Title 13, Protective Proceedings; Powers of Attorney; Trusts

This chapter may be cited as the Uniform Principal and Income Act. [2003 c.279 §1] Note: Section 34, chapter 279, Oregon Laws 2003, provides: Sec. 34. Except as may be expressly provided in a will or in the terms of a trust or in sections 1 to 31 of this 2003 Act [ORS chapter 129…

In this chapter: (1) “Accounting period” means a calendar year unless another 12-month period is selected by a fiduciary. The term includes a portion of a calendar year or other 12-month period that begins when an income interest begins or ends when an income interest ends. (2) “…

(1) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of ORS 129.250 to 129.280, a fiduciary: (a) Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is …

(1) 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 t…

(1) The court may not order a fiduciary to change a 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. A fiduciary’s decision is not an abuse of discretion mere…

(1) As used in this section, “beneficiary” means a person who has an interest in the trust to be converted and who has the legal capacity to take all actions authorized under this section. (2)(a) Unless expressly prohibited by the terms of the trust, a trustee may release the pow…

After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules 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 spe…

(1) Each beneficiary described in ORS 129.250 (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 distribution of asse…

(1) 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 inter…

(1) A trustee shall allocate an income receipt or disbursement other than one to which ORS 129.250 (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 income inter…

(1) 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 has been added or is required to be added to principal under th…

(1) In this section, “entity” means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund or any other organization in which a trustee has an interest other than a trust or estate to which ORS 129.305 …

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 e…

(1) 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 of the trust’s general accounting records, the trustee may mainta…

A trustee shall allocate to principal: (1) To the extent not allocated to income under this chapter, 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…

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 …

(1) 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…

(1) Except as otherwise provided in subsection (2) 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 truste…

If a trustee determines that an allocation between principal and income required by ORS 129.355, 129.360, 129.365, 129.370 or 129.385 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in ORS 129.215 (3) applies to …

(1) In this section, the following terms have the following meanings: (a) “Payment” means a payment 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 payer in exchange …

(1) 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 a leasehold, patent, copyright, royalty right and right to receive payments during …

(1) 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: (a) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be alloca…

(1) 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: (a) To income to the extent that the amount of timber removed from the land does not exceed the rate of growt…

(1) 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 OR…

(1) In this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, …

(1) 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 includes an asset that gives the owner the right to…

(1) A trustee shall make the following disbursements from income to the extent that they are not disbursements to which ORS 129.250 (2)(b) or (c) applies: (a) Except as provided in subsection (2) of this section, one-half of the regular compensation of the trustee; (b) Except as …

(1) A trustee shall make the following disbursements from principal: (a) The remaining portions of the disbursements described in ORS 129.400 (1)(a) to (c); (b) All of the trustee’s compensation calculated on principal as a fee for acceptance, distribution or termination and disb…

(1) In this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion or gradual obsolescence of a fixed asset having a useful life of more than one year. (2) A trustee may transfer to principal a reasonable amount of the net cash receipts from a prin…

(1) 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 disbursement…

(1) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income. (2) 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 author…

(1) 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 which arise from: (a) Elections and decisions, other than those described in subsection (2) of t…

In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. [2003 c.279 §31] _______________