14-7401. Definitions 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 ends when an income interest ends. […]
14-7402. Fiduciary duties; general principles 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 there is […]
14-7403. Trustee’s power to adjust 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 the trust’s […]
14-7404. Judicial control of discretionary powers A. A court shall not change a fiduciary’s decision to exercise or not to exercise a discretionary power conferred by this article unless it determines that the decision was an abuse of the fiduciary’s discretion. A court shall not determine that a fiduciary abused its discretion merely because the […]
14-7405. 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 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 […]
14-7406. Distribution to residuary and remainder beneficiaries 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 distribution of assets to beneficiaries […]
14-7407. 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 subject to a […]
14-7408. 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 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 […]
14-7409. Apportionment when income interest ends; definition 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 not disposed of […]
14-7410. Character of receipts; definition 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 related distributions in […]
14-7411. 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 distribution of principal from such a trust […]
14-7412. 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 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 […]
14-7413. Principal receipts A trustee shall allocate to principal: 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 […]
14-7414. 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 lease. An amount received as a refundable deposit, including a […]
14-7415. 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, must be allocated to income without any provision for amortization of premium. B. A trustee shall allocate […]
14-7416. 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, including a contract that insures the trust or its trustee against […]
14-7417. Insubstantial allocations not required 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, subsection C applies to the allocation. This power may be […]
14-7418. Deferred compensation, annuities and similar payments; definition 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 […]
14-7419. Liquidating assets; definition 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 receipts […]
14-7420. 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 nominal annual rent on a lease, a receipt must be […]
