FIRSTREGULARSESSION
[PERFECTED]
HOUSEBILLNO.608
103RDGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVETHOMPSON.
1639H.01P JOSEPHENGLER,ChiefClerk
ANACT
Torepealsections214.330,469.401,469.402,469.403,469.405,469.409,469.411,469.413,
469.415,469.417,469.419,469.421,469.423,469.425,469.427,469.429,469.431,
469.432,469.433,469.435,469.437,469.439,469.441,469.443,469.445,469.447,
469.449,469.451,469.453,469.455,469.457,469.459,469.461,469.463,469.465,
and469.467,RSMo,andtoenactinlieuthereofforty-eightnewsectionsrelatingto
trustandestateadministration.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Sections214.330,469.401,469.402,469.403,469.405,469.409,469.411,
2469.413,469.415,469.417,469.419,469.421,469.423,469.425,469.427,469.429,469.431,
3469.432,469.433,469.435,469.437,469.439,469.441,469.443,469.445,469.447,469.449,
4469.451,469.453,469.455,469.457,469.459,469.461,469.463,469.465,and469.467,
5RSMo,arerepealedandforty-eightnewsectionsenactedinlieuthereof,tobeknownas
6sections214.330,469.399,469.401,469.402,469.403,469.404,469.405,469.413,469.415,
7469.417,469.419,469.421,469.423,469.425,469.427,469.429,469.431,469.432,469.433,
8469.435,469.437,469.439,469.441,469.443,469.445,469.447,469.449,469.450,469.451,
9469.453,469.455,469.456,469.457,469.459,469.462,469.463,469.464,469.465,469.467,
10469.471,469.473,469.475,469.477,469.479,469.481,469.483,469.485,and469.487,to
11readasfollows:
214.330.1.(1)Theendowedcaretrustfundrequiredbysections214.270to214.410
2shallbepermanentlysetasideintrustorinaccordancewiththeprovisionsofsubsection2of
3thissection.Thetrusteeoftheendowedcaretrustshallbeastateorfederallychartered
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 4financialinstitutionauthorizedtoexercisetrustpowersinMissouri.Thecontactinformation
5foratrustofficerordulyappointedrepresentativeofthetrusteewithknowledgeandaccessto
6thetrustfundaccountingandtrustfundrecordsmustbedisclosedtotheofficeoritsduly
7authorizedrepresentativeuponrequest.
8 (2)Thetrustfundrecords,includingalltrustfundaccountingrecords,shallbe
9maintainedinthestateofMissouriatalltimesorshallbeelectronicallystoredsothatthe
10recordsmaybemadeavailableinthestateofMissouriwithinfifteenbusinessdaysofreceipt
11ofawrittenrequest.Theoperatorofanendowedcarecemeteryshallmaintainacurrentname
12andaddressofthetrusteeandtherecordscustodianfortheendowedcaretrustfundandshall
13supplysuchinformationtotheoffice,oritsrepresentative,uponrequest.
14 (3)MissourilawshallcontrolallendowedcaretrustfundsandtheMissouricourts
15shallhavejurisdictionoverendowedcaretrustsregardlessofwhererecordsmaybekeptor
16variousadministrativetasksmaybeperformed.
17 2.AnendowedcaretrustfundshallbeadministeredinaccordancewithMissourilaw
18governingtrusts,includingbutnotlimitedtotheapplicableprovisionsofchapters456and
19469,exceptasspecificallyprovidedinthissubsectionorwheretheprovisionsofsections
20214.270to214.410providedifferently,providedthatacemeteryoperatorshallnotinany
21circumstancesbeauthorizedtorestrict,enlarge,change,ormodifytherequirementsofthis
22sectionortheprovisionsofchapters456and469byagreementorotherwise.
23 (1)Incomeandprincipalofanendowedcaretrustfundshallbedeterminedunderthe
24provisionsoflawapplicabletotrusts,exceptthatthe[provisionsofsection469.405shallnot
25apply] trusteeshallhave:
26 (a)Nopowerofadjustmentundersection469.405;
27 (b)Nopowerofconversioneitherfromanincometrusttoaunitrustorfroma
28unitrusttoanincometrustundersection469.475;
29 (c)Nopowerordiscretiontodetermineormodifytheunitrustrate,as
30establishedinthetermsoftheendowedcaretrustagreement;and
31 (d)Nodiscretiontodetermineapplicablevalueforpurposesofcomputingthe
32unitrustamountbeyondthatgrantedbylawandexercisedsolelyforreasonsof
33administrativeconvenienceandnottoaffectthesizeofdistributions.
34
35Indeterminingapplicablevalueundersection469.473,valuesoverathree-yearperiod
36ifavailable,orthedurationofthetrustifshorter,shallbeused.
37 (2)Noprincipalshallbedistributedfromanendowedcaretrustfundexcepttothe
38extentthataunitrust[electionisineffectwithrespecttosuchtrustundertheprovisionsof
39section469.411]amountisrequiredbythetermsoftheendowedcaretrustfund
40agreementundersubdivision(6)ofthissubsection.
HB608 2 41 (3)NorighttotransferjurisdictionfromMissouriundersection456.1-108shallexist
42forendowedcaretrusts.
43 (4)Allendowedcaretrustsshallbeirrevocable.
44 (5)Notrusteeshallhavethepowertoterminateanendowedcaretrustfundunderthe
45provisionsofsection456.4-414.
46 (6)Aunitrust[electionmadeinaccordancewiththeprovisionsofchapter469shall
47bemadebythecemeteryoperatorinthetermsoftheendowedcaretrustfundagreement
48itself,notbythetrustee] definitionofincomeundersections469.471to469.487shallbe
49establishedbythecemeteryoperatorinthetermsoftheendowedcaretrustfund
50agreementitself,notbythetrustee,andshallnotprovideforaunitrustrateexceeding
51fivepercentperannum.Theunitrustrateshallbechangedonlybyamendmenttothe
52agreementasprovidedinthissection.
53 (7)Nocontractofinsuranceshallbedeemedasuitableinvestmentforanendowed
54caretrustfund.
55 (8)Theincomefromtheendowedcarefundmaybedistributedtothecemetery
56operatoratleastannuallyonadatedesignatedbythecemeteryoperatorbyrecord,butno
57laterthansixtydaysfollowingtheendofthe[trustfund]trust'sfiscalyear.Anyincomenot
58distributedwithinsixtydaysfollowingtheendofthetrust'sfiscalyearshallbeaddedtoand
59heldaspartoftheprincipalofthetrustfund.Thecemeteryoperatormayinstructby
60recordthetrusteetodistributelessthanalltheincomedistributablefortheyearifthe
61cemeteryoperatordeterminesthatthemoneyisnotneeded.
62 3.Thecemeteryoperatorshallhavethedutyandresponsibilitytoapplytheincome
63distributedtoprovidecareandmaintenanceonlyforthatpartofthecemeterydesignatedas
64anendowedcaresectionandnotforanyotherpurpose.
65 4.Inadditiontoanyotherduty,obligation,orrequirementimposedbysections
66214.270to214.410ortheendowedcaretrustagreement,thetrustee'sdutiesshallbethe
67maintenanceofrecordsrelatedtothetrustandtheaccountingforandinvestmentofmoneys
68depositedbytheoperatortotheendowedcaretrustfund.
69 (1)Forthepurposesofsections214.270to214.410,thetrusteeshallnotbedeemed
70responsibleforthecare,themaintenance,ortheoperationofthecemetery,orforanyother
71matterrelatingtothecemetery,ortheproperexpenditureoffundsdistributedbythetrusteeto
72thecemeteryoperator,including,butnotlimitedto,compliancewithenvironmentallawsand
73regulations.
74 (2)Withrespecttocemeterypropertymaintainedbyendowedcarefunds,the
75cemeteryoperatorshallberesponsiblefortheperformanceofthecareandmaintenanceofthe
76cemeteryproperty.
HB608 3 77 5.Iftheendowedcarecemeteryfundisnotpermanentlysetasideinatrustfundas
78requiredbysubsection1ofthissection,thenthefundsshallbepermanentlysetasideinan
79escrowaccountinthestateofMissouri.Fundsinanescrowaccountshallbeplacedinan
80endowedcaretrustfundundersubsection1ifthefundsintheescrowaccountexceedthree
81hundredfiftythousanddollars,unlessotherwiseapprovedbythedivisionforgoodcause.
