Title 14 — Trusts, Estates and Protective Proceedings

In this article, unless the context otherwise requires: 1. "Accounting period" means a calendar year unless another twelve month period is selected by a fiduciary and includes a portion of a calendar year or other twelve month period that begins when an income interest begins or …

A. In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of sections 14-7405 through 14-7409, a fiduciary: 1. Shall administer a trust or estate in accordance with the terms of the trust or the will, even if t…

A. A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to th…

B. The decisions to which subsection A of this section applies include: 1. A determination under section 14-7403, subsection A of whether and to what extent an amount should be transferred from principal to income or from income to principal. 2. A determination of the factors tha…

After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following apply: 1. A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifical…

A. Each beneficiary described in section 14-7405, paragraph 4 is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribu…

A. An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income intere…

A. A trustee shall allocate an income receipt or disbursement other than one to which section 14-7405, paragraph 1 applies to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive …

A. When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is n…

A. Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity. B. A trustee shall allocate the following receipts from an entity to principal: 1. Property other than money. 2. Money received in one distribution or a series of re…

A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and shall allocate to principal an amount received as a distribution of principal from such a trust or es…

A. If a trustee who conducts a business or other activity determines that it is in the best interest of all of the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may main…

1. To the extent not allocated to income under this article, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest or a payer under a contract naming the trust or its trustee as beneficiary. 2. Money or…

To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received …

A. An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of …

A. Except as otherwise provided in subsection B of this section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee a…

If a trustee determines that an allocation between principal and income required by section 14-7418, 14-7419, 14-7420, 14-7421 or 14-7424 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in section 14-7403, subsec…

A. To the extent that a payment is characterized as interest or a dividend, or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same ac…

A. A trustee shall allocate to income ten per cent of the receipts from a liquidating asset and the balance to principal. B. For the purposes of this section, "liquidating asset": 1. Means an asset whose value will diminish or terminate because the asset is expected to produce re…

A. To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows: 1. If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocate…

A. To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts: 1. To income to the extent that the amount of timber removed from the land does not exceed the rate of growth …

A. If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under sec…

A. To the extent that a trustee does not account under section 14-7412 for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions. B. If a trustee grants an option to buy property from the tr…

A. If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment that the payer identifies as being from interest or other current return and shall al…

A trustee shall make the following disbursements from income to the extent that they are not disbursements to which section 14-7405, paragraph 2, subdivision (b) or (c) applies: 1. One-half of the regular compensation of the trustee and of any person providing investment advisory…

A. A trustee shall make the following disbursements from principal: 1. The remaining one-half of the disbursements described in section 14-7425, paragraphs 1 and 2. 2. All of the trustee's compensation calculated on principal as a fee for acceptance, distribution or termination a…

A. A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation but may not transfer any amount for depreciation: 1. Of that portion of real property used or available for use by a beneficiary as a residen…

A. If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements…

A. A tax required to be paid by a trustee based on receipts allocated to income must be paid from income. B. A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authorit…

A. A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries that arise from: 1. Elections and decisions, other than those described in subsection B, that the…

A. A trustee may, but is not required to, give notice of a proposed action regarding a matter governed by this article as provided in this section. B. The trustee shall mail notice of a proposed action, by certified, registered or ordinary first class mail, to all beneficiaries w…

A. In this article, unless the context otherwise requires: 1. "Bank" includes commercial banks, savings banks, trust companies, and any person or association of persons, whether incorporated or not, carrying on the business of banking. 2. "Fiduciary" includes a trustee under any …

A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideratio…

If any negotiable instrument payable or endorsed to a fiduciary as such is endorsed by the fiduciary, or if any negotiable instrument payable or endorsed to his principal is endorsed by a fiduciary empowered to endorse such instrument on behalf of his principal, the endorsee is n…

If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, the payee is not bound to inquire whether the fiduciary is committing a breach of his obligation as…

If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, payable to the fiduciary personally, or payable to a third person and by him transferred to the fidu…

If a deposit is made in a bank to the credit of a fiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with the name in which such deposit is entered, without being liable to the principal, unless t…

If a check is drawn upon the account of his principal in a bank by a fiduciary who is empowered to draw checks upon his principal's account, the bank is authorized to pay such check without being liable to the principal, unless the bank pays the check with actual knowledge that t…

If a fiduciary makes a deposit in a bank to his personal credit of checks drawn by him upon an account in his own name as fiduciary, or of checks payable to him as fiduciary, or of checks drawn by him upon an account in the name of his principal if he is empowered to draw checks …

When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account by any trustee or trustees authorized by the other trustee or trustees to draw checks upon the trust account, neither the payee nor other holder nor the ban…

In any case not provided for in this article the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments and banking, shall continue to apply.

This article shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.

This article may be cited as the uniform fiduciaries act.

In this article, unless the context otherwise requires: 1. "Adult" means a person who is at least twenty-one years of age. 2. "Benefit plan" means an employer's plan for the benefit of an employee or partner. 3. "Broker" means a person lawfully engaged in the business of effectin…

A. This article applies to a transfer that refers to this article in the designation made pursuant to section 14-7659 by which the transfer is made, if at the time of the transfer the transferor, the minor or the custodian is a resident of this state or the custodial property is …

A. A person having the right to designate the recipient of property transferable on the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary on the occurrence of the event by naming the custodian followed in substance by …

A person may make a transfer by irrevocable gift to, or the irrevocable exercise of a power of appointment in favor of, a custodian for the benefit of a minor pursuant to section 14-7659.

A. A personal representative or trustee may make an irrevocable transfer pursuant to section 14-7659 to a custodian for the benefit of a minor as authorized in the governing will or trust. B. If the testator or settlor has nominated a custodian pursuant to section 14-7653 to rece…

A. Pursuant to subsection C of this section, a personal representative or trustee may make an irrevocable transfer to another adult or trust company as custodian for the benefit of a minor pursuant to section 14-7659 in the absence of a will or under a will or trust that does not…

A. Pursuant to subsections B and C of this section, a person who is not subject to section 14-7655 or 14-7656 and who holds property of or owes a liquidated debt to a minor who does not have a conservator may make an irrevocable transfer to a custodian for the benefit of the mino…