1. (a) A power of appointment is exercised only:

   1. (1) If the instrument exercising the power is valid under applicable law;

   2. (2) If the terms of the instrument exercising the power:

      (A) Manifest the powerholder's intent to exercise the power; and

      (B) Subject to subsection (b), satisfy any requirements that the terms of the trust may impose on the exercise of the power; and

   3. (3) To the extent that the appointment is a permissible exercise of the power.

2. (b) A powerholder's substantial compliance with a formal requirement of appointment imposed by the terms of the trust, including a requirement that the instrument exercising the power of appointment make reference or specific reference to the power, is sufficient if:

   1. (1) The powerholder knows of and intends to exercise the power;
   2. (2) The terms of the trust do not require strict compliance with the formal requirement of appointment imposed by the settlor; and
   3. (3) The powerholder's manner of attempted exercise of the power does not impair a material purpose of the trust.

Source. 2017, 257:28, eff. July 18, 2017.