(a) Standard of review.--A court shall not change a fiduciary's decision to exercise or not to exercise a discretionary power conferred by this chapter unless it determines that the decision was an abuse of the fiduciary's discretion.
(b) Remedies.--If a court determines that a fiduciary has abused its discretion regarding a discretionary power conferred by this chapter, the remedy is to restore the income and remainder beneficiaries to the positions they would have occupied if the fiduciary had not abused its discretion, according to the following rules:
(1) To the extent that the abuse of discretion has resulted in no distribution to a beneficiary or a distribution which is too small, the court shall require the fiduciary to distribute from the trust to the beneficiary an amount that the court determines will restore the beneficiary, in whole or in part, to the beneficiary's appropriate position.
(2) To the extent that the abuse of discretion has resulted in a distribution to a beneficiary which is too large, the court shall restore the beneficiaries, the trust or both, in whole or in part, to their appropriate positions by requiring the fiduciary to withhold an amount from one or more future distributions to the beneficiary who received the distribution that was too large or requiring that beneficiary or that beneficiary's estate to return some or all of the distribution to the trust, notwithstanding a spendthrift or similar provision.
(3) If the abuse of discretion concerns the power to convert a trust into a unitrust, the court shall require the trustee either to convert into a unitrust or to reconvert from a unitrust.
(4) To the extent that the court is unable, after applying paragraphs (1), (2) and (3), to restore the beneficiaries, the trust or both to the positions they would have occupied if the fiduciary had not abused its discretion, the court may require the fiduciary to pay an appropriate amount from its own funds to one or more of the beneficiaries or the trust or both.
Structure Pennsylvania Consolidated & Unconsolidated Statutes
Pennsylvania Consolidated & Unconsolidated Statutes
Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES
Chapter 81 - Principal and Income
Section 8101 - Short title of chapter
Section 8103 - Fiduciary duties; general principles
Section 8104 - Trustee's power to adjust
Section 8105 - Power to convert to unitrust
Section 8106 - Judicial control of discretionary powers
Section 8113 - Charitable trusts
Section 8121 - Determination and distribution of net income
Section 8122 - Distribution to residuary and remainder beneficiaries
Section 8131 - When right to income begins and ends
Section 8133 - Apportionment when income interest ends
Section 8141 - Character of receipts
Section 8142 - Distribution from trust or estate
Section 8143 - Business and other activities conducted by trustee
Section 8144 - Principal receipts
Section 8145 - Rental property
Section 8146 - Obligation to pay money
Section 8147 - Insurance policies and similar contracts
Section 8148 - Insubstantial allocations not required
Section 8150 - Liquidating asset
Section 8151 - Minerals, water and other natural resources
Section 8153 - Property not productive of income
Section 8154 - Derivatives and options
Section 8155 - Asset-backed securities
Section 8161 - Mandatory disbursements from income
Section 8162 - Mandatory disbursements from principal
Section 8163 - Discretionary allocation of disbursements
Section 8164 - Transfers from income to principal for depreciation
Section 8165 - Transfers from income to reimburse principal
Section 8167 - Adjustments between principal and income because of taxes