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Statutory Techniques for Balancing the Financial Interests of Trust Beneficiaries

58 Pages Posted: 20 Oct 2005 Last revised: 12 Sep 2010

Alyssa A. DiRusso

Samford University - Cumberland School of Law

Kathleen M. Sablone

U.S. Trust

Abstract

Trustees have long struggled with the duty to balance the interests of current and future beneficiaries of a trust. As modern portfolio investment techniques and laws have encouraged trustees to invest for total return, trust legislation has developed that empowers trustees to mitigate the inequitable effects to beneficiaries of this investment approach. Key legislation includes the Uniform Principal and Income Act, unitrust statutes, the Uniform Management of Institutional Funds Act, and private foundation tax compliance statutes. This Article explains why these acts are important in the context of current investment practices and laws, details the different approaches, and compares them. It concludes by suggesting a broadening of the application of these laws, including the extension of the Uniform Management of Institutional Funds Act to non-institutional trustees.

Keywords: Principal and income, UMIFA, unitrust, trust, investment, 4945, UPIA

JEL Classification: K00, K3

Suggested Citation

DiRusso, Alyssa A. and Sablone, Kathleen M., Statutory Techniques for Balancing the Financial Interests of Trust Beneficiaries. University of San Francisco Law Review, Vol. 39, p. 261, 2005. Available at SSRN: https://ssrn.com/abstract=822258

Alyssa A. DiRusso (Contact Author)

Samford University - Cumberland School of Law ( email )

800 Lakeshore Dr.
Birmingham, AL 35229
United States

Kathleen M. Sablone

U.S. Trust ( email )

225 Franklin Street
Boston, MA 02110
United States

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