sec.196Protection of buyer if invalid appointment

### sec.196 Protection of buyer if invalid appointment This section applies if— a document gives a person (the appointor ) a power of appointment over property; and the appointor invalidly appoints property to another person (the appointee ) in purported exercise of the power; and another person (the buyer ) purchases the invalidly appointed property from the appointee. The buyer has a valid title to the property if— the appointee is at least 25 years; and the appointee is a person, or member of a class of persons, entitled to the property in default of exercise of the power of appointment; and the buyer did not know, and could not reasonably be expected to have known, that the appointment of the property to the appointee was invalid; and the buyer gave valuable consideration for the purchase. However, if the amount or value of the invalidly appointed property is more than the value of the appointee’s entitlement to the property immediately before the purported exercise of the power of appointment, the buyer has a valid title to the property only to the extent of the appointee’s entitlement to the property at that time. For subsection (3) , the appointee’s entitlement to the property immediately before the purported exercise of the power of appointment must be calculated taking into account— any advance made to the appointee; and any hotchpot provision in the power of appointment. In this section— hotchpot provision , in a power of appointment, means a provision providing for the appointment of property to an object after taking into account advances of property already made to the object under the provision. (sec.196-ssec.1) This section applies if— a document gives a person (the appointor ) a power of appointment over property; and the appointor invalidly appoints property to another person (the appointee ) in purported exercise of the power; and another person (the buyer ) purchases the invalidly appointed property from the appointee. (sec.196-ssec.2) The buyer has a valid title to the property if— the appointee is at least 25 years; and the appointee is a person, or member of a class of persons, entitled to the property in default of exercise of the power of appointment; and the buyer did not know, and could not reasonably be expected to have known, that the appointment of the property to the appointee was invalid; and the buyer gave valuable consideration for the purchase. (sec.196-ssec.3) However, if the amount or value of the invalidly appointed property is more than the value of the appointee’s entitlement to the property immediately before the purported exercise of the power of appointment, the buyer has a valid title to the property only to the extent of the appointee’s entitlement to the property at that time. (sec.196-ssec.4) For subsection (3) , the appointee’s entitlement to the property immediately before the purported exercise of the power of appointment must be calculated taking into account— any advance made to the appointee; and any hotchpot provision in the power of appointment. (sec.196-ssec.5) In this section— hotchpot provision , in a power of appointment, means a provision providing for the appointment of property to an object after taking into account advances of property already made to the object under the provision. - (a) a document gives a person (the appointor ) a power of appointment over property; and - (b) the appointor invalidly appoints property to another person (the appointee ) in purported exercise of the power; and - (c) another person (the buyer ) purchases the invalidly appointed property from the appointee. - (a) the appointee is at least 25 years; and - (b) the appointee is a person, or member of a class of persons, entitled to the property in default of exercise of the power of appointment; and - (c) the buyer did not know, and could not reasonably be expected to have known, that the appointment of the property to the appointee was invalid; and - (d) the buyer gave valuable consideration for the purchase. - (a) any advance made to the appointee; and - (b) any hotchpot provision in the power of appointment.