Missouri 2025 Regular Session

Missouri House Bill HB608 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		FIRSTREGULARSESSION
2		-	[PERFECTED]
3	2		HOUSEBILLNO.608
4	3		103RDGENERALASSEMBLY
5	4		INTRODUCEDBYREPRESENTATIVETHOMPSON.
6		-	1639H.~~01P~~ ~~JOSEPHENGLER~~,ChiefClerk
	5	+	1639H.01I DANARADEMANMILLER,ChiefClerk
7	6		ANACT
8	7		Torepealsections214.330,469.401,469.402,469.403,469.405,469.409,469.411,469.413,
9	8		469.415,469.417,469.419,469.421,469.423,469.425,469.427,469.429,469.431,
10	9		469.432,469.433,469.435,469.437,469.439,469.441,469.443,469.445,469.447,
11	10		469.449,469.451,469.453,469.455,469.457,469.459,469.461,469.463,469.465,
12	11		and469.467,RSMo,andtoenactinlieuthereofforty-eightnewsectionsrelatingto
13	12		trustandestateadministration.
14	13		BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
15	14		SectionA.Sections214.330,469.401,469.402,469.403,469.405,469.409,469.411,
16	15		2469.413,469.415,469.417,469.419,469.421,469.423,469.425,469.427,469.429,469.431,
17	16		3469.432,469.433,469.435,469.437,469.439,469.441,469.443,469.445,469.447,469.449,
18	17		4469.451,469.453,469.455,469.457,469.459,469.461,469.463,469.465,and469.467,
19	18		5RSMo,arerepealedandforty-eightnewsectionsenactedinlieuthereof,tobeknownas
20	19		6sections214.330,469.399,469.401,469.402,469.403,469.404,469.405,469.413,469.415,
21	20		7469.417,469.419,469.421,469.423,469.425,469.427,469.429,469.431,469.432,469.433,
22	21		8469.435,469.437,469.439,469.441,469.443,469.445,469.447,469.449,469.450,469.451,
23	22		9469.453,469.455,469.456,469.457,469.459,469.462,469.463,469.464,469.465,469.467,
24	23		10469.471,469.473,469.475,469.477,469.479,469.481,469.483,469.485,and469.487,to
25	24		11readasfollows:
26	25		214.330.1.(1)Theendowedcaretrustfundrequiredbysections214.270to214.410
27	26		2shallbepermanentlysetasideintrustorinaccordancewiththeprovisionsofsubsection2of
28	27		3thissection.Thetrusteeoftheendowedcaretrustshallbeastateorfederallychartered
	28	+	4financialinstitutionauthorizedtoexercisetrustpowersinMissouri.Thecontactinformation
29	29		EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
30		-	intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 4financialinstitutionauthorizedtoexercisetrustpowersinMissouri.Thecontactinformation
31		-	5foratrustofficerordulyappointedrepresentativeofthetrusteewithknowledgeandaccessto
	30	+	intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 5foratrustofficerordulyappointedrepresentativeofthetrusteewithknowledgeandaccessto
32	31		6thetrustfundaccountingandtrustfundrecordsmustbedisclosedtotheofficeoritsduly
33	32		7authorizedrepresentativeuponrequest.
34	33		8 (2)Thetrustfundrecords,includingalltrustfundaccountingrecords,shallbe
35	34		9maintainedinthestateofMissouriatalltimesorshallbeelectronicallystoredsothatthe
36	35		10recordsmaybemadeavailableinthestateofMissouriwithinfifteenbusinessdaysofreceipt
37	36		11ofawrittenrequest.Theoperatorofanendowedcarecemeteryshallmaintainacurrentname
38	37		12andaddressofthetrusteeandtherecordscustodianfortheendowedcaretrustfundandshall
39	38		13supplysuchinformationtotheoffice,oritsrepresentative,uponrequest.
40	39		14 (3)MissourilawshallcontrolallendowedcaretrustfundsandtheMissouricourts
41	40		15shallhavejurisdictionoverendowedcaretrustsregardlessofwhererecordsmaybekeptor
42	41		16variousadministrativetasksmaybeperformed.
43	42		17 2.AnendowedcaretrustfundshallbeadministeredinaccordancewithMissourilaw
44	43		18governingtrusts,includingbutnotlimitedtotheapplicableprovisionsofchapters456and
45	44		19469,exceptasspecificallyprovidedinthissubsectionorwheretheprovisionsofsections
46	45		20214.270to214.410providedifferently,providedthatacemeteryoperatorshallnotinany
47	46		21circumstancesbeauthorizedtorestrict,enlarge,change,ormodifytherequirementsofthis
48	47		22sectionortheprovisionsofchapters456and469byagreementorotherwise.
49	48		23 (1)Incomeandprincipalofanendowedcaretrustfundshallbedeterminedunderthe
50	49		24provisionsoflawapplicabletotrusts,exceptthatthe[provisionsofsection469.405shallnot
51	50		25apply] trusteeshallhave:
52	51		26 (a)Nopowerofadjustmentundersection469.405;
53	52		27 (b)Nopowerofconversioneitherfromanincometrusttoaunitrustorfroma
54	53		28unitrusttoanincometrustundersection469.475;
55	54		29 (c)Nopowerordiscretiontodetermineormodifytheunitrustrate,as
56	55		30establishedinthetermsoftheendowedcaretrustagreement;and
57	56		31 (d)Nodiscretiontodetermineapplicablevalueforpurposesofcomputingthe
58	57		32unitrustamountbeyondthatgrantedbylawandexercisedsolelyforreasonsof
59	58		33administrativeconvenienceandnottoaffectthesizeofdistributions.
60	59		34
61	60		35Indeterminingapplicablevalueundersection469.473,valuesoverathree-yearperiod
62	61		36ifavailable,orthedurationofthetrustifshorter,shallbeused.
63	62		37 (2)Noprincipalshallbedistributedfromanendowedcaretrustfundexcepttothe
64	63		38extentthataunitrust[electionisineffectwithrespecttosuchtrustundertheprovisionsof
65	64		39section469.411]amountisrequiredbythetermsoftheendowedcaretrustfund
66	65		40agreementundersubdivision(6)ofthissubsection.
67	66		HB608 2 41 (3)NorighttotransferjurisdictionfromMissouriundersection456.1-108shallexist
68	67		42forendowedcaretrusts.
69	68		43 (4)Allendowedcaretrustsshallbeirrevocable.
70	69		44 (5)Notrusteeshallhavethepowertoterminateanendowedcaretrustfundunderthe
71	70		45provisionsofsection456.4-414.
72	71		46 (6)Aunitrust[electionmadeinaccordancewiththeprovisionsofchapter469shall
73	72		47bemadebythecemeteryoperatorinthetermsoftheendowedcaretrustfundagreement
74	73		48itself,notbythetrustee] definitionofincomeundersections469.471to469.487shallbe
75	74		49establishedbythecemeteryoperatorinthetermsoftheendowedcaretrustfund
76	75		50agreementitself,notbythetrustee,andshallnotprovideforaunitrustrateexceeding
77	76		51fivepercentperannum.Theunitrustrateshallbechangedonlybyamendmenttothe
78	77		52agreementasprovidedinthissection.
79	78		53 (7)Nocontractofinsuranceshallbedeemedasuitableinvestmentforanendowed
80	79		54caretrustfund.
81	80		55 (8)Theincomefromtheendowedcarefundmaybedistributedtothecemetery
82	81		56operatoratleastannuallyonadatedesignatedbythecemeteryoperatorbyrecord,butno
83	82		57laterthansixtydaysfollowingtheendofthe[trustfund]trust'sfiscalyear.Anyincomenot
84	83		58distributedwithinsixtydaysfollowingtheendofthetrust'sfiscalyearshallbeaddedtoand
85	84		59heldaspartoftheprincipalofthetrustfund.Thecemeteryoperatormayinstructby
86	85		60recordthetrusteetodistributelessthanalltheincomedistributablefortheyearifthe
87	86		61cemeteryoperatordeterminesthatthemoneyisnotneeded.
88	87		62 3.Thecemeteryoperatorshallhavethedutyandresponsibilitytoapplytheincome
89	88		63distributedtoprovidecareandmaintenanceonlyforthatpartofthecemeterydesignatedas
90	89		64anendowedcaresectionandnotforanyotherpurpose.
91	90		65 4.Inadditiontoanyotherduty,obligation,orrequirementimposedbysections
92	91		66214.270to214.410ortheendowedcaretrustagreement,thetrustee'sdutiesshallbethe
93	92		67maintenanceofrecordsrelatedtothetrustandtheaccountingforandinvestmentofmoneys
94	93		68depositedbytheoperatortotheendowedcaretrustfund.
95	94		69 (1)Forthepurposesofsections214.270to214.410,thetrusteeshallnotbedeemed
96	95		70responsibleforthecare,themaintenance,ortheoperationofthecemetery,orforanyother
97	96		71matterrelatingtothecemetery,ortheproperexpenditureoffundsdistributedbythetrusteeto
98	97		72thecemeteryoperator,including,butnotlimitedto,compliancewithenvironmentallawsand
99	98		73regulations.
100	99		74 (2)Withrespecttocemeterypropertymaintainedbyendowedcarefunds,the
101	100		75cemeteryoperatorshallberesponsiblefortheperformanceofthecareandmaintenanceofthe
102	101		76cemeteryproperty.
103	102		HB608 3 77 5.Iftheendowedcarecemeteryfundisnotpermanentlysetasideinatrustfundas
104	103		78requiredbysubsection1ofthissection,thenthefundsshallbepermanentlysetasideinan
105	104		79escrowaccountinthestateofMissouri.Fundsinanescrowaccountshallbeplacedinan
106	105		80endowedcaretrustfundundersubsection1ifthefundsintheescrowaccountexceedthree
107	106		81hundredfiftythousanddollars,unlessotherwiseapprovedbythedivisionforgoodcause.
108	107		82TheaccountshallbeinsuredbytheFederalDepositInsuranceCorporationorcomparable
109	108		83depositinsuranceandheldinastateorfederallycharteredfinancialinstitutionauthorizedto
110	109		84dobusinessinMissouriandlocatedinthisstate.
111	110		85 (1)Theinterestfromtheescrowaccountmaybedistributedtothecemeteryoperator
112	111		86atleastinannualorsemiannualinstallments,butnotlaterthansixmonthsfollowingthe
113	112		87calendaryear.Anyinterestnotdistributedwithinsixmonthsfollowingtheendofthe
114	113		88calendaryearshallbeaddedtoandheldaspartoftheprincipaloftheaccount.
115	114		89 (2)Thecemeteryoperatorshallhavethedutyandresponsibilitytoapplytheinterest
116	115		90toprovidecareandmaintenanceonlyforthatpartofthecemeteryinwhichburialspaceshall
117	116		91havebeensoldandwithrespecttowhichsalestheescrowaccountshallhavebeenestablished
118	117		92andnotforanyotherpurpose.Theprincipalofsuchfundsshallbekeptintact.Thecemetery
119	118		93operator'sdutiesshallbethemaintenanceofrecordsandtheaccountingforaninvestmentof
120	119		94moneysdepositedbytheoperatortotheescrowaccount.Forpurposesofsections214.270to
121	120		95214.410,theadministratoroftheofficeofendowedcarecemeteriesshallnotbedeemedtobe
122	121		96responsibleforthecare,maintenance,oroperationofthecemetery.Withrespecttocemetery
123	122		97propertymaintainedbycemeterycarefunds,thecemeteryoperatorshallberesponsiblefor
124	123		98theperformanceofthecareandmaintenanceofthecemeterypropertyownedbythecemetery
125	124		99operator.
126	125		100 (3)Thedivisionmayapproveanescrowagentiftheescrowagentdemonstratesthe
127	126		101knowledge,skill,andabilitytohandleescrowfundsandfinancialtransactionsandisofgood
128	127		102moralcharacter.
129	128		103 6.Thecemeteryoperatorshallbeaccountabletotheownersofburialspaceinthe
130	129		104cemeteryforcompliancewithsections214.270to214.410.
131	130		105 7.Excludingfundsheldinanescrowaccount,allendowedcaretrustfundsshallbe
132	131		106administeredinaccordancewithanendowedcaretrustfundagreement,whichshallbe
133	132		107submittedtotheofficebythecemeteryoperatorforreviewandapproval.Theendowedcare
134	133		108cemeteryshallbenotifiedinwritingbytheofficeofendowedcarecemeteriesregardingthe
135	134		109approvalordisapprovaloftheendowedcaretrustfundagreementandregardinganychanges
136	135		110requiredtobemadeforcompliancewithsections214.270to214.410andtherulesand
137	136		111regulationspromulgatedthereunder.
138	137		112 8.Allendowedcarecemeteriesshallbeunderacontinuingdutytofilewiththeoffice
139	138		113ofendowedcarecemeteriesandtosubmitforpriorapprovalanyandallchanges,
140	139		HB608 4 114amendments,orrevisionsoftheendowedcaretrustfundagreementatleastthirtydaysbefore
141	140		115theeffectivedateofsuchchange,amendment,orrevision.
142	141		116 9.Iftheendowedcaretrustfundagreement,oranychanges,amendments,or
143	142		117revisionsfiledwiththeoffice,arenotdisapprovedbytheofficewithinthirtydaysafter
144	143		118submissionbythecemeteryoperator,theendowedcaretrustfundagreement,ortherelated
145	144		119change,amendment,orrevision,shallbedeemedapprovedandmaybeusedbythecemetery
146	145		120operatorandthetrustee.Notwithstandinganyotherprovisionofthissection,theofficemay
147	146		121reviewanddisapproveanendowedcaretrustfundagreement,oranysubmittedchange,
148	147		122amendment,orrevision,afterthethirtydaysprovidedhereinoratanyothertimeifthe
149	148		123agreementisnotincompliancewithsections214.270to214.410ortherulespromulgated
150	149		124thereunder.Noticeofdisapprovalbytheofficeshallbeinwritinganddeliveredtothe
151	150		125cemeteryoperatorandthetrusteewithintendaysofdisapproval.
152	151		126 10.Fundsinanendowedcaretrustfundorescrowaccountmaybecommingledwith
153	152		127endowedcarefundsforotherendowedcarecemeteries,providedthatthecemeteryoperator
154	153		128andthetrusteeshallmaintainadequateaccountingrecordsofthedisbursements,
155	154		129contributions,andincomeallocatedforeachcemetery.
156	155		130 11.Byacceptingthetrusteeshipofanendowedcaretrustoracceptingfundsasan
157	156		131escrowagentpursuanttosections214.270to214.410,thetrusteeorescrowagentsubmits
158	157		132personallytothejurisdictionofthecourtsofthisstateandtheofficeofendowedcare
159	158		133cemeteriesregardingtheadministrationofthetrustorescrowaccount.Atrusteeorescrow
160	159		134agentshallconsentinwritingtothejurisdictionofthestateofMissouriandtheofficein
161	160		135regardstothetrusteeshiportheoperationoftheescrowaccountandtotheappointmentofthe
162	161		136officeofsecretaryofstateasitsagentforserviceofprocessregardinganyadministrativeor
163	162		137legalactionsrelatingtothetrustortheescrowaccount,ifithasnodesignatedagentfor
164	163		138serviceofprocesslocatedinthisstate.Suchconsentshallbefiledwiththeofficepriorto
165	164		139acceptingfundspursuanttosections214.270to214.410astrusteeorasanescrowagentona
166	165		140formprovidedbytheofficebyrule.
167	166		469.399.Sections469.399to469.487shallbeknownandmaybecitedasthe
168	167		2"MissouriUniformFiduciaryIncomeandPrincipalAct".
