Adjustment Power of Trustees Under Revised UPIA Analyzed

S. Alan Medlin (David W. Robinson Professor of Law, University of South Carolina School of Law) has recently published his article entitled Limitations on the Trustee’s Power to Adjust, 42 Real Prop. Prob. & Tr. J. 717 (2008).  [ABA membership needed to access link].

Here is the editors’ synopsis of his article:

This Article examines the Uniform Principal and Income Act’s acceptance of the modern 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.