CA SB522

Repeals the Uniform Principal and Income Act and replaces it with the Uniform Fiduciary Income and Principal Act, which governs allocation of receipts and disbursements between principal and income for trusts and estates.

Applies when California is the principal place of administration of a trust or estate, or the situs of property subject to a life estate or term interest; trustees accepting trusteeship in California submit to the law's application.

Establishes comprehensive rules for allocating receipts (dividends, distributions, rent, insurance proceeds) and disbursements (fees, taxes, repairs, insurance premiums) between income and principal based on the nature of each receipt or expense.

Provides fiduciaries with powers to adjust between income and principal, convert income trusts to unitrusts, and change unitrust rates to administer trusts impartially, subject to restrictions for certain tax-qualified trusts and when fiduciaries lack independence.

Defines detailed procedures for unitrust administration, including unitrust rates between 3-5 percent (unless court-approved), valuation methods, and notice requirements to beneficiaries before implementing changes.