposition when special power is unexercised.
702.17 Rights of creditors of the donee.
702.19 Matters governed by common law.
702.21 Applicability of chapter.
702.22 Applicability of general transfers at death provisions.
702.01
702.01
Definitions. As used in this chapter, unless the context indicates otherwise:
702.01(1)
(1) "Creating instrument" means the will, trust agreement or other document which creates or reserves the power.
702.01(2)
(2) "Donor" means the person who creates or reserves the power; "donee" means the person in whom the power is created or reserved; and "appointee" means the person to whom an interest is appointed.
702.01(3)
(3) "General power" means a power exercisable in favor of the donee, the donee's estate, the donee's creditors or the creditors of the donee's estate, whether or not it is exercisable in favor of others. A power to appoint to any person or a power which is not expressly restricted as to appointees may be exercised in favor of the donee or the donee's creditors if exercisable during lifetime, and in favor of the donee's estate or the creditors of the donee's estate if exercisable by will.
702.01(4)
(4) "Power" means a power of appointment over legal or equitable interests in real or personal property. A power of appointment is a power created or reserved by a person having property subject to his or her disposition which enables the donee of the power to designate, within such limits as may be prescribed, the transferees of the property or the shares or the interests in which it shall be received; it does not include a power of sale, a power of attorney, a power of revocation or a power exercisable by a trustee or other fiduciary in his or her fiduciary capacity.
702.01(5)
(5) "Special power" means a power exercisable only in favor of one or more persons not including the donee, the donee's estate, the donee's creditors or the creditors of the donee's estate and, when exercisable in favor of a class, so limited in size by description of the class that in the event of nonexercise of the power a court can make distribution to persons within the class if the donor has failed to provide for this contingency.
702.01(6)
(6) "Unclassified power" means a power which is neither a general power nor a special power as defined in this section.
702.03
702.03
Manifestation of intent to exercise powers. 702.03(1)(1) Unless the person who executed it had a contrary intention, if a governing instrument, as defined in
s. 854.01 (2), or an inter vivos governing instrument, as defined in
s. 700.27 (1) (c), creates a power of appointment that expressly requires that the power be exercised by any type of reference to the power or its source, the donor's intention in requiring the reference is presumed to be to prevent an inadvertent exercise of the power. Extrinsic evidence, as defined in
s. 854.01 (1), may be used to construe the intent.
702.03(2)
(2) In the case of other powers, an instrument manifests an intent to exercise the power if the instrument purports to transfer an interest in the appointive property which the donee would have no power to transfer except by virtue of the power, even though the power is not recited or referred to in the instrument, or if the instrument either expressly or by necessary implication from its wording interpreted in light of the circumstances surrounding its drafting and execution manifests an intent to exercise the power. If there is a general power exercisable by will with no gift in default in the creating instrument, a residuary clause or other general language in the donee's will purporting to dispose of all of the donee's estate or property operates to exercise the power in favor of the donee's estate, but in all other cases such a clause or language does not in itself manifest an intent to exercise a power exercisable by will.
702.03 History
History: 1997 a. 188;
2005 a. 216.
702.05
702.05
Exercise of powers. 702.05(1)(1)
Capacity to exercise power. A power can be exercised only by a person who would have the capacity to transfer the property covered by the power.
702.05(2)
(2) Kind of instrument and formalities of execution. A donee can exercise a power only by an instrument which meets the intent of the donor as to kind of instrument and formalities of execution. If the power is exercisable by will, this means a will executed with the formalities necessary for a valid will. A written instrument signed by the donee is sufficient if the donor fails to require any additional formalities or fails to indicate a will, but if the power is to appoint interests in land, it can be exercised only by an instrument executed with sufficient formalities for that purpose.
702.05(3)
(3) Consent of 3rd persons. When the consent of the donor or of any other person is required by the donor for the exercise of a power, such consent must be expressed in the instrument exercising the power or in a separate written instrument, signed in either case by the persons whose consent is required. If any person whose consent is required dies or becomes legally incapable of consenting, the power may be exercised by the donee without the consent of that person unless the donor has manifested a contrary intent in the instrument creating the power.
702.05(4)
(4) Power vested in 2 or more donees. Unless the donor manifests a contrary intent, when a power is vested in 2 or more persons, all must unite in its exercise, but if one or more of the donees dies, becomes incapable of exercising the power or renounces, releases or disclaims the power, the power may be exercised by the others.
702.05 Annotation
A warranty deed grants a present fee simple interest. A purported reservation of a power of appointment in a warranty deed is ineffective. Powers may be reserved and a lesser interests granted, but not by warranty deed. Lucareli v. Lucareli, 2000 WI App 133,
237 Wis. 2d 487,
614 N.W.2d 60,
99-1679.
702.07
702.07
Powers to be construed as exclusive. The donee of any power may appoint the whole or any part of the appointive assets to any one or more of the permissible appointees and exclude others, except to the extent that the donor specifies either a minimum share or amount to be appointed to each permissible appointee or to designated appointees, or a maximum share or amount appointable to any one or more appointees.
702.08
702.08
Disclaimer of powers. The donee of any power may disclaim all or part of the power as provided under
s. 700.27 or
854.13.
702.09
702.09
Release of powers. 702.09(1)(1) Except as the creating instrument expressly provides that the power cannot be released or expressly restricts the time, manner or scope of release, the donee of any power may:
702.09(1)(a)
(a) At any time completely release the donee's power;
702.09(1)(b)
(b) At any time or times release the donee's power in any one or more of the following respects:
702.09(1)(b)1.
1. As to the whole or any part of the property which is subject thereto;
702.09(1)(b)2.
2. As to any one or more persons or objects, or classes of persons or objects, in whose favor such power is exercisable;
702.09(1)(b)3.
3. So as to limit in any other respect the extent to or manner in which it may be exercised.
702.09(2)
(2) A release may be effected, either with or without consideration, by written instrument signed by the donee and delivered.
702.09(3)
(3) Delivery of a release may be accomplished in any of the following manners, but this subsection is permissive and does not preclude a determination that a release has been delivered in some other manner:
702.09(3)(a)
(a) Delivery to any person specified in the creating instrument;
702.09(3)(b)
(b) Delivery to a trustee or to one of several trustees of the property to which the power relates, or filing with the court having jurisdiction over the trust;
702.09(3)(c)
(c) Delivery to any person, other than the donee, who could be adversely affected by an exercise of the power; or
702.09(3)(d)
(d) Recording in the office of register of deeds in the county where the property is located.
702.09 History
History: 1993 a. 301,
486.
702.11
702.11
Irrevocability of creation, exercise and release of powers. The creation, exercise or release of a power is irrevocable unless the power to revoke is reserved in the creation, exercise or release of the power.
702.13
702.13
Recording instruments relating to powers. 702.13(1)(1) Any of the following instruments relating to powers is entitled to be recorded as a conveyance upon compliance with
s. 706.05 (1):
702.13(1)(a)
(a) An instrument, other than a will, exercising a power;
702.13(1)(b)
(b) An instrument expressing consent to exercise;