169	168		469.401.Asusedinsections[469.401] 469.399to[469.467] 469.487, thefollowing
170	169		2termsmean:
171	170		3 (1)"Accountingperiod",acalendaryearunless[anothertwelve-monthperiodis
172	171		4selectedby]afiduciaryselectsanotherperiodoftwelvecalendarmonthsor
173	172		5approximatelytwelvecalendarmonths. Thetermincludesa[portion] partofa
174	173		6calendaryearor[othertwelve-month] anotherperiod[that]oftwelvecalendarmonthsor
175	174		7approximatelytwelvecalendarmonthsthatbeginswhenanincomeinterestbeginsorends
176	175		8whenanincomeinterestends;
177	176		HB608 5 9 (2)"Asset-backedsecurity",asecuritythatisservicedprimarilybythecash
178	177		10flowsofadiscretepooloffixedorrevolvingreceivablesorotherfinancialassetsthatby
179	178		11theirtermsconvertintocashwithinafinitetime.Thetermincludesrightsorother
180	179		12assetsthatensuretheservicingortimelydistributionofproceedstotheholderofthe
181	180		13asset-backedsecurity.Thetermdoesnotincludeanassettowhichsection469.423,
182	181		14469.437,or469.447applies;
183	182		15 (3)"Beneficiary",includes:
184	183		16 (a)Foratrust:
185	184		17 a.Acurrentbeneficiary,includingacurrentincomebeneficiaryanda
186	185		18beneficiarythatmayreceiveonlyprincipal;
187	186		19 b.Aremainderbeneficiary;and
188	187		20 c.Anyothersuccessorbeneficiary;
189	188		21 (b)Foranestate,anheir,legatee, anddevisee[ofadecedent'sestate,andanincome
190	189		22beneficiaryandaremainderbeneficiaryofatrust,includinganytypeofentitythathasa
191	190		23beneficialinterestineitheranestateoratrust]; and
192	191		24 (c)Foralifeestateorterminterest,apersonthatholdsalifeestate,term
193	192		25interest,orremainderorotherinterestfollowingalifeestateorterminterest;
194	193		26 (4)"Court",anycourtinthisstatehavingjurisdictionrelatingtoatrust,estate,
195	194		27lifeestate,orotherterminterestdescribedinsubdivision(2)ofsubsection1ofsection
196	195		28469.402;
197	196		29 (5)"Currentincomebeneficiary",abeneficiarytowhichafiduciarymay
198	197		30distributenetincome,whetherornotthefiduciaryalsomaydistributeprincipaltothe
199	198		31beneficiary;
200	199		32 (6)"Distribution",apaymentortransferbyafiduciarytoabeneficiaryinthe
201	200		33beneficiary’scapacityasabeneficiary,madeunderthetermsofthetrust,without
202	201		34considerationotherthanthebeneficiary’srighttoreceivethepaymentortransfer
203	202		35underthetermsofthetrust."Distribute","distributed",and"distributee"have
204	203		36correspondingmeanings;
205	204		37 (7)"Estate",adecedent’sestate.Thetermincludesthepropertyofthedecedent
206	205		38astheestateisoriginallyconstitutedandthepropertyoftheestateasitexistsatany
207	206		39timeduringadministration;
208	207		40 [(3)](8)"Fiduciary",includesatrustee,trustprotectordeterminedundersection
209	208		41456.8-808,personalrepresentative,[trustee,executor,administrator,successorpersonal
210	209		42representative,specialadministratorandanyotherpersonperformingsubstantiallythesame
211	210		43function] lifetenant,holderofaterminterest,andpersonactingunderadelegation
212	211		44fromafiduciary.Thetermincludesapersonthatholdspropertyforasuccessor
213	212		45beneficiarywhoseinterestmaybeaffectedbyanallocationofreceiptsandexpenditures
214	213		HB608 6 46betweenincomeandprincipal.Iftherearetwoormoreco-fiduciaries,theterm
215	214		47includesallco-fiduciariesactingunderthetermsofthetrustandapplicablelaw;
216	215		48 [(4)](9)"Income",moneyorotherproperty[that] afiduciaryreceivesascurrent
217	216		49returnfrom[a]principal[asset,includingaportion]. Thetermincludesapartofreceipts
218	217		50fromasale,exchange, orliquidationofaprincipalasset,[as]totheextentprovidedin
219	218		51sections469.423to[469.449] 469.450;
220	219		52 [(5)"Incomebeneficiary",apersontowhomnetincomeofatrustisormaybe
221	220		53payable;
222	221		54 (6)](10)"Incomeinterest",therightof[an]acurrentincomebeneficiarytoreceive
223	222		55allorpartofnetincome,whetherthetermsofthetrustrequire[it]thenetincometobe
224	223		56distributedorauthorize[it]thenetincometobedistributedinthe[trustee's] fiduciary's
225	224		57discretion. Thetermincludestherightofacurrentbeneficiarytousepropertyheldbya
226	225		58fiduciary;
227	226		59 (11)"Independentperson",apersonthatisnot:
228	227		60 (a)Foratrust:
229	228		61 a.Aqualifiedbeneficiaryasdefinedundersection456.1-103;
230	229		62 b.Asettlorofthetrust;or
231	230		63 c.Anindividualwhoselegalobligationtosupportabeneficiarymaybesatisfied
232	231		64byadistributionfromthetrust;
233	232		65 (b)Foranestate,abeneficiary;
234	233		66 (c)Aspouse,parent,brother,sister,orissueofanindividualdescribedin
235	234		67paragraph(a)or(b)ofthissubdivision;
236	235		68 (d)Acorporation,partnership,limitedliabilitycompany,orotherentityin
237	236		69whichpersonsdescribedinparagraphs(a)to(c)ofthissubdivision,intheaggregate,
238	237		70havevotingcontrol;or
239	238		71 (e)Anemployeeofapersondescribedinparagraph(a),(b),(c),or(d)ofthis
240	239		72subdivision;
241	240		73 [(7)](12)"Mandatoryincomeinterest",therightof[an]acurrentincome
242	241		74beneficiarytoreceivenetincomethatthetermsofthetrustrequirethefiduciarytodistribute;
243	242		75 [(8)](13)"Netincome",[ifsection469.411appliestothetrust,theunitrustamount,
244	243		76orifsection469.411doesnotapplytothetrust,] thetotal[receiptsallocatedtoincome]
245	244		77allocationsduringanaccountingperiodtoincomeunderthetermsofatrustandsections
246	245		78469.399to469.487minusthedisbursements[madefromincomeduringthesameperiod,plus
247	246		79orminustransferspursuanttosections469.401to469.467toorfromincomeduringthesame
248	247		80period] duringtheperiod,otherthandistributions,allocatedtoincomeundertheterms
249	248		81ofthetrustandsections469.399to469.487.Totheextentthetrustisaunitrustunder
250	249		82sections469.471to469.487,"netincome"meanstheunitrustamountdetermined
251	250		HB608 7 83thereunder."Netincome"includesanadjustmentfromprincipaltoincomeunder
252	251		84section469.405.Thetermdoesnotincludeanadjustmentfromincometoprincipal
253	252		85undersection469.405;
254	253		86 [(9)](14)"Person",anindividual,[corporation,businesstrust,] estate,trust,
255	254		87[partnership,limitedliabilitycompany,association,jointventure] businessornonprofit
256	255		88entity,publiccorporation, government[,] orgovernmentalsubdivision,agency,or
257	256		89instrumentality,[publiccorporation] or[any]otherlegal[orcommercial] entity;
258	257		90 (15)"Personalrepresentative",anexecutor,administrator,successorpersonal
259	258		91representative,specialadministrator,orpersonthatperformssubstantiallythesame
260	259		92functionwithrespecttoanestateunderthelawgoverningtheperson’sstatus;
261	260		93 [(10)] (16)"Principal",propertyheldintrustfordistributionto[aremainder],
262	261		94productionofincomefor,orusebyacurrentorsuccessorbeneficiary[whenthetrust
263	262		95terminates];
264	263		96 [(11)"Qualifiedbeneficiary",abeneficiarydefinedinsection456.1-103;
265	264		97 (12)"Remainderbeneficiary",apersonentitledtoreceiveprincipalwhenanincome
266	265		98interestends;
267	266		99 (13)](17)"Record",informationthatisinscribedonatangiblemediumorthat
268	267		100isstoredinanelectronicorothermediumandisretrievableinperceivableform;
269	268		101 (18)"Settlor",aperson,includingatestator,thatcreatesorcontributes
270	269		102propertytoatrust.Ifmorethanonepersoncreatesorcontributespropertytoatrust,
271	270		103thetermincludeseachperson,totheextentofthetrustpropertyattributabletothat
272	271		104person’scontribution,excepttotheextentanotherpersonhasthepowertorevokeor
273	272		105withdrawthatportion;
274	273		106 (19)"Specialtaxbenefit":
275	274		107 (a)Exclusionofatransfertoatrustfromgiftsdescribedin26U.S.C.Section
276	275		1082503(b),asamended,becauseofthequalificationofanincomeinterestinthetrustasa
277	276		109presentinterestinproperty;
278	277		110 (b)StatusasaqualifiedsubchapterStrustdescribedin26U.S.C.Section1361
279	278		111(d)(3),asamended,atatimethetrustholdsstockofanScorporationdescribedin26
280	279		112U.S.C.Section1361(a)(1),asamended;
281	280		113 (c)Anestateorgifttaxmaritaldeductionforatransfertoatrustunder26
282	281		114U.S.C.Section2056or2523,asamended,whichdependsordependedinwholeorin
283	282		115partontherightofthesettlor’sspousetoreceivethenetincomeofthetrust;
284	283		116 (d)Exemptioninwholeorinpartofatrustfromthefederalgeneration-skipping
285	284		117transfertaximposedby26U.S.C.Section2601,asamended,becausethetrustwas
286	285		118irrevocableonSeptember25,1985,ifthereisanypossibilitythat:
287	286		HB608 8 119 a.Ataxabledistribution,asdefinedin26U.S.C.Section2612(b),asamended,
288	287		120couldbemadefromthetrust;or
289	288		121 b.Ataxabletermination,asdefinedin26U.S.C.Section2612(a),asamended,
290	289		122couldoccurwithrespecttothetrust;or
291	290		123 (e)Aninclusionratio,asdefinedin26U.S.C.Section2642(a),asamended,ofthe
292	291		124trustwhichislessthanone,ifthereisanypossibilitythat:
293	292		125 a.Ataxabledistribution,asdefinedin26U.S.C.Section2612(b),asamended,
294	293		126couldbemadefromthetrust;or
295	294		127 b.Ataxabletermination,asdefinedin26U.S.C.Section2612(a),asamended,
296	295		128couldoccurwithrespecttothetrust;
297	296		129 (20)"Successiveinterest",theinterestofasuccessorbeneficiary;
298	297		130 (21)"Successorbeneficiary",apersonentitledtoreceiveincomeorprincipalor
299	298		131tousepropertywhenanincomeinterestorothercurrentinterestends;
300	299		132 (22)"Termsofatrust":
301	300		133 (a)Exceptasotherwiseprovidedinparagraph(b)ofthissubdivision, the
302	301		134manifestationofthesettlor's[ordecedent's] intentregardingatrust'sprovisionsas:
303	302		135 a.Expressedin[amannerwhichis]thetrustinstrument;or
304	303		136 b.Establishedbyotherevidencethatwouldbeadmissible[asproof] inajudicial
305	304		137proceeding[, whetherbywrittenorspokenwordsorbyconduct];
306	305		138 (b)Thetrust'sprovisionsasestablished,determined,oramendedby:
307	306		139 a.Atrusteeortrustdirectorinaccordancewithapplicablelaw;
308	307		140 b.Courtorder;or
309	308		141 c.Anonjudicialsettlementagreementundersection456.1-111;
310	309		142 (c)Foranestate,awill;or
311	310		143 (d)Foralifeestateorterminterest,thecorrespondingmanifestationofthe
312	311		144rightsofthebeneficiaries;
313	312		145 (23)"Trust":
314	313		146 (a)Includes:
315	314		147 a.Anexpresstrust,privateorcharitable,withadditionstothetrust,wherever
316	315		148andhowevercreated;and
317	316		149 b.Atrustcreatedordeterminedbyjudgmentordecreeunderwhichthetrustis
318	317		150tobeadministeredinthemannerofanexpresstrust;and
319	318		151 (b)Doesnotinclude:
320	319		152 a.Aconstructivetrust;
321	320		153 b.Aresultingtrust,conservatorship,guardianship,multi-partyaccount,
322	321		154custodialarrangementforaminor,businesstrust,votingtrust,securityarrangement,
323	322		155liquidationtrust,ortrustfortheprimarypurposeofpayingdebts,dividends,interest,
324	323		HB608 9 156salaries,wages,profits,pensions,retirementbenefits,oremployeebenefitsofanykind;
325	324		157or
326	325		158 c.Anarrangementunderwhichapersonisanominee,escrowee,oragentfor
327	326		159another;
328	327		160 [(14)] (24)"Trustee",aperson,otherthanapersonalrepresentative,thatownsor
329	328		161holdspropertyforthebenefitofabeneficiary.Thetermincludesanoriginal,additional,
330	329		162orsuccessortrustee,whetherornotappointedorconfirmedbyacourt;
331	330		163 [(15)"Unitrustamount",netincomeasdefinedbysection469.411]
332	331		164 (25)"Will",anytestamentaryinstrumentrecognizedbyapplicablelawthat
333	332		165makesalegallyeffectivedispositionofanindividual'sproperty,effectiveatthe
334	333		166individual'sdeath.Thetermincludesacodicilorotheramendmenttoatestamentary
335	334		167instrument.
336	335		469.402.[Theprovisionsofsections456.3-301to456.3-305shallapplytosections
337	336		2469.401to469.467forallpurposes.] 1.Exceptasotherwiseprovidedinthetermsofa
338	337		3trustorsections469.399to469.487,sections469.399to469.487applyto:
339	338		4 (1)Atrustorestate;and
340	339		5 (2)Alifeestateorotherterminterestinwhichtheinterestofoneormore
341	340		6personswillbesucceededbytheinterestofoneormoreotherpersons.
342	341		7 2.Exceptasotherwiseprovidedinthetermsofatrustorsections469.399to
343	342		8469.487,sections469.399to469.487applywhenthisstateistheprincipalplaceof
344	343		9administrationofatrustorestateorthesitusofpropertythatisnotheldinatrustor
345	344		10estateandissubjecttoalifeestateorotherterminterestdescribedinsubdivision(2)of
346	345		11subsection1ofthissection.Byacceptingthetrusteeshipofatrusthavingitsprincipal
347	346		12placeofadministrationinthisstateorbymovingtheprincipalplaceofadministration
348	347		13ofatrusttothisstate,thetrusteesubmitstotheapplicationofsections469.399to
349	348		14469.487toanymatterwithinthescopeofsections469.399to469.487involvingthetrust.
350	349		469.403.1.[Inallocatingreceiptsanddisbursementstoorbetweenprincipaland
351	350		2income,andwithrespecttoanymatterwithinthescopeof]Inmakinganallocationor
352	351		3determinationorexercisingdiscretionundersections469.413to469.421,afiduciary
353	352		4shall:
354	353		5 (1)[Shall] Actingoodfaith,basedonwhatisfairandreasonabletoall
355	354		6beneficiaries;
356	355		7 (2)Administeratrustorestate[under] impartially,excepttotheextentthetermsof
357	356		8thetrustmanifestanintentthatthefiduciaryshallor[thewill]mayfavoroneormore
358	357		9beneficiaries;
359	358		10 (3)Administerthetrustorestateinaccordancewiththetermsofthetrust, even
360	359		11ifthereisadifferentprovisioninsections[469.401] 469.399to[469.467] 469.487; and
361	360		HB608 10 12 [(2)May](4)Administer[a]thetrustorestate[byexercising] inaccordancewith
362	361		13sections469.399to469.487,excepttotheextentthetermsofthetrustprovideotherwise
363	362		14orauthorizethefiduciarytodetermineotherwise.
364	363		15 2.Afiduciary'sallocation,determination,orexerciseofdiscretionunder
365	364		16sections469.399to409.487ispresumedtobefairandreasonabletoallbeneficiaries.A
366	365		17fiduciarymayexerciseadiscretionarypowerofadministrationgiventothefiduciarybythe
367	366		18termsofthetrust[orthewill,evenifthe],andanexerciseofthepowerthatproducesaresult
368	367		19differentfromaresultrequiredorpermittedbysections[469.401] 469.399to[469.467;]
369	368		20469.487doesnotcreateaninferencethatthefiduciaryabusedthefiduciary'sdiscretion.
370	369		21 [(3)Shalladministeratrustorestatepursuant]
371	370		22 3.Afiduciaryshall:
372	371		23 (1)Addareceiptto[sections469.401to469.467if]principal,totheextentneither
373	372		24thetermsofthetrust[orthewilldonotcontainadifferentprovisionordonotgive]nor
374	373		25sections469.399to469.487allocatethe[fiduciaryadiscretionarypowerofadministration]
375	374		26receiptbetweenincomeandprincipal; and
376	375		27 [(4)Shalladdareceiptor](2)Chargeadisbursementtoprincipal, totheextent[that
377	376		28thetermsofthetrustandsections469.401to469.467donotprovidearuleforallocatingthe
378	377		29receiptordisbursementtoorbetweenprincipalandincome.
379	378		30 2.Inexercisingthepowertoadjustpursuanttosection469.405oradiscretionary
380	379		31powerofadministrationregardingamatterwithinthescopeofsections469.401to469.467,
381	380		32whethergrantedbythetermsofatrust,awill,orsections469.401to469.467,afiduciary
382	381		33shalladministeratrustorestateimpartially,basedonwhatisfairandreasonabletoallofthe
383	382		34beneficiaries,excepttotheextentthatthetermsofthetrustorthewillclearlymanifestan
384	383		35intentthatthefiduciaryshallormayfavoroneormoreofthebeneficiaries.Adetermination
385	384		36inaccordancewithsections469.401to469.467ispresumedtobefairandreasonabletoallof
386	385		37thebeneficiaries] neitherthetermsofthetrustnorsections469.399to469.487allocate
387	386		38thedisbursementbetweenincomeandprincipal.
388	387		39 4.Afiduciarymayexercisethepowertoadjustundersection469.405,convert
389	388		40anincometrusttoaunitrustundersubdivision(1)ofsubsection1ofsection469.475,
390	389		41changethepercentageormethodusedtocalculateaunitrustamountundersubdivision
391	390		42(2)ofsubsection1ofsection469.475,orconvertaunitrusttoanincometrustunder
392	391		43subdivision(3)ofsubsection1ofsection469.475,ifthefiduciarydeterminestheexercise
393	392		44ofthepowerwillassistthefiduciarytoadministerthetrustorestateimpartially.
394	393		45 5.Factorsthefiduciaryshallconsiderinmakingthedeterminationunder
395	394		46subsection4ofthissectioninclude:
396	395		47 (1)Thetermsofthetrust;
397	396		48 (2)Thenature,distributionstandards,andexpecteddurationofthetrust;
398	397		HB608 11 49 (3)Theeffectoftheallocationrules,includingspecificadjustmentsbetween
399	398		50incomeandprincipal,undersections407.413to407.461;
400	399		51 (4)Thedesirabilityofliquidityandregularityofincome;
401	400		52 (5)Thedesirabilityofthepreservationandappreciationofprincipal;
402	401		53 (6)Theextenttowhichanassetisusedormaybeusedbyabeneficiary;
403	402		54 (7)Theincreaseordecreaseinthevalueofprincipalassets,reasonably
404	403		55determinedbythefiduciary;
405	404		56 (8)Whetherandtowhatextentthetermsofthetrustgivethefiduciarypowerto
406	405		57accumulateincomeorinvadeprincipalorprohibitthefiduciaryfromaccumulating
407	406		58incomeorinvadingprincipal;
408	407		59 (9)Theextenttowhichthefiduciaryhasaccumulatedincomeorinvaded
409	408		60principalinprecedingaccountingperiods;
410	409		61 (10)Theeffectofcurrentandreasonablyexpectedeconomicconditions;and
411	410		62 (11)Thereasonablyexpectedtaxconsequencesoftheexerciseofthepower.
412	411		469.404.1.Inthissection,"fiduciarydecision"means:
413	412		2 (1)Afiduciary’sallocationbetweenincomeandprincipalorother
414	413		3determinationregardingincomeandprincipalrequiredorauthorizedbythetermsof
415	414		4thetrustorsections469.399to469.487;
416	415		5 (2)Thefiduciary’sexerciseornonexerciseofadiscretionarypowerregarding
417	416		6incomeandprincipalgrantedbythetermsofthetrustorsections469.399to469.487,
418	417		7includingthepowertoadjustundersection469.405,convertanincometrusttoa
419	418		8unitrustundersubdivision(1)ofsubsection1ofsection469.475,changethepercentage
420	419		9ormethodusedtocalculateaunitrustamountundersubdivision(2)ofsubsection1of
421	420		10section469.475,orconvertaunitrusttoanincometrustundersubdivision(3)of
422	421		11subsection1section469.475;or
423	422		12 (3)Thefiduciary’simplementationofadecisiondescribedinsubdivision(1)or
424	423		13(2)ofthissubsection.
425	424		14 2.Thecourtshallnotorderafiduciarytochangeafiduciarydecisionunlessthe
426	425		15courtdeterminesthatthefiduciarydecisionwasanabuseofthefiduciary’sdiscretion.
427	426		16 3.Ifthecourtdeterminesthatafiduciarydecisionwasanabuseofthe
428	427		17fiduciary’sdiscretion,thecourtmayorderaremedyauthorizedbylaw,includingunder
429	428		18section456.10-1001.Toplacethebeneficiariesinthepositionsthebeneficiarieswould
430	429		19haveoccupiediftherehadnotbeenanabuseofthefiduciary’sdiscretion,thecourtmay
431	430		20order:
432	431		21 (1)Thefiduciarytoexerciseorrefrainfromexercisingthepowertoadjust
433	432		22undersection469.405;
434	433		HB608 12 23 (2)Thefiduciarytoexerciseorrefrainfromexercisingthepowertoconvertan
435	434		24incometrusttoaunitrustundersubdivision(1)ofsubsection1ofsection469.475,
436	435		25changethepercentageormethodusedtocalculateaunitrustamountundersubdivision
437	436		26(2)ofsubsection1ofsection469.475,orconvertaunitrusttoanincometrustunder
438	437		27subdivision(3)ofsubsection1ofsection469.475;
439	438		28 (3)Thefiduciarytodistributeanamounttoabeneficiary;
440	439		29 (4)Abeneficiarytoreturnsomeorallofadistribution;or
441	440		30 (5)Thefiduciarytowithholdanamountfromoneormorefuturedistributions
442	441		31toabeneficiary.
443	442		32 4.Onpetitionbyafiduciaryforinstruction,thecourtmaydeterminewhethera
444	443		33proposedfiduciarydecisionwillresultinanabuseofthefiduciary’sdiscretion.Ifthe
445	444		34petitiondescribestheproposeddecision,containssufficientinformationtoinformthe
446	445		35beneficiaryofthereasonsformakingtheproposeddecisionandthefactsonwhichthe
447	446		36fiduciaryrelies,andexplainshowthebeneficiarywillbeaffectedbytheproposed
448	447		37decision,abeneficiarythatopposestheproposeddecisionhastheburdentoestablish
449	448		38thatitwillresultinanabuseofthefiduciary’sdiscretion.
450	449		469.405.1.[Atrusteemayadjustbetweenprincipalandincometotheextentthe
451	450		2trusteeconsidersnecessaryifthetrusteeinvestsandmanagestrustassetsasaprudent
452	451		3investor,thetermsofthetrustdescribetheamountthatmayorshallbedistributedtoa
453	452		4beneficiarybyreferringtothetrust'sincome,andthetrusteedetermines,afterapplying
454	453		5subsection1ofsection469.403,thatthetrusteeisunabletocomplywithsubsection2of
455	454		6section469.403.] Exceptasotherwiseprovidedinthetermsofatrustorthissection,a
456	455		7fiduciary,inarecord,withoutcourtapproval,mayadjustbetweenincomeandprincipal
457	456		8ifthefiduciarydeterminestheexerciseofthepowertoadjustwillassistthefiduciaryto
458	457		9administerthetrustorestateimpartially.
459	458		10 2.Thissectiondoesnotcreateadutytoexerciseorconsiderthepowertoadjust
460	459		11undersubsection1ofthissectionortoinformabeneficiaryabouttheapplicabilityof
461	460		12thissection.
462	461		13 3.Afiduciarythatingoodfaithexercisesorfailstoexercisethepowertoadjust
463	462		14undersubsection1ofthissectionisnotliabletoapersonaffectedbytheexerciseor
464	463		15failuretoexercise.
465	464		16 [2.]4.Indecidingwhetherandtowhatextenttoexercisethepower[conferredby]to
466	465		17adjustundersubsection1ofthissection,a[trustee] fiduciaryshallconsiderallfactorsthe
467	466		18fiduciaryconsidersrelevant[tothetrustanditsbeneficiaries], including[thefollowing]
468	467		19relevantfactors[totheextentrelevant:] insubsection5ofsection469.403andthe
469	468		20applicationofsections469.423,469.435,and469.445.
470	469		21 [(1)Thenature,purposeandexpecteddurationofthetrust;
471	470		HB608 13 22 (2)Theintentofthesettlor;
472	471		23 (3)Theidentityandcircumstancesofthebeneficiaries;
473	472		24 (4)Theneedsforliquidity,regularityofincome,andpreservationandappreciationof
474	473		25capital;
475	474		26 (5)Theassetsheldinthetrust,includingtheextenttowhichsuchassetsconsistof
476	475		27financialassets,interestsincloselyheldenterprises,tangibleandintangiblepersonal
477	476		28property,orrealproperty,andtheextenttowhichsuchassetsareusedbyabeneficiary,and
478	477		29whethersuchassetswerepurchasedbythetrusteeorreceivedfromthesettlor;
479	478		30 (6)Thenetamountallocatedtoincomepursuanttosections469.401to469.467,
480	479		31otherthanthissection,andtheincreaseordecreaseinthevalueoftheprincipalassets,which
481	480		32thetrusteemayestimateastoassetsforwhichmarketvaluesarenotreadilyavailable;
482	481		33 (7)Whetherandtowhatextentthetermsofthetrustgivethetrusteethepowerto
483	482		34invadeprincipaloraccumulateincome,orprohibitthetrusteefrominvadingprincipalor
484	483		35accumulatingincome,andtheextenttowhichthetrusteehasexercisedapowerfromtimeto
485	484		36timetoinvadeprincipaloraccumulateincome;
486	485		37 (8)Theactualandanticipatedeffectofeconomicconditionsonprincipalandincome
487	486		38andeffectsofinflationanddeflation;and
488	487		39 (9)Theanticipatedtaxconsequencesofanadjustment.
