Allocating receipts and disbursements between principal and
income
Sec. 14. (a) The following applies to a fiduciary in allocating
receipts and disbursements to or between principal and income, and
with respect to any matter within the scope of this chapter:
(1) A fiduciary shall administer a trust or estate in accordance
with the terms of the trust or the will, even if there is a different
provision in this chapter.
(2) A fiduciary may administer a trust or estate by the exercise
of a discretionary power of administration given to the fiduciary
by the terms of the trust or the will, even if the exercise of the
power produces a result different from a result required or
permitted by this chapter. An inference that the fiduciary has
improperly exercised the discretion does not arise from the fact
that the fiduciary has made or has not made an allocation
contrary to a provision of this chapter.
(3) A fiduciary shall administer a trust or an estate in
accordance with this chapter if the terms of the trust or the will
do not contain a different provision or do not give the fiduciary
a discretionary power of administration.
(4) A fiduciary shall add a receipt or charge a disbursement to
principal to the extent that the terms of the trust or the will and
this chapter do not provide a rule for allocating the receipt or
disbursement to or between principal and income.
(b) In exercising the power to adjust under section 15 of this
chapter or a discretionary power of administration regarding a matter
within the scope of this chapter, whether granted by the terms of a
trust, a will, or this chapter, a fiduciary shall administer a trust or an
estate impartially, based on what is fair and reasonable to all of the
beneficiaries, except to the extent that the terms of the trust or the
will clearly manifest an intention that the fiduciary shall or may favor
one (1) or more of the beneficiaries. A determination in accordance
with this chapter is presumed to be fair and reasonable to all of the
beneficiaries.
As added by P.L.84-2002, SEC.2.
Last modified: May 27, 2006