82TheaccountshallbeinsuredbytheFederalDepositInsuranceCorporationorcomparable
83depositinsuranceandheldinastateorfederallycharteredfinancialinstitutionauthorizedto
84dobusinessinMissouriandlocatedinthisstate.
85 (1)Theinterestfromtheescrowaccountmaybedistributedtothecemeteryoperator
86atleastinannualorsemiannualinstallments,butnotlaterthansixmonthsfollowingthe
87calendaryear.Anyinterestnotdistributedwithinsixmonthsfollowingtheendofthe
88calendaryearshallbeaddedtoandheldaspartoftheprincipaloftheaccount.
89 (2)Thecemeteryoperatorshallhavethedutyandresponsibilitytoapplytheinterest
90toprovidecareandmaintenanceonlyforthatpartofthecemeteryinwhichburialspaceshall
91havebeensoldandwithrespecttowhichsalestheescrowaccountshallhavebeenestablished
92andnotforanyotherpurpose.Theprincipalofsuchfundsshallbekeptintact.Thecemetery
93operator'sdutiesshallbethemaintenanceofrecordsandtheaccountingforaninvestmentof
94moneysdepositedbytheoperatortotheescrowaccount.Forpurposesofsections214.270to
95214.410,theadministratoroftheofficeofendowedcarecemeteriesshallnotbedeemedtobe
96responsibleforthecare,maintenance,oroperationofthecemetery.Withrespecttocemetery
97propertymaintainedbycemeterycarefunds,thecemeteryoperatorshallberesponsiblefor
98theperformanceofthecareandmaintenanceofthecemeterypropertyownedbythecemetery
99operator.
100 (3)Thedivisionmayapproveanescrowagentiftheescrowagentdemonstratesthe
101knowledge,skill,andabilitytohandleescrowfundsandfinancialtransactionsandisofgood
102moralcharacter.
103 6.Thecemeteryoperatorshallbeaccountabletotheownersofburialspaceinthe
104cemeteryforcompliancewithsections214.270to214.410.
105 7.Excludingfundsheldinanescrowaccount,allendowedcaretrustfundsshallbe
106administeredinaccordancewithanendowedcaretrustfundagreement,whichshallbe
107submittedtotheofficebythecemeteryoperatorforreviewandapproval.Theendowedcare
108cemeteryshallbenotifiedinwritingbytheofficeofendowedcarecemeteriesregardingthe
109approvalordisapprovaloftheendowedcaretrustfundagreementandregardinganychanges
110requiredtobemadeforcompliancewithsections214.270to214.410andtherulesand
111regulationspromulgatedthereunder.
112 8.Allendowedcarecemeteriesshallbeunderacontinuingdutytofilewiththeoffice
113ofendowedcarecemeteriesandtosubmitforpriorapprovalanyandallchanges,
HB608 4 114amendments,orrevisionsoftheendowedcaretrustfundagreementatleastthirtydaysbefore
115theeffectivedateofsuchchange,amendment,orrevision.
116 9.Iftheendowedcaretrustfundagreement,oranychanges,amendments,or
117revisionsfiledwiththeoffice,arenotdisapprovedbytheofficewithinthirtydaysafter
118submissionbythecemeteryoperator,theendowedcaretrustfundagreement,ortherelated
119change,amendment,orrevision,shallbedeemedapprovedandmaybeusedbythecemetery
120operatorandthetrustee.Notwithstandinganyotherprovisionofthissection,theofficemay
121reviewanddisapproveanendowedcaretrustfundagreement,oranysubmittedchange,
122amendment,orrevision,afterthethirtydaysprovidedhereinoratanyothertimeifthe
123agreementisnotincompliancewithsections214.270to214.410ortherulespromulgated
124thereunder.Noticeofdisapprovalbytheofficeshallbeinwritinganddeliveredtothe
125cemeteryoperatorandthetrusteewithintendaysofdisapproval.
126 10.Fundsinanendowedcaretrustfundorescrowaccountmaybecommingledwith
127endowedcarefundsforotherendowedcarecemeteries,providedthatthecemeteryoperator
128andthetrusteeshallmaintainadequateaccountingrecordsofthedisbursements,
129contributions,andincomeallocatedforeachcemetery.
130 11.Byacceptingthetrusteeshipofanendowedcaretrustoracceptingfundsasan
131escrowagentpursuanttosections214.270to214.410,thetrusteeorescrowagentsubmits
132personallytothejurisdictionofthecourtsofthisstateandtheofficeofendowedcare
133cemeteriesregardingtheadministrationofthetrustorescrowaccount.Atrusteeorescrow
134agentshallconsentinwritingtothejurisdictionofthestateofMissouriandtheofficein
135regardstothetrusteeshiportheoperationoftheescrowaccountandtotheappointmentofthe
136officeofsecretaryofstateasitsagentforserviceofprocessregardinganyadministrativeor
137legalactionsrelatingtothetrustortheescrowaccount,ifithasnodesignatedagentfor
138serviceofprocesslocatedinthisstate.Suchconsentshallbefiledwiththeofficepriorto
139acceptingfundspursuanttosections214.270to214.410astrusteeorasanescrowagentona
140formprovidedbytheofficebyrule.
469.399.Sections469.399to469.487shallbeknownandmaybecitedasthe
2"MissouriUniformFiduciaryIncomeandPrincipalAct".
469.401.Asusedinsections[469.401] 469.399to[469.467] 469.487, thefollowing
2termsmean:
3 (1)"Accountingperiod",acalendaryearunless[anothertwelve-monthperiodis
4selectedby]afiduciaryselectsanotherperiodoftwelvecalendarmonthsor
5approximatelytwelvecalendarmonths. Thetermincludesa[portion] partofa
6calendaryearor[othertwelve-month] anotherperiod[that]oftwelvecalendarmonthsor
7approximatelytwelvecalendarmonthsthatbeginswhenanincomeinterestbeginsorends
8whenanincomeinterestends;
HB608 5 9 (2)"Asset-backedsecurity",asecuritythatisservicedprimarilybythecash
10flowsofadiscretepooloffixedorrevolvingreceivablesorotherfinancialassetsthatby
11theirtermsconvertintocashwithinafinitetime.Thetermincludesrightsorother
12assetsthatensuretheservicingortimelydistributionofproceedstotheholderofthe
13asset-backedsecurity.Thetermdoesnotincludeanassettowhichsection469.423,
14469.437,or469.447applies;
15 (3)"Beneficiary",includes:
16 (a)Foratrust:
17 a.Acurrentbeneficiary,includingacurrentincomebeneficiaryanda
18beneficiarythatmayreceiveonlyprincipal;
19 b.Aremainderbeneficiary;and
20 c.Anyothersuccessorbeneficiary;
21 (b)Foranestate,anheir,legatee, anddevisee[ofadecedent'sestate,andanincome
22beneficiaryandaremainderbeneficiaryofatrust,includinganytypeofentitythathasa
23beneficialinterestineitheranestateoratrust]; and
24 (c)Foralifeestateorterminterest,apersonthatholdsalifeestate,term
25interest,orremainderorotherinterestfollowingalifeestateorterminterest;
26 (4)"Court",anycourtinthisstatehavingjurisdictionrelatingtoatrust,estate,
27lifeestate,orotherterminterestdescribedinsubdivision(2)ofsubsection1ofsection
28469.402;
29 (5)"Currentincomebeneficiary",abeneficiarytowhichafiduciarymay
30distributenetincome,whetherornotthefiduciaryalsomaydistributeprincipaltothe
31beneficiary;
32 (6)"Distribution",apaymentortransferbyafiduciarytoabeneficiaryinthe
33beneficiary’scapacityasabeneficiary,madeunderthetermsofthetrust,without
34considerationotherthanthebeneficiary’srighttoreceivethepaymentortransfer
35underthetermsofthetrust."Distribute","distributed",and"distributee"have
36correspondingmeanings;
37 (7)"Estate",adecedent’sestate.Thetermincludesthepropertyofthedecedent
38astheestateisoriginallyconstitutedandthepropertyoftheestateasitexistsatany
39timeduringadministration;
40 [(3)](8)"Fiduciary",includesatrustee,trustprotectordeterminedundersection
41456.8-808,personalrepresentative,[trustee,executor,administrator,successorpersonal
42representative,specialadministratorandanyotherpersonperformingsubstantiallythesame
43function] lifetenant,holderofaterminterest,andpersonactingunderadelegation
44fromafiduciary.Thetermincludesapersonthatholdspropertyforasuccessor
45beneficiarywhoseinterestmaybeaffectedbyanallocationofreceiptsandexpenditures
HB608 6 46betweenincomeandprincipal.Iftherearetwoormoreco-fiduciaries,theterm