489	488		40 3.]5.A[trusteemay]fiduciaryshallnotexercisethepowerundersubsection1of
490	489		41thissectiontomakeanadjustmentorundersection469.435tomakeadeterminationthat
491	490		42anallocationisinsubstantialif:
492	491		43 (1)[Thatdiminishestheincomeinterestinatrustwhichrequiresalloftheincometo
493	492		44bepaidatleastannuallytoaspouseandforwhichanestatetaxorgifttaxmaritaldeduction
494	493		45wouldbeallowed,inwholeorinpart,ifthetrusteedidnothavethepowertomakethe
495	494		46adjustment;
496	495		47 (2)Thatreducestheactuarialvalueoftheincomeinterestinatrusttowhichaperson
497	496		48transferspropertywiththeintenttoqualifyforagifttaxexclusion;
498	497		49 (3)Thatchanges] Theadjustmentordeterminationwouldreducetheamount
499	498		50payabletoa[beneficiary] currentincomebeneficiaryfromatrustthatqualifiesfora
500	499		51specialtaxbenefit,excepttotheextenttheadjustmentismadetoprovidefora
501	500		52reasonableapportionmentofthetotalreturnofthetrustbetweenthecurrentincome
502	501		53beneficiaryandsuccessorbeneficiaries;
503	502		54 (2)Theadjustmentordeterminationwouldchangetheamountpayabletoa
504	503		55beneficiary,asafixedannuityorafixedfractionofthevalueofthetrustassets, underthe
505	504		56termsofthetrust;
506	505		57 [(4)Fromany](3)Theadjustmentordeterminationwouldreduceanamountthat
507	506		58ispermanentlysetasideforacharitable[purposes] purposeunder[awillor]thetermsof[a]
508	507		HB608 14 59thetrust[totheextentthattheexistenceofthepowertoadjustwouldchangethecharacterof
509	508		60theamount] ,unlessbothincomeandprincipalaresetasidefor[federalincome,giftor
510	509		61estatetaxpurposes] thecharitablepurpose;
511	510		62 [(5)If](4)Possessingorexercisingthepower[tomakeanadjustmentcausesan
512	511		63individual] wouldcauseapersontobetreatedastheownerofallorpartofthetrustfor
513	512		64[incometaxpurposes,andtheindividualwouldnotbetreatedastheownerifthetrusteedid
514	513		65notpossessthepowertomakeanadjustment] federalincometaxpurposes;
515	514		66 [(6)If](5)Possessingorexercisingthepower[tomakeanadjustmentcauses] would
516	515		67causeallorpartofthevalueofthetrustassetstobeincluded[forestatetaxpurposes] inthe
517	516		68grossestateofanindividual[whohas]forfederalestatetaxpurposes;
518	517		69 (6)Possessingorexercisingthepower[toremoveorappointatrustee,orboth,]
519	518		70wouldcauseanindividualtobetreatedasmakingagiftforfederalgifttaxpurposes;
520	519		71 (7)Thefiduciaryisnotanindependentperson;
521	520		72 (8)Thetrustisirrevocableand[theassetswouldnotbeincludedintheestateofthe
522	521		73individualifthetrusteedidnotpossess] providesforincometobepaidtothesettlorand
523	522		74possessingorexercisingthepower[tomakeanadjustment] wouldcausetheadjusted
524	523		75principalorincometobeconsideredanavailableresourceoravailableincomeundera
525	524		76public-benefitprogram;or
526	525		77 [(7)Ifthetrusteeisabeneficiaryofthetrust;or
527	526		78 (8)Ifthetrusteeisnotabeneficiary,buttheadjustmentwouldbenefitthetrustee
528	527		79directlyorindirectly]
529	528		80 (9)Thetrustisaunitrustundersections469.471to469.487.
530	529		81 [4.]6.If[subdivision(5),(6),(7)or(8)of]subsection[3]5ofthissectionappliestoa
531	530		82[trusteeandthereismorethanonetrustee,acotrusteetowhomtheprovisiondoes]fiduciary:
532	531		83 (1)Aco-fiduciarytowhichsubdivisions(4)to(7)ofsubsection5ofthissection
533	532		84donotapplymay[make] exercisethe[adjustment] powertoadjustunlesstheexerciseofthe
534	533		85powerbytheremaining[trusteeortrustees] co-fiduciaryorco-fiduciariesisnotpermitted
535	534		86bythetermsofthetrustorlawotherthansections469.399to469.487;and
536	535		87 (2)Ifthereisnoco-fiduciarytowhichsubdivisions(4)to(7)ofsubsection5of
537	536		88thissectiondonotapply,thefiduciarymayappointaco-fiduciarytowhichsubdivisions
538	537		89(4)to(7)ofsubsection5ofthissectiondonotapply,whichmaybeaspecialfiduciary
539	538		90withlimitedpowers,andtheappointedco-fiduciarymayexercisethepowertoadjust
540	539		91undersubsection1ofthissection,unlesstheappointmentofaco-fiduciaryorthe
541	540		92exerciseofthepowerbyaco-fiduciaryisnotpermittedbythetermsofthetrustorlaw
542	541		93otherthanundersections469.399to469.487.
543	542		94 [5.]7.A[trustee] fiduciarymayrelease[theentirepowerconferredbysubsection1
544	543		95ofthissection,ormayreleaseonlythepowertoadjustfromincometoprincipalorthepower
545	544		HB608 15 96toadjustfromprincipaltoincomeifthetrusteeisuncertainaboutwhetherpossessingor
546	545		97exercisingthepowerwill]ordelegatetoaco-fiduciarythepowertoadjustunder
547	546		98subsection1ofthissectionifthefiduciarydeterminesthatthefiduciary'spossessionor
548	547		99exerciseofthepowerwillormay:
549	548		100 (1)Causearesultdescribedinsubdivisions(1)to(6)orsubdivision(8)ofsubsection
550	549		101[3]5ofthissection[,];or[ifthetrusteedeterminesthatpossessingorexercisingthepower
551	550		102willormay]
552	551		103 (2)Deprivethetrustofataxbenefitorimposeataxburdennotdescribedin
553	552		104subdivisions(1)to(6)ofsubsection[3]5ofthissection.
554	553		105 8.Afiduciary'sreleaseordelegationtoaco-fiduciaryundersubsection7ofthis
555	554		106sectionofthepowertoadjustundersubsection1ofthissection:
556	555		107 (1)Shallbeinarecord;
557	556		108 (2)Appliestotheentirepower,unlessthereleaseordelegationprovidesa
558	557		109limitation,whichmaybealimitationtothepowertoadjust:
559	558		110 (a)Fromincometoprincipal;
560	559		111 (b)Fromprincipaltoincome;
561	560		112 (c)Forspecifiedproperty;or
562	561		113 (d)Inspecifiedcircumstances;
563	562		114 (3)Foradelegation,maybemodifiedbyare-delegationunderthissubsection
564	563		115bytheco-fiduciarytowhichthedelegationismade;and
565	564		116 (4)Subjecttosubdivision(3)ofthissubsection,is[maybe]permanent[orfor]
566	565		117unlessthereleaseordelegationprovidesaspecifiedperiod,includingaperiodmeasuredby
567	566		118thelifeofanindividualorthelivesofmorethanoneindividual.
568	567		119 [6.]9.Termsofatrustthatdenyorlimitthepower[ofatrustee] to[makean
569	568		120adjustment] adjustbetweenincomeandprincipal[andincome] donotaffecttheapplication
570	569		121ofthissectionunless[itisclearfrom] thetermsofthetrust[thatthetermsareintendedto]
571	570		122expresslydeny[thetrustee] orlimitthepower[ofadjustmentconferredby]toadjustunder
572	571		123subsection1ofthissection.
573	572		124 10.Theexerciseofthepowertoadjustundersubsection1ofthissectioninany
574	573		125accountingperiodmayapplytothecurrentperiod,theimmediatelyprecedingperiod,
575	574		126andoneormoresubsequentperiods.
576	575		127 11.Adescriptionoftheexerciseofthepowertoadjustundersubsection1ofthis
577	576		128sectionshallbe:
578	577		129 (1)Includedinareport,ifany,senttobeneficiariesundersubsection3ofsection
579	578		130456.8-813;or
580	579		131 (2)Communicatedatleastannuallytothequalifiedbeneficiariesdefinedunder
581	580		132section456.1-103otherthanallbeneficiariesthatreceiveorareentitledtoreceive
582	581		HB608 16 133incomefromthetrustorwouldbeentitledtoreceiveadistributionofprincipalifthe
583	582		134trustwereterminatedatthetimethenoticeissent,assumingnopowerofappointment
584	583		135isexercised.
585	584		469.413.[Afteradecedentdies,inthecase]1.Thissectionapplieswhen:
586	585		2 (1)Thedeathofanindividualresultsinthecreationofanestate[, orafter] or
587	586		3trust;or
588	587		4 (2)Anincomeinterestinatrust[ends,thefollowingrulesapply:] terminates,
589	588		5whetherthetrustcontinuesorisdistributed.
590	589		6 [(1)]2.Afiduciaryofanestateor[ofaterminating] trustwithanincomeinterest
591	590		7thatterminatesshalldetermine, undersubsection7ofthissectionandsections469.417to
592	591		8469.462,theamountofnetincomeandnetprincipalreceiptsreceivedfromproperty
593	592		9specificallygiventoabeneficiary[pursuanttotherulesinsections469.417to469.461which
594	593		10applytotrusteesandtherulesinsubdivision(5)ofthissection]. Thefiduciaryshalldistribute
595	594		11thenetincomeandnetprincipalreceiptstothebeneficiary[who] thatistoreceivethe
596	595		12specificproperty[;].
597	596		13 [(2)]3.Afiduciaryshalldeterminethe[remaining] incomeandnetincomeof[a
598	597		14decedent's] anestateor[aterminating] incomeinterest[pursuanttotherulesin]inatrust
599	598		15thatterminates,otherthantheamountofnetincomedeterminedundersubsection2of
600	599		16thissection,undersections469.417to[469.461whichapplytotrustees] 469.462andby:
601	600		17 [(a)](1)Includinginnetincomeallincomefrompropertyusedorsoldtodischarge
602	601		18liabilities;
603	602		19 [(b)](2)Payingfromincomeorprincipal,inthefiduciary'sdiscretion,feesof
604	603		20attorneys,accountants, andfiduciaries;courtcostsandotherexpensesofadministration;and
605	604		21intereston[death] estateandinheritancetaxesandothertaxesimposedbecauseofthe
606	605		22decedent'sdeath, butthefiduciarymaypay[those] theexpensesfromincomeofproperty
607	606		23passingtoatrustforwhichthefiduciaryclaims[an]afederalestatetaxmaritalorcharitable
608	607		24deductiononlytotheextent[that]:
609	608		25 (a)Thepaymentof[those] theexpensesfromincomewillnotcausethereductionor
610	609		26lossofthededuction;[and]or
611	610		27 (b)Thefiduciarymakesanadjustmentundersubsection2ofsection469.462;
612	611		28and
613	612		29 [(c)](3)Payingfromprincipal[all]otherdisbursementsmadeorincurredin
614	613		30connectionwiththesettlementof[adecedent's] theestateorthewindingupof[a
615	614		31terminating] anincomeinterest[,] thatterminates,including:
616	615		32 (a)Totheextentauthorizedbythedecedent'swill,thetermsofthetrust,or
617	616		33applicablelaw,debts,funeralexpenses,dispositionofremains,familyallowances,[and
618	617		HB608 17 34deathtaxes] estateandinheritancetaxes,andothertaxesimposedbecauseofthe
619	618		35decedent'sdeath;and
620	619		36 (b)Relatedpenaltiesthatareapportioned, bythedecedent'swill,thetermsofthe
621	620		37trust,orapplicablelaw,totheestateor[terminating] incomeinterest[bythewill,theterms
622	621		38ofthetrust,orapplicablelaw;]thatterminates.
623	622		39 [(3)Afiduciaryshalldistributetoabeneficiarywhoreceivesapecuniaryamount
624	623		40outrighttheinterestoranyotheramountprovidedbythewill,thetermsofthetrust,orinthe
625	624		41absenceofanysuchprovisions,theprovisionsofsection473.633,fromnetincome
626	625		42determinedpursuanttosubdivision(2)ofthissectionorfromprincipaltotheextentthatnet
627	626		43incomeisinsufficient.]
628	627		44 4.Ifadecedent'swill,thetermsofatrust,orapplicablelawprovidesforthe
629	628		45paymentofinterestortheequivalentofinteresttoabeneficiarythatreceivesa
630	629		46pecuniaryamountoutright,thefiduciaryshallmakethepaymentfromnetincome
631	630		47determinedundersubsection3ofthissectionorfromprincipaltotheextentnetincome
632	631		48isinsufficient.
633	632		49 5.Ifabeneficiaryistoreceiveapecuniaryamountoutrightfromatrustafteran
634	633		50incomeinterestendsbecauseofanincomebeneficiary'sdeath,andnopaymentofinterest
635	634		51or[otheramount] theequivalentofinterestisprovidedforbythetermsofthetrustor
636	635		52applicablelaw,thefiduciaryshall[distribute] paytheinterestor[otheramount] the
637	636		53equivalentofinteresttowhichthebeneficiarywouldbeentitledunderapplicablelawifthe
638	637		54pecuniaryamountwererequiredtobepaidunderawill[;].
639	638		55 [(4)]6.Afiduciaryshalldistribute[the]netincomeremainingafter[distributions]
640	639		56paymentsrequiredby[subdivision(3)]subsections4and5ofthissectioninthemanner
641	640		57describedinsection469.415toallotherbeneficiaries,includingabeneficiary[who] that
642	641		58receivesapecuniaryamountintrust,evenifthebeneficiaryholdsanunqualifiedpowerto
643	642		59withdrawassetsfromthetrustorotherpresentlyexercisablegeneralpowerofappointment
644	643		60overthetrust[;].
645	644		61 [(5)]7.Afiduciary[may] shallnotreduceprincipalorincomereceiptsfromproperty
646	645		62describedin[subdivision(1)]subsection2ofthissectionbecauseofapaymentdescribedin
647	646		63sections469.451and469.453totheextent[that]thedecedent'swill,thetermsofthetrust,or
648	647		64applicablelawrequiresthefiduciarytomakethepaymentfromassetsotherthantheproperty
649	648		65ortotheextent[that]thefiduciaryrecoversorexpectstorecoverthepaymentfromathird
650	649		66party.Thenetincomeandprincipalreceiptsfromtheproperty[are]shallbedeterminedby
651	650		67including[allof]theamountsthefiduciaryreceivesorpays[withrespectto]regardingthe
652	651		68property,whether[thoseamounts] theamountaccruedorbecameduebefore,on,orafterthe
653	652		69dateof[adecedent's] thedecedent'sdeathoranincomeinterest'sterminatingevent,and[by]
654	653		HB608 18 70makingareasonableprovisionfor[amountsthatthefiduciarybelieves] anamounttheestate
655	654		71or[terminating] incomeinterestmaybecomeobligatedtopayafterthepropertyisdistributed.
656	655		469.415.1.[Each] Excepttotheextentsections469.471to469.487applyfora
657	656		2beneficiarythatisatrust,eachbeneficiarydescribedin[subdivision(4)]subsection6of
658	657		3section469.413isentitledtoreceivea[portion] shareofthenetincomeequaltothe
659	658		4beneficiary'sfractionalinterestinundistributedprincipalassets,usingvaluesasofthe
660	659		5distributiondate.Ifafiduciarymakesmorethanonedistributionofassetstobeneficiariesto
661	660		6[whom] whichthissectionapplies,eachbeneficiary,including[onewho]abeneficiarythat
662	661		7doesnotreceivepartofthedistribution,isentitled,asofeachdistributiondate,toashareof
663	662		8thenetincomethefiduciary[has]receivedafterthe[dateof]decedent'sdeath[or],an
664	663		9incomeinterest'sotherterminatingevent, or[earlier] theprecedingdistribution[datebut
665	664		10hasnotdistributedasofthecurrentdistributiondate]bythefiduciary.
666	665		11 2.Indeterminingabeneficiary'sshareofnetincomeundersubsection1ofthis
667	666		12section, thefollowingrulesapply:
668	667		13 (1)Thebeneficiaryisentitledtoreceivea[portion] shareofthenetincomeequalto
669	668		14thebeneficiary'sfractionalinterestintheundistributedprincipalassetsimmediatelybefore
670	669		15thedistributiondate[, includingassetsthatlatermaybesoldtomeetprincipalobligations];
671	670		16 (2)Thebeneficiary'sfractionalinterest[intheundistributedprincipalassetsshall]
672	671		17undersubdivision(1)ofthissubsectionshallbecalculated[withoutregardtoproperty
673	672		18specificallygiventoabeneficiaryandpropertyrequiredtopaypecuniaryamountsnotin
674	673		19trust;
675	674		20 (3)Thebeneficiary'sfractionalinterestintheundistributedprincipalassetsshallbe
676	675		21calculated]:
677	676		22 (a)Onthe[basisofthe]aggregatevalueof[those] theassetsasofthedistribution
678	677		23datewithoutreducingthevaluebyanyunpaidprincipalobligation;and
679	678		24 (b)Withoutregardto:
680	679		25 a.Propertyspecificallygiventoabeneficiaryunderthedecedent'swillorthe
681	680		26termsofthetrust;and
682	681		27 b.Propertyrequiredtopaypecuniaryamountsnotintrust;and
683	682		28 [(4)](3)Thedistributiondate[forpurposesofthissection] undersubdivision(1)of
684	683		29thissubsectionmaybethedateasofwhichthefiduciarycalculatesthevalueoftheassetsif
685	684		30thatdateisreasonablynearthedateonwhichtheassetsare[actually] distributed.
686	685		31 3.[If]Totheextentafiduciarydoesnotdistributeunderthissectionall[of]the
687	686		32collectedbutundistributednetincometoeach[person] beneficiaryasofadistributiondate,
688	687		33thefiduciaryshallmaintain[appropriate] recordsshowingtheinterestofeachbeneficiaryin
689	688		34[that]thenetincome.
690	689		HB608 19 35 4.Ifthissectionappliestoincomefromanasset,afiduciarymayapplytherulesin
691	690		36thissection[, totheextentthatthefiduciaryconsidersitappropriate,] tonetgainorloss
692	691		37realizedfromthedispositionoftheassetafterthe[dateofdeathor]decedent'sdeath,an
693	692		38incomeinterest'sterminatingevent, or[earlier] theprecedingdistribution[datefromthe
694	693		39dispositionofaprincipalassetifthissectionappliestotheincomefromtheasset] bythe
695	694		40fiduciary.
696	695		469.417.1.Anincomebeneficiaryisentitledtonetincomeinaccordancewiththe
697	696		2termsofthetrustfromthedate[onwhichthe]anincomeinterestbegins.[An]Theincome
698	697		3interestbeginsonthedatespecifiedinthetermsofthetrustor,ifnodateisspecified,onthe
699	698		4dateanassetbecomessubjectto[atrustorsuccessiveincomeinterest]:
700	699		5 (1)Thetrustforthecurrentincomebeneficiary;or
701	700		6 (2)Asuccessiveinterestforasuccessorbeneficiary.
702	701		7 2.Anassetbecomessubjecttoatrustundersubdivision(1)ofsubsection1ofthis
703	702		8section:
704	703		9 (1)[Onthedateitistransferredtothetrustinthecaseof]Foranassetthatis
705	704		10transferredto[a]thetrustduringthe[transferor's] settlor'slife,onthedatetheassetis
706	705		11transferred;
707	706		12 (2)[Onthedateofatestator'sdeathinthecaseof]Foranassetthatbecomessubject
708	707		13to[a]thetrust[byreason] becauseofa[will] decedent'sdeath,onthedateofthe
709	708		14decedent'sdeath, evenifthereisaninterveningperiodofadministrationofthe[testator's]
710	709		15decedent'sestate;or
711	710		16 (3)[Onthedateofanindividual'sdeathinthecaseof]Foranassetthatistransferred
712	711		17toafiduciarybyathirdpartybecauseof[theindividual's] adecedent'sdeath, onthedateof
713	712		18thedecedent'sdeath.
714	713		19 3.Anassetbecomessubjecttoasuccessive[income] interestundersubdivision(2)
715	714		20ofsubsection1ofthissectiononthedayaftertheprecedingincomeinterestends,as
716	715		21determined[pursuantto]undersubsection4ofthissection,evenifthereisanintervening
717	716		22periodofadministrationtowinduptheprecedingincomeinterest.
718	717		23 4.Anincomeinterestendsonthedaybeforeanincomebeneficiarydiesoranother
719	718		24terminatingeventoccurs[,] oronthelastdayofaperiodduringwhichthereisnobeneficiary
720	719		25to[whom] whicha[trustee] fiduciarymayorshalldistributeincome.
721	720		469.419.1.A[trustee] fiduciaryshallallocateanincomereceiptordisbursement,
722	721		2otherthan[one]areceipttowhich[subdivision(1)]subsection2ofsection469.413applies,
723	722		3toprincipalifitsduedateoccursbefore[adecedentdiesinthecaseof]thedateonwhich:
724	723		4 (1)Foranestate, thedecedentdied;or[before]
725	724		5 (2)Foratrustorsuccessiveinterest,anincomeinterestbegins[inthecaseofatrust
726	725		6orsuccessiveincomeinterest].
727	726		HB608 20 7 2.[Atrusteeshallallocateanincomereceiptordisbursementtoincomeifits]Ifthe
728	727		8duedateofaperiodicincomereceiptordisbursementoccursonorafterthedateonwhich
729	728		9adecedent[dies] diedoranincomeinterest[beginsanditisaperiodicduedate.Anincome]
730	729		10began,afiduciaryshallallocatethereceiptordisbursementtoincome.
