2021 Colorado Code
Title 15 - Probate, Trusts, and Fiduciaries
Article 2.5 - Uniform Powers of Appointment Act
Part 4 - Disclaimer or Release; Contract to Appoint or Not to Appoint
§ 15-2.5-406. Power to Contract - Power of Appointment Not Presently Exercisable

1. A powerholder of a power of appointment that is not presently exercisable may contract to exercise or not to exercise the power only if the powerholder:
   1. Is also the donor of the power; and
   2. Has reserved the power in the instrument creating the power.

History. Source: L. 2014: Entire article added,(HB 14-1353), ch. 209, p. 781, § 1, effective July 1, 2015.

Except in the case of a power reserved by the donor in a revocable inter vivos trust, a contract to exercise, or not to exercise, a power of appointment that is not presently exercisable is unenforceable, because the powerholder does not have the authority to make a current appointment. If the powerholder was also the donor of the power and created the power in a revocable inter vivos trust, however, a contract to appoint is enforceable, because the donor-powerholder could have revoked the trust and recaptured ownership of the trust assets or could have amended the trust to change the power onto one that is presently exercisable.

In all other cases, the donor of a power not presently exercisable has manifested an intent that the selection of the appointees and the determination of the interests they are to receive are to be made in the light of the circumstances that exist on the date that the power becomes exercisable. Were a contract to be enforceable, the donor's intent would be defeated.

The ability of an agent or guardian to contract on behalf of a principal or ward is determined by other law, such as the Uniform Power of Attorney Act or the Uniform Guardianship and Protective Proceedings Act.

The rule of this section is consistent with, and this Comment draws on, Restatement Third of Property: Wills and Other Donative Transfers § 21.2 and the accompanying Commentary.