47includesallco-fiduciariesactingunderthetermsofthetrustandapplicablelaw;
48 [(4)](9)"Income",moneyorotherproperty[that] afiduciaryreceivesascurrent
49returnfrom[a]principal[asset,includingaportion]. Thetermincludesapartofreceipts
50fromasale,exchange, orliquidationofaprincipalasset,[as]totheextentprovidedin
51sections469.423to[469.449] 469.450;
52 [(5)"Incomebeneficiary",apersontowhomnetincomeofatrustisormaybe
53payable;
54 (6)](10)"Incomeinterest",therightof[an]acurrentincomebeneficiarytoreceive
55allorpartofnetincome,whetherthetermsofthetrustrequire[it]thenetincometobe
56distributedorauthorize[it]thenetincometobedistributedinthe[trustee's] fiduciary's
57discretion. Thetermincludestherightofacurrentbeneficiarytousepropertyheldbya
58fiduciary;
59 (11)"Independentperson",apersonthatisnot:
60 (a)Foratrust:
61 a.Aqualifiedbeneficiaryasdefinedundersection456.1-103;
62 b.Asettlorofthetrust;or
63 c.Anindividualwhoselegalobligationtosupportabeneficiarymaybesatisfied
64byadistributionfromthetrust;
65 (b)Foranestate,abeneficiary;
66 (c)Aspouse,parent,brother,sister,orissueofanindividualdescribedin
67paragraph(a)or(b)ofthissubdivision;
68 (d)Acorporation,partnership,limitedliabilitycompany,orotherentityin
69whichpersonsdescribedinparagraphs(a)to(c)ofthissubdivision,intheaggregate,
70havevotingcontrol;or
71 (e)Anemployeeofapersondescribedinparagraph(a),(b),(c),or(d)ofthis
72subdivision;
73 [(7)](12)"Mandatoryincomeinterest",therightof[an]acurrentincome
74beneficiarytoreceivenetincomethatthetermsofthetrustrequirethefiduciarytodistribute;
75 [(8)](13)"Netincome",[ifsection469.411appliestothetrust,theunitrustamount,
76orifsection469.411doesnotapplytothetrust,] thetotal[receiptsallocatedtoincome]
77allocationsduringanaccountingperiodtoincomeunderthetermsofatrustandsections
78469.399to469.487minusthedisbursements[madefromincomeduringthesameperiod,plus
79orminustransferspursuanttosections469.401to469.467toorfromincomeduringthesame
80period] duringtheperiod,otherthandistributions,allocatedtoincomeundertheterms
81ofthetrustandsections469.399to469.487.Totheextentthetrustisaunitrustunder
82sections469.471to469.487,"netincome"meanstheunitrustamountdetermined
HB608 7 83thereunder."Netincome"includesanadjustmentfromprincipaltoincomeunder
84section469.405.Thetermdoesnotincludeanadjustmentfromincometoprincipal
85undersection469.405;
86 [(9)](14)"Person",anindividual,[corporation,businesstrust,] estate,trust,
87[partnership,limitedliabilitycompany,association,jointventure] businessornonprofit
88entity,publiccorporation, government[,] orgovernmentalsubdivision,agency,or
89instrumentality,[publiccorporation] or[any]otherlegal[orcommercial] entity;
90 (15)"Personalrepresentative",anexecutor,administrator,successorpersonal
91representative,specialadministrator,orpersonthatperformssubstantiallythesame
92functionwithrespecttoanestateunderthelawgoverningtheperson’sstatus;
93 [(10)] (16)"Principal",propertyheldintrustfordistributionto[aremainder],
94productionofincomefor,orusebyacurrentorsuccessorbeneficiary[whenthetrust
95terminates];
96 [(11)"Qualifiedbeneficiary",abeneficiarydefinedinsection456.1-103;
97 (12)"Remainderbeneficiary",apersonentitledtoreceiveprincipalwhenanincome
98interestends;
99 (13)](17)"Record",informationthatisinscribedonatangiblemediumorthat
100isstoredinanelectronicorothermediumandisretrievableinperceivableform;
101 (18)"Settlor",aperson,includingatestator,thatcreatesorcontributes
102propertytoatrust.Ifmorethanonepersoncreatesorcontributespropertytoatrust,
103thetermincludeseachperson,totheextentofthetrustpropertyattributabletothat
104person’scontribution,excepttotheextentanotherpersonhasthepowertorevokeor
105withdrawthatportion;
106 (19)"Specialtaxbenefit":
107 (a)Exclusionofatransfertoatrustfromgiftsdescribedin26U.S.C.Section
1082503(b),asamended,becauseofthequalificationofanincomeinterestinthetrustasa
109presentinterestinproperty;
110 (b)StatusasaqualifiedsubchapterStrustdescribedin26U.S.C.Section1361
111(d)(3),asamended,atatimethetrustholdsstockofanScorporationdescribedin26
112U.S.C.Section1361(a)(1),asamended;
113 (c)Anestateorgifttaxmaritaldeductionforatransfertoatrustunder26
114U.S.C.Section2056or2523,asamended,whichdependsordependedinwholeorin
115partontherightofthesettlor’sspousetoreceivethenetincomeofthetrust;
116 (d)Exemptioninwholeorinpartofatrustfromthefederalgeneration-skipping
117transfertaximposedby26U.S.C.Section2601,asamended,becausethetrustwas
118irrevocableonSeptember25,1985,ifthereisanypossibilitythat:
HB608 8 119 a.Ataxabledistribution,asdefinedin26U.S.C.Section2612(b),asamended,
120couldbemadefromthetrust;or
121 b.Ataxabletermination,asdefinedin26U.S.C.Section2612(a),asamended,
122couldoccurwithrespecttothetrust;or
123 (e)Aninclusionratio,asdefinedin26U.S.C.Section2642(a),asamended,ofthe
124trustwhichislessthanone,ifthereisanypossibilitythat:
125 a.Ataxabledistribution,asdefinedin26U.S.C.Section2612(b),asamended,
126couldbemadefromthetrust;or
127 b.Ataxabletermination,asdefinedin26U.S.C.Section2612(a),asamended,
128couldoccurwithrespecttothetrust;
129 (20)"Successiveinterest",theinterestofasuccessorbeneficiary;
130 (21)"Successorbeneficiary",apersonentitledtoreceiveincomeorprincipalor
131tousepropertywhenanincomeinterestorothercurrentinterestends;
132 (22)"Termsofatrust":
133 (a)Exceptasotherwiseprovidedinparagraph(b)ofthissubdivision, the
134manifestationofthesettlor's[ordecedent's] intentregardingatrust'sprovisionsas:
135 a.Expressedin[amannerwhichis]thetrustinstrument;or
136 b.Establishedbyotherevidencethatwouldbeadmissible[asproof] inajudicial
137proceeding[, whetherbywrittenorspokenwordsorbyconduct];
138 (b)Thetrust'sprovisionsasestablished,determined,oramendedby:
139 a.Atrusteeortrustdirectorinaccordancewithapplicablelaw;
140 b.Courtorder;or
141 c.Anonjudicialsettlementagreementundersection456.1-111;
142 (c)Foranestate,awill;or
143 (d)Foralifeestateorterminterest,thecorrespondingmanifestationofthe
144rightsofthebeneficiaries;
145 (23)"Trust":
146 (a)Includes:
147 a.Anexpresstrust,privateorcharitable,withadditionstothetrust,wherever
148andhowevercreated;and
149 b.Atrustcreatedordeterminedbyjudgmentordecreeunderwhichthetrustis
150tobeadministeredinthemannerofanexpresstrust;and
151 (b)Doesnotinclude:
152 a.Aconstructivetrust;
153 b.Aresultingtrust,conservatorship,guardianship,multi-partyaccount,
154custodialarrangementforaminor,businesstrust,votingtrust,securityarrangement,
155liquidationtrust,ortrustfortheprimarypurposeofpayingdebts,dividends,interest,
HB608 9 156salaries,wages,profits,pensions,retirementbenefits,oremployeebenefitsofanykind;
157or
158 c.Anarrangementunderwhichapersonisanominee,escrowee,oragentfor
159another;
160 [(14)] (24)"Trustee",aperson,otherthanapersonalrepresentative,thatownsor
161holdspropertyforthebenefitofabeneficiary.Thetermincludesanoriginal,additional,
162orsuccessortrustee,whetherornotappointedorconfirmedbyacourt;
163 [(15)"Unitrustamount",netincomeasdefinedbysection469.411]
164 (25)"Will",anytestamentaryinstrumentrecognizedbyapplicablelawthat
165makesalegallyeffectivedispositionofanindividual'sproperty,effectiveatthe
166individual'sdeath.Thetermincludesacodicilorotheramendmenttoatestamentary
167instrument.
