PRINCIPAL AND INCOME
•    Remainder v. income beneficiaries
•    Texas 113.103bi
•    Subject to trust expenses
•    Charge estate tax to principal – 113.111b6
•    Income tax goes against income – 113.111a7
•    113.111a6 – you can decide to get your fees from either
•    113.111a, b – income v. principal designations
•    All this stuff is really important
•    Uniform Principal and Income Act (1931 and 1962) has been very successful
•    Tait
•    Hurting corpus by giving an income to beneficiary and not ever adding to principal
•    Texas 113.103c3 says the same thing
•    6% rule
•    Englund
•    Did TA grant trustee authority to divide principal and income?  NO – just to resolve ambiguous situations
•    Almost always how these cases come out
•    What you invest in doesn’t matter for prudent investor but it does for income v. principal
•    Uniform Principal and Income Act – 103, 104
•    This is default law and trustee can adjust
•    Three requirements under the UPIA:
•    Prudent investor law complied with
•    Mandatory income trust
•    Violated duty of impartiality?  Must be able to be charged with partiality (103b)
•    4% Unitrust – income beneficiary gets 4% each year and trust revaluation (NY and PA are considering this)
•    Why 4% when current CD interest rate is 6%?  Then taking 2% from beneficiary and giving to remaindermen
•    But remaindermen normally stolen FROM
•    Take into account fees and expenses?
•    Should the goal be income not the remainder because income normally to kids/spouse
•    Can change percentage
•    Can signify that income/remaindermen are more important and trustee should focus on one or other OR
•    Could create discretionary trust
•    Accounting
•    Allow waiver
•    Surcharge – personal liability for difference
•    Res judicata if not appealed but must include everything or be liable – drown them in paperwork