Title 30, Guardians And Trustees

[§557A-105] Notice of proposed action. (a) A trustee may give a notice of proposed action regarding a matter governed by the chapter as provided in this section. For the purpose of this section, a proposed action includes a course of action and a decision not to take action. (b) …

[§557A-106] Proceedings regarding trustee's power to adjust. In a proceeding with respect to a trustee's exercise or nonexercise of the power to make an adjustment under section 557A-104, the sole remedy shall be to direct, deny, or revise an adjustment between principal and inco…

ARTICLE 2 DECEDENT'S ESTATE OR TERMINATING INCOME INTEREST [§557A-201] Determination and distribution of net income. After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:

[§557A-202] Distribution to residuary and remainder beneficiaries. (a) Each beneficiary described in section 557A-201(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 dis…

ARTICLE 3 APPORTIONMENT AT BEGINNING AND END OF INCOME INTEREST [§557A-301] When right to income begins and ends. (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…

[§557A-302] Apportionment of receipts and disbursements when decedent dies or income interest begins. (a) An income receipt or disbursement other than one to which section 557A-201(1) applies shall be allocated to principal if its due date occurs before a decedent dies in the cas…

[§557A-303] Apportionment when income interest ends. (a) As used in this section, "undistributed income" means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that ha…

ARTICLE 4 ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST PART I. RECEIPTS FROM ENTITIES [§557A-401] Character of receipts. (a) As used in this section, "entity" means a corporation, partnership, joint venture, limited liability company, regulated investment company, real e…

[§557A-402] Distribution from trust or estate. Subject to the terms of a recipient trust, 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 shall be allocated to income. An amount received a…

[§557A-403] Business and other activities conducted by trustee. (a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part o…

PART II. RECEIPTS NOT NORMALLY APPORTIONED [§557A-404] Principal receipts. The following shall be allocated to principal:

[§557A-405] Rental property. To the extent that a trustee accounts for receipts from rental property pursuant to this section, an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease, shall be allocated to incom…

[§557A-406] Obligation to pay money. (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, shall be allocated to income wi…

[§557A-407] Insurance policies and similar contracts. (a) Except as provided in subsection (b), proceeds from a life insurance policy or other contract whose beneficiary is the trust or its trustee, including a contract that insures the trust or its trustee against loss for the d…

PART III. RECEIPTS NORMALLY APPORTIONED [§557A-408] Insubstantial allocations not required. If a trustee determines that an allocation between principal and income required by sections 557A-409 through 557A-412 or section [557A-415] is insubstantial, the trustee may allocate the …

[§557A-409] Deferred compensation, annuities, and similar payments. (a) This section shall apply to payments that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payor in …

[§557A-410] Liquidating asset. (a) As used in this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes leaseholds, patents, trademarks, copyrights,…

[§557A-411] Minerals, water, and other natural resources. (a) Receipts from an interest in minerals or other natural resources shall be allocated as follows: (b) An amount received on account of an interest in water that is renewable shall be allocated to income. If the water is …

[§557A-412] Timber. (a) A trustee may account for net receipts from the sale of timber and related products under subsection (b), unless the trustee determines that net receipts are insubstantial and allocates the net receipts to principal under section 557A-408. If a trust owns …

[§557A-413] Property not productive of income. (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 surviving spouse with sufficient income from or use of the trust assets, and if the amounts tha…

[§557A-414] Derivatives and options. (a) As used in this section, "derivative" means a contract or financial instrument or a combination of contracts and financial instruments that gives a trust the right or obligation to participate in some or all changes in the price of a tangi…

[§557A-415] Asset-backed securities. (a) As used in this section, "asset-backed security" means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. The term includ…

ARTICLE 5 ALLOCATION OF DISBURSEMENTS DURING ADMINISTRATION OF TRUST [§557A-501] Disbursements from income. Unless otherwise governed by statutory fees or unless the instrument provides for it, [a] trustee shall make the following disbursements from income to the extent that they…

[§557A-502] Disbursements from principal. (a) Unless otherwise governed by statutory fees or unless the instrument provides for it, a trustee shall make the following disbursements from principal: (b) If a principal asset is encumbered with an obligation that requires income from…

[§557A-503] Transfers from income to principal for depreciation. (a) As used in this section, "depreciation" means a reduction in value of a fixed asset having a useful life of more than one year, due to wear, tear, decay, corrosion, or gradual obsolescence. (b) A trustee may tra…

[§557A-504] Transfers from income to reimburse principal. (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…

[§557A-505] Income taxes. (a) A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income. (b) A tax required to be paid by a trustee based on receipts allocated to principal shall be paid from principal, even if the tax is called an inc…

[§557A-506] Adjustments between principal and income because of taxes. (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: (b) If t…