Limitations on the Trustee's Power to Adjust

Publication Date

Winter 2008



Document Type



Editors' Synopsis: This Article examines the Uniform Principal and Income Act's acceptance of the modem portfolio theory of investment, which focuses on the total return of a trust. The Uniform Principal and Income Act introduces the power to adjust, which allows a trustee to allocate between income and principal based on principles of fairness rather than the type of asset return. The Article analyzes the factors that determine when a trustee has the power to adjust and what limitations on the power might apply. The Article also discusses the hierarchy of judicial remedies available under the Act to guide a trustee uncertain about the power to adjust in a given trust situation

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