What is the effect of the 5x5 power on corpus?

What is the effect of the 5x5 power on corpus?

• A. It permits withdrawal of trust income only
• B. It permits withdrawal of trust corpus only
• C. It permits withdrawal of both income and corpus
• D. It has no withdrawal power

Answer: (B)

A 5x5 power is a restricted right to invade the trust corpus (the principal), not the income. It limits how much principal can be withdrawn, leaving the trust’s income untouched unless the instrument says otherwise. That’s why the effect is withdrawal from the corpus only. In this setup, the power impacts the principal and reduces the amount available for future benefit, while the income generated by the trust remains separate and not subject to this invasion. So the correct choice reflects that the withdrawal allowed under a 5x5 power targets corpus, not income.

A 5x5 power is a restricted right to invade the trust corpus (the principal), not the income. It limits how much principal can be withdrawn, leaving the trust’s income untouched unless the instrument says otherwise. That’s why the effect is withdrawal from the corpus only.

In this setup, the power impacts the principal and reduces the amount available for future benefit, while the income generated by the trust remains separate and not subject to this invasion. So the correct choice reflects that the withdrawal allowed under a 5x5 power targets corpus, not income.