Title 20, DECEDENTS, ESTATES AND FIDUCIARIES

(a) Conversion.--Unless expressly prohibited by the governing instrument, a trustee may release the power under section 8104 (relating to trustee's power to adjust) and convert a trust into a unitrust as described in this section if all of the following apply: (1) The trustee det…

(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 f…

(a) General rule.--In the absence of a contrary intent appearing in the governing instrument of an express unitrust, the governing instrument shall be construed in accordance with the following rules: (1) The trustee shall follow an investment policy seeking a total return for th…

(a) Election.--Notwithstanding the foregoing provisions of this chapter, the trustee of a trust held exclusively for charitable purposes may elect to be governed by this section unless the governing instrument expressly provides that the election provided by this section shall no…

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 speci…

(a) Distribution of net income.--Each beneficiary described in section 8121(4) (relating to determination and distribution of net income) is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using val…

(a) Accrual of income interest.--An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins: (1) on the date specified in the governing instrument; or (2) if no date is specified, on the date an asset becomes subje…

(a) Allocation to principal.--Unless section 8121(1) (relating to determination and distribution of net income) applies, a trustee shall allocate an income receipt or disbursement to principal if its due date occurs before: (1) a decedent dies in the case of an estate; or (2) an …

(a) End of mandatory income interest.--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 o…

(a) Allocation to income.--Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity, including reinvested cash dividends. (b) Allocation to principal.--A trustee shall allocate the following receipts from an entity to principa…

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) Separate accounting for business or activity.--If a trustee that 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 ge…

A trustee shall allocate to principal any of the following: (1) To the extent not allocated to income under this chapter, assets received from: (i) a transferor during the transferor's lifetime; (ii) a decedent's estate; (iii) a trust with a terminating income interest; or (iv) a…

(a) Rent.--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. This subsection includes an amount received for cancellation or renewal of a …

(a) Interest allocated to income.--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 without a…

(a) General rule.-- (1) Except as otherwise provided in subsection (b) or (c), 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. This paragraph includes a contract which insur…

If a trustee determines that an allocation between principal and income required by section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments), 8150 (relating to liquidating asset), 8151 (relating to miner…

(a) General rule.-- (1) The trustee shall allocate to income the greater of: (i) the portion of a payment characterized by the payor as interest or a dividend or a remittance in lieu of interest or a dividend; or (ii) the portion of the payment characterized as imputed interest f…

(a) Allocation.--A trustee shall allocate to income 10% of the receipts from a liquidating asset and the balance to principal. (b) Definition.--As used in this section, the term "liquidating asset" means an asset the value of which will diminish or terminate because the asset is …

(a) Allocation for receipts from minerals and other natural resources.--To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources under this section, the trustee shall allocate them as follows: (1) If received as nominal delay rent…

(a) Allocation of net receipts.--To the extent that a trustee accounts for receipts from the sale of timber and related products under 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 e…

(a) General rule.--If a Federal estate or gift tax marital deduction is allowed for all or part of a trust whose income is required to be paid to the settlor's or testator's spouse and whose assets consist substantially of property that does not provide the spouse with sufficient…

(a) Derivatives.--To the extent that a trustee does not account under section 8143 (relating to business and other activities conducted by trustee) for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with tho…

(a) General rule.--If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets: (1) The trustee shall allocate to income the portion of the payment which the payor identifies as being from interest or other curren…

A trustee shall make the following disbursements from income: (1) Interest, except interest on death taxes. (2) Ordinary repairs. (3) Real estate and other regularly recurring taxes assessed against principal. (4) Recurring premiums on fire or other insurance covering the loss of…

(a) Mandatory disbursements.--A trustee shall make the following disbursements from principal: (1) Extraordinary expenses incurred in connection with the administration, management or preservation of trust property and the distribution of income. (2) Extraordinary repairs. (3) Co…

Subject to sections 8161 (relating to mandatory disbursements from income) and 8162 (relating to mandatory disbursements from principal), a trustee may, in the trustee's discretion, allocate to income or principal or partly to each ordinary expenses incurred in connection with th…

(a) Transfers.--A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation. However, a trustee may not transfer any amount for depreciation: (1) of that portion of real property used or available for use…

(a) Permissible reimbursements.--A 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 disbursements if the trustee makes or expects to make a disbursement from principal w…

(a) Receipts allocated to income.--A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income. (b) Receipts allocated to principal.--A tax required to be paid by a trustee based on receipts allocated to principal shall be paid from prin…

A trustee 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 any of the following: (1) An election or decision which the trustee makes regarding t…

In applying and construing this chapter, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states which enact it.