469.402.[Theprovisionsofsections456.3-301to456.3-305shallapplytosections
2469.401to469.467forallpurposes.] 1.Exceptasotherwiseprovidedinthetermsofa
3trustorsections469.399to469.487,sections469.399to469.487applyto:
4 (1)Atrustorestate;and
5 (2)Alifeestateorotherterminterestinwhichtheinterestofoneormore
6personswillbesucceededbytheinterestofoneormoreotherpersons.
7 2.Exceptasotherwiseprovidedinthetermsofatrustorsections469.399to
8469.487,sections469.399to469.487applywhenthisstateistheprincipalplaceof
9administrationofatrustorestateorthesitusofpropertythatisnotheldinatrustor
10estateandissubjecttoalifeestateorotherterminterestdescribedinsubdivision(2)of
11subsection1ofthissection.Byacceptingthetrusteeshipofatrusthavingitsprincipal
12placeofadministrationinthisstateorbymovingtheprincipalplaceofadministration
13ofatrusttothisstate,thetrusteesubmitstotheapplicationofsections469.399to
14469.487toanymatterwithinthescopeofsections469.399to469.487involvingthetrust.
469.403.1.[Inallocatingreceiptsanddisbursementstoorbetweenprincipaland
2income,andwithrespecttoanymatterwithinthescopeof]Inmakinganallocationor
3determinationorexercisingdiscretionundersections469.413to469.421,afiduciary
4shall:
5 (1)[Shall] Actingoodfaith,basedonwhatisfairandreasonabletoall
6beneficiaries;
7 (2)Administeratrustorestate[under] impartially,excepttotheextentthetermsof
8thetrustmanifestanintentthatthefiduciaryshallor[thewill]mayfavoroneormore
9beneficiaries;
10 (3)Administerthetrustorestateinaccordancewiththetermsofthetrust, even
11ifthereisadifferentprovisioninsections[469.401] 469.399to[469.467] 469.487; and
HB608 10 12 [(2)May](4)Administer[a]thetrustorestate[byexercising] inaccordancewith
13sections469.399to469.487,excepttotheextentthetermsofthetrustprovideotherwise
14orauthorizethefiduciarytodetermineotherwise.
15 2.Afiduciary'sallocation,determination,orexerciseofdiscretionunder
16sections469.399to409.487ispresumedtobefairandreasonabletoallbeneficiaries.A
17fiduciarymayexerciseadiscretionarypowerofadministrationgiventothefiduciarybythe
18termsofthetrust[orthewill,evenifthe],andanexerciseofthepowerthatproducesaresult
19differentfromaresultrequiredorpermittedbysections[469.401] 469.399to[469.467;]
20469.487doesnotcreateaninferencethatthefiduciaryabusedthefiduciary'sdiscretion.
21 [(3)Shalladministeratrustorestatepursuant]
22 3.Afiduciaryshall:
23 (1)Addareceiptto[sections469.401to469.467if]principal,totheextentneither
24thetermsofthetrust[orthewilldonotcontainadifferentprovisionordonotgive]nor
25sections469.399to469.487allocatethe[fiduciaryadiscretionarypowerofadministration]
26receiptbetweenincomeandprincipal; and
27 [(4)Shalladdareceiptor](2)Chargeadisbursementtoprincipal, totheextent[that
28thetermsofthetrustandsections469.401to469.467donotprovidearuleforallocatingthe
29receiptordisbursementtoorbetweenprincipalandincome.
30 2.Inexercisingthepowertoadjustpursuanttosection469.405oradiscretionary
31powerofadministrationregardingamatterwithinthescopeofsections469.401to469.467,
32whethergrantedbythetermsofatrust,awill,orsections469.401to469.467,afiduciary
33shalladministeratrustorestateimpartially,basedonwhatisfairandreasonabletoallofthe
34beneficiaries,excepttotheextentthatthetermsofthetrustorthewillclearlymanifestan
35intentthatthefiduciaryshallormayfavoroneormoreofthebeneficiaries.Adetermination
36inaccordancewithsections469.401to469.467ispresumedtobefairandreasonabletoallof
37thebeneficiaries] neitherthetermsofthetrustnorsections469.399to469.487allocate
38thedisbursementbetweenincomeandprincipal.
39 4.Afiduciarymayexercisethepowertoadjustundersection469.405,convert
40anincometrusttoaunitrustundersubdivision(1)ofsubsection1ofsection469.475,
41changethepercentageormethodusedtocalculateaunitrustamountundersubdivision
42(2)ofsubsection1ofsection469.475,orconvertaunitrusttoanincometrustunder
43subdivision(3)ofsubsection1ofsection469.475,ifthefiduciarydeterminestheexercise
44ofthepowerwillassistthefiduciarytoadministerthetrustorestateimpartially.
45 5.Factorsthefiduciaryshallconsiderinmakingthedeterminationunder
46subsection4ofthissectioninclude:
47 (1)Thetermsofthetrust;
48 (2)Thenature,distributionstandards,andexpecteddurationofthetrust;
HB608 11 49 (3)Theeffectoftheallocationrules,includingspecificadjustmentsbetween
50incomeandprincipal,undersections407.413to407.461;
51 (4)Thedesirabilityofliquidityandregularityofincome;
52 (5)Thedesirabilityofthepreservationandappreciationofprincipal;
53 (6)Theextenttowhichanassetisusedormaybeusedbyabeneficiary;
54 (7)Theincreaseordecreaseinthevalueofprincipalassets,reasonably
55determinedbythefiduciary;
56 (8)Whetherandtowhatextentthetermsofthetrustgivethefiduciarypowerto
57accumulateincomeorinvadeprincipalorprohibitthefiduciaryfromaccumulating
58incomeorinvadingprincipal;
59 (9)Theextenttowhichthefiduciaryhasaccumulatedincomeorinvaded
60principalinprecedingaccountingperiods;
61 (10)Theeffectofcurrentandreasonablyexpectedeconomicconditions;and
62 (11)Thereasonablyexpectedtaxconsequencesoftheexerciseofthepower.
469.404.1.Inthissection,"fiduciarydecision"means:
2 (1)Afiduciary’sallocationbetweenincomeandprincipalorother
3determinationregardingincomeandprincipalrequiredorauthorizedbythetermsof
4thetrustorsections469.399to469.487;
5 (2)Thefiduciary’sexerciseornonexerciseofadiscretionarypowerregarding
6incomeandprincipalgrantedbythetermsofthetrustorsections469.399to469.487,
7includingthepowertoadjustundersection469.405,convertanincometrusttoa
8unitrustundersubdivision(1)ofsubsection1ofsection469.475,changethepercentage
9ormethodusedtocalculateaunitrustamountundersubdivision(2)ofsubsection1of
10section469.475,orconvertaunitrusttoanincometrustundersubdivision(3)of
11subsection1section469.475;or
12 (3)Thefiduciary’simplementationofadecisiondescribedinsubdivision(1)or
13(2)ofthissubsection.
14 2.Thecourtshallnotorderafiduciarytochangeafiduciarydecisionunlessthe
15courtdeterminesthatthefiduciarydecisionwasanabuseofthefiduciary’sdiscretion.
