[§557A-103]  Fiduciary duties; general
principles.  (a)  In allocating receipts and disbursements to or between
principal and income, and in any matter within the scope of articles 2 and 3, a
fiduciary:



(1)  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)  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, and no inference
that the fiduciary has improperly exercised the discretion arises from the fact
that the fiduciary has made an alteration contrary to the provisions of this
chapter;



(3)  Shall administer a trust or 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; and



(4)  Shall add a receipt or charge a disbursement to
principal to the extent that the terms of the trust 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 granted
by section 557A-104(a) 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 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 or more of the beneficiaries.  The
exercise of discretion in accordance with this chapter is presumed to be fair
and reasonable to all of the beneficiaries. [L 2000, c 191, pt of §1]