Article 9.--UNIFORM PRINCIPAL AND INCOME ACT (1997)
58-9-104.Trustee's power to adjust.(a) A trustee may adjust between principal and income to theextent thetrustee considers necessary if the trustee invests and manages trust assets asaprudent investor, pursuant to K.S.A. 58-24a02,andamendments thereto,the termsof the trust describe the amount that may or mustbedistributed to a beneficiary by referring to the trust's income, and thetrusteedetermines, after applying the rules in subsection (a) of K.S.A. 58-9-103, andamendments thereto, that the trustee isunable tocomply with subsection (b) of K.S.A. 58-9-103, and amendmentsthereto.
(b) In deciding whether and to what extent to exercise the power conferredby subsection (a), a trustee shall consider all factors relevant to the trustand itsbeneficiaries, including the following factors to the extent they are relevant:
(1) The nature, purpose, and expected duration of the trust;
(2) the intent of the settlor;
(3) the identity and circumstances of the beneficiaries;
(4) the needs for liquidity, regularity of income, and preservation andappreciation of capital;
(5) the assets held in the trust; the extent to which they consist offinancial assets, interests in closely held enterprises, tangible andintangiblepersonal property, or real property; the extent to which an asset is used by abeneficiary; and whether an asset was purchased by the trustee or received fromthesettlor;
(6) the net amount allocated to income under the other sections of thisact and the increase or decrease in the value of the principal assets, whichthetrustee may estimate as to assets for which market values are not readilyavailable;
(7) whether and to what extent the terms of the trust give the trustee thepower to invade principal or accumulate income or prohibit the trustee frominvading principal or accumulating income, and the extent to which the trusteehasexercised a power from time to time to invade principal or accumulate income;
(8) the actual and anticipated effect of economic conditions on principaland income and effects of inflation and deflation; and
(9) the anticipated tax consequences of an adjustment.
(c) A trustee may not make an adjustment:
(1) That diminishes the income interest in a trust that requires all of theincome to be paid at least annually to a spouse and for which an estate tax orgifttax marital deduction would be allowed, in whole or in part, if the trustee didnothave the power to make the adjustment;
(2) that reduces the actuarial value of the income interest in a trust towhich a person transfers property with the intent to qualify for a gift taxexclusion;
(3) that changes the amount payable to a beneficiary as a fixed annuityor a fixed fraction of the value of the trust assets;
(4) from any amount that is permanently set aside for charitablepurposes under a will or the terms of a trust unless both income and principalare soset aside;
(5) if possessing or exercising the power to make an adjustment causesan individual to be treated as the owner of all or part of the trust for incometaxpurposes, and the individual would not be treated as the owner if the trusteedid notpossess the power to make an adjustment;
(6) if possessing or exercising the power to make an adjustment causesall or part of the trust assets to be included for estate tax purposes in theestate of anindividual who has the power to remove a trustee or appoint a trustee, or both,andthe assets would not be included in the estate of the individual if the trusteedid notpossess the power to make an adjustment;
(7) if the trustee is a beneficiary of the trust; or
(8) if the trustee is not a beneficiary, but the adjustment would benefitthe trustee directly or indirectly.
(d) If subsection (c)(5), (6), (7), or (8) applies to a trustee and there ismorethan one trustee, a cotrustee to whom the provision does not apply may make theadjustment unless the exercise of the power by the remaining trustee ortrustees isnot permitted by the terms of the trust.
(e) A trustee may release the entire power conferred by subsection (a) ormay release only the power to adjust from income to principal or the power toadjust from principal to income if the trustee is uncertain about whetherpossessingor exercising the power will cause a result described in subsection (c)(1)through(6) or (c)(8) or if the trustee determines that possessing or exercising thepower willor may deprive the trust of a tax benefit or impose a tax burden not describedinsubsection (c). The release may be permanent or for a specified period,including aperiod measured by the life of an individual.
(f) Terms of a trust that limit the power of a trustee to make an adjustmentbetween principal and income do not affect the application of this sectionunless itis clear from the terms of the trust that the terms are intended to deny thetrustee thepower of adjustment conferred by subsection (a).
History: L. 2000, ch. 61, § 4; L. 2001, ch. 75, § 7;July 1.