16 3.Ifthecourtdeterminesthatafiduciarydecisionwasanabuseofthe
17fiduciary’sdiscretion,thecourtmayorderaremedyauthorizedbylaw,includingunder
18section456.10-1001.Toplacethebeneficiariesinthepositionsthebeneficiarieswould
19haveoccupiediftherehadnotbeenanabuseofthefiduciary’sdiscretion,thecourtmay
20order:
21 (1)Thefiduciarytoexerciseorrefrainfromexercisingthepowertoadjust
22undersection469.405;
HB608 12 23 (2)Thefiduciarytoexerciseorrefrainfromexercisingthepowertoconvertan
24incometrusttoaunitrustundersubdivision(1)ofsubsection1ofsection469.475,
25changethepercentageormethodusedtocalculateaunitrustamountundersubdivision
26(2)ofsubsection1ofsection469.475,orconvertaunitrusttoanincometrustunder
27subdivision(3)ofsubsection1ofsection469.475;
28 (3)Thefiduciarytodistributeanamounttoabeneficiary;
29 (4)Abeneficiarytoreturnsomeorallofadistribution;or
30 (5)Thefiduciarytowithholdanamountfromoneormorefuturedistributions
31toabeneficiary.
32 4.Onpetitionbyafiduciaryforinstruction,thecourtmaydeterminewhethera
33proposedfiduciarydecisionwillresultinanabuseofthefiduciary’sdiscretion.Ifthe
34petitiondescribestheproposeddecision,containssufficientinformationtoinformthe
35beneficiaryofthereasonsformakingtheproposeddecisionandthefactsonwhichthe
36fiduciaryrelies,andexplainshowthebeneficiarywillbeaffectedbytheproposed
37decision,abeneficiarythatopposestheproposeddecisionhastheburdentoestablish
38thatitwillresultinanabuseofthefiduciary’sdiscretion.
469.405.1.[Atrusteemayadjustbetweenprincipalandincometotheextentthe
2trusteeconsidersnecessaryifthetrusteeinvestsandmanagestrustassetsasaprudent
3investor,thetermsofthetrustdescribetheamountthatmayorshallbedistributedtoa
4beneficiarybyreferringtothetrust'sincome,andthetrusteedetermines,afterapplying
5subsection1ofsection469.403,thatthetrusteeisunabletocomplywithsubsection2of
6section469.403.] Exceptasotherwiseprovidedinthetermsofatrustorthissection,a
7fiduciary,inarecord,withoutcourtapproval,mayadjustbetweenincomeandprincipal
8ifthefiduciarydeterminestheexerciseofthepowertoadjustwillassistthefiduciaryto
9administerthetrustorestateimpartially.
10 2.Thissectiondoesnotcreateadutytoexerciseorconsiderthepowertoadjust
11undersubsection1ofthissectionortoinformabeneficiaryabouttheapplicabilityof
12thissection.
13 3.Afiduciarythatingoodfaithexercisesorfailstoexercisethepowertoadjust
14undersubsection1ofthissectionisnotliabletoapersonaffectedbytheexerciseor
15failuretoexercise.
16 [2.]4.Indecidingwhetherandtowhatextenttoexercisethepower[conferredby]to
17adjustundersubsection1ofthissection,a[trustee] fiduciaryshallconsiderallfactorsthe
18fiduciaryconsidersrelevant[tothetrustanditsbeneficiaries], including[thefollowing]
19relevantfactors[totheextentrelevant:] insubsection5ofsection469.403andthe
20applicationofsections469.423,469.435,and469.445.
21 [(1)Thenature,purposeandexpecteddurationofthetrust;
HB608 13 22 (2)Theintentofthesettlor;
23 (3)Theidentityandcircumstancesofthebeneficiaries;
24 (4)Theneedsforliquidity,regularityofincome,andpreservationandappreciationof
25capital;
26 (5)Theassetsheldinthetrust,includingtheextenttowhichsuchassetsconsistof
27financialassets,interestsincloselyheldenterprises,tangibleandintangiblepersonal
28property,orrealproperty,andtheextenttowhichsuchassetsareusedbyabeneficiary,and
29whethersuchassetswerepurchasedbythetrusteeorreceivedfromthesettlor;
30 (6)Thenetamountallocatedtoincomepursuanttosections469.401to469.467,
31otherthanthissection,andtheincreaseordecreaseinthevalueoftheprincipalassets,which
32thetrusteemayestimateastoassetsforwhichmarketvaluesarenotreadilyavailable;
33 (7)Whetherandtowhatextentthetermsofthetrustgivethetrusteethepowerto
34invadeprincipaloraccumulateincome,orprohibitthetrusteefrominvadingprincipalor
35accumulatingincome,andtheextenttowhichthetrusteehasexercisedapowerfromtimeto
36timetoinvadeprincipaloraccumulateincome;
37 (8)Theactualandanticipatedeffectofeconomicconditionsonprincipalandincome
38andeffectsofinflationanddeflation;and
39 (9)Theanticipatedtaxconsequencesofanadjustment.
40 3.]5.A[trusteemay]fiduciaryshallnotexercisethepowerundersubsection1of
41thissectiontomakeanadjustmentorundersection469.435tomakeadeterminationthat
42anallocationisinsubstantialif:
43 (1)[Thatdiminishestheincomeinterestinatrustwhichrequiresalloftheincometo
44bepaidatleastannuallytoaspouseandforwhichanestatetaxorgifttaxmaritaldeduction
45wouldbeallowed,inwholeorinpart,ifthetrusteedidnothavethepowertomakethe
46adjustment;
47 (2)Thatreducestheactuarialvalueoftheincomeinterestinatrusttowhichaperson
48transferspropertywiththeintenttoqualifyforagifttaxexclusion;
49 (3)Thatchanges] Theadjustmentordeterminationwouldreducetheamount
50payabletoa[beneficiary] currentincomebeneficiaryfromatrustthatqualifiesfora
51specialtaxbenefit,excepttotheextenttheadjustmentismadetoprovidefora
52reasonableapportionmentofthetotalreturnofthetrustbetweenthecurrentincome
53beneficiaryandsuccessorbeneficiaries;
54 (2)Theadjustmentordeterminationwouldchangetheamountpayabletoa
55beneficiary,asafixedannuityorafixedfractionofthevalueofthetrustassets, underthe
56termsofthetrust;
57 [(4)Fromany](3)Theadjustmentordeterminationwouldreduceanamountthat
58ispermanentlysetasideforacharitable[purposes] purposeunder[awillor]thetermsof[a]
HB608 14 59thetrust[totheextentthattheexistenceofthepowertoadjustwouldchangethecharacterof
60theamount] ,unlessbothincomeandprincipalaresetasidefor[federalincome,giftor
61estatetaxpurposes] thecharitablepurpose;
62 [(5)If](4)Possessingorexercisingthepower[tomakeanadjustmentcausesan
63individual] wouldcauseapersontobetreatedastheownerofallorpartofthetrustfor
64[incometaxpurposes,andtheindividualwouldnotbetreatedastheownerifthetrusteedid
65notpossessthepowertomakeanadjustment] federalincometaxpurposes;
66 [(6)If](5)Possessingorexercisingthepower[tomakeanadjustmentcauses] would
67causeallorpartofthevalueofthetrustassetstobeincluded[forestatetaxpurposes] inthe
68grossestateofanindividual[whohas]forfederalestatetaxpurposes;
69 (6)Possessingorexercisingthepower[toremoveorappointatrustee,orboth,]
70wouldcauseanindividualtobetreatedasmakingagiftforfederalgifttaxpurposes;
71 (7)Thefiduciaryisnotanindependentperson;
72 (8)Thetrustisirrevocableand[theassetswouldnotbeincludedintheestateofthe
73individualifthetrusteedidnotpossess] providesforincometobepaidtothesettlorand
74possessingorexercisingthepower[tomakeanadjustment] wouldcausetheadjusted
75principalorincometobeconsideredanavailableresourceoravailableincomeundera
76public-benefitprogram;or
77 [(7)Ifthetrusteeisabeneficiaryofthetrust;or
78 (8)Ifthetrusteeisnotabeneficiary,buttheadjustmentwouldbenefitthetrustee
79directlyorindirectly]
80 (9)Thetrustisaunitrustundersections469.471to469.487.
