2022 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
§ 15-2.5-405. Power to Contract - Presently Exercisable Power of Appointment

1. A powerholder of a presently exercisable power of appointment may contract:
   1. Not to exercise the power if the contract, when made, does not confer a benefit on a person other than a taker in default or a permissible appointee; or
   2. To exercise the power if the contract, when made, does not confer a benefit on an impermissible appointee.

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

A powerholder of a presently exercisable power may contract to make, or not to make, an appointment if the contract does not confer a benefit on an impermissible appointee. The rationale is that the power is presently exercisable, so the powerholder can presently enter into a contract concerning the appointment.

The contract may not confer a benefit on an impermissible appointee. Recall that a general power presently exercisable in favor of the powerholder or the powerholder's estate has no impermissible appointees. See Section 305(1). In contrast, a presently exercisable nongeneral power, or a general power presently exercisable only in favor of one or more of the creditors of the powerholder or the powerholder's estate, does have impermissible appointees. See Section 305(2)-(3).

A contract not to appoint assures that the appointive property will pass to the taker in default. A contract to appoint to a taker in default, if enforceable, has the same effect as a contract not to appoint.

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 § 21.1 and the accompanying Commentary.