Sunday, July 6, 2014
Low interest rates make it difficult for trust beneficiaries to receive income from the trust. One answer to this problem arising in today’s economic climate of low interest rates is “the power to adjust”. Adjusting allows trustees to reclassify assets to generate more income and keep both income and remainder beneficiaries happy. However, this strategy requires the trustee to have the discretion to adjust, which is not allowed in Illinois, Iowa, and North Dakota.
See Janet Novack, With Interest Rates Low, Here’s How to Boost Income From a Trust, Forbes, July 2, 2014.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.