Uniform Principal and Income Act [UPAIA] Law and Legal Definition

The Uniform Principal and Income Act (“UPAIA”) is a federal legislation governing the proper distribution of assets to trust beneficiaries, heirs and devisees. The UPAIA provides that the trustee may make discretionary allocations if s/he determines that such an adjustment would be “fair and reasonable” to all the beneficiaries. The UPAIA also facilitates in relieving a trustee from the obligation to determine what amount should be allocated to principal or income using the power to adjust between income and principal. This will enable trustees to invest for total return.