The general power of appointment over property loses its "general" status when it is exercisable for what purposes?

Prepare for the CFP Estate Planning Evaluation. Utilize flashcards and multiple choice questions, each with hints and explanations. Ensure your success on the exam!

A general power of appointment is one that allows an individual to designate who will receive certain property and to whom they can transfer that property without restriction. However, this power is characterized as "general" unless it is limited to certain specific uses or beneficiaries.

When the power of appointment is exercisable for the purposes of health, education, maintenance, or support, it becomes a special power of appointment rather than a general one. These limitations ground the power in specific needs and ignore the broader capability to distribute the property freely among a wider range of recipients. Special powers are generally designed to benefit a limited class of people, such as family members, for specific purposes, which does not align with the unrestricted nature of a general power.

In contrast, exercising the power for purposes such as investment and financial gain, business and real estate management, or charitable donations tends to maintain the broader application of the general power of appointment. Each of these options allows for more flexible and varied distributions, keeping the power general in its essence.

Thus, limiting the power of appointment to specific needs related to health, education, maintenance, or support is what distinctly alters its classification, making the answer focused on those restricted purposes.

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