Mere power of appointment meaning

A mere power of appointment is a discretionary authority, conferred by a trust instrument or will, allowing the donee (commonly a trustee, but possibly another person) to appoint property among specified objects or beneficiaries; the donee may, but need not, exercise it. If left unexercised, the property devolves under any gift over or default trust in favour of default beneficiaries; failing that, it may result back to the settlor or estate. The expression is not defined by statute; it is a case law term used across trust practice. In England and Wales and Northern Ireland (and similarly in Ireland), Re Gulbenkian’s Settlements confirms the “is or is not” test for certainty of objects for such powers. Where the holder is a trustee or other fiduciary, they must consider from time to time whether to exercise the power, act for proper purposes, and not capriciously; there is no duty to appoint. A personal donee may exercise it for their own purposes, subject to the fraud on a power doctrine. Scots law recognises analogous discretionary powers in trust deeds; while terminology may differ, the practical distinction from a mandatory trust duty is broadly consistent across the UK and Ireland.