invasion powers

Invasion Powers

The ability of the trustee of a trust to give part of the principal (or original assets deposited in the trust) to the beneficiary if the investment income from the trust is insufficient for the beneficiary's needs. Using invasion powers can reduce the life of the trust and certainly threaten its sustainability. Because of this, the trustee may only exercise these powers under certain circumstances following procedures set forth in the trust agreement.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

invasion powers

A provision in a trust that permits the trustee to use the principal of the trust if its income is insufficient to fulfill the requirements of the beneficiary. However, trustees are usually prohibited from exercising this power without prior authorization.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The upper house of Russia's parliament voted Wednesday to revoke invasion powers it had granted President Vladimir Putinon March1.Putin had requestedthe move a day earlier, saying he wanted to help support Ukraine's fledgling peace process by reducing tensions.
Kerry Warns Russia That Additional U.S., E.U. Economic Sanctions Are Possible
However, broad invasion powers can still be exercised if what is involved is a marital trust or if an independent party is chosen to serve as trustee.
Weighing Interests When Trust Contains Broad Invasion Powers
When drafting trusts that include broad invasion powers, the attorney might want to consider the following:
The invasion power that is most likely chosen to accomplish this result is the "comfort" standard.
Are the beneficiary's income and other resources required to be considered by the trustee in the exercise of a broad invasion power? In this respect, consideration of the beneficiary's income and other resources are clearly factors that could limit the size of a requested distribution and affect the decision as to whether a distribution is warranted at all.
Drafting trusts that include broad invasion powers
Crummey invasion powers may be limited to only trust income.
In the Crummey decision, the Court was concerned primarily with the exercise of the invasion power by minor children, some of whom lacked the power to act as individuals under California law.
Packaging your gifts carefully: lifetime gifts as an estate planning tool
The drafting mistake was providing the trustee with broad invasion powers in favor of the surviving spouse and then naming that spouse as trustee.
Critique: The IRS noted that the trustee's principal invasion powers were not subject to a Sec.
The decedent was the income beneficiary of both trusts and possessed an unlimited invasion power over the marital trust principal.
These adverse consequences could have been avoided if the decedent's marital trust invasion power had been limited to a 5% and $5,000 power or was based on an ascertainable standard.
Significant recent developments in estate planning
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