(1) As used in this section, the term “power of appointment” means a power that enables a person acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over trust property.
(2) Unless the terms of a trust expressly provide otherwise by specific reference to this part, section, or paragraph, this part does not apply to:(a) A power of appointment;
(b) A power to appoint or remove a trustee or trust director;
(c) A power of a settlor over a trust while the trust is revocable by that settlor;
(d) A power of a beneficiary over a trust to the extent the exercise or nonexercise of the power affects the beneficial interest of:1. The beneficiary; or
2. Another beneficiary represented by the beneficiary under ss. 736.0301-736.0305 with respect to the exercise or nonexercise of the power; (e) A power over a trust if the terms of the trust provide that the power is held in a nonfiduciary capacity; and1. The power must be held in a nonfiduciary capacity to achieve the settlor’s tax objectives under the United States Internal Revenue Code of 1986, as amended, and regulations issued thereunder, as amended; or
2. It is a power to reimburse the settlor for all or a part of the settlor’s income tax liabilities attributable to the income of the trust; or
(f) A power to add or to release a power under the trust instrument if the power subject to addition or release causes the settlor to be treated as the owner of all or any portion of the trust for federal income tax purposes.
(3) Unless the terms of a trust provide otherwise, a power granted to a person other than a trustee:(a) To designate a recipient of an ownership interest in trust property, including a power to terminate a trust, is a power of appointment and not a power of direction.
(b) To create, modify, or terminate a power of appointment is a power of direction and not a power of appointment, except a power to create a power of appointment that is an element of a broader power to affect an ownership interest in trust property beyond the mere creation of a power of appointment, such as a power to appoint trust property in further trust, is a power of appointment and not a power of direction.