81 [4.]6.If[subdivision(5),(6),(7)or(8)of]subsection[3]5ofthissectionappliestoa
82[trusteeandthereismorethanonetrustee,acotrusteetowhomtheprovisiondoes]fiduciary:
83 (1)Aco-fiduciarytowhichsubdivisions(4)to(7)ofsubsection5ofthissection
84donotapplymay[make] exercisethe[adjustment] powertoadjustunlesstheexerciseofthe
85powerbytheremaining[trusteeortrustees] co-fiduciaryorco-fiduciariesisnotpermitted
86bythetermsofthetrustorlawotherthansections469.399to469.487;and
87 (2)Ifthereisnoco-fiduciarytowhichsubdivisions(4)to(7)ofsubsection5of
88thissectiondonotapply,thefiduciarymayappointaco-fiduciarytowhichsubdivisions
89(4)to(7)ofsubsection5ofthissectiondonotapply,whichmaybeaspecialfiduciary
90withlimitedpowers,andtheappointedco-fiduciarymayexercisethepowertoadjust
91undersubsection1ofthissection,unlesstheappointmentofaco-fiduciaryorthe
92exerciseofthepowerbyaco-fiduciaryisnotpermittedbythetermsofthetrustorlaw
93otherthanundersections469.399to469.487.
94 [5.]7.A[trustee] fiduciarymayrelease[theentirepowerconferredbysubsection1
95ofthissection,ormayreleaseonlythepowertoadjustfromincometoprincipalorthepower
HB608 15 96toadjustfromprincipaltoincomeifthetrusteeisuncertainaboutwhetherpossessingor
97exercisingthepowerwill]ordelegatetoaco-fiduciarythepowertoadjustunder
98subsection1ofthissectionifthefiduciarydeterminesthatthefiduciary'spossessionor
99exerciseofthepowerwillormay:
100 (1)Causearesultdescribedinsubdivisions(1)to(6)orsubdivision(8)ofsubsection
101[3]5ofthissection[,];or[ifthetrusteedeterminesthatpossessingorexercisingthepower
102willormay]
103 (2)Deprivethetrustofataxbenefitorimposeataxburdennotdescribedin
104subdivisions(1)to(6)ofsubsection[3]5ofthissection.
105 8.Afiduciary'sreleaseordelegationtoaco-fiduciaryundersubsection7ofthis
106sectionofthepowertoadjustundersubsection1ofthissection:
107 (1)Shallbeinarecord;
108 (2)Appliestotheentirepower,unlessthereleaseordelegationprovidesa
109limitation,whichmaybealimitationtothepowertoadjust:
110 (a)Fromincometoprincipal;
111 (b)Fromprincipaltoincome;
112 (c)Forspecifiedproperty;or
113 (d)Inspecifiedcircumstances;
114 (3)Foradelegation,maybemodifiedbyare-delegationunderthissubsection
115bytheco-fiduciarytowhichthedelegationismade;and
116 (4)Subjecttosubdivision(3)ofthissubsection,is[maybe]permanent[orfor]
117unlessthereleaseordelegationprovidesaspecifiedperiod,includingaperiodmeasuredby
118thelifeofanindividualorthelivesofmorethanoneindividual.
119 [6.]9.Termsofatrustthatdenyorlimitthepower[ofatrustee] to[makean
120adjustment] adjustbetweenincomeandprincipal[andincome] donotaffecttheapplication
121ofthissectionunless[itisclearfrom] thetermsofthetrust[thatthetermsareintendedto]
122expresslydeny[thetrustee] orlimitthepower[ofadjustmentconferredby]toadjustunder
123subsection1ofthissection.
124 10.Theexerciseofthepowertoadjustundersubsection1ofthissectioninany
125accountingperiodmayapplytothecurrentperiod,theimmediatelyprecedingperiod,
126andoneormoresubsequentperiods.
127 11.Adescriptionoftheexerciseofthepowertoadjustundersubsection1ofthis
128sectionshallbe:
129 (1)Includedinareport,ifany,senttobeneficiariesundersubsection3ofsection
130456.8-813;or
131 (2)Communicatedatleastannuallytothequalifiedbeneficiariesdefinedunder
132section456.1-103otherthanallbeneficiariesthatreceiveorareentitledtoreceive
HB608 16 133incomefromthetrustorwouldbeentitledtoreceiveadistributionofprincipalifthe
134trustwereterminatedatthetimethenoticeissent,assumingnopowerofappointment
135isexercised.
469.413.[Afteradecedentdies,inthecase]1.Thissectionapplieswhen:
2 (1)Thedeathofanindividualresultsinthecreationofanestate[, orafter] or
3trust;or
4 (2)Anincomeinterestinatrust[ends,thefollowingrulesapply:] terminates,
5whetherthetrustcontinuesorisdistributed.
6 [(1)]2.Afiduciaryofanestateor[ofaterminating] trustwithanincomeinterest
7thatterminatesshalldetermine, undersubsection7ofthissectionandsections469.417to
8469.462,theamountofnetincomeandnetprincipalreceiptsreceivedfromproperty
9specificallygiventoabeneficiary[pursuanttotherulesinsections469.417to469.461which
10applytotrusteesandtherulesinsubdivision(5)ofthissection]. Thefiduciaryshalldistribute
11thenetincomeandnetprincipalreceiptstothebeneficiary[who] thatistoreceivethe
12specificproperty[;].
13 [(2)]3.Afiduciaryshalldeterminethe[remaining] incomeandnetincomeof[a
14decedent's] anestateor[aterminating] incomeinterest[pursuanttotherulesin]inatrust
15thatterminates,otherthantheamountofnetincomedeterminedundersubsection2of
16thissection,undersections469.417to[469.461whichapplytotrustees] 469.462andby:
17 [(a)](1)Includinginnetincomeallincomefrompropertyusedorsoldtodischarge
18liabilities;
19 [(b)](2)Payingfromincomeorprincipal,inthefiduciary'sdiscretion,feesof
20attorneys,accountants, andfiduciaries;courtcostsandotherexpensesofadministration;and
21intereston[death] estateandinheritancetaxesandothertaxesimposedbecauseofthe
22decedent'sdeath, butthefiduciarymaypay[those] theexpensesfromincomeofproperty
23passingtoatrustforwhichthefiduciaryclaims[an]afederalestatetaxmaritalorcharitable
24deductiononlytotheextent[that]:
25 (a)Thepaymentof[those] theexpensesfromincomewillnotcausethereductionor
26lossofthededuction;[and]or
27 (b)Thefiduciarymakesanadjustmentundersubsection2ofsection469.462;
28and
29 [(c)](3)Payingfromprincipal[all]otherdisbursementsmadeorincurredin
30connectionwiththesettlementof[adecedent's] theestateorthewindingupof[a
31terminating] anincomeinterest[,] thatterminates,including:
32 (a)Totheextentauthorizedbythedecedent'swill,thetermsofthetrust,or
33applicablelaw,debts,funeralexpenses,dispositionofremains,familyallowances,[and
HB608 17 34deathtaxes] estateandinheritancetaxes,andothertaxesimposedbecauseofthe
35decedent'sdeath;and
36 (b)Relatedpenaltiesthatareapportioned, bythedecedent'swill,thetermsofthe
37trust,orapplicablelaw,totheestateor[terminating] incomeinterest[bythewill,theterms
38ofthetrust,orapplicablelaw;]thatterminates.
39 [(3)Afiduciaryshalldistributetoabeneficiarywhoreceivesapecuniaryamount
40outrighttheinterestoranyotheramountprovidedbythewill,thetermsofthetrust,orinthe
41absenceofanysuchprovisions,theprovisionsofsection473.633,fromnetincome
42determinedpursuanttosubdivision(2)ofthissectionorfromprincipaltotheextentthatnet
43incomeisinsufficient.]
44 4.Ifadecedent'swill,thetermsofatrust,orapplicablelawprovidesforthe
45paymentofinterestortheequivalentofinteresttoabeneficiarythatreceivesa
46pecuniaryamountoutright,thefiduciaryshallmakethepaymentfromnetincome
47determinedundersubsection3ofthissectionorfromprincipaltotheextentnetincome
48isinsufficient.