731	730		11 3.Ifanincomereceiptordisbursementisnotperiodicorhasnoduedate,a
732	731		12fiduciaryshall[betreated] treatthereceiptordisbursementunderthissectionas
733	732		13accruingfromdaytoday[ifitsduedateisnotperiodicorithasnoduedate]. Thefiduciary
734	733		14shallallocatetoprincipaltheportionofthereceiptordisbursementaccruingbeforethedate
735	734		15onwhichadecedent[dies] diedoranincomeinterest[beginsshallbeallocatedtoprincipal]
736	735		16began,andtoincomethebalance[shallbeallocatedtoincome].
737	736		17 [3.]4.Areceiptordisbursementisperiodicundersubsections2and3ofthis
738	737		18sectionif:
739	738		19 (1)Thereceiptordisbursementshallbepaidatregularintervalsunderan
740	739		20obligationtomakepayments;or
741	740		21 (2)Thepayercustomarilymakespaymentsatregularintervals.
742	741		22 5.Anitemofincomeor[an]obligationisdueunderthissectiononthedate[a
743	742		23payment] thepayerisrequiredtomakeapayment. Ifapaymentdateisnotstated,thereis
744	743		24noduedate[forthepurposesofsections469.401to469.467].
745	744		25 6.Distributionstoshareholdersorotherownersfromanentitytowhichsection
746	745		26469.423appliesare[deemedtobe]due:
747	746		27 (1)Onthedatefixedbyoronbehalfoftheentityfordetermining[whois]the
748	747		28personsentitledtoreceivethedistribution[or,];
749	748		29 (2)Ifnodateisfixed,onthe[declaration] date[for]ofthedecisionbyoronbehalf
750	749		30oftheentitytomakethedistribution[. Aduedateisperiodicforreceiptsordisbursements
751	750		31thatshallbepaidatregularintervalsunderaleaseoranobligationtopayinterestorifan
752	751		32entitycustomarilymakesdistributionsatregularintervals]; or
753	752		33 (3)Ifnodateisfixedandthefiduciarydoesnotknowthedateofthedecisionby
754	753		34oronbehalfoftheentitytomakethedistribution,onthedatethefiduciarylearnsofthe
755	754		35decision.
756	755		469.421.1.[Forpurposesof]Inthissection,[thephrase] "undistributedincome"
757	756		2meansnetincomereceivedonorbeforethedateonwhichanincomeinterestends.The
758	757		3[phrase] termdoesnotincludeanitemofincomeorexpensethatisdueoraccrued[,] ornet
759	758		4incomethathasbeenaddedorisrequiredtobeaddedtoprincipalunderthetermsofthetrust.
760	759		5 2.Exceptasotherwiseprovidedinsubsection3ofthissection,whenamandatory
761	760		6incomeinterestofabeneficiaryends,the[trustee] fiduciaryshallpay[toamandatory
762	761		7incomebeneficiarywhosurvivesthatdate,ortheestateofadeceasedmandatoryincome
763	762		8beneficiarywhosedeathcausestheinteresttoend,] thebeneficiary'sshareofthe
764	763		HB608 21 9undistributedincomethatisnotdisposedofunderthetermsofthetrust[unlessthe]tothe
765	764		10beneficiaryor,ifthebeneficiarydoesnotsurvivethedatetheinterestends,tothe
766	765		11beneficiary’sestate.
767	766		12 3.Ifabeneficiaryhasanunqualifiedpowerto[revoke] withdrawmorethanfive
768	767		13percentofthevalueofatrustimmediatelybefore[the]anincomeinterestends[. Inthelatter
769	768		14case,]:
770	769		15 (1)Thefiduciaryshallallocatetoprincipaltheundistributedincomefromthe
771	770		16portionofthetrustthatmaybe[revokedshallbeaddedtoprincipal] withdrawn;and
772	771		17 (2)Subsection2ofthissectionappliesonlytothebalanceoftheundistributed
773	772		18income.
774	773		19 [3.]4.Whena[trustee's] fiduciary'sobligationtopayafixedannuityorafixed
775	774		20fractionofthevalueof[thetrust's] assetsends,the[trustee] fiduciaryshallproratethefinal
776	775		21payment[ifandtotheextent] asrequired[byapplicablelawtoaccomplishapurposeofthe
777	776		22trustoritssettlorrelating] topreserveanincometax,gifttax,estatetax,orothertax
778	777		23[requirements] benefit.
779	778		469.423.1.[Forpurposesof]Inthissection[, theterm]:
780	779		2 (1)"Capitaldistribution"meansanentitydistributionofmoneythatisa:
781	780		3 (a)Returnofcapital;or
782	781		4 (b)Distributionintotalorpartialliquidationoftheentity;
783	782		5 (2)"Entity":
784	783		6 (a)Meansacorporation,partnership,limitedliabilitycompany,regulatedinvestment
785	784		7company,realestateinvestmenttrust,commontrustfund,oranyotherorganization[inwhich
786	785		8atrusteehasaninterest,otherthanatrustorestatetowhichsection469.425applies,a
787	786		9businessoractivitytowhichsection469.427applies,oranasset-backedsecuritytowhich
788	787		10section469.449applies.] orarrangementinwhichafiduciaryownsorholdsaninterest,
789	788		11whetherornottheentityisataxpayerforfederalincometaxpurposes;and
790	789		12 (b)Doesnotinclude:
791	790		13 a.Atrustorestatetowhichsection469.425applies;
792	791		14 b.Abusinessorotheractivitytowhichsection469.427appliesthatisnot
793	792		15conductedbyanentitydescribedinparagraph(a)ofthissubdivision;
794	793		16 c.Anasset-backedsecurity;or
795	794		17 d.Aninstrumentorarrangementtowhichsection469.450applies;
796	795		18 (3)"Entitydistribution"meansapaymentortransferbyanentitymadetoa
797	796		19personintheperson’scapacityasanownerorholderofaninterestintheentity.
798	797		20 2.Inthissection,anattributeoractionofanentityincludesanattributeor
799	798		21actionofanyotherentityinwhichtheentityownsorholdsaninterest,includingan
800	799		22interestownedorheldindirectlythroughanotherentity.
801	800		HB608 22 23 [2.]3.Exceptasotherwiseprovidedin[thissection] subdivisions(2)to(4)of
802	801		24subsection4ofthissection, a[trustee] fiduciaryshallallocatetoincome:
803	802		25 (1)Moneyreceived[from] inanentity[.
804	803		26 3.Atrusteeshallallocatethefollowingreceiptsfromanentitytoprincipal:
805	804		27 (1)Propertyotherthanmoney;
806	805		28 (2)Moneyreceivedinonedistributionoraseriesofrelateddistributionsinexchange
807	806		29forpartorallofatrust'sinterestintheentity;
808	807		30 (3)Moneyreceivedintotalorpartialliquidationoftheentity;and
809	808		31 (4)Moneyreceivedfromanentitythatis]distribution;and
810	809		32 (2)Tangiblepersonalpropertyofnominalvaluereceivedfromtheentity.
811	810		33 4.Afiduciaryshallallocatetoprincipal:
812	811		34 (1)Propertyreceivedinanentitydistributionthatisnot:
813	812		35 (a)Money;or
814	813		36 (b)Tangiblepersonalpropertyofnominalvalue;
815	814		37 (2)Moneyreceivedinanentitydistributioninanexchangeforpartorallofthe
816	815		38fiduciary’sinterestintheentity,totheextenttheentitydistributionreducesthe
817	816		39fiduciary’sinterestintheentityrelativetotheinterestsofotherpersonsthatownor
818	817		40holdinterestsintheentity;
819	818		41 (3)Moneyreceivedinanentitydistributionthatthefiduciarydeterminesor
820	819		42estimatesisacapitaldistribution;and
821	820		43 (4)Moneyreceivedinanentitydistributionfromanentitythatis:
822	821		44 (a)Aregulatedinvestmentcompanyor[a]realestateinvestmenttrustifthemoney
823	822		45[distributed] receivedisacapitalgaindividendforfederalincometaxpurposes[.
824	823		46 4.Moneyisreceivedinpartialliquidation:
825	824		47 (1)Totheextentthattheentity,atornearthetimeofadistribution,indicatesthat
826	825		48suchmoneyisadistributioninpartialliquidation;or
827	826		49 (2)If];or
828	827		50 (b)Treatedforfederalincometaxpurposescomparablytothetreatment
829	828		51describedinparagraph(a)ofthissubdivision.
830	829		52 5.Afiduciarymaydetermineorestimatethatmoneyreceivedinanentity
831	830		53distributionisacapitaldistribution:
832	831		54 (1)Byrelying,withoutinquiryorinvestigation,onacharacterizationofthe
833	832		55entitydistributionprovidedbyoronbehalfoftheentityunlessthefiduciary:
834	833		56 (a)Determines,onthebasisofinformationknowntothefiduciary,thatthe
835	834		57characterizationisormaybeincorrect;or
836	835		58 (b)Ownsorholdsmorethanfiftypercentofthevotinginterestintheentity;
837	836		HB608 23 59 (2)Bydeterminingorestimating,onthebasisofinformationknowntothe
838	837		60fiduciaryorprovidedtothefiduciarybyoronbehalfoftheentity,thatthetotalamount
839	838		61ofmoneyandpropertyreceivedbythefiduciaryin[a]theentitydistributionoraseriesof
840	839		62relatedentitydistributionsisorwillbegreaterthantwentypercentofthe[entity'sgross
841	840		63assets,asshownbytheentity'syear-endfinancialstatementsimmediatelyprecedingthe
842	841		64initialreceipt.
843	842		65 5.Moneyisnotreceivedinpartialliquidation,normayitbetakenintoaccount
844	843		66pursuanttosubdivision(2)ofsubsection4ofthissection,totheextentthatsuchmoneydoes
845	844		67notexceedtheamountofincometaxthatatrusteeorbeneficiaryshallpayontaxableincome
846	845		68oftheentitythatdistributesthemoney.
847	846		69 6.Atrusteemayrelyuponastatementmadebyanentityaboutthesourceor
848	847		70characterofadistributionifthestatementismadeatornearthetimeofdistributionbythe
849	848		71entity'sboardofdirectorsorotherpersonorgroupofpersonsauthorizedtoexercisepowersto
850	849		72paymoneyortransferpropertycomparabletothoseofacorporation'sboardofdirectors.] fair
851	850		73marketvalueofthefiduciary’sinterestintheentity;or
852	851		74 (3)Ifneithersubdivision(1)nor(2)ofthissubsectionapplies,byconsideringthe
853	852		75factorsinsubsection6ofthissectionandtheinformationknowntothefiduciaryor
854	853		76providedtothefiduciarybyoronbehalfoftheentity.
855	854		77 6.Inmakingadeterminationorestimateundersubdivision(3)ofsubsection5of
856	855		78thissection,afiduciarymayconsider:
857	856		79 (1)Acharacterizationofanentitydistributionprovidedbyoronbehalfofthe
858	857		80entity;
859	858		81 (2)Theamountofmoneyorpropertyreceivedin:
860	859		82 (a)Theentitydistribution;or
861	860		83 (b)Whatthefiduciarydeterminesisorwillbeaseriesofrelatedentity
862	861		84distributions;
863	862		85 (3)Theamountdescribedinsubdivision(2)ofthissubsectioncomparedtothe
864	863		86amountthefiduciarydeterminesorestimatesis,duringthecurrentorpreceding
865	864		87accountingperiods:
866	865		88 (a)Theentity’soperatingincome;
867	866		89 (b)Theproceedsoftheentity’ssaleorotherdispositionof:
868	867		90 a.Allorpartofthebusinessorotheractivityconductedbytheentity;
869	868		91 b.Oneormorebusinessassetsthatarenotsoldtocustomersintheordinary
870	869		92courseofthebusinessorotheractivityconductedbytheentity;or
871	870		93 c.Oneormoreassetsotherthanbusinessassets,unlesstheentity’sprimary
872	871		94activityistoinvestinassetstorealizegainonthedispositionofallorsomeoftheassets;
873	872		HB608 24 95 (c)Iftheentity’sprimaryactivityistoinvestinassetstorealizegainonthe
874	873		96dispositionofallorsomeoftheassets,thegainrealizedonthedisposition;
875	874		97 (d)Theentity’sregular,periodicentitydistributions;
876	875		98 (e)Theamountofmoneytheentityhasaccumulated;
877	876		99 (f)Theamountofmoneytheentityhasborrowed;
878	877		100 (g)Theamountofmoneytheentityhasreceivedfromthesourcesdescribedin
879	878		101sections469.433,469.439,469.441,and469.443;and
880	879		102 (h)Theamountofmoneytheentityhasreceivedfromasourcenototherwise
881	880		103describedinthisparagraph;and
882	881		104 (4)Anyotherfactorthefiduciarydeterminesisrelevant.
883	882		105 7.If,afterapplyingsubsections3to6ofthissection,afiduciarydeterminesthat
884	883		106apartofanentitydistributionisacapitaldistributionbutisindoubtabouttheamount
885	884		107oftheentitydistributionthatisacapitaldistribution,thefiduciaryshallallocateto
886	885		108principaltheamountoftheentitydistributionthatisindoubt.
887	886		109 8.Ifafiduciaryreceivesadditionalinformationabouttheapplicationofthis
888	887		110sectiontoanentitydistributionbeforethefiduciaryhaspaidpartoftheentity
889	888		111distributiontoabeneficiary,thefiduciarymayconsidertheadditionalinformation
890	889		112beforemakingthepaymenttothebeneficiaryandmaychangeadecisiontomakethe
891	890		113paymenttothebeneficiary.
892	891		114 9.Ifafiduciaryreceivesadditionalinformationabouttheapplicationofthis
893	892		115sectiontoanentitydistributionafterthefiduciaryhaspaidpartoftheentity
894	893		116distributiontoabeneficiary,thefiduciaryisnotrequiredtochangeorrecoverthe
895	894		117paymenttothebeneficiarybutmayconsiderthatinformationindeterminingwhether
896	895		118toexercisethepowertoadjustundersection469.405.
897	896		469.425.A[trustee] fiduciaryshallallocatetoincomeanamountreceivedasa
898	897		2distributionofincome, includingaunitrustdistributionundersections469.471to
899	898		3469.487,fromatrustor[an]estateinwhichthe[trust] fiduciaryhasaninterest, otherthan[a]
900	899		4aninterestthefiduciarypurchased[interest] inatrustthatisaninvestmententity, and
901	900		5shallallocatetoprincipalanamountreceivedasadistributionofprincipalfrom[sucha]the
902	901		6trustorestate.Ifa[trustee] fiduciarypurchases, orreceivesfromasettlor,aninterestina
903	902		7trustthatisaninvestmententity,[oradecedentordonortransfersaninterestinsuchatrustto
904	903		8atrustee,] section469.423[or],469.449[shallapply], or469.450appliestoareceiptfrom
905	904		9thetrust.
906	905		469.427.1.[Ifatrusteewhoconducts] Thissectionappliestoabusinessorother
907	906		2activityconductedbyafiduciaryifthefiduciarydeterminesthatitisinthe[bestinterest]
908	907		3interestsof[all]thebeneficiariestoaccountseparatelyforthebusinessorotheractivity
909	908		4insteadof:
910	909		HB608 25 5 (1)Accountingfor[it]thebusinessorotheractivityaspartofthe[trust's]
911	910		6fiduciary'sgeneralaccountingrecords[,]; or
912	911		7 (2)Conductingthe[trustee] businessorotheractivitythroughanentitydescribed
913	912		8inparagraph(a)ofsubdivision(2)ofsubsection1ofsection469.423.
914	913		9 2.Afiduciarymay[maintainseparateaccountingrecords] accountseparately
915	914		10underthissectionfor[its]thetransactionsofabusinessorotheractivity, whetherornot
916	915		11[its]assetsofthebusinessorotheractivityaresegregatedfromother[trust] assetsheldby
917	916		12thefiduciary.
918	917		13 [2.]3.A[trusteewho]fiduciarythataccountsseparatelyunderthissectionfora
919	918		14businessorotheractivity:
920	919		15 (1)Maydetermine:
921	920		16 (a)Theextenttowhichthenetcashreceipts[shall] ofthebusinessorotheractivity
922	921		17shallberetainedfor:
923	922		18 a.Workingcapital[,];
924	923		19 b.Theacquisitionorreplacementoffixedassets[,]; and
925	924		20 c.Otherreasonablyforeseeableneedsofthebusinessorotheractivity[,]; and
926	925		21 (b)Theextenttowhichtheremainingnetcashreceiptsareaccountedforasprincipal
927	926		22orincomeinthe[trust's] fiduciary'sgeneralaccountingrecords[. Ifatrusteesellsassetsof
928	927		23thebusinessorotheractivity,otherthanintheordinarycourseofthebusinessoractivity,the
929	928		24trustee] forthetrust;
930	929		25 (2)Maymakeadeterminationundersubdivision(1)ofthissubsection
931	930		26separatelyanddifferentlyfromthefiduciary’sdecisionsconcerningdistributionsof
932	931		27incomeorprincipal;and
933	932		28 (3)Shallaccountforthenetamountreceivedfromthesaleofanassetofthe
934	933		29businessorotheractivity,otherthanasaleintheordinarycourseofthebusinessor
935	934		30otheractivity,asprincipalinthe[trust's] fiduciary'sgeneralaccountingrecordsforthe
936	935		31trust,totheextentthe[trustee] fiduciarydeterminesthatthenetamountreceivedisno
937	936		32longerrequiredintheconductofthebusinessorotheractivity.
938	937		33 [3.]4.Activitiesforwhicha[trusteemaymaintainseparateaccountingrecords]
939	938		34fiduciarymayaccountseparatelyunderthissectioninclude:
940	939		35 (1)Retail,manufacturing,service, andothertraditionalbusinessactivities;
941	940		36 (2)Farming;
942	941		37 (3)Raisingandsellinglivestockandotheranimals;
943	942		38 (4)[Managementof]Managingrentalproperties;
944	943		39 (5)[Extractionof]Extractingminerals, water,andothernaturalresources;
945	944		40 (6)Growingandcuttingtimber[operations]; [and]
946	945		HB608 26 41 (7)[Activities] Anactivitytowhichsection469.447, 469.449,or469.450applies[.];
947	946		42and
948	947		43 (8)Anyotherbusinessconductedbythefiduciary.
949	948		469.429.A[trustee] fiduciaryshallallocatetoprincipal:
950	949		2 (1)Totheextentnotallocatedtoincome[pursuantto]undersections[469.401]
951	950		3469.399to[469.467] 469.487, [assets] anassetreceivedfrom[atransferor]:
952	951		4 (a)Anindividualduringthe[transferor's] individual'slifetime[, adecedent's];
953	952		5 (b)Anestate[,];
954	953		6 (c)Atrust[withaterminating] onterminationofanincomeinterest[,]; or
955	954		7 (d)Apayerunderacontractnamingthe[trustoritstrustee] fiduciaryasbeneficiary;
956	955		8 (2)Exceptasotherwiseprovidedinsections469.423to469.450,moneyorother
957	956		9propertyreceivedfromthesale,exchange,liquidation, orchangeinformofaprincipalasset[,
958	957		10includingrealizedprofit,subjecttosections469.423to469.467];
959	958		11 (3)[Amounts] Anamountrecoveredfromathird[parties] partytoreimbursethe
960	959		12[trust] fiduciarybecauseof[disbursements] adisbursementdescribedin[subdivision(7)of]
961	960		13subsection1ofsection469.453orfor[otherreasons] anotherreasontotheextentnotbased
962	961		14on[the]lossofincome;
963	962		15 (4)Proceedsofpropertytakenbyeminentdomain,[butaseparateawardmade]
964	963		16exceptthatproceedsawardedfor[the]lossofincome[withrespectto]inanaccounting
965	964		17period[duringwhich] areincomeifacurrentincomebeneficiaryhadamandatoryincome
966	965		18interest[isincome] duringtheperiod;
967	966		19 (5)Netincomereceivedinanaccountingperiodduringwhichthereisnobeneficiary
968	967		20to[whom] whicha[trustee] fiduciarymayorshalldistributeincome;and
969	968		21 (6)Otherreceiptsasprovidedinsections469.435to[469.449] 469.450.
970	969		469.431.Totheextent[thatatrusteeaccounts] afiduciarydoesnotaccountfor
971	970		2[receiptsfrom] themanagementofrentalproperty[pursuanttothissection] asabusiness
972	971		3undersection469.427, the[trustee] fiduciaryshallallocatetoincomeanamountreceivedas
973	972		4rentofrealorpersonalproperty,includinganamountreceivedforcancellationorrenewalof
974	973		5alease.Anamountreceivedasarefundabledeposit,includingasecuritydepositoradeposit
975	974		6thatistobeappliedasrentforfutureperiods[, shallbeaddedtoprincipalandheldsubjectto
976	975		7thetermsoftheleaseandisnotavailablefordistributiontoabeneficiaryuntilthetrustee's
977	976		8contractualobligationshavebeensatisfiedwithrespecttothatamount.]:
978	977		9 (1)Shallbeaddedtoprincipalandheldsubjecttothetermsofthelease,except
979	978		10asotherwiseprovidedbylawotherthansections469.399to469.487;and
980	979		11 (2)Isnotallocatedtoincomeoravailablefordistributiontoabeneficiaryuntil
981	980		12thefiduciary’scontractualobligationshavebeensatisfiedwithrespecttothatamount.
