{"data":{"id":"us-ok/okla.-stat.-tit.-60-60-175.104","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 60, § 60-175.104","heading":"Trustee's power to adjust","body":"TRUSTEE'S POWER TO ADJUST\n\nA. A trustee may adjust between principal and income to the\n\nextent the trustee considers necessary if the trustee invests and\n\nmanages trust assets as a prudent investor, the terms of the trust\n\ndescribe the amount that may or must be distributed to a beneficiary\n\nby referring to the trust's income, and the trustee determines,\n\nafter applying the rules in subsection A of Section 175.103 of Title\n\n60 of the Oklahoma Statutes, that the trustee is unable to comply\n\nwith subsection B of Section 175.103 of Title 60 of the Oklahoma\n\nStatutes.\n\nB. In deciding whether and to what extent to exercise the power\n\nconferred by subsection A of this section, a trustee shall consider\n\nall factors relevant to the trust and its beneficiaries, including\n\nthe following factors to the extent they are relevant:\n\n1. The nature, purpose, and expected duration of the trust;\n\n2. The intent of the settlor;\n\n3. The identity and circumstances of the beneficiaries;\n\n4. The needs for liquidity, regularity of income, and\n\npreservation and appreciation of capital;\n\n5. The assets held in the trust; the extent to which they\n\nconsist of financial assets, interests in closely held enterprises,\n\ntangible and intangible personal property, or real property; the\n\nextent to which an asset is used by a beneficiary; and whether an\n\nasset was purchased by the trustee or received from the settlor;\n\n6. The net amount allocated to income under the other sections\n\nof this act and the increase or decrease in the value of the\n\nprincipal assets, which the trustee may estimate as to assets for\n\nwhich market values are not readily available;\n\n7. Whether and to what extent the terms of the trust give the\n\ntrustee the power to invade principal or accumulate income or\n\nprohibit the trustee from invading principal or accumulating income,\n\nand the extent to which the trustee has exercised a power from time\n\nto time to invade principal or accumulate income;\n\n8. The actual and anticipated effect of economic conditions on\n\nprincipal and income and effects of inflation and deflation; and\n\n9. The anticipated tax consequences of an adjustment.\n\nC. A trustee may not make an adjustment:\n\n1. That diminishes the income interest in a trust that requires\n\nall of the income to be paid at least annually to a spouse and for\n\nwhich an estate tax or gift tax marital deduction would be allowed,\n\nin whole or in part, if the trustee did not have the power to make\n\nthe adjustment;\n\n2. That reduces the actuarial value of the income interest in a\n\ntrust to which a person transfers property with the intent to\n\nqualify for a gift tax exclusion;\n\n3. That changes the amount payable to a beneficiary as a fixed\n\nannuity or a fixed fraction of the value of the trust assets;\n\n4. From any amount that is permanently set aside for charitable\n\npurposes under a will or the terms of a trust unless both income and\n\nprincipal are so set aside;\n\n5. If possessing or exercising the power to make an adjustment\n\ncauses an individual to be treated as the owner of all or part of\n\nthe trust for income tax purposes, and the individual would not be\n\ntreated as the owner if the trustee did not possess the power to\n\nmake an adjustment;\n\n6. If possessing or exercising the power to make an adjustment\n\ncauses all or part of the trust assets to be included for estate tax\n\npurposes in the estate of an individual who has the power to remove\n\na trustee or appoint a trustee, or both, and the assets would not be\n\nincluded in the estate of the individual if the trustee did not\n\npossess the power to make an adjustment;\n\n7. If the trustee is a beneficiary of the trust (except where\n\nthe trustee is a charitable, religious or educational organization\n\nrecognized as tax exempt under Section 501(c)(3) of the Internal\n\nRevenue Code and as a beneficiary will hold the beneficial interest\n\nas an institutional endowment fund as that term is defined in the\nal if the trustee did not\n\npossess the power to make an adjustment;\n\n7. If the trustee is a beneficiary of the trust (except where\n\nthe trustee is a charitable, religious or educational organization\n\nrecognized as tax exempt under Section 501(c)(3) of the Internal\n\nRevenue Code and as a beneficiary will hold the beneficial interest\n\nas an institutional endowment fund as that term is defined in the\n\nOklahoma Uniform Management of Institutional Endowment Funds Act\n\nsolely for the benefit of one or more other charitable, religious or\n\neducational organizations recognized as tax exempt under Section\n\n501(c)(3) of the Internal Revenue Code); or\n\n8. If the trustee is not a beneficiary, but the adjustment\n\nwould benefit the trustee directly or indirectly.\n\nD. If paragraph 5, 6, 7, or 8 of subsection C of this section\n\napplies to a trustee and there is more than one trustee, a cotrustee\n\nto whom the provision does not apply may make the adjustment unless\n\nthe exercise of the power by the remaining trustee or trustees is\n\nnot permitted by the terms of the trust.\n\nE. A trustee may release the entire power conferred by\n\nsubsection A of this section or may release only the power to adjust\n\nfrom income to principal or the power to adjust from principal to\n\nincome if the trustee is uncertain about whether possessing or\n\nexercising the power will cause a result described in paragraphs 1\n\nthrough 6 or 8 of subsection C of this section or if the trustee\n\ndetermines that possessing or exercising the power will or may\n\ndeprive the trust of a tax benefit or impose a tax burden not\n\ndescribed in subsection C of this section. The release may be\n\npermanent or for a specified period, including a period measured by\n\nthe life of an individual.\n\nF. Terms of a trust that limit the power of a trustee to make\n\nan adjustment between principal and income do not affect the\n\napplication of this section unless it is clear from the terms of the\n\ntrust that the terms are intended to deny the trustee the power of\n\nadjustment conferred by subsection A of this section.","path":["OK Code","Title 60"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os60.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"32f34b5ed04dc6ab7f7b86ebe969c406b5d690849704623be03af399e25b2c1b","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-60-60-175.103","next":"us-ok/okla.-stat.-tit.-60-60-175.11"},"notice":"GroundRules: Original legal text. Not legal advice."}