49 5.Ifabeneficiaryistoreceiveapecuniaryamountoutrightfromatrustafteran
50incomeinterestendsbecauseofanincomebeneficiary'sdeath,andnopaymentofinterest
51or[otheramount] theequivalentofinterestisprovidedforbythetermsofthetrustor
52applicablelaw,thefiduciaryshall[distribute] paytheinterestor[otheramount] the
53equivalentofinteresttowhichthebeneficiarywouldbeentitledunderapplicablelawifthe
54pecuniaryamountwererequiredtobepaidunderawill[;].
55 [(4)]6.Afiduciaryshalldistribute[the]netincomeremainingafter[distributions]
56paymentsrequiredby[subdivision(3)]subsections4and5ofthissectioninthemanner
57describedinsection469.415toallotherbeneficiaries,includingabeneficiary[who] that
58receivesapecuniaryamountintrust,evenifthebeneficiaryholdsanunqualifiedpowerto
59withdrawassetsfromthetrustorotherpresentlyexercisablegeneralpowerofappointment
60overthetrust[;].
61 [(5)]7.Afiduciary[may] shallnotreduceprincipalorincomereceiptsfromproperty
62describedin[subdivision(1)]subsection2ofthissectionbecauseofapaymentdescribedin
63sections469.451and469.453totheextent[that]thedecedent'swill,thetermsofthetrust,or
64applicablelawrequiresthefiduciarytomakethepaymentfromassetsotherthantheproperty
65ortotheextent[that]thefiduciaryrecoversorexpectstorecoverthepaymentfromathird
66party.Thenetincomeandprincipalreceiptsfromtheproperty[are]shallbedeterminedby
67including[allof]theamountsthefiduciaryreceivesorpays[withrespectto]regardingthe
68property,whether[thoseamounts] theamountaccruedorbecameduebefore,on,orafterthe
69dateof[adecedent's] thedecedent'sdeathoranincomeinterest'sterminatingevent,and[by]
HB608 18 70makingareasonableprovisionfor[amountsthatthefiduciarybelieves] anamounttheestate
71or[terminating] incomeinterestmaybecomeobligatedtopayafterthepropertyisdistributed.
469.415.1.[Each] Excepttotheextentsections469.471to469.487applyfora
2beneficiarythatisatrust,eachbeneficiarydescribedin[subdivision(4)]subsection6of
3section469.413isentitledtoreceivea[portion] shareofthenetincomeequaltothe
4beneficiary'sfractionalinterestinundistributedprincipalassets,usingvaluesasofthe
5distributiondate.Ifafiduciarymakesmorethanonedistributionofassetstobeneficiariesto
6[whom] whichthissectionapplies,eachbeneficiary,including[onewho]abeneficiarythat
7doesnotreceivepartofthedistribution,isentitled,asofeachdistributiondate,toashareof
8thenetincomethefiduciary[has]receivedafterthe[dateof]decedent'sdeath[or],an
9incomeinterest'sotherterminatingevent, or[earlier] theprecedingdistribution[datebut
10hasnotdistributedasofthecurrentdistributiondate]bythefiduciary.
11 2.Indeterminingabeneficiary'sshareofnetincomeundersubsection1ofthis
12section, thefollowingrulesapply:
13 (1)Thebeneficiaryisentitledtoreceivea[portion] shareofthenetincomeequalto
14thebeneficiary'sfractionalinterestintheundistributedprincipalassetsimmediatelybefore
15thedistributiondate[, includingassetsthatlatermaybesoldtomeetprincipalobligations];
16 (2)Thebeneficiary'sfractionalinterest[intheundistributedprincipalassetsshall]
17undersubdivision(1)ofthissubsectionshallbecalculated[withoutregardtoproperty
18specificallygiventoabeneficiaryandpropertyrequiredtopaypecuniaryamountsnotin
19trust;
20 (3)Thebeneficiary'sfractionalinterestintheundistributedprincipalassetsshallbe
21calculated]:
22 (a)Onthe[basisofthe]aggregatevalueof[those] theassetsasofthedistribution
23datewithoutreducingthevaluebyanyunpaidprincipalobligation;and
24 (b)Withoutregardto:
25 a.Propertyspecificallygiventoabeneficiaryunderthedecedent'swillorthe
26termsofthetrust;and
27 b.Propertyrequiredtopaypecuniaryamountsnotintrust;and
28 [(4)](3)Thedistributiondate[forpurposesofthissection] undersubdivision(1)of
29thissubsectionmaybethedateasofwhichthefiduciarycalculatesthevalueoftheassetsif
30thatdateisreasonablynearthedateonwhichtheassetsare[actually] distributed.
31 3.[If]Totheextentafiduciarydoesnotdistributeunderthissectionall[of]the
32collectedbutundistributednetincometoeach[person] beneficiaryasofadistributiondate,
33thefiduciaryshallmaintain[appropriate] recordsshowingtheinterestofeachbeneficiaryin
34[that]thenetincome.
HB608 19 35 4.Ifthissectionappliestoincomefromanasset,afiduciarymayapplytherulesin
36thissection[, totheextentthatthefiduciaryconsidersitappropriate,] tonetgainorloss
37realizedfromthedispositionoftheassetafterthe[dateofdeathor]decedent'sdeath,an
38incomeinterest'sterminatingevent, or[earlier] theprecedingdistribution[datefromthe
39dispositionofaprincipalassetifthissectionappliestotheincomefromtheasset] bythe
40fiduciary.
469.417.1.Anincomebeneficiaryisentitledtonetincomeinaccordancewiththe
2termsofthetrustfromthedate[onwhichthe]anincomeinterestbegins.[An]Theincome
3interestbeginsonthedatespecifiedinthetermsofthetrustor,ifnodateisspecified,onthe
4dateanassetbecomessubjectto[atrustorsuccessiveincomeinterest]:
5 (1)Thetrustforthecurrentincomebeneficiary;or
6 (2)Asuccessiveinterestforasuccessorbeneficiary.
7 2.Anassetbecomessubjecttoatrustundersubdivision(1)ofsubsection1ofthis
8section:
9 (1)[Onthedateitistransferredtothetrustinthecaseof]Foranassetthatis
10transferredto[a]thetrustduringthe[transferor's] settlor'slife,onthedatetheassetis
11transferred;
12 (2)[Onthedateofatestator'sdeathinthecaseof]Foranassetthatbecomessubject
13to[a]thetrust[byreason] becauseofa[will] decedent'sdeath,onthedateofthe
14decedent'sdeath, evenifthereisaninterveningperiodofadministrationofthe[testator's]
15decedent'sestate;or
16 (3)[Onthedateofanindividual'sdeathinthecaseof]Foranassetthatistransferred
17toafiduciarybyathirdpartybecauseof[theindividual's] adecedent'sdeath, onthedateof
18thedecedent'sdeath.
19 3.Anassetbecomessubjecttoasuccessive[income] interestundersubdivision(2)
20ofsubsection1ofthissectiononthedayaftertheprecedingincomeinterestends,as
21determined[pursuantto]undersubsection4ofthissection,evenifthereisanintervening
22periodofadministrationtowinduptheprecedingincomeinterest.
23 4.Anincomeinterestendsonthedaybeforeanincomebeneficiarydiesoranother
24terminatingeventoccurs[,] oronthelastdayofaperiodduringwhichthereisnobeneficiary
25to[whom] whicha[trustee] fiduciarymayorshalldistributeincome.
469.419.1.A[trustee] fiduciaryshallallocateanincomereceiptordisbursement,
2otherthan[one]areceipttowhich[subdivision(1)]subsection2ofsection469.413applies,
3toprincipalifitsduedateoccursbefore[adecedentdiesinthecaseof]thedateonwhich:
4 (1)Foranestate, thedecedentdied;or[before]
5 (2)Foratrustorsuccessiveinterest,anincomeinterestbegins[inthecaseofatrust
6orsuccessiveincomeinterest].
HB608 20 7 2.[Atrusteeshallallocateanincomereceiptordisbursementtoincomeifits]Ifthe
8duedateofaperiodicincomereceiptordisbursementoccursonorafterthedateonwhich
9adecedent[dies] diedoranincomeinterest[beginsanditisaperiodicduedate.Anincome]
10began,afiduciaryshallallocatethereceiptordisbursementtoincome.