982	981		HB608 27 469.432.1.Thissectiondoesnotapplytoanobligationtowhichsection469.437,
983	982		2469.439,469.441,469.443,469.447,469.449,or469.450applies.
984	983		3 2.Afiduciaryshallallocatetoincome,withoutprovisionforamortizationof
985	984		4premium,anamountreceivedasinterest[, whetherdeterminedatafixed,variableorfloating
986	985		5rate,]onanobligationtopaymoneytothe[trustee] fiduciary, includinganamountreceived
987	986		6asconsiderationforprepayingprincipal[, shallbeallocatedtoincomewithoutanyprovision
988	987		7foramortizationofpremium].
989	988		8 [2.]3.A[trustee] fiduciaryshallallocatetoprincipalanamountreceivedfromthe
990	989		9sale,redemption, orotherdispositionofanobligationtopaymoneytothe[trusteemorethan
991	990		10oneyearafteritispurchasedoracquiredbythetrustee,includinganobligationwhose
992	991		11purchasepriceorvaluewhenitisacquiredislessthanitsvalueatmaturity.Iftheobligation
993	992		12matureswithinoneyearafteritispurchasedoracquiredbythetrustee,anamountreceivedin
994	993		13excessofitspurchasepriceoritsvaluewhenacquiredbythetrustshallbeallocatedto
995	994		14income] fiduciary.Afiduciaryshallallocatetoincometheincrementinvalueofabond
996	995		15orotherobligationforthepaymentofmoneybearingnostatedinterestbutpayableor
997	996		16redeemable,atmaturityoranotherfuturetime,inanamountthatexceedstheamount
998	997		17inconsiderationofwhichitwasissued.
999	998		18 [3.Thissectiondoesnotapplytoanobligationtowhichsection469.437,469.439,
1000	999		19469.441,469.443,469.447or469.449applies.]
1001	1000		469.433.1.Thissectiondoesnotapplytoacontracttowhichsection469.437
1002	1001		2applies.
1003	1002		3 2.Exceptasotherwiseprovidedinsubsection[2]3ofthissection,a[trustee]
1004	1003		4fiduciaryshallallocatetoprincipaltheproceedsofalifeinsurancepolicyorothercontract
1005	1004		5[inwhichthetrustoritstrusteeisnamed] receivedbythefiduciaryasbeneficiary,including
1006	1005		6acontractthatinsures[thetrustoritstrustee] against[lossfor]damageto,destructionof,or
1007	1006		7lossoftitleto[atrust] anasset.The[trustee] fiduciaryshallallocatedividendsonan
1008	1007		8insurancepolicytoincome[if]totheextentpremiumsonthepolicyarepaidfromincome[,]
1009	1008		9andtoprincipal[if]totheextentpremiumsonthepolicyarepaidfromprincipal.
1010	1009		10 [2.]3.A[trustee] fiduciaryshallallocatetoincomeproceedsofacontractthat
1011	1010		11insuresthe[trustee] fiduciaryagainstlossof:
1012	1011		12 (1)Occupancyorotheruseby[anincomebeneficiary,lossof]acurrentincome[,]
1013	1012		13beneficiary;
1014	1013		14 (2)Income;or[,]
1015	1014		15 (3)Subjecttosection469.427,[lossof]profitsfromabusiness.
1016	1015		16 [3.Thissectiondoesnotapplytoacontracttowhichsection469.437applies.]
1017	1016		469.435.1.Ifa[trustee] fiduciarydeterminesthatanallocationbetweenincome
1018	1017		2andprincipal[andincome] requiredbysection469.437,469.439,469.441,469.443or
1019	1018		HB608 28 3469.449isinsubstantial,the[trustee] fiduciarymayallocatetheentireamounttoprincipal,
1020	1019		4unless[oneofthecircumstancesdescribedin]subsection[3]5ofsection469.405appliesto
1021	1020		5theallocation.[Thispower]
1022	1021		6 2.Afiduciarymay[beexercisedbyacotrusteeinthecircumstancesdescribedin
1023	1022		7subsection4ofsection469.405andmaybereleasedforthereasonsandinthemanner
1024	1023		8describedinsubsection5ofsection469.405.] presumeanallocationis[presumedtobe]
1025	1024		9insubstantialundersubsection1ofthissectionif:
1026	1025		10 (1)Theamountoftheallocationwouldincreaseordecreasenetincomeinan
1027	1026		11accountingperiod,asdeterminedbeforetheallocation,bylessthantenpercent;[or]and
1028	1027		12 (2)[Thevalueof]Theassetproducingthereceipt[forwhichtheallocationwould] to
1029	1028		13be[madeis]allocatedhasafairmarketvaluelessthantenpercentofthetotalfairmarket
1030	1029		14valueofthe[trust's] assetsownedorheldbythefiduciaryatthebeginningofthe
1031	1030		15accountingperiod.
1032	1031		16 3.Thepowertomakeadeterminationundersubsection1ofthissectionmaybe:
1033	1032		17 (1)Exercisedbyaco-fiduciaryinthemannerdescribedinsubsection6ofsection
1034	1033		18469.405;or
1035	1034		19 (2)Releasedordelegatedforareasondescribedinsubsection7ofsection
1036	1035		20469.405andinthemannerdescribedinsubsection8ofsection469.405.
1037	1036		469.437.1.Asusedinthissection,thefollowingtermsmean:
1038	1037		2 (1)["Payment",anamountthatis:
1039	1038		3 (a)Receivedorwithdrawnfromaplan;or
1040	1039		4 (b)Oneofaseriesofdistributionsthathavebeenorwillbereceivedoverafixed
1041	1040		5numberofyearsorduringthelifeofoneormoreindividualsunderanycontractualorother
1042	1041		6arrangement,orisasinglepaymentfromaplanthatthetrusteecouldhavereceivedovera
1043	1042		7fixednumberofyearsorduringthelifeofoneormoreindividuals;
1044	1043		8 (2)"Plan",acontractual,custodial,trustorotherarrangementthatprovidesfor
1045	1044		9distributionstothetrust,including,butnotlimitedto,qualifiedretirementplans,Individual
1046	1045		10RetirementAccounts,RothIndividualRetirementAccounts,publicandprivateannuities,and
1047	1046		11deferredcompensation,includingpaymentsreceiveddirectlyfromanentityasdefinedin
1048	1047		12section469.423regardlessofwhetherornotsuchdistributionsaremadefromaspecificfund
1049	1048		13oraccount.
1050	1049		14 2.Ifanyportionofapaymentischaracterizedasadistributiontothetrusteeof
1051	1050		15interest,dividendsoradividendequivalent,thetrusteeshallallocatetheportionso
1052	1051		16characterizedtoincome.Thetrusteeshallallocatethebalanceofthatpaymenttoprincipal.
1053	1052		17 3.Ifnopartofapaymentisallocatedtoincomepursuanttosubsection2ofthis
1054	1053		18section,thenforeachaccountingperiodofthetrustthatanypaymentisreceivedbythetrust
1055	1054		19withrespecttothetrust'sinterestinaplan,thetrusteeshallallocatetoincomethatportionof
1056	1055		HB608 29 20theaggregatevalueofallpaymentsreceivedbythetrusteeinthataccountingperiodequalto
1057	1056		21theamountofplanincomeattributabletothetrust'sinterestintheplanforthatcalendaryear.
1058	1057		22Thetrusteeshallallocatethebalanceofthatpaymenttoprincipal.
1059	1058		23 4.Forpurposesofthissection,ifapaymentisreceivedfromaplanthatmaintainsa
1060	1059		24separateaccountorfundforitsparticipantsoraccountholders,including,butnotlimitedto,
1061	1060		25definedcontributionretirementplans,IndividualRetirementAccounts,RothIndividual
1062	1061		26RetirementAccounts,andsometypesofdeferredcompensationplans,thephrase"plan
1063	1062		27income"shallmeaneithertheamountoftheplanaccountorfundheldforthebenefitofthe
1064	1063		28trustthat,iftheplanaccountorfundwereatrust,wouldbeallocatedtoincomepursuantto
1065	1064		29sections469.401to469.467forthataccountingperiod,orfourpercentofthevalueofthe
1066	1065		30planaccountorfundonthefirstdayofthataccountingperiod.Themethodofdetermining
1067	1066		31planincomepursuanttothissubsectionshallbechosenbythetrusteeinthetrustee's
1068	1067		32discretion.Thetrusteesmaychangethemethodofdeterminingplanincomepursuanttothis
1069	1068		33subsectionforanyfutureaccountingperiod.
1070	1069		34 5.Forpurposesofthissectionifthepaymentisreceivedfromaplanthatdoesnot
1071	1070		35maintainaseparateaccountorfundforitsparticipantsoraccountholders,includingbyway
1072	1071		36ofexampleandnotlimitationdefinedbenefitretirementplansandsometypesofdeferred
1073	1072		37compensationplans,theterm"planincome"shallmeanfourpercentofthetotalpresentvalue
1074	1073		38ofthetrust'sinterestintheplanasofthefirstdayoftheaccountingperiod,basedon
1075	1074		39reasonableactuarialassumptionsasdeterminedbythetrustee.
1076	1075		40 6.Notwithstandingsubsections1to5ofthissection,withrespecttoatrustwherean
1077	1076		41electiontoqualifyforamaritaldeductionunderSection2056(b)(7)orSection2523(f)ofthe
1078	1077		42InternalRevenueCodeof1986,asamended,hasbeenmade,oratrustthatqualifiedforthe
1079	1078		43maritaldeductionundereitherSection2056(b)(5)orSection2523(e)oftheInternalRevenue
1080	1079		44Codeof1986,asamended,atrusteeshalldeterminetheplanincomefortheaccounting
1081	1080		45periodasiftheplanwereatrustsubjecttosections469.401to469.467.Uponrequestofthe
1082	1081		46survivingspouse,thetrusteeshalldemandthatthepersonadministeringtheplandistribute
1083	1082		47theplanincometothetrust.Thetrusteeshallallocateapaymentfromtheplantoincometo
1084	1083		48theextentoftheplanincomeanddistributethatamounttothesurvivingspouse.Thetrustee
1085	1084		49shallallocatethebalanceofthepaymenttoprincipal.Uponrequestofthesurvivingspouse,
1086	1085		50thetrusteeshallallocateprincipaltoincometotheextenttheplanincomeexceedspayments
1087	1086		51madefromtheplantothetrustduringtheaccountingperiod.
1088	1087		52 7.If,toobtainanestateorgifttaxmaritaldeductionforatrust,atrusteeshallallocate
1089	1088		53moreofapaymenttoincomethanprovidedforbythissection,thetrusteeshallallocateto
1090	1089		54incometheadditionalamountnecessarytoobtainthemaritaldeduction.] "Internalincome
1091	1090		55ofaseparatefund",theamountdeterminedundersubsection2ofthissection;
1092	1091		56 (2)"Maritaltrust",atrust:
1093	1092		HB608 30 57 (a)Ofwhichthesettlor'ssurvivingspouseistheonlycurrentincomebeneficiary
1094	1093		58andisentitledtoadistributionofallthecurrentnetincomeofthetrust;and
1095	1094		59 (b)Thatqualifiesforamaritaldeductionwithrespecttothesettlor'sestate
1096	1095		60under26U.S.C.Section2056,asamended,because:
1097	1096		61 a.Anelectiontoqualifyforamaritaldeductionunder26U.S.C.Section2056(b)
1098	1097		62(7),asamended,hasbeenmade;or
1099	1098		63 b.Thetrustqualifiesforamaritaldeductionunder26U.S.C.Section2056(b)(5),
1100	1099		64asamended;
1101	1100		65 (3)"Payment",anamountafiduciarymayreceiveoverafixednumberofyears
1102	1101		66orduringthelifeofoneormoreindividualsbecauseofservicesrenderedorproperty
1103	1102		67transferredtothepayerinexchangeforfutureamountsthefiduciarymayreceive.The
1104	1103		68termincludesanamountreceivedinmoneyorpropertyfromthepayer’sgeneralassets
1105	1104		69orfromaseparatefundcreatedbythepayer;
1106	1105		70 (4)"Separatefund",includesaprivateorcommercialannuity,anindividual
1107	1106		71retirementaccount,andapension,profit-sharing,stockbonus,orstock-ownershipplan.
1108	1107		72 2.Foreachaccountingperiod,thefollowingrulesapplytoaseparatefund:
1109	1108		73 (1)Thefiduciaryshalldeterminetheinternalincomeoftheseparatefundasif
1110	1109		74theseparatefundwasatrustsubjecttosections469.399to469.487;
1111	1110		75 (2)Ifthefiduciarycannotdeterminetheinternalincomeoftheseparatefund
1112	1111		76undersubdivision(1)ofthissubsection,theinternalincomeoftheseparatefundis
1113	1112		77deemedtoequalthreepercentofthevalueoftheseparatefund,accordingtothemost
1114	1113		78recentstatementofvalueprecedingthebeginningoftheaccountingperiod;and
1115	1114		79 (3)Ifthefiduciarycannotdeterminethevalueoftheseparatefundunder
1116	1115		80subdivision(2)ofthissubsection,thevalueoftheseparatefundisdeemedtoequalthe
1117	1116		81presentvalueoftheexpectedfuturepayments,asdeterminedunder26U.S.C.Section
1118	1117		827520,asamended,forthemonthprecedingthebeginningoftheaccountingperiodfor
1119	1118		83whichthecomputationismade.
1120	1119		84 3.Afiduciaryshallallocateapaymentreceivedfromaseparatefundduringan
1121	1120		85accountingperiodtoincome,totheextentoftheinternalincomeoftheseparatefund
1122	1121		86duringtheperiod,andthebalancetoprincipal.
1123	1122		87 4.Thefiduciaryofamaritaltrustshall:
1124	1123		88 (1)Withdrawfromaseparatefundtheamountthecurrentincomebeneficiary
1125	1124		89ofthetrustrequeststhefiduciarytowithdraw,notgreaterthantheamountbywhich
1126	1125		90theinternalincomeoftheseparatefundduringtheaccountingperiodexceedsthe
1127	1126		91amountthefiduciaryotherwisereceivesfromtheseparatefundduringtheperiod;
1128	1127		92 (2)Transferfromprincipaltoincometheamountthecurrentincome
1129	1128		93beneficiaryrequeststhefiduciarytotransfer,notgreaterthantheamountbywhich
1130	1129		HB608 31 94theinternalincomeoftheseparatefundduringtheperiodexceedstheamountthe
1131	1130		95fiduciaryreceivesfromtheseparatefundduringtheperiodaftertheapplicationof
1132	1131		96subdivision(1)ofthissubsection;and
1133	1132		97 (3)Distributetothecurrentincomebeneficiaryasincome:
1134	1133		98 (a)Theamountoftheinternalincomeoftheseparatefundreceivedor
1135	1134		99withdrawnduringtheperiod;and
1136	1135		100 (b)Theamounttransferredfromprincipaltoincomeundersubdivision(2)of
1137	1136		101thissubsection.
1138	1137		102 5.Foratrust,otherthanamaritaltrust,ofwhichoneormorecurrentincome
1139	1138		103beneficiariesareentitledtoadistributionofallthecurrentnetincome,thefiduciary
1140	1139		104shalltransferfromprincipaltoincometheamountbywhichtheinternalincomeofa
1141	1140		105separatefundduringtheaccountingperiodexceedstheamountthefiduciaryreceives
1142	1141		106fromtheseparatefundduringtheperiod.
1143	1142		469.439.1.[Asused]Inthissection,[thephrase] "liquidatingasset"meansanasset
1144	1143		2whosevaluewilldiminishorterminatebecausetheassetisexpectedtoproducereceiptsfora
1145	1144		3[periodof]limited[duration] time. The[phrase] termincludesaleasehold,patent,
1146	1145		4copyright,royaltyright,andrighttoreceivepaymentsduringaperiodofmorethanoneyear
1147	1146		5underanarrangementthatdoesnotprovideforthepaymentofinterestontheunpaidbalance.
1148	1147		6[Thephrase]
1149	1148		7 2.Thissectiondoesnot[includeapayment] applytoareceiptsubjecttosection
1150	1149		8469.423,469.437,[resourcessubjecttosection] 469.441,[timbersubjecttosection] 469.443,
1151	1150		9[anactivitysubjecttosection] 469.447,[anassetsubjecttosection] 469.449,469.450,or[any
1152	1151		10assetforwhichthetrusteeestablishesareservefordepreciationpursuanttosection] 469.455.
1153	1152		11 [2.]3.A[trustee] fiduciaryshallallocate:
1154	1153		12 (1)Toincome[tenpercentofthereceiptsfrom]:
1155	1154		13 (a)Areceiptproducedbyaliquidatingasset[andthebalance], totheextentthe
1156	1155		14receiptdoesnotexceedthreepercentofthevalueoftheasset;or
1157	1156		15 (b)Ifthefiduciarycannotdeterminethevalueoftheasset,tenpercentofthe
1158	1157		16receipt;and
1159	1158		17 (2)Toprincipal, thebalanceofthereceipt.
1160	1159		469.441.1.Totheextent[thatatrusteeaccountsforreceipts] afiduciarydoesnot
1161	1160		2accountforareceiptfromaninterestinminerals, water,orothernaturalresources[pursuant
1162	1161		3tothissection] asabusinessundersection469.427, the[trustee] fiduciaryshallallocate
1163	1162		4[themasfollows] thereceipt:
1164	1163		5 (1)[If]Toincome,totheextentreceived:
1165	1164		6 (a)As[nominal] delayrentalor[nominal] annualrentonalease[, areceiptshallbe
1166	1165		7allocatedtoincome];
1167	1166		HB608 32 8 (b)Asafactorforinterestortheequivalentofinterestunderanagreement
1168	1167		9creatingaproductionpayment;or
1169	1168		10 (c)Onaccountofaninterestinrenewablewater;
1170	1169		11 (2)Toprincipal,ifreceivedfromaproductionpayment,[areceiptshallbeallocated
1171	1170		12toincomeifandtotheextentthattheagreementcreatingtheproductionpaymentprovidesa
1172	1171		13factorforinterestoritsequivalent.Thebalanceshallbeallocatedtoprincipal;] totheextent
1173	1172		14paragraph(b)ofsubdivision(1)ofthissubsectiondoesnotapply;or
1174	1173		15 (3)[Ifanamountreceived] Betweenincomeandprincipalequitably,totheextent
1175	1174		16received:
1176	1175		17 (a)Onaccountofaninterestinnonrenewablewater;
1177	1176		18 (b)Asaroyalty,shut-in-wellpayment,take-or-paypayment,orbonus[ordelay
1178	1177		19rentalismorethannominal,ninetypercentshallbeallocatedtoprincipalandthebalanceto
1179	1178		20income]; or
1180	1179		21 [(4)Ifanamountisreceived] (c)Fromaworkinginterestoranyotherinterestnot
1181	1180		22providedforinsubdivision(1)[,]or(2)[or(3)]ofthissubsection[, ninetypercentofthenet
1182	1181		23amountreceivedshallbeallocatedtoprincipalandthebalancetoincome] orparagraph(a)
1183	1182		24or(b)ofthissubdivision.
1184	1183		25 2.[Anamountreceivedonaccountof]Thissectionappliestoaninterest[inwater
1185	1184		26thatisrenewableshallbeallocatedtoincome.Ifthewaterisnotrenewable,ninetypercentof
1186	1185		27theamountshallbeallocatedtoprincipalandthebalancetoincome.
1187	1186		28 3.Sections469.401to469.467apply] ownedorheldbyafiduciarywhetherornota
1188	1187		29[decedentordonor] settlorwasextractingminerals,water, orothernaturalresourcesbefore
1189	1188		30thefiduciaryownedorheldtheinterest[becamesubjecttothetrust].
1190	1189		31 3.Anallocationofareceiptundersubdivision(3)ofsubsection1ofthissection
1191	1190		32ispresumedtobeequitableiftheamountallocatedtoprincipalisequaltotheamount
1192	1191		33allowedbyTitle26oftheUnitedStatesCode,asamended,asadeductionfordepletion
1193	1192		34oftheinterest.
1194	1193		35 4.Ifa[trust] fiduciaryownsorholdsaninterestinminerals,water, orothernatural
1195	1194		36resources[on]beforeAugust28,[2001] 2025, the[trustee] fiduciarymayallocatereceipts
1196	1195		37fromtheinterestasprovidedin[sections469.401to469.467] thissectionorinthemanner
1197	1196		38usedbythe[trustee] fiduciarybeforeAugust28,[2001] 2025. Ifthe[trust] fiduciary
1198	1197		39acquiresaninterestinminerals,water, orothernaturalresourcesonorafterAugust28,
1199	1198		40[2001] 2025, the[trustee] fiduciaryshallallocatereceiptsfromtheinterestasprovidedin
1200	1199		41[sections469.401to469.467] thissection.
1201	1200		469.443.1.Totheextent[thatatrusteeaccounts] afiduciarydoesnotaccountfor
1202	1201		2receiptsfromthesaleoftimberandrelatedproducts[pursuanttothissection] asabusiness
1203	1202		3undersection469.427, the[trustee] fiduciaryshallallocatethenetreceipts:
1204	1203		HB608 33 4 (1)Toincome, totheextent[that]theamountoftimber[removed] cutfromtheland
1205	1204		5doesnotexceedtherateofgrowthofthetimber[duringtheaccountingperiodsinwhicha
1206	1205		6beneficiaryhasamandatoryincomeinterest];
1207	1206		7 (2)Toprincipal, totheextent[that]theamountoftimber[removed] cutfromtheland
1208	1207		8exceedstherateofgrowthofthetimberorthenetreceiptsarefromthesaleofstanding
1209	1208		9timber;
1210	1209		10 (3)[Toor]Betweenincomeandprincipalifthenetreceiptsarefromtheleaseof
1211	1210		11[timberland] landusedforgrowingandcuttingtimberorfromacontracttocuttimber
1212	1211		12fromland[ownedbyatrust], bydeterminingtheamountoftimber[removed] cutfromthe
1213	1212		13landundertheleaseorcontractandapplyingtherulesinsubdivisions(1)and(2)ofthis
1214	1213		14subsection;or
1215	1214		15 (4)Toprincipal, totheextent[that]advancepayments,bonuses, andotherpayments
1216	1215		16arenotallocated[pursuanttoeither] undersubdivision(1),(2),or(3)ofthissubsection.
1217	1216		17 2.Indeterminingnetreceiptstobeallocated[pursuantto]undersubsection1ofthis
1218	1217		18section,a[trustee] fiduciaryshalldeductandtransfertoprincipalareasonableamountfor
1219	1218		19depletion.
1220	1219		20 3.[Sections469.401to469.467apply] Thissectionappliestolandownedorheld
1221	1220		21byafiduciarywhetherornota[decedentortransferor] settlorwas[harvesting] cutting
1222	1221		22timberfromthelandbeforethefiduciaryownedorheldtheproperty[beforeitbecame
1223	1222		23subjecttothetrust].
1224	1223		24 4.Ifa[trust] fiduciaryownsorholdsaninterestin[timberlandon]landusedfor
1225	1224		25growingandcuttingtimberbeforeAugust28,[2001] 2025, the[trustee] fiduciarymay
1226	1225		26allocatenetreceiptsfromthesaleoftimberandrelatedproductsasprovidedin[sections
1227	1226		27469.401to469.467] thissectionorinthemannerusedbythe[trustee] fiduciarybefore
1228	1227		28August28,[2001] 2025. Ifthe[trust] fiduciaryacquiresaninterestin[timberland] land
1229	1228		29usedforgrowingandcuttingtimberonorafterAugust28,[2001] 2025, the[trustee]
1230	1229		30fiduciaryshallallocatenetreceiptsfromthesaleoftimberandrelatedproductsasprovided
1231	1230		31in[sections469.401to469.467] thissection.
1232	1231		469.445.1.Ifatrustreceivedpropertyforwhichagiftorestatetaxmarital
1233	1232		2deduction[isallowedforallorpartofatrustwhose] wasallowedandthesettlor’sspouse
1234	1233		3holdsamandatoryincomeinterestinthetrust,thespousemayrequirethetrustee,to
1235	1234		4theextentthetrustassets[consistsubstantiallyofpropertythatdoes] otherwisedonot
1236	1235		5providethespousewithsufficientincomefromoruseofthetrustassets[, andiftheamounts
1237	1236		6thatthetrusteetransfersfromprincipaltoincomepursuanttosection469.405anddistributes
1238	1237		7tothespousefromprincipalpursuanttothetermsofthetrustareinsufficienttoprovidethe
1239	1238		8spousewiththebeneficialenjoymentrequiredtoobtainthemarital] toqualifyforthe
1240	1239		9deduction,[thespousemayrequirethetrustee] to:
1241	1240		HB608 34 10 (1)Makepropertyproductiveofincome[,];
1242	1241		11 (2)Convertpropertytopropertyproductiveofincomewithinareasonabletime[,];
1243	1242		12or
1244	1243		13 (3)Exercisethepower[conferredbysubsection1of]toadjustundersection
1245	1244		14469.405.
1246	1245		15 2.Thetrusteemaydecidewhichactionorcombinationofactionsinsubsection1of
1247	1246		16thissectiontotake.
1248	1247		17 [2.Incasesnotgovernedbysubsection1ofthissection,proceedsfromthesaleor
1249	1248		18otherdispositionofanassetareprincipalwithoutregardtotheamountofincometheasset
1250	1249		19producesduringanyaccountingperiod.]
1251	1250		469.447.1.[Asused] Inthissection,[theterm] "derivative"meansacontract[or
1252	1251		2financial], instrument, otherarrangement,oracombinationofcontracts[andfinancial],
1253	1252		3instruments, orotherarrangements,thevalue,rights,andobligationsofwhich[givesa
1254	1253		4trusttherightorobligationtoparticipateinsomeorallchangesinthepriceofa]are,in
1255	1254		5wholeorinpart,dependentonorderivedfromanunderlyingtangibleorintangibleasset
1256	1255		6[orgroupofassets,orchangesinarate,anindexofpricesor],groupoftangibleor
1257	1256		7intangibleassets,index,oroccurrenceofanevent.Thetermincludesstocks,fixed
1258	1257		8incomesecurities,andfinancialinstrumentsandarrangementsbasedonindices,
1259	1258		9commodities,interestrates,[orothermarketindicatorforanassetoragroupofassets]
1260	1259		10weather-relatedevents,andcreditdefaultevents.
1261	1260		11 2.Totheextent[thatatrustee] afiduciarydoesnotaccount[pursuanttosection
1262	1261		12469.427fortransactions] foratransactioninderivatives[, thetrustee] asabusinessunder
1263	1262		13section469.427,thefiduciaryshallallocate[toprincipal] tenpercentofreceiptsfromthe
1264	1263		14transactionandtenpercentofdisbursementsmadeinconnectionwith[thosetransactions]
1265	1264		15thetransactiontoincomeandthebalancetoprincipal.
1266	1265		16 3.Subsection4ofthissectionappliesif:
1267	1266		17 (1)A[trustee] fiduciary:
1268	1267		18 (a)Grantsanoptiontobuypropertyfrom[the]atrust,whetherornotthetrustowns
1269	1268		19thepropertywhentheoptionisgranted[,];
1270	1269		20 (b)Grantsanoptionthatpermitsanotherpersontosellpropertytothetrust[,]; or
1271	1270		21 (c)Acquiresanoptiontobuypropertyforthetrustoranoptiontosellanassetowned
1272	1271		22bythetrust[,]; and
1273	1272		23 (2)The[trustee] fiduciaryorotherowneroftheassetisrequiredtodelivertheasset
1274	1273		24iftheoptionisexercised[,].
1275	1274		25 4.Ifthissubsectionapplies,thefiduciaryshallallocatetenpercenttoincome
1276	1275		26andthebalancetoprincipalofthefollowingamounts:
1277	1276		27 (1)Anamountreceivedforgrantingtheoption[shallbeallocatedtoprincipal.];
1278	1277		HB608 35 28 (2)Anamountpaidtoacquiretheoption[shallbepaidfromprincipal.A];and
1279	1278		29 (3)Gainorlossrealized[upon] ontheexercise[ofanoption,includinganoption
1280	1279		30grantedtoasettlor], exchange,settlement,offset,closing,orexpirationofthe[trustfor
1281	1280		31servicesrendered,shallbeallocatedtoprincipal] option.
1282	1281		469.449.1.[Asusedinthissection,thephrase"asset-backedsecurity"meansan
1283	1282		2assetwhosevalueisbasedupontherightitgivestheownertoreceivedistributionsfromthe
1284	1283		3proceedsoffinancialassetsthatprovidecollateralforthesecurity.Thephraseincludesan
1285	1284		4assetthatgivestheownertherighttoreceivefromthecollateralfinancialassetsonlythe
1286	1285		5interestorothercurrentreturnoronlytheproceedsotherthaninterestorcurrentreturn.The
1287	1286		6phrasedoesnotincludeanassettowhichsection469.423or469.437applies.
1288	1287		7 2.Ifatrustreceivesapaymentfrominterestorothercurrentreturnandfromother
1289	1288		8proceedsofthecollateralfinancialassets,thetrustee] Exceptasotherwiseprovidedin
1290	1289		9subsection2ofthissection,afiduciaryshallallocatetoincome[theportionof]areceipt
1291	1290		10fromorrelatedtoanasset-backedsecurity,totheextentthe[paymentwhichthe]payer
1292	1291		11identifiesthepaymentasbeingfrominterestorothercurrentreturn, and[shallallocate] to
1293	1292		12principalthebalanceofthe[paymenttoprincipal] receipt.
1294	1293		13 [3.]2.Ifa[trust] fiduciaryreceivesoneormorepaymentsinexchangeforpartor
1295	1294		14allofthe[trust'sentire] fiduciary'sinterestinanasset-backedsecurity[inoneaccounting
1296	1295		15period,thetrusteeshallallocatethepaymentstoprincipal.Ifapaymentisoneofaseriesof
1297	1296		16paymentsthatwillresultinthe],includingaliquidationorredemptionofthe[trust's]
1298	1297		17fiduciary'sinterestinthesecurity[overmorethanoneaccountingperiod], the[trustee]
1299	1298		18fiduciaryshallallocate[ten]toincometenpercentofreceiptsfromthe[paymentto
1300	1299		19income] transactionand[thebalancetoprincipal] tenpercentofdisbursementsmadein
1301	1300		20connectionwiththetransaction,andtoprincipalthebalanceofthereceiptsand
1302	1301		21disbursements.
1303	1302		469.450.Afiduciaryshallallocatereceiptsfromorrelatedtoafinancial
1304	1303		2instrumentorarrangementnototherwiseaddressedbysections469.399to469.487.The
1305	1304		3allocationshallbeconsistentwithsections469.447and469.449.
1306	1305		469.451.[Atrusteeshallmakethefollowingdisbursementsfromincometotheextent
1307	1306		2thattheyarenotdisbursementstowhichparagraph(b)or(c)of]Subjecttosection469.456,
1308	1307		3andexceptasotherwiseprovidedinsubdivision(2)or(3)ofsubsection3ofsection
1309	1308		4469.413[applies], afiduciaryshalldisbursefromincome:
1310	1309		5 (1)One-halfof:
1311	1310		6 (a)Theregularcompensationofthe[trustee] fiduciaryand[of]anypersonproviding
1312	1311		7investmentadvisory[or],custodial, orotherservicestothe[trustee] fiduciary,totheextent
1313	1312		8incomeissufficient; and
1314	1313		HB608 36 9 [(2)One-halfofallexpenses] (b)Anexpensefor[accountings] anaccounting,
1315	1314		10judicial[proceedings] ornonjudicialproceeding, orother[matters] matterthat[involve]
1316	1315		11involvesboth[the]incomeand[remainder] successiveinterests, totheextentincomeis
1317	1316		12sufficient;
1318	1317		13 [(3)Alloftheother] (2)Thebalanceofthedisbursementsdescribedin
1319	1318		14subdivision(1)ofthissection,totheextentafiduciarythatisanindependentperson
1320	1319		15determinesthatmakingthosedisbursementsfromincomewouldbeintheinterestsof
1321	1320		16thebeneficiaries;
1322	1321		17 (3)Anotherordinary[expenses] expenseincurredinconnectionwith[the]
1323	1322		18administration,management, orpreservationof[trust] propertyand[the]distributionof
1324	1323		19income,includinginterest,anordinary[repairs] repair,regularlyrecurring[taxes] tax
1325	1324		20assessedagainstprincipal,and[expenses] anexpenseof[a]anaccounting,judicialor
1326	1325		21nonjudicialproceeding, orothermatterthat[concerns] involvesprimarily[the]anincome
1327	1326		22interest, totheextentincomeissufficient; and
1328	1327		23 (4)[Recurringpremiums] Apremiumoninsurancecovering[the]lossofaprincipal
1329	1328		24assetor[thelossof]incomefromoruseoftheasset.
1330	1329		469.453.1.[Atrusteeshallmakethefollowingdisbursements] Subjecttosection
1331	1330		2469.457,andexceptasotherwiseprovidedinsubdivision(2)ofsubsection3ofsection
1332	1331		3469.413,afiduciaryshalldisbursefromprincipal:
1333	1332		4 (1)The[remainingone-half] balanceofthedisbursementsdescribedin[subdivisions
1334	1333		5(1)and(2)]subdivisions(1)and(3)ofsection469.451,afterapplicationofsubdivision(2)
1335	1334		6ofsection469.451;
1336	1335		7 (2)[Allof]The[trustee's] fiduciary'scompensationcalculatedonprincipalasafee
1337	1336		8foracceptance,distribution, ortermination[, anddisbursementsmadetopreparepropertyfor
1338	1337		9sale];
1339	1338		10 (3)[Payments] Apaymentofanexpensetopreparefororexecuteasaleorother
1340	1339		11dispositionofproperty;
1341	1340		12 (4)Apaymentontheprincipalofatrustdebt;
1342	1341		13 [(4)Expensesofa](5)Apaymentofanexpenseofanaccounting,judicialor
1343	1342		14nonjudicialproceeding, orothermatterthat[concerns] involvesprimarily[aninterestin]
1344	1343		15principal, includingaproceedingtoconstruethetermsofthetrustorprotectproperty;
1345	1344		16 [(5)Premiumspaidonapolicyof](6)Apaymentofapremiumforinsurance,
1346	1345		17includingtitleinsurance, notdescribedinsubdivision(4)ofsection469.451ofwhichthe
1347	1346		18[trust] fiduciaryistheownerandbeneficiary;
1348	1347		19 [(6)](7)Apaymentofanestate[,] orinheritance[andothertransfertaxes] taxor
1349	1348		20othertaximposedbecauseofthedeathofadecedent, includingpenalties,apportionedto
1350	1349		21thetrust;and
1351	1350		HB608 37 22 [(7)Extraordinaryexpensesincurredinconnectionwiththemanagementand
1352	1351		23preservationoftrustproperty;
1353	1352		24 (8)Expensesforacapitalimprovementtoaprincipalasset,whetherintheformof
1354	1353		25changestoanexistingassetortheconstructionofanewasset,includingspecialassessments;
1355	1354		26and
1356	1355		27 (9)Disbursements] (8)Apayment:
1357	1356		28 (a)Relatedtoenvironmentalmatters,including:
1358	1357		29 a.Reclamation[,];
1359	1358		30 b.Assessingenvironmentalconditions[,];
1360	1359		31 c.Remedyingandremovingenvironmentalcontamination[,];
1361	1360		32 d.Monitoringremedialactivitiesandthereleaseofsubstances[,];
1362	1361		33 e.Preventingfuturereleasesofsubstances[,];
1363	1362		34 f.Collectingamountsfrompersonsliableorpotentiallyliableforthecostsof[those]
1364	1363		35activities[,] describedinsubparagraphsa.toe.ofthisparagraph;
1365	1364		36 g.Penaltiesimposedunderenvironmentallawsorregulations[and];
1366	1365		37 h.Other[paymentsmade] actionstocomplywith[those] environmentallawsor
1367	1366		38regulations[,];
1368	1367		39 i.Statutoryorcommonlawclaimsbythirdparties[,]; and
1369	1368		40 j.Defendingclaimsbasedonenvironmentalmatters[.]; and
1370	1369		41 (b)Forapremiumforinsuranceformattersdescribedinparagraph(a)ofthis
1371	1370		42subdivision.
1372	1371		43 2.Ifaprincipalassetisencumberedwithanobligationthatrequiresincomefrom
1373	1372		44[that]theassettobepaiddirectlyto[the]acreditor,the[trustee] fiduciaryshalltransferfrom
1374	1373		45principaltoincomeanamountequaltotheincomepaidtothecreditorinreductionofthe
1375	1374		46principalbalanceoftheobligation.
1376	1375		469.455.1.[Asused]Inthissection,[theterm]"depreciation"meansareductionin
1377	1376		2valueduetowear,tear,decay,corrosion, orgradualobsolescenceofa[fixed] tangibleasset
1378	1377		3havingausefullifeofmorethanoneyear.
1379	1378		4 2.A[trustee] fiduciarymaytransfertoprincipalareasonableamountofthenetcash
1380	1379		5receiptsfromaprincipalassetthatissubjecttodepreciation,but[may] shallnottransferany
1381	1380		6amountfordepreciation:
1382	1381		7 (1)Of[thatportion] thepartofrealpropertyusedoravailableforusebya
1383	1382		8beneficiaryasaresidence[or];
1384	1383		9 (2)Oftangiblepersonalpropertyheldormadeavailableforthepersonaluseor
1385	1384		10enjoymentofabeneficiary;or
1386	1385		11 [(2)Duringtheadministrationofadecedent'sestate;or]
1387	1386		HB608 38 12 (3)[Pursuantto]Underthissection[ifthetrusteeisaccountingpursuanttosection
1388	1387		13469.427], totheextentthefiduciaryaccounts:
1389	1388		14 (a)Undersection469.439fortheasset;or
1390	1389		15 (b)Undersection469.427forthebusinessorotheractivityinwhichtheassetis
1391	1390		16used.
1392	1391		17 3.Anamounttransferredtoprincipalunderthissectionneednotbeseparatelyheld
1393	1392		18[asaseparatefund].
1394	1393		469.456.1.Ifafiduciarymakesorexpectstomakeanincomedisbursement
1395	1394		2describedinsubsection2ofthissection,thefiduciarymaytransferanappropriate
1396	1395		3amountfromprincipaltoincomeinoneormoreaccountingperiodstoreimburse
1397	1396		4income.
1398	1397		5 2.Totheextentthefiduciaryhasnotbeenanddoesnotexpecttobereimbursed
1399	1398		6byathirdparty,incomedisbursementstowhichsubsection1ofthissectionapplies
1400	1399		7include:
1401	1400		8 (1)Anamountchargeabletoprincipalbutpaidfromincomebecauseprincipal
1402	1401		9isilliquid;
1403	1402		10 (2)Adisbursementmadetopreparepropertyforsale,includingimprovements
1404	1403		11andcommissions;and
1405	1404		12 (3)Adisbursementdescribedinsubsection1ofsection469.453.
1406	1405		13 3.Ifanassetwhoseownershipgivesrisetoanincomedisbursementbecomes
1407	1406		14subjecttoasuccessiveinterestafteranincomeinterestends,thefiduciarymaycontinue
1408	1407		15tomaketransfersundersubsection1ofthissection.
1409	1408		469.457.1.Ifa[trustee] fiduciarymakesorexpectstomakeaprincipal
1410	1409		2disbursementdescribedinsubsection2ofthissection,the[trustee] fiduciarymaytransferan
1411	1410		3appropriateamountfromincometoprincipalinoneormoreaccountingperiodstoreimburse
1412	1411		4principalor[to]provideareserveforfutureprincipaldisbursements.
1413	1412		5 2.Totheextentafiduciaryhasnotbeenanddoesnotexpecttobereimbursedby
1414	1413		6athirdparty,principaldisbursementstowhichsubsection1ofthissectionappliesinclude
1415	1414		7[thefollowing,butonlytotheextentthatthetrusteehasnotbeenanddoesnotexpecttobe
1416	1415		8reimbursedbyathirdparty]:
1417	1416		9 (1)Anamountchargeabletoincomebutpaidfromprincipalbecause[it]incomeis
1418	1417		10[unusuallylarge,includingextraordinaryrepairs] notsufficient;
1419	1418		11 (2)[Disbursements] Thecostofanimprovementtoprincipal,whetherachange
1420	1419		12toanexistingassetortheconstructionofanewasset,includingaspecialassessment;
1421	1420		13 (3)Adisbursementmadetopreparepropertyforrental,includingtenantallowances,
1422	1421		14leaseholdimprovements,and[broker's] commissions;
1423	1422		HB608 39 15 [(3)](4)Aperiodic[payments] paymentonanobligationsecuredbyaprincipal
1424	1423		16asset,totheextent[that]theamounttransferredfromincometoprincipalfordepreciationis
1425	1424		17lessthantheperiodic[payments] payment; and
1426	1425		18 [(4)Disbursements] (5)Adisbursementdescribedin[subdivision(7)of]subsection
1427	1426		191ofsection469.453.
1428	1427		20 3.If[the]anassetwhoseownershipgivesriseto[thedisbursements] aprincipal
1429	1428		21disbursementbecomessubjecttoasuccessive[income] interestafteranincomeinterest
1430	1429		22ends,[atrustee] thefiduciarymaycontinueto[transferamountsfromincometoprincipalas
1431	1430		23providedin]maketransfersundersubsection1ofthissection.
1432	1431		469.459.1.Ataxrequiredtobepaidbya[trustee] fiduciarythatisbasedon
1433	1432		2receiptsallocatedtoincomeshallbepaidfromincome.
1434	1433		3 2.Ataxrequiredtobepaidbya[trustee] fiduciarythatisbasedonreceiptsallocated
1435	1434		4toprincipalshallbepaidfromprincipal,evenifthetaxiscalledanincometaxbythetaxing
1436	1435		5authority.
1437	1436		6 3.Subjecttosubsection4ofthissectionandsections469.456,469.457,and
1438	1437		7469.462,ataxrequiredtobepaidbya[trustee] fiduciaryon[thetrust's] ashareofanentity's
1439	1438		8taxableincomeinanaccountingperiodshallbepaidfrom:
1440	1439		9 (1)[From] Incomeandprincipalproportionatelytothe[extentthat]allocation
1441	1440		10betweenincomeandprincipalofreceiptsfromtheentity[areallocatedtoincome] inthe
1442	1441		11period; and
1443	1442		12 (2)[From] Principaltotheextent[that]thetaxexceedsthereceiptsfromtheentity
1444	1443		13[areallocatedonlytoprincipal] intheperiod.
1445	1444		14 4.Afterapplyingsubsections1to3ofthissection,[thetrustee] afiduciaryshall
1446	1445		15adjustincomeorprincipalreceipts, totheextent[that]the[trust's] taxesthefiduciarypays
1447	1446		16arereducedbecause[thetrustreceives] ofadeductionforapaymentmadetoabeneficiary.
1448	1447		469.462.1.Afiduciarymaymakeanadjustmentbetweenincomeandprincipal
1449	1448		2tooffsettheshiftingofeconomicinterestsortaxbenefitsbetweencurrentincome
1450	1449		3beneficiariesandsuccessorbeneficiariesthatarisesfrom:
1451	1450		4 (1)Anelectionordecisionthefiduciarymakesregardingataxmatter,other
1452	1451		5thanadecisiontoclaimanincometaxdeductiontowhichsubsection2ofthissection
1453	1452		6applies;
1454	1453		7 (2)Anincometaxorothertaximposedonthefiduciaryorabeneficiaryasa
1455	1454		8resultofatransactioninvolvingthefiduciaryoradistributionbythefiduciary;or
1456	1455		9 (3)Ownershipbythefiduciaryofaninterestinanentity,apartofwhosetaxable
1457	1456		10income,whetherornotdistributed,isincludableinthetaxableincomeofthefiduciary
1458	1457		11orabeneficiary.
1459	1458		HB608 40 12 2.Iftheamountofanestatetaxmaritalorcharitabledeductionisreduced
1460	1459		13becauseafiduciarydeductsanamountpaidfromprincipalforincometaxpurposes
1461	1460		14insteadofdeductingitforestatetaxpurposesand,asaresult,estatetaxespaidfrom
1462	1461		15principalareincreasedandincometaxespaidbythefiduciaryorabeneficiaryare
1463	1462		16decreased,thefiduciaryshallchargeeachbeneficiarythatbenefitsfromthedecreasein
1464	1463		17incometaxtoreimbursetheprincipalfromwhichtheincreaseinestatetaxispaid.The
1465	1464		18totalreimbursementshallequaltheincreaseintheestatetax,totheextenttheprincipal
1466	1465		19usedtopaytheincreasewouldhavequalifiedforamaritalorcharitabledeductionbut
1467	1466		20forthepayment.Theshareofthereimbursementforeachfiduciaryorbeneficiary
1468	1467		21whoseincometaxesarereducedshallbethesameasitsshareofthetotaldecreasein
1469	1468		22incometax.
1470	1469		23 3.Afiduciarythatchargesabeneficiaryundersubsection2ofthissectionmay
1471	1470		24offsetthechargebyobtainingpaymentfromthebeneficiary,withholdinganamount
1472	1471		25fromfuturedistributionstothebeneficiary,oradoptinganothermethodorcombination
1473	1472		26ofmethods.
1474	1473		469.463.Inapplyingandconstruingsections[469.401] 469.399to[469.467]
1475	1474		2469.487, considerationshallbegiventotheneedtopromoteuniformityofthelawwith
1476	1475		3respecttoitssubjectmatteramongstatesthatenactit.
1477	1476		469.464.Sections469.399to469.487modify,limit,orsupersedetheElectronic
1478	1477		2SignaturesinGlobalandNationalCommerceAct,15U.S.C.Section7001etseq.,butdo
1479	1478		3notmodify,limit,orsupersede15U.S.C.Section7001(c)orauthorizeelectronicdelivery
1480	1479		4ofanyofthenoticesdescribedin15U.S.C.Section7003(b).
1481	1480		469.465.Ifanyprovisionofsections[469.401] 469.399to[469.467] 469.487or[the]
1482	1481		2itsapplication[ofthesesections] toanypersonorcircumstanceisheldinvalid,theinvalidity
1483	1482		3doesnotaffectotherprovisionsorapplicationsofsections[469.401] 469.399to[469.467]
1484	1483		4469.487whichcanbegiveneffectwithouttheinvalidprovisionorapplicationandtothis
1485	1484		5end,theprovisionsofsections469.399to469.487areseverable.
1486	1485		469.467.Sections[469.401] 469.399to[469.467] 469.487applyto[every] atrustor
1487	1486		2[decedent's] estateexistingorcreatedonorafterAugust28,[2001] 2025, exceptas
1488	1487		3otherwiseexpresslyprovidedinthe[willor]termsofthetrustor[in]sections[469.401]
1489	1488		4469.399to[469.467] 469.487.
1490	1489		469.471.Asusedinsections469.471to469.487,thefollowingtermsmean:
1491	1490		2 (1)"Applicablevalue",theamountofthenetfairmarketvalueofatrusttaken
1492	1491		3intoaccountundersection469.483;
1493	1492		4 (2)"Expressunitrust",atrustforwhich,underthetermsofthetrustwithout
1494	1493		5regardtosections469.471to469.487,incomeornetincomeshallormaybecalculated
1495	1494		6asaunitrustamount;
1496	1495		HB608 41 7 (3)"Incometrust",atrustthatisnotaunitrust;
1497	1496		8 (4)"Netfairmarketvalueofatrust",thefairmarketvalueoftheassetsofthe
1498	1497		9trust,lessthenoncontingentliabilitiesofthetrust;
1499	1498		10 (5)"Unitrust",atrustforwhichnetincomeisaunitrustamount.Theterm
1500	1499		11includesanexpressunitrust;
1501	1500		12 (6)"Unitrustamount",anamountcomputedbymultiplyingadeterminedvalue
1502	1501		13ofatrustbyadeterminedpercentage.Foraunitrustadministeredunderaunitrust
1503	1502		14policy,thetermmeanstheapplicablevaluemultipliedbytheunitrustrate;
1504	1503		15 (7)"Unitrustpolicy",apolicydescribedinsections469.479to469.487and
1505	1504		16adoptedundersection469.475;
1506	1505		17 (8)"Unitrustrate",therateusedtocomputetheunitrustamountforaunitrust
1507	1506		18administeredunderaunitrustpolicy.
1508	1507		469.473.1.Exceptasotherwiseprovidedinsubsection2ofthissection,sections
1509	1508		2469.471to469.487applyto:
1510	1509		3 (1)Anincometrust,unlessthetermsofthetrustexpresslyprohibituseof
1511	1510		4sections469.471to469.487byaspecificreferencetothesesectionsoranexplicit
1512	1511		5expressionofintentthatnetincomenotbecalculatedasaunitrustamount;and
1513	1512		6 (2)Anexpressunitrust,excepttotheextentthetermsofthetrustexplicitly:
1514	1513		7 (a)Prohibituseofsections469.471to469.487byaspecificreferencetosuch
1515	1514		8sections;
1516	1515		9 (b)Prohibitconversiontoanincometrust;or
1517	1516		10 (c)Limitchangestothemethodofcalculatingtheunitrustamount.
1518	1517		11 2.Sections469.471to469.487donotapplytoatrustdescribedin26U.S.C.
1519	1518		12Section170(f)(2)(B),642(c)(5),664(d),2702(a)(3)(A)(ii)or(iii),or2702(b),asamended.
1520	1519		13 3.Anincometrusttowhichsections469.471to469.487applyundersubdivision
1521	1520		14(1)ofsubsection1ofthissectionmaybeconvertedtoaunitrustundersections469.471
1522	1521		15to469.487regardlessofthetermsofthetrustconcerningdistributions.Conversiontoa
1523	1522		16unitrustundersections469.471to469.487doesnotaffectothertermsofthetrust
1524	1523		17concerningdistributionsofincomeorprincipal.
1525	1524		18 4.Sections469.471to469.487applytoanestateonlytotheextentatrustisa
1526	1525		19beneficiaryoftheestate.Totheextentofthetrust’sinterestintheestate,theestatemay
1527	1526		20beadministeredasaunitrust,theadministrationoftheestateasaunitrustmaybe
1528	1527		21discontinued,orthepercentageormethodusedtocalculatetheunitrustamountmaybe
1529	1528		22changed,inthesamemannerasforatrustundersections469.471to469.487.
1530	1529		23 5.Sections469.471to469.487donotcreateadutytotakeorconsideraction
1531	1530		24undersections469.471to469.487ortoinformabeneficiaryabouttheapplicabilityof
1532	1531		25sections469.471to469.487.
1533	1532		HB608 42 26 6.Afiduciarythatingoodfaithtakesorfailstotakeanactionundersections
1534	1533		27469.471to469.487isnotliabletoapersonaffectedbytheactionorinaction.
1535	1534		469.475.1.Afiduciary,withoutcourtapproval,bycomplyingwithsubsections2
1536	1535		2and6ofthissection,may:
1537	1536		3 (1)Convertanincometrusttoaunitrustifthefiduciaryadoptsinarecorda
1538	1537		4unitrustpolicyforthetrustproviding:
1539	1538		5 (a)Thatinadministeringthetrustthenetincomeofthetrustwillbeaunitrust
1540	1539		6amountratherthannetincomedeterminedwithoutregardtosections469.471to
1541	1540		7469.487;and
1542	1541		8 (b)Thepercentageandmethodusedtocalculatetheunitrustamount;
1543	1542		9 (2)Changethepercentageormethodusedtocalculateaunitrustamountfora
1544	1543		10unitrustifthefiduciaryadoptsinarecordaunitrustpolicyoranamendmentor
1545	1544		11replacementofaunitrustpolicyprovidingchangesinthepercentageormethodusedto
1546	1545		12calculatetheunitrustamount;or
1547	1546		13 (3)Convertaunitrusttoanincometrustifthefiduciaryadoptsinarecorda
1548	1547		14determinationthat,inadministeringthetrust,thenetincomeofthetrustwillbenet
1549	1548		15incomedeterminedwithoutregardtosections469.471to469.487ratherthanaunitrust
1550	1549		16amount.
1551	1550		17 2.Afiduciarymaytakeanactionundersubsection1ofthissectionif:
1552	1551		18 (1)Thefiduciarydeterminesthattheactionwillassistthefiduciaryto
1553	1552		19administeratrustimpartially;
1554	1553		20 (2)Thefiduciarysendsanoticeinarecord,inthemannerrequiredbysection
1555	1554		21469.477,describingandproposingtotaketheaction;
1556	1555		22 (3)Thefiduciarysendsacopyofthenoticeundersubdivision(2)ofthis
1557	1556		23subsectiontoeachsettlorofthetrustthatis:
1558	1557		24 (a)Ifanindividual,living;or
1559	1558		25 (b)Ifnotanindividual,inexistence;
1560	1559		26 (4)Atleastonememberofeachclassofthequalifiedbeneficiariesdescribed
1561	1560		27undersection456.1-103receivingthenoticeundersubdivision(2)ofthissubsectionis:
1562	1561		28 (a)Ifanindividual,legallycompetent;
1563	1562		29 (b)Ifnotanindividual,inexistence;or
1564	1563		30 (c)Representedinthemannerprovidedinsubsection2ofsection469.477;and
1565	1564		31 (5)Thefiduciarydoesnotreceive,bythedatespecifiedinthenoticeunder
1566	1565		32subdivision(5)ofsubsection4ofsection469.477,anobjectioninarecordtotheaction
1567	1566		33proposedundersubdivision(2)ofthissubsectionfromapersontowhichthenotice
1568	1567		34undersubdivision(2)ofthissubsectionissent.
1569	1568		HB608 43 35 3.Ifafiduciaryreceives,notlaterthanthedatestatedinthenoticeunder
1570	1569		36subdivision(5)ofsubsection4ofsection469.477,anobjectioninarecorddescribedin
1571	1570		37subdivision(4)ofsubsection4ofsection469.477toaproposedaction,thefiduciaryora
1572	1571		38beneficiarymayrequestthecourttohavetheproposedactiontakenasproposed,taken
1573	1572		39withmodifications,orprevented.Apersondescribedinsubsection1ofsection469.477
1574	1573		40mayopposetheproposedactionintheproceedingunderthissubsection,whetherornot
1575	1574		41theperson:
1576	1575		42 (1)Consentedundersubsection3ofsection469.477;or
1577	1576		43 (2)Objectedundersubdivision(4)ofsubsection4ofsection469.477.
1578	1577		44 4.If,aftersendinganoticeundersubdivision(2)ofsubsection2ofthissection,a
1579	1578		45fiduciarydecidesnottotaketheactionproposedinthenotice,thefiduciaryshallnotify
1580	1579		46inarecordeachpersondescribedinsubsection1ofsection469.477ofthedecisionnotto
1581	1580		47taketheactionandthereasonsforthedecision.
1582	1581		48 5.Ifabeneficiaryrequestsinarecordthatafiduciarytakeanactiondescribed
1583	1582		49insubsection1ofthissectionandthefiduciarydeclinestoactordoesnotactwithin
1584	1583		50ninetydaysafterreceivingtherequest,thebeneficiarymayrequestthecourttodirect
1585	1584		51thefiduciarytotaketheactionrequested.
1586	1585		52 6.Indecidingwhetherandhowtotakeanactionauthorizedbysubsection1of
1587	1586		53thissection,orwhetherandhowtorespondtoarequestbyabeneficiaryunder
1588	1587		54subsection5ofthissection,afiduciaryshallconsiderallfactorsrelevanttothetrustand
1589	1588		55thebeneficiaries,includingrelevantfactorsinsubsection5ofsection469.403.
1590	1589		56 7.Afiduciarymayreleaseordelegatethepowertoconvertanincometrusttoa
1591	1590		57unitrustundersubdivision(1)ofsubsection1ofthissection,changethepercentageor
1592	1591		58methodusedtocalculateaunitrustamountundersubdivision(2)ofsubsection1ofthis
1593	1592		59section,orconvertaunitrusttoanincometrustundersubdivision(3)ofsubsection1of
1594	1593		60thissection,forareasondescribedinsubsection7ofsection469.405andinthemanner
1595	1594		61describedinsubsection8ofsection469.405.
1596	1595		469.477.1.Anoticerequiredbysubdivision(3)ofsubsection2ofsection
1597	1596		2469.475shallbesentinamannerauthorizedundersection456.1-109to:
1598	1597		3 (1)Thequalifiedbeneficiariesdefinedundersection456.1-103;
1599	1598		4 (2)Eachpersonactingastrustprotectorundersection456.8-808;and
1600	1599		5 (3)Eachpersonthatisgrantedapoweroverthetrustbythetermsofthetrust,
1601	1600		6totheextentthepowerisexercisablewhenthepersonisnotthenservingasatrustee:
1602	1601		7 (a)Includinga:
1603	1602		8 a.Powerovertheinvestment,management,ordistributionoftrustpropertyor
1604	1603		9othermattersoftrustadministration;and
1605	1604		HB608 44 10 b.Powertoappointorremoveatrusteeorpersondescribedinthisparagraph;
1606	1605		11and
1607	1606		12 (b)Excludinga:
1608	1607		13 a.Powerofappointment;
1609	1608		14 b.Powerofabeneficiaryoverthetrust,totheextenttheexerciseornonexercise
1610	1609		15ofthepoweraffectsthebeneficialinterestofthebeneficiaryoranotherbeneficiary
1611	1610		16representedbythebeneficiaryundersections456.3-301to456.3-305withrespecttothe
1612	1611		17exerciseornonexerciseofthepower;and
1613	1612		18 c.Poweroverthetrustifthetermsofthetrustprovidethatthepowerisheldin
1614	1613		19anonfiduciarycapacityandthepowershallbeheldinanonfiduciarycapacityto
1615	1614		20achieveataxobjectiveunderTitle26oftheUnitedStatesCode,asamended.
1616	1615		21 2.Therepresentationprovisionsofsections456.3-301to456.3-305applyto
1617	1616		22noticeunderthissection.
1618	1617		23 3.Apersonmayconsentinarecordatanytimetoactionproposedunder
1619	1618		24subdivision(2)ofsubsection2ofsection469.475.Anoticerequiredbysubdivision(2)of
1620	1619		25subsection2ofsection469.475neednotbesenttoapersonthatconsentsunderthis
1621	1620		26subsection.
1622	1621		27 4.Anoticerequiredbysubdivision(2)ofsubsection2ofsection469.475shall
1623	1622		28include:
1624	1623		29 (1)Theactionproposedundersubdivision(2)ofsubsection2ofsection469.475;
1625	1624		30 (2)Foraconversionofanincometrusttoaunitrust,acopyoftheunitrustpolicy
1626	1625		31adoptedundersubdivision(1)ofsubsection1ofsection469.475;
1627	1626		32 (3)Forachangeinthepercentageormethodusedtocalculatetheunitrust
1628	1627		33amount,acopyoftheunitrustpolicyoramendmentorreplacementoftheunitrust
1629	1628		34policyadoptedundersubdivision(2)ofsubsection1ofsection469.475;
1630	1629		35 (4)Astatementthatthepersontowhichthenoticeissentmayobjecttothe
1631	1630		36proposedactionbystatinginarecordthebasisfortheobjectionandsendingor
1632	1631		37deliveringtherecordtothefiduciary;
1633	1632		38 (5)Thedatebywhichanobjectionundersubdivision(4)ofthissubsectionshall
1634	1633		39bereceivedbythefiduciary,whichshallbeatleastthirtydaysafterthedatethenoticeis
1635	1634		40sent;
1636	1635		41 (6)Thedateonwhichtheactionisproposedtobetakenandthedateonwhich
1637	1636		42theactionisproposedtotakeeffect;
1638	1637		43 (7)Thenameandcontactinformationofthefiduciary;and
1639	1638		44 (8)Thenameandcontactinformationofapersonthatmaybecontactedfor
1640	1639		45additionalinformation.
1641	1640		HB608 45 469.479.1.Inadministeringaunitrustundersections469.471to469.487,a
1642	1641		2fiduciaryshallfollowaunitrustpolicyadoptedundersubdivision(1)or(2)ofsubsection
1643	1642		31ofsection469.475oramendedorreplacedundersubdivision(2)ofsection1ofsection
1644	1643		4469.475.
1645	1644		5 2.Aunitrustpolicyshallprovide:
1646	1645		6 (1)Theunitrustrateorthemethodfordeterminingtheunitrustrateunder
1647	1646		7section469.481;
1648	1647		8 (2)Themethodfordeterminingtheapplicablevalueundersection469.483;and
1649	1648		9 (3)Therulesdescribedinsections469.481to469.487thatapplyinthe
1650	1649		10administrationoftheunitrust,whethertherulesare:
1651	1650		11 (a)Mandatory,asprovidedinsubsection1ofsection469.483andsubsection1of
1652	1651		12section469.485;or
1653	1652		13 (b)Optional,asprovidedinsection469.481,subsection2ofsection469.483,
1654	1653		14subsection2ofsection469.485,andsubsection1ofsection469.487,totheextentthe
1655	1654		15fiduciaryelectstoadoptsuchrules.
1656	1655		469.481.1.Exceptasotherwiseprovidedinsubdivision(1)ofsubsection2of
1657	1656		2section469.487,aunitrustratemaybe:
1658	1657		3 (1)Afixedunitrustrate;or
1659	1658		4 (2)Aunitrustratethatisdeterminedforeachperiodusing:
1660	1659		5 (a)Amarketindexorotherpublisheddata;or
1661	1660		6 (b)Amathematicalblendofmarketindicesorotherpublisheddataovera
1662	1661		7statednumberofprecedingperiods.
1663	1662		8 2.Exceptasotherwiseprovidedinsubdivision(1)ofsubsection2ofsection
1664	1663		9469.487,aunitrustpolicymayprovide:
1665	1664		10 (1)Alimitonhowhightheunitrustratedeterminedundersubdivision(2)of
1666	1665		11subsection1ofthissectionmayrise;
1667	1666		12 (2)Alimitonhowlowtheunitrustratedeterminedundersubdivision(2)of
1668	1667		13subsection1ofthissectionmayfall;
1669	1668		14 (3)Alimitonhowmuchtheunitrustratedeterminedundersubdivision(2)of
1670	1669		15subsection1ofthissectionmayincreaseovertheunitrustratefortheprecedingperiod
1671	1670		16oramathematicalblendofunitrustratesoverastatednumberofprecedingperiods;
1672	1671		17 (4)Alimitonhowmuchtheunitrustratedeterminedundersubdivision(2)of
1673	1672		18subsection1ofthissectionmaydecreasebelowtheunitrustrateforthepreceding
1674	1673		19periodoramathematicalblendofunitrustratesoverastatednumberofpreceding
1675	1674		20periods;or
1676	1675		HB608 46 21 (5)Amathematicalblendofanyoftheunitrustratesdeterminedunder
1677	1676		22subdivision(2)ofsubsection1ofthissectionandsubdivisions(1)to(4)ofthis
1678	1677		23subsection.
1679	1678		469.483.1.Aunitrustpolicyshallprovidethemethodfordeterminingthefair
1680	1679		2marketvalueofanassetforthepurposeofdeterminingtheunitrustamount,including:
1681	1680		3 (1)Thefrequencyofvaluingtheasset,whichneednotrequireavaluationin
1682	1681		4everyperiod;and
1683	1682		5 (2)Thedateforvaluingtheassetineachperiodinwhichtheassetisvalued.
1684	1683		6 2.Exceptasotherwiseprovidedinsubdivision(2)ofsubsection2ofsection
1685	1684		7469.487,aunitrustpolicymayprovidemethodsfordeterminingtheamountofthenet
1686	1685		8fairmarketvalueofthetrusttotakeintoaccountindeterminingtheapplicablevalue,
1687	1686		9including:
1688	1687		10 (1)Obtaininganappraisalofanassetforwhichfairmarketvalueisnotreadily
1689	1688		11available;
1690	1689		12 (2)Exclusionofspecificassetsorgroupsortypesofassets;
1691	1690		13 (3)Otherexceptionsormodificationsofthetreatmentofspecificassetsor
1692	1691		14groupsortypesofassets;
1693	1692		15 (4)Identificationandtreatmentofcashorpropertyheldfordistribution;
1694	1693		16 (5)Useof:
1695	1694		17 (a)Anaverageoffairmarketvaluesoverastatednumberofprecedingperiods;
1696	1695		18or
1697	1696		19 (b)Anothermathematicalblendoffairmarketvaluesoverastatednumberof
1698	1697		20precedingperiods;
1699	1698		21 (6)Alimitonhowmuchtheapplicablevalueofallassets,groupsofassets,or
1700	1699		22individualassetsmayincreaseover:
1701	1700		23 (a)Thecorrespondingapplicablevaluefortheprecedingperiod;or
1702	1701		24 (b)Amathematicalblendofapplicablevaluesoverastatednumberofpreceding
1703	1702		25periods;
1704	1703		26 (7)Alimitonhowmuchtheapplicablevalueofallassets,groupsofassets,or
1705	1704		27individualassetsmaydecreasebelow:
1706	1705		28 (a)Thecorrespondingapplicablevaluefortheprecedingperiod;or
1707	1706		29 (b)Amathematicalblendofapplicablevaluesoverastatednumberofpreceding
1708	1707		30periods;
1709	1708		31 (8)Thetreatmentofaccruedincomeandotherfeaturesofanassetthataffect
1710	1709		32value;and
1711	1710		33 (9)Determiningtheliabilitiesofthetrust,includingtreatmentofliabilitiesto
1712	1711		34conformwiththetreatmentofassetsundersubdivisions(1)to(8)ofthissubsection.
1713	1712		HB608 47 469.485.1.Aunitrustpolicyshallprovidetheperiodusedundersections
1714	1713		2469.481and469.483.Exceptasotherwiseprovidedinsubdivision(3)ofsubsection2of
1715	1714		3section469.481,theperiodmaybe:
1716	1715		4 (1)Acalendaryear;
1717	1716		5 (2)Atwelve-monthperiodotherthanacalendaryear;
1718	1717		6 (3)Acalendarquarter;
1719	1718		7 (4)Athree-monthperiodotherthanacalendarquarter;or
1720	1719		8 (5)Anotherperiod.
1721	1720		9 2.Exceptasotherwiseprovidedinsubsection2ofsection469.487,aunitrust
1722	1721		10policymayprovidestandardsfor:
1723	1722		11 (1)Usingfewerprecedingperiodsunderparagraph(b)ofsubdivision(2)of
1724	1723		12subsection1ofsection469.481orsubdivision(3)or(4)ofsubsection2ofsection469.481
1725	1724		13if:
1726	1725		14 (a)Thetrustwasnotinexistenceinaprecedingperiod;or
1727	1726		15 (b)Marketindicesorotherpublisheddataarenotavailableforapreceding
1728	1727		16period;
1729	1728		17 (2)Usingfewerprecedingperiodsunderparagraph(a)or(b)ofsubdivision(5)
1730	1729		18ofsubsection2ofsection469.483,paragraph(b)ofsubdivision(6)ofsubsection2of
1731	1730		19section469.483,orparagraph(b)ofsubdivision(7)ofsubsection2ofsection469.483if:
1732	1731		20 (a)Thetrustwasnotinexistenceinaprecedingperiod;or
1733	1732		21 (b)Fairmarketvaluesarenotavailableforaprecedingperiod;and
1734	1733		22 (3)Proratingtheunitrustamountonadailybasisforapartofaperiodinwhich
1735	1734		23thetrustortheadministrationofthetrustasaunitrustortheinterestofanybeneficiary
1736	1735		24commencesorterminates.
1737	1736		469.487.1.Aunitrustpolicymay:
1738	1737		2 (1)Providemethodsandstandardsfor:
1739	1738		3 (a)Determiningthetimingofdistributions;
1740	1739		4 (b)Makingdistributionsincashorinkindorpartlyincashandpartlyinkind;
1741	1740		5or
1742	1741		6 (c)Correctinganunderpaymentoroverpaymenttoabeneficiarybasedonthe
1743	1742		7unitrustamountifthereisanerrorincalculatingtheunitrustamount;
1744	1743		8 (2)Specifysourcesandtheorderofsources,includingcategoriesofincomefor
1745	1744		9federalincometaxpurposes,fromwhichdistributionsofaunitrustamountarepaid;or
1746	1745		10 (3)Provideotherstandardsandrulesthefiduciarydeterminesservethe
1747	1746		11interestsofthebeneficiaries.
1748	1747		12 2.Ifatrustqualifiesforaspecialtaxbenefitorafiduciaryisnotanindependent
1749	1748		13person:
1750	1749		HB608 48 14 (1)Theunitrustrateestablishedundersection469.481shallnotbelessthan
1751	1750		15threepercentormorethanfivepercent;
1752	1751		16 (2)Theonlyprovisionsofsection469.483thatapplyaresubsection1ofsection
1753	1752		17469.483;subdivisions(1),(4),and(9)ofsubsection2ofsection469.483;andparagraph
1754	1753		18(a)ofsubdivision(5)ofsubsection2ofsection469.483;
1755	1754		19 (3)Theonlyperiodthatmaybeusedundersection469.485isacalendaryear
1756	1755		20undersubdivision(1)ofsubsection1ofsection469.485;and
1757	1756		21 (4)Theonlyotherprovisionsofsection469.485thatapplyareparagraph(a)of
1758	1757		22subdivision(2)ofsubsection2ofsection469.485andsubdivision(3)ofsubsection2of
1759	1758		23section469.485.
1760	1759		[469.409.1.Anyclaimforbreachofatrustee'sdutytoimpartially
1761	1760		2 administeratrustrelated,directlyorindirectly,toanadjustmentmadebya
1762	1761		3 fiduciarytotheallocationbetweenprincipalandincomepursuantto
1763	1762		4 subsection1ofsection469.405oranyallocationmadebythefiduciary
1764	1763		5 pursuanttoanyauthorityordiscretionspecifiedinsubsection1ofsection
1765	1764		6 469.403,unlesspreviouslybarredbyadjudication,consentorotherlimitation,
1766	1765		7 shallbebarredasprovidedinthissection.
1767	1766		8 (1)Anysuchclaimbroughtbyaqualifiedbeneficiaryisbarredifnot
1768	1767		9 assertedinajudicialproceedingcommencedwithintwoyearsafterthetrustee
1769	1768		10 hassentareporttothatqualifiedbeneficiarythatadequatelydisclosesthefacts
1770	1769		11 constitutingtheclaim.
1771	1770		12 (2)Anysuchclaimbroughtbyabeneficiary(otherthanaqualified
1772	1771		13 beneficiary)withanyinterestwhatsoeverinthetrust,nomatterhowremoteor
1773	1772		14 contingent,orwhetherornotthebeneficiaryisascertainableorhasthe
1774	1773		15 capacitytocontract,isbarredifnotassertedinajudicialproceeding
1775	1774		16 commencedwithintwoyearsafterthefirsttooccurof:
1776	1775		17 (a)Thedatethetrusteesentareporttoallqualifiedbeneficiariesthat
1777	1776		18 adequatelydisclosesthefactsconstitutingtheclaim;or
1778	1777		19 (b)Thedatethetrusteesentareporttoapersonthatrepresentsthe
1779	1778		20 beneficiaryundertheprovisionsofsubdivision(2)ofsubsection2ofthis
1780	1779		21 section.
1781	1780		22 2.Forpurposesofthissectionthefollowingrulesshallapply:
1782	1781		23 (1)Areportadequatelydisclosesthefactsconstitutingaclaimifit
1783	1782		24 providessufficientinformationsothatthebeneficiaryshouldknowofthe
1784	1783		25 claimorreasonablyshouldhaveinquiredintoitsexistence;
1785	1784		26 (2)Section469.402shallapplyindeterminingwhetherabeneficiary
1786	1785		27 (includingaqualifiedbeneficiary)hasreceivednoticeforpurposesofthis
1787	1786		28 section;
1788	1787		29 (3)Thedeterminationoftheidentityofallqualifiedbeneficiariesshall
1789	1788		30 bemadeonthedatethereportisdeemedtohavebeensent;and
1790	1789		31 (4)Thissectiondoesnotprecludeanactiontorecoverforfraudor
1791	1790		32 misrepresentationrelatedtothereport.]
1792	1791		HB608 49 [469.411.1.(1)Iftheprovisionsofthissectionapplytoatrust,the
1793	1792		2 unitrustamountdeterminedforeachaccountingyearofthetrustshallbea
1794	1793		3 percentagebetweenthreeandfivepercentoftheaveragenetfairmarketvalue
1795	1794		4 ofthetrust,asofthefirstdayofthetrust'scurrentaccountingyear.The
1796	1795		5 percentageapplicabletoatrustshallbethatpercentagespecifiedbytheterms
1797	1796		6 ofthegoverninginstrumentorbytheelectionmadeinaccordancewith
1798	1797		7 subdivision(2)ofsubsection5ofthissection.
1799	1798		8 (2)Theunitrustamountforthecurrentaccountingyearcomputed
1800	1799		9 pursuanttothissectionshallbeproportionatelyreducedforanydistributions,
1801	1800		10 inwholeorinpart,otherthandistributionsoftheunitrustamount,andforany
1802	1801		11 paymentsofexpenses,includingdebts,disbursementsandtaxes,fromthetrust
1803	1802		12 withinacurrentaccountingyearthatthetrusteedeterminestobematerialand
1804	1803		13 substantial,andshallbeproportionatelyincreasedforthereceipt,otherthana
1805	1804		14 receiptthatrepresentsareturnoninvestment,ofanyadditionalpropertyinto
1806	1805		15 thetrustwithinacurrentaccountingyear.
1807	1806		16 (3)Forpurposesofthissection,thenetfairmarketvaluesoftheassets
1808	1807		17 heldinthetrustonthefirstbusinessdayofaprioraccountingquartershallbe
1809	1808		18 adjustedtoreflectanyreduction,inthecaseofadistributionorpayment,or
1810	1809		19 increase,inthecaseofareceipt,fortheprioraccountingyearpursuantto
1811	1810		20 subdivision(1)ofthissubsection,asifthedistribution,paymentorreceipthad
1812	1811		21 occurredonthefirstdayoftheprioraccountingyear.
1813	1812		22 (4)Inthecaseofashortaccountingperiod,thetrusteeshallprorate
1814	1813		23 theunitrustamountonadailybasis.
1815	1814		24 (5)Inthecasewherethenetfairmarketvalueofanassetheldinthe
1816	1815		25 trusthasbeenincorrectlydeterminedinanyquarter,theunitrustamountshall
1817	1816		26 beincreasedinthecaseofanundervaluation,orbedecreasedinthecaseofan
1818	1817		27 overvaluation,byanamountequaltothedifferencebetweentheunitrust
1819	1818		28 amountdeterminedbasedonthecorrectvaluationoftheassetandtheunitrust
1820	1819		29 amountoriginallydetermined.
1821	1820		30 2.Asusedinthissection,thefollowingtermsmean:
1822	1821		31 (1)"Averagenetfairmarketvalue",arollingaverageofthefair
1823	1822		32 marketvalueoftheassetsheldinthetrustonthefirstbusinessdayofthe
1824	1823		33 lessorofthenumberofaccountingquartersofthetrustfromthedateof
1825	1824		34 inceptionofthetrusttothedeterminationofthetrust'saveragenetfairmarket
1826	1825		35 value,ortwelveaccountingquartersofthetrust,regardlessofwhetherthis
1827	1826		36 sectionappliedtotheascertainmentofnetincomeforallvaluationquarters;
1828	1827		37 (2)"Currentaccountingyear",theaccountingperiodofthetrustfor
1829	1828		38 whichtheunitrustamountisbeingdetermined.
1830	1829		39 3.Indeterminingtheaveragenetfairmarketvalueoftheassetsheldin
1831	1830		40 thetrust,thereshallnotbeincludedthevalueof:
1832	1831		41 (1)Anyresidentialpropertyoranytangiblepersonalpropertythat,as
1833	1832		42 ofthefirstbusinessdayofthecurrentvaluationyear,oneormoreincome
1834	1833		43 beneficiariesofthetrusthaveorhadtherighttooccupy,orhaveorhadthe
1835	1834		44 righttopossessorcontrol,otherthaninacapacityastrustee,andinsteadthe
1836	1835		45 rightofoccupancyortherighttopossessionorcontrolshallbedeemedtobe
1837	1836		46 theunitrustamountwithrespecttotheresidentialpropertyorthetangible
1838	1837		47 personalproperty;or
1839	1838		HB608 50 48 (2)Anyassetspecificallygiventoabeneficiaryunderthetermsofthe
1840	1839		49 trustandthereturnoninvestmentonthatasset,whichreturnoninvestment
1841	1840		50 shallbedistributabletothebeneficiary.
1842	1841		51 4.Indeterminingtheaveragenetfairmarketvalueoftheassetsheldin
1843	1842		52 thetrustpursuanttosubsection1ofthissection,thetrusteeshall,notlessoften
1844	1843		53 thanannually,determinethefairmarketvalueofeachassetofthetrustthat
1845	1844		54 consistsprimarilyofrealpropertyorotherpropertythatisnottradedona
1846	1845		55 regularbasisinanactivemarketbyappraisalorotherreasonablemethodor
1847	1846		56 estimate,andthatdetermination,ifmadereasonablyandingoodfaith,shallbe
1848	1847		57 conclusiveastoallpersonsinterestedinthetrust.Anyclaimbasedona
1849	1848		58 determinationmadepursuanttothissubsectionshallbebarredifnotasserted
1850	1849		59 inajudicialproceedingbroughtbyanybeneficiarywithanyinterest
1851	1850		60 whatsoeverinthetrustwithintwoyearsafterthetrusteehassentareporttoall
1852	1851		61 qualifiedbeneficiariesthatadequatelydisclosesthefactsconstitutingthe
1853	1852		62 claim.Therulessetforthinsubsection2ofsection469.409shallapplytothe
1854	1853		63 barringofclaimspursuanttothissubsection.
1855	1854		64 5.Thissectionshallapplytothefollowingtrusts:
1856	1855		65 (1)AnytrustcreatedafterAugust28,2001,withrespecttowhichthe
1857	1856		66 termsofthetrustclearlymanifestanintentthatthissectionapply;
1858	1857		67 (2)Anytrustcreatedunderaninstrumentthatbecameirrevocableon,
1859	1858		68 before,orafterAugust28,2001,ifthetrustee,inthetrustee'sdiscretion,elects
1860	1859		69 tohavethissectionapplyunlesstheinstrumentcreatingthetrustspecifically
1861	1860		70 prohibitsanelectionunderthissubdivision.Thetrusteeshalldelivernoticeto
1862	1861		71 allqualifiedbeneficiariesandthesettlorofthetrust,ifheorsheisthenliving,
1863	1862		72 ofthetrustee'sintenttomakesuchanelectionatleastsixtydaysbefore
1864	1863		73 makingthatelection.Thetrusteeshallhavesoleauthoritytomakethe
1865	1864		74 election.Section469.402shallapplyforallpurposesofthissubdivision.An
1866	1865		75 actionororderbyanycourtshallnotberequired.Theelectionshallbemade
1867	1866		76 byasignedwritingdeliveredtothesettlorofthetrust,ifheorsheisthen
1868	1867		77 living,andtoallqualifiedbeneficiaries.Theelectionisirrevocable,unless
1869	1868		78 revokedbyorderofthecourthavingjurisdictionofthetrust.Theelection
1870	1869		79 mayspecifythepercentageusedtodeterminetheunitrustamountpursuantto
1871	1870		80 thissection,providedthatsuchpercentageisbetweenthreeandfivepercent,
1872	1871		81 orifnopercentageisspecified,thenthatpercentageshallbethreepercent.In
1873	1872		82 makinganelectionpursuanttothissubsection,thetrusteeshallbesubjectto
1874	1873		83 thesamelimitationsandconditionsasapplytoanadjustmentbetweenincome
1875	1874		84 andprincipalpursuanttosubsections3and4ofsection469.405;and
1876	1875		85 (3)Noactionofanykindbasedonanelectionmadebyatrustee
1877	1876		86 pursuanttosubdivision(2)ofthissubsectionshallbebroughtagainstthe
1878	1877		87 trusteebyanybeneficiaryofthattrustthreeyearsfromtheeffectivedateof
1879	1878		88 thatelection.
1880	1879		89 6.(1)Oncetheprovisionsofthissectionbecomeapplicabletoatrust,
1881	1880		90 thenetincomeofthetrustshallbetheunitrustamount.
1882	1881		91 (2)Unlessotherwiseprovidedbythegoverninginstrument,the
1883	1882		92 unitrustamountdistributedeachyearshallbepaidfromthefollowingsources
1884	1883		93 forthatyearuptothefullvalueoftheunitrustamountinthefollowingorder:
1885	1884		94 (a)Netincomeasdeterminedifthetrustwerenotaunitrust;
1886	1885		HB608 51 95 (b)Otherordinaryincomeasdeterminedforfederalincometax
1887	1886		96 purposes;
1888	1887		97 (c)Assetsofthetrustprincipalforwhichthereisareadilyavailable
1889	1888		98 marketvalue;and
1890	1889		99 (d)Othertrustprincipal.
1891	1890		100 (3)Additionally,thetrusteemayallocatetotrustincomeforeach
1892	1891		101 taxableyearofthetrust,orportionthereof:
1893	1892		102 (a)Netshort-termcapitalgaindescribedintheInternalRevenueCode,
1894	1893		103 26U.S.C.Section1222(5),forsuchyear,orportionthereof,butonlytothe
1895	1894		104 extentthattheamountsoallocatedtogetherwithallotheramountstotrust
1896	1895		105 income,asdeterminedundertheprovisionsofthischapterwithoutregardto
1897	1896		106 thissection,forsuchyear,orportionthereof,doesnotexceedtheunitrust
1898	1897		107 amountforsuchyear,orportionthereof;
1899	1898		108 (b)Netlong-termcapitalgaindescribedintheInternalRevenueCode,
1900	1899		109 26U.S.C.Section1222(7),forsuchyear,orportionthereof,butonlytothe
1901	1900		110 extentthattheamountsoallocatedtogetherwithallotheramounts,including
1902	1901		111 amountsdescribedinparagraph(a)ofthissubdivision,allocatedtotrust
1903	1902		112 incomeforsuchyear,orportionthereof,doesnotexceedtheunitrustamount
1904	1903		113 forsuchyear,orportionthereof.
1905	1904		114 7.AtrustwithrespecttowhichthissectionappliesonAugust28,
1906	1905		115 2011,maycalculatetheunitrustamountinaccordancewiththeprovisionsof
1907	1906		116 thissection,asitexistedeitherbeforeoraftersuchdate,asthetrusteeofsuch
1908	1907		117 trustshalldetermineinawritingkeptwiththerecordsofthetrustinthe
1909	1908		118 trustee'sdiscretion.]
1910	1909		[469.461.1.Afiduciarymaymakeadjustmentsbetweenprincipaland
1911	1910		2 incometooffsettheshiftingofeconomicinterestsortaxbenefitsbetween
1912	1911		3 incomebeneficiariesandremainderbeneficiarieswhicharisefrom:
1913	1912		4 (1)Electionsanddecisions,otherthanthosedescribedinsubsection2
1914	1913		5 ofthissection,thatthefiduciarymakesfromtimetotimeregardingtax
1915	1914		6 matters;
1916	1915		7 (2)Anincometaxoranyothertaxthatisimposeduponthefiduciary
1917	1916		8 orabeneficiaryasaresultofatransactioninvolvingoradistributionfromthe
1918	1917		9 estateortrust;or
1919	1918		10 (3)Theownershipbyanestateortrustofaninterestinanentitywhose
1920	1919		11 taxableincome,whetherornotdistributed,isincludableinthetaxableincome
1921	1920		12 oftheestate,trustorabeneficiary.
1922	1921		13 2.Iftheamountofanestatetaxmaritaldeductionorcharitable
1923	1922		14 contributiondeductionisreducedbecauseafiduciarydeductsanamountpaid
1924	1923		15 fromprincipalforincometaxpurposesinsteadofdeductingitforestatetax
1925	1924		16 purposes,andasaresultestatetaxespaidfromprincipalareincreasedand
1926	1925		17 incometaxespaidbyanestate,trustorbeneficiaryaredecreased,eachestate,
1927	1926		18 trustorbeneficiarythatbenefitsfromthedecreaseinincometaxshall
1928	1927		19 reimbursetheprincipalfromwhichtheincreaseinestatetaxispaid.Thetotal
1929	1928		20 reimbursementshallequaltheincreaseintheestatetaxtotheextentthatthe
1930	1929		21 principalusedtopaytheincreasewouldhavequalifiedforamaritaldeduction
1931	1930		22 orcharitablecontributiondeductionbutforthepayment.Theproportionate
1932	1931		23 shareofthereimbursementforeachestate,trustorbeneficiarywhoseincome
1933	1932		HB608 52 24 taxesarereducedshallbethesameasitsproportionateshareofthetotal
1934	1933		25 decreaseinincometax.Anestateortrustshallreimburseprincipalfrom
1935	1934		26 income.]
1936	1935		✔
1937	1936		HB608 53