Article 9.--UNIFORM PRINCIPAL AND INCOME ACT (1997)
58-9-104.Trustee's power to adjust.(a) A trustee may adjust between principal and income to theextent thetrustee considers necessary if the trustee invests and manages trust assets asaprudent investor, pursuant to K.S.A. 58-24a02,andamendments thereto,the termsof the trust describe the amount that may or mustbedistributed to a beneficiary by referring to the trust's income, and thetrusteedetermines, after applying the rules in subsection (a) of K.S.A. 58-9-103, andamendments thereto, that the trustee isunable tocomply with subsection (b) of K.S.A. 58-9-103, and amendmentsthereto.
(b) In deciding whether and to what extent to exercise the power conferredby subsection (a), a trustee shall consider all factors relevant to the trustand itsbeneficiaries, including the following factors to the extent they are relevant:
(1) The nature, purpose, and expected duration of the trust;
(2) the intent of the settlor;
(3) the identity and circumstances of the beneficiaries;
(4) the needs for liquidity, regularity of income, and preservation andappreciation of capital;
(5) the assets held in the trust; the extent to which they consist offinancial assets, interests in closely held enterprises, tangible andintangiblepersonal property, or real property; the extent to which an asset is used by abeneficiary; and whether an asset was purchased by the trustee or received fromthesettlor;
(6) the net amount allocated to income under the other sections of thisact and the increase or decrease in the value of the principal assets, whichthetrustee may estimate as to assets for which market values are not readilyavailable;
(7) whether and to what extent the terms of the trust give the trustee thepower to invade principal or accumulate income or prohibit the trustee frominvading principal or accumulating income, and the extent to which the trusteehasexercised a power from time to time to invade principal or accumulate income;
(8) the actual and anticipated effect of economic conditions on principaland income and effects of inflation and deflation; and
(9) the anticipated tax consequences of an adjustment.
(c) A trustee may not make an adjustment:
(1) That diminishes the income interest in a trust that requires all of theincome to be paid at least annually to a spouse and for which an estate tax orgifttax marital deduction would be allowed, in whole or in part, if the trustee didnothave the power to make the adjustment;
(2) that reduces the actuarial value of the income interest in a trust towhich a person transfers property with the intent to qualify for a gift taxexclusion;
(3) that changes the amount payable to a beneficiary as a fixed annuityor a fixed fraction of the value of the trust assets;
(4) from any amount that is permanently set aside for charitablepurposes under a will or the terms of a trust unless both income and principalare soset aside;
(5) if possessing or exercising the power to make an adjustment causesan individual to be treated as the owner of all or part of the trust for incometaxpurposes, and the individual would not be treated as the owner if the trusteedid notpossess the power to make an adjustment;
(6) if possessing or exercising the power to make an adjustment causesall or part of the trust assets to be included for estate tax purposes in theestate of anindividual who has the power to remove a trustee or appoint a trustee, or both,andthe assets would not be included in the estate of the individual if the trusteedid notpossess the power to make an adjustment;
(7) if the trustee is a beneficiary of the trust; or
(8) if the trustee is not a beneficiary, but the adjustment would benefitthe trustee directly or indirectly.
(d) If subsection (c)(5), (6), (7), or (8) applies to a trustee and there ismorethan one trustee, a cotrustee to whom the provision does not apply may make theadjustment unless the exercise of the power by the remaining trustee ortrustees isnot permitted by the terms of the trust.
(e) A trustee may release the entire power conferred by subsection (a) ormay release only the power to adjust from income to principal or the power toadjust from principal to income if the trustee is uncertain about whetherpossessingor exercising the power will cause a result described in subsection (c)(1)through(6) or (c)(8) or if the trustee determines that possessing or exercising thepower willor may deprive the trust of a tax benefit or impose a tax burden not describedinsubsection (c). The release may be permanent or for a specified period,including aperiod measured by the life of an individual.
(f) Terms of a trust that limit the power of a trustee to make an adjustmentbetween principal and income do not affect the application of this sectionunless itis clear from the terms of the trust that the terms are intended to deny thetrustee thepower of adjustment conferred by subsection (a).
History: L. 2000, ch. 61, § 4; L. 2001, ch. 75, § 7;July 1.
Article 9.--UNIFORM PRINCIPAL AND INCOME ACT (1997)
58-9-104.Trustee's power to adjust.(a) A trustee may adjust between principal and income to theextent thetrustee considers necessary if the trustee invests and manages trust assets asaprudent investor, pursuant to K.S.A. 58-24a02,andamendments thereto,the termsof the trust describe the amount that may or mustbedistributed to a beneficiary by referring to the trust's income, and thetrusteedetermines, after applying the rules in subsection (a) of K.S.A. 58-9-103, andamendments thereto, that the trustee isunable tocomply with subsection (b) of K.S.A. 58-9-103, and amendmentsthereto.
(b) In deciding whether and to what extent to exercise the power conferredby subsection (a), a trustee shall consider all factors relevant to the trustand itsbeneficiaries, including the following factors to the extent they are relevant:
(1) The nature, purpose, and expected duration of the trust;
(2) the intent of the settlor;
(3) the identity and circumstances of the beneficiaries;
(4) the needs for liquidity, regularity of income, and preservation andappreciation of capital;
(5) the assets held in the trust; the extent to which they consist offinancial assets, interests in closely held enterprises, tangible andintangiblepersonal property, or real property; the extent to which an asset is used by abeneficiary; and whether an asset was purchased by the trustee or received fromthesettlor;
(6) the net amount allocated to income under the other sections of thisact and the increase or decrease in the value of the principal assets, whichthetrustee may estimate as to assets for which market values are not readilyavailable;
(7) whether and to what extent the terms of the trust give the trustee thepower to invade principal or accumulate income or prohibit the trustee frominvading principal or accumulating income, and the extent to which the trusteehasexercised a power from time to time to invade principal or accumulate income;
(8) the actual and anticipated effect of economic conditions on principaland income and effects of inflation and deflation; and
(9) the anticipated tax consequences of an adjustment.
(c) A trustee may not make an adjustment:
(1) That diminishes the income interest in a trust that requires all of theincome to be paid at least annually to a spouse and for which an estate tax orgifttax marital deduction would be allowed, in whole or in part, if the trustee didnothave the power to make the adjustment;
(2) that reduces the actuarial value of the income interest in a trust towhich a person transfers property with the intent to qualify for a gift taxexclusion;
(3) that changes the amount payable to a beneficiary as a fixed annuityor a fixed fraction of the value of the trust assets;
(4) from any amount that is permanently set aside for charitablepurposes under a will or the terms of a trust unless both income and principalare soset aside;
(5) if possessing or exercising the power to make an adjustment causesan individual to be treated as the owner of all or part of the trust for incometaxpurposes, and the individual would not be treated as the owner if the trusteedid notpossess the power to make an adjustment;
(6) if possessing or exercising the power to make an adjustment causesall or part of the trust assets to be included for estate tax purposes in theestate of anindividual who has the power to remove a trustee or appoint a trustee, or both,andthe assets would not be included in the estate of the individual if the trusteedid notpossess the power to make an adjustment;
(7) if the trustee is a beneficiary of the trust; or
(8) if the trustee is not a beneficiary, but the adjustment would benefitthe trustee directly or indirectly.
(d) If subsection (c)(5), (6), (7), or (8) applies to a trustee and there ismorethan one trustee, a cotrustee to whom the provision does not apply may make theadjustment unless the exercise of the power by the remaining trustee ortrustees isnot permitted by the terms of the trust.
(e) A trustee may release the entire power conferred by subsection (a) ormay release only the power to adjust from income to principal or the power toadjust from principal to income if the trustee is uncertain about whetherpossessingor exercising the power will cause a result described in subsection (c)(1)through(6) or (c)(8) or if the trustee determines that possessing or exercising thepower willor may deprive the trust of a tax benefit or impose a tax burden not describedinsubsection (c). The release may be permanent or for a specified period,including aperiod measured by the life of an individual.
(f) Terms of a trust that limit the power of a trustee to make an adjustmentbetween principal and income do not affect the application of this sectionunless itis clear from the terms of the trust that the terms are intended to deny thetrustee thepower of adjustment conferred by subsection (a).
History: L. 2000, ch. 61, § 4; L. 2001, ch. 75, § 7;July 1.