11 3.Ifanincomereceiptordisbursementisnotperiodicorhasnoduedate,a
12fiduciaryshall[betreated] treatthereceiptordisbursementunderthissectionas
13accruingfromdaytoday[ifitsduedateisnotperiodicorithasnoduedate]. Thefiduciary
14shallallocatetoprincipaltheportionofthereceiptordisbursementaccruingbeforethedate
15onwhichadecedent[dies] diedoranincomeinterest[beginsshallbeallocatedtoprincipal]
16began,andtoincomethebalance[shallbeallocatedtoincome].
17 [3.]4.Areceiptordisbursementisperiodicundersubsections2and3ofthis
18sectionif:
19 (1)Thereceiptordisbursementshallbepaidatregularintervalsunderan
20obligationtomakepayments;or
21 (2)Thepayercustomarilymakespaymentsatregularintervals.
22 5.Anitemofincomeor[an]obligationisdueunderthissectiononthedate[a
23payment] thepayerisrequiredtomakeapayment. Ifapaymentdateisnotstated,thereis
24noduedate[forthepurposesofsections469.401to469.467].
25 6.Distributionstoshareholdersorotherownersfromanentitytowhichsection
26469.423appliesare[deemedtobe]due:
27 (1)Onthedatefixedbyoronbehalfoftheentityfordetermining[whois]the
28personsentitledtoreceivethedistribution[or,];
29 (2)Ifnodateisfixed,onthe[declaration] date[for]ofthedecisionbyoronbehalf
30oftheentitytomakethedistribution[. Aduedateisperiodicforreceiptsordisbursements
31thatshallbepaidatregularintervalsunderaleaseoranobligationtopayinterestorifan
32entitycustomarilymakesdistributionsatregularintervals]; or
33 (3)Ifnodateisfixedandthefiduciarydoesnotknowthedateofthedecisionby
34oronbehalfoftheentitytomakethedistribution,onthedatethefiduciarylearnsofthe
35decision.
469.421.1.[Forpurposesof]Inthissection,[thephrase] "undistributedincome"
2meansnetincomereceivedonorbeforethedateonwhichanincomeinterestends.The
3[phrase] termdoesnotincludeanitemofincomeorexpensethatisdueoraccrued[,] ornet
4incomethathasbeenaddedorisrequiredtobeaddedtoprincipalunderthetermsofthetrust.
5 2.Exceptasotherwiseprovidedinsubsection3ofthissection,whenamandatory
6incomeinterestofabeneficiaryends,the[trustee] fiduciaryshallpay[toamandatory
7incomebeneficiarywhosurvivesthatdate,ortheestateofadeceasedmandatoryincome
8beneficiarywhosedeathcausestheinteresttoend,] thebeneficiary'sshareofthe
HB608 21 9undistributedincomethatisnotdisposedofunderthetermsofthetrust[unlessthe]tothe
10beneficiaryor,ifthebeneficiarydoesnotsurvivethedatetheinterestends,tothe
11beneficiary’sestate.
12 3.Ifabeneficiaryhasanunqualifiedpowerto[revoke] withdrawmorethanfive
13percentofthevalueofatrustimmediatelybefore[the]anincomeinterestends[. Inthelatter
14case,]:
15 (1)Thefiduciaryshallallocatetoprincipaltheundistributedincomefromthe
16portionofthetrustthatmaybe[revokedshallbeaddedtoprincipal] withdrawn;and
17 (2)Subsection2ofthissectionappliesonlytothebalanceoftheundistributed
18income.
19 [3.]4.Whena[trustee's] fiduciary'sobligationtopayafixedannuityorafixed
20fractionofthevalueof[thetrust's] assetsends,the[trustee] fiduciaryshallproratethefinal
21payment[ifandtotheextent] asrequired[byapplicablelawtoaccomplishapurposeofthe
22trustoritssettlorrelating] topreserveanincometax,gifttax,estatetax,orothertax
23[requirements] benefit.
469.423.1.[Forpurposesof]Inthissection[, theterm]:
2 (1)"Capitaldistribution"meansanentitydistributionofmoneythatisa:
3 (a)Returnofcapital;or
4 (b)Distributionintotalorpartialliquidationoftheentity;
5 (2)"Entity":
6 (a)Meansacorporation,partnership,limitedliabilitycompany,regulatedinvestment
7company,realestateinvestmenttrust,commontrustfund,oranyotherorganization[inwhich
8atrusteehasaninterest,otherthanatrustorestatetowhichsection469.425applies,a
9businessoractivitytowhichsection469.427applies,oranasset-backedsecuritytowhich
10section469.449applies.] orarrangementinwhichafiduciaryownsorholdsaninterest,
11whetherornottheentityisataxpayerforfederalincometaxpurposes;and
12 (b)Doesnotinclude:
13 a.Atrustorestatetowhichsection469.425applies;
14 b.Abusinessorotheractivitytowhichsection469.427appliesthatisnot
15conductedbyanentitydescribedinparagraph(a)ofthissubdivision;
16 c.Anasset-backedsecurity;or
17 d.Aninstrumentorarrangementtowhichsection469.450applies;
18 (3)"Entitydistribution"meansapaymentortransferbyanentitymadetoa
19personintheperson’scapacityasanownerorholderofaninterestintheentity.
20 2.Inthissection,anattributeoractionofanentityincludesanattributeor
21actionofanyotherentityinwhichtheentityownsorholdsaninterest,includingan
22interestownedorheldindirectlythroughanotherentity.
HB608 22 23 [2.]3.Exceptasotherwiseprovidedin[thissection] subdivisions(2)to(4)of
24subsection4ofthissection, a[trustee] fiduciaryshallallocatetoincome:
25 (1)Moneyreceived[from] inanentity[.
26 3.Atrusteeshallallocatethefollowingreceiptsfromanentitytoprincipal:
27 (1)Propertyotherthanmoney;
28 (2)Moneyreceivedinonedistributionoraseriesofrelateddistributionsinexchange
29forpartorallofatrust'sinterestintheentity;
30 (3)Moneyreceivedintotalorpartialliquidationoftheentity;and
31 (4)Moneyreceivedfromanentitythatis]distribution;and
32 (2)Tangiblepersonalpropertyofnominalvaluereceivedfromtheentity.
33 4.Afiduciaryshallallocatetoprincipal:
34 (1)Propertyreceivedinanentitydistributionthatisnot:
35 (a)Money;or
36 (b)Tangiblepersonalpropertyofnominalvalue;
37 (2)Moneyreceivedinanentitydistributioninanexchangeforpartorallofthe
38fiduciary’sinterestintheentity,totheextenttheentitydistributionreducesthe
39fiduciary’sinterestintheentityrelativetotheinterestsofotherpersonsthatownor
40holdinterestsintheentity;
41 (3)Moneyreceivedinanentitydistributionthatthefiduciarydeterminesor
42estimatesisacapitaldistribution;and
43 (4)Moneyreceivedinanentitydistributionfromanentitythatis:
44 (a)Aregulatedinvestmentcompanyor[a]realestateinvestmenttrustifthemoney
45[distributed] receivedisacapitalgaindividendforfederalincometaxpurposes[.
46 4.Moneyisreceivedinpartialliquidation:
47 (1)Totheextentthattheentity,atornearthetimeofadistribution,indicatesthat
48suchmoneyisadistributioninpartialliquidation;or
49 (2)If];or
50 (b)Treatedforfederalincometaxpurposescomparablytothetreatment
51describedinparagraph(a)ofthissubdivision.
52 5.Afiduciarymaydetermineorestimatethatmoneyreceivedinanentity
53distributionisacapitaldistribution:
54 (1)Byrelying,withoutinquiryorinvestigation,onacharacterizationofthe
55entitydistributionprovidedbyoronbehalfoftheentityunlessthefiduciary:
56 (a)Determines,onthebasisofinformationknowntothefiduciary,thatthe
57characterizationisormaybeincorrect;or
58 (b)Ownsorholdsmorethanfiftypercentofthevotinginterestintheentity;
HB608 23 59 (2)Bydeterminingorestimating,onthebasisofinformationknowntothe
60fiduciaryorprovidedtothefiduciarybyoronbehalfoftheentity,thatthetotalamount
61ofmoneyandpropertyreceivedbythefiduciaryin[a]theentitydistributionoraseriesof
62relatedentitydistributionsisorwillbegreaterthantwentypercentