Title 14, Title 14: Decedents' Estates and Fiduciary Relations

§ 3325. Judicial control of discretionary power (a) 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 fiducia…

§ 3326. Uniformity of application and construction 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 that enact it. (Added 2011, No. 114 (Adj. Sess.), § 1.)

§ 3327. Severability clause If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, a…

§ 3331. 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: (1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income …

§ 3332. Distribution to residuary and remainder beneficiaries (a) Each beneficiary described in subdivision 3331(4) of this title is entitled to receive a portion of the net income equal to the beneficiary’s fractional interest in undistributed principal assets, using values as o…

§ 3341. 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 the trust or, if no date is specified, on the date an asset becomes …

§ 3342. Apportionment of receipts and disbursements when decedent dies or income interest begins (a) A trustee shall allocate an income receipt or disbursement other than one to which subdivision 3331(1) of this title applies to principal if its due date occurs before a decedent …

§ 3343. 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 has bee…

§ 3351. Character of receipts (a) As used 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 …

§ 3352. Distribution from trust or estate 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 distr…

§ 3353. 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 of the…

§ 3354. Principal receipts 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 …

§ 3355. Rental property 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 le…

§ 3356. Obligation to pay money (a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on a bond or an obligation to pay money to the fiduciary shall be allocated to income. (b) Except as provided in subsections (c) and (d) of this section,…

§ 3357. Insurance policies and similar contracts (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, includin…

§ 3358. Insubstantial allocations not required If a trustee determines that an allocation between principal and income required by section 3359, 3360, 3361, 3362, or 3365 of this title is insubstantial, the trustee may allocate the entire amount to principal unless one of the cir…

§ 3359. Deferred compensation, annuities, and similar payments (a) In this section: (1) “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 paye…

§ 3360. 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 a leasehold, patent, copyright, royalty right, an…

§ 3361. Minerals, water, and other natural resources (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 nom…

§ 3362. Timber (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 th…

§ 3363. 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 spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee t…

§ 3364. Derivatives and options (a) As used 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 …

§ 3365. 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 includes an…

§ 3371. Disbursements from income A trustee shall make the following disbursements from income to the extent that they are not disbursements to which subdivision 3331(2)(B) or (C) of this title applies: (1) one-half of the regular compensation of the trustee and of any person pro…

§ 3372. Disbursements from principal (a) A trustee shall make the following disbursements from principal: (1) the remaining one-half of the disbursements described in subdivisions 3371(1) and (2) of this title; (2) all of the trustee’s compensation calculated on principal as a fe…

§ 3373. Transfers from income to principal for depreciation (a) As used 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. (b) A trustee may transfer …

§ 3374. 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 or t…

§ 3375. 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 income t…

§ 3376. 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 which arise from: (1) election…