Section 637.101 – Short title.
637.101 Short title. This Act may be cited as the “Uniform Principal and Income Act”. 99 Acts, ch 124, §1
Section 637.102 – Definitions.
637.102 Definitions. As used in this chapter: 1. “Accounting period” means a calendar year, unless another twelve-month period is selected by a fiduciary. The term 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. 2. “Beneficiary” includes, in the […]
Section 637.103 – Fiduciary duties — general principles.
637.103 Fiduciary duties — general principles. 1. In allocating receipts and disbursements to or between principal and income, and in any matter within the scope of subchapters II and III, a fiduciary shall do all of the following: a. Administer a trust or estate in accordance with the terms of the trust or the will, […]
Section 637.201 – Determination and distribution of net income.
637.201 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: 1. A fiduciary of an estate or a terminating income interest shall determine the amount of net income and net principal receipts received from property […]
Section 637.202 – Distribution to residuary and remainder beneficiaries.
637.202 Distribution to residuary and remainder beneficiaries. 1. Each beneficiary described in section 637.201, subsection 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 […]
Section 637.301 – When right to income begins and ends.
637.301 When right to income begins and ends. 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 […]
Section 637.302 – Apportionment of receipts and disbursements when decedent dies or income interest begins.
637.302 Apportionment of receipts and disbursements when decedent dies or income interest begins. 1. An income receipt or disbursement other than one to which section 637.201, subsection 1, applies must be allocated to principal if its due date occurs before a decedent dies in the case of an estate, or before an income interest begins […]
Section 637.303 – Apportionment when income interest ends.
637.303 Apportionment when income interest ends. 1. For purposes of 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 […]
Section 637.401 – Character of receipts.
637.401 Character of receipts. 1. For purposes of this section, “entity” means a corporation, partnership, joint venture, limited liability company, regulated investment company, real estate investment trust, common trust fund, and any other organization in which a trustee has an interest other than a trust or estate to which section 637.402 applies or a business […]
Section 637.402 – Distribution from trust or estate.
637.402 Distribution from trust or estate. 1. 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. 2. An amount received as a distribution of principal […]
Section 637.403 – Business and other activities conducted by trustee.
637.403 Business and other activities conducted by trustee. 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 […]
Section 637.410 – Principal receipts.
637.410 Principal receipts. The following items must be allocated to principal: 1. To the extent not allocated to income under this chapter, assets received from any of the following sources: a. A transferor during the transferor’s lifetime. b. A decedent’s estate. c. A trust with a terminating income interest. d. A payor pursuant to a […]
Section 637.411 – Rental property.
637.411 Rental property. 1. An amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease, must be allocated to income. 2. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, […]
Section 637.412 – Obligation to pay money.
637.412 Obligation to pay money. 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 premium. 2. An amount received from […]
Section 637.413 – Insurance policies and similar contracts.
637.413 Insurance policies and similar contracts. 1. Proceeds from a life insurance policy whose beneficiary is the trust or its trustee or a policy that insures the trust or its trustee against loss for the damage or destruction of, or loss of title to, a principal asset must be allocated to principal. Dividends received from […]
Section 637.420 – Insubstantial allocations not required.
637.420 Insubstantial allocations not required. 1. If a trustee determines that an allocation between principal and income required by sections 637.421 through 637.424 or section 637.427 is insubstantial, the trustee may allocate the entire receipt to principal. 2. An allocation is presumed to be insubstantial if either of the following would be true if an […]
Section 637.421 – Deferred compensation, annuities, and similar payments.
637.421 Deferred compensation, annuities, and similar payments. 1. For purposes of this section, the following definitions shall apply: a. “Payments” 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 payor in exchange […]
Section 637.422 – Liquidating asset.
637.422 Liquidating asset. 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 leaseholds, patents, trademarks, copyrights, royalty rights, and rights to receive payments during a period of more than one year under […]
Section 637.423 – Minerals, water, and other natural resources.
637.423 Minerals, water, and other natural resources. 1. Receipts from an interest in minerals or other natural resources must be allocated according to the type of payment, as follows: a. If received as nominal delay rental or annual rent on a lease, a receipt must be allocated to income. b. If received from a production […]
Section 637.424 – Timber.
637.424 Timber. 1. A trustee may account for net receipts from the sale of timber and related products under subsection 2 or section 637.403 or, if the trustee determines that net receipts are insubstantial, may allocate the net receipts to principal. The presumptions in section 637.420 apply in determining whether net receipts are insubstantial. If […]