Collateral Power Law and Legal Definition

Collateral power means a power created when the donee has only merely the authority to appoint and has no estate in the land. A mere collateral power can not be extinguished or suspended by the donee. But all powers other than powers collateral and powers coupled with a trust or duty may be suspended or destroyed, either wholly or in part, by the donee, and the rule applies where the donee is confined or limited in his choice to certain classes of individuals or to certain institutions.

In Columbia Trust Co. v. Christopher, 133 Ky. 335 (Ky. 1909), the court observed that “Powers are either collateral or such as relate to an estate or interest given by the donor to the donee of the power. A collateral power is a bare power given to a mere stranger, who has no interest in the estate or property to which the power relates. A power collateral is of the nature of an authority to deal with an estate, no interest in which is vested in the donee of the power. A power of that kind is wholly different from an estate or interest, and can not without abuse of language be so designated.”