AR HB1693

Repeals Arkansas Code Title 28, Chapter 70 (Uniform Principal and Income Act) and replaces it with a new Chapter 77 (Uniform Fiduciary Income and Principal Act), effective January 1, 2022.

Modernizes income and principal allocation rules for trusts and estates, including new provisions for fiduciary duties, judicial review of discretionary decisions, and an optional unitrust framework allowing conversion between income trusts and unitrusts.

Establishes detailed rules for allocating receipts and disbursements between income and principal for various asset types (entities, rental property, liquidating assets, minerals, timber, derivatives, asset-backed securities, etc.).

Introduces a fiduciary power to adjust between income and principal to promote impartial administration, subject to limitations protecting special tax benefits, marital deductions, and certain trust provisions.

Provides comprehensive provisions for handling income and principal when beneficiaries die or income interests terminate, including rules for distributing net income to successor beneficiaries and detailed apportionment formulas.