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.
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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.