The holder of a power of appointment differs from the trustee of a trust in that the former has no obligation to manage the property for the generation of income, but need only distribute it.
Example: "I leave my video game collection to be distributed as my son Andrew sees fit."
In the United States of America, a general power of appointment is defined for federal estate tax purposes in the Internal Revenue Code §2041.
A general power of appointment is a key element of a type of marital deduction tax law as prescribed in Internal Revenue Code §2056(b)(5).
[3] Special powers of appointment also appear in the context of a trust and are primarily used to reduce liability for generation-skipping transfer tax, or to provide asset protection trust features without fraudulent conveyance liability.
Testamentary powers are usually indicated by the inclusion of limiting language in the granting instrument such as "to B for life, remainder to persons as B shall 'by will' appoint".