§ 105-188.1. (Repealed effective January 1, 2009) Powers of appointment.
§105‑188.1. (Repealed effective January 1, 2009) Powers of appointment.
(a) For purposes ofthis Article "general power of appointment" shall mean any power ofappointment which is exercisable in favor of the individual possessing thepower (hereinafter in this section referred to as the "possessor"),his estate, his creditors, or the creditors of his estate; except that:
(1) A power to consume,invade, or appropriate property for the benefit of the possessor which islimited by an ascertainable standard relating to the health, education, supportor maintenance of the possessor shall not be deemed a general power ofappointment.
(2) In the case of apower of appointment which is exercisable by the possessor only in conjunctionwith another person:
a. If the power is notexercisable by the possessor except in conjunction with the creator of thepower, such power shall not be deemed a general power of appointment.
b. If the power is notexercisable by the possessor except in conjunction with a person having asubstantial interest, in the property subject to the power, which is adverse toexercise of the power in favor of the possessor, such power shall not be deemeda general power of appointment. For the purposes of this clause a person who,after the death of the possessor, may be possessed of a power of appointment(with respect to the property subject to the possessor's power) which he mayexercise in his own favor shall be deemed as having an interest in the propertyand such interest shall be deemed adverse to such exercise of the possessor'spower.
c. If (after theapplication of clauses a and b) the power is a general power of appointment andis exercisable in favor of such other person, such power shall be deemed ageneral power of appointment only in respect of a fractional part of theproperty subject to such power, such part to be determined by dividing thevalue of such property by the number of such persons (including the possessor)in favor of whom such power is exercisable.
d. For purposes of clausesb and c, a power shall be deemed exercisable in favor of a person if it isexercisable in favor of such person, his estate, his creditors, or thecreditors of his estate.
(b) Any person having ageneral power of appointment with respect to any interest in property shall forgift tax purposes be deemed to be the owner of such interest, and accordingly:
(1) If in connectionwith any gift of property the donor shall give to any person a general power ofappointment with respect to any interest in such property, the donor shall bedeemed to have given such person such interest in such property.
(2) If any personholding a general power of appointment with respect to any interest in propertyshall exercise such power in favor of any other person or persons, he shall bedeemed to have made a gift of such interest to such person or persons.
(3) If any personholding a general power of appointment with respect to any interest in propertyshall relinquish such power, he shall be deemed to have made a gift of such interestto the person or persons who shall benefit by such relinquishment.
(4) The lapse of ageneral power of appointment during the life of the individual possessing thepower shall be considered a relinquishment of the power. The rule of thepreceding sentence shall apply with respect to the lapse of such powers duringany calendar year only to the extent that the interest in property which couldhave been appointed by exercise of the lapsed power exceeds in value thegreater of the following amounts:
a. Five thousanddollars ($5,000) or
b. Five percent (5%) ofthe aggregate value of the interest in property out of which, or the proceedsof which, the exercise of the lapsed power could be satisfied.
(c) Neither theexercise nor the relinquishment of a special power of appointment with respectto an interest in property shall be deemed to constitute a gift of suchinterest in such property.
(d) If in connectionwith any gift of property the donor shall give to any person a special power ofappointment with respect to any interest in such property, the donor shall bedeemed for gift tax purposes to have given such interest in equal shares tothose persons, not more than two, among the possible appointees and takers indefault of appointment whom the donor or his executor or administrator maydesignate in the gift tax return filed with respect to such gift. But the taxshall be computed according to the relationship of the donee of the power tothe person designated if:
(1) The possibleappointees and takers in default of appointment include any persons moreclosely related to the donee of the power than to the donor, and
(2) Such computationwould produce a higher tax. (1963, c. 942; 1967, c. 1110,s. 7; 1987, c. 556; 2008‑107, s. 28.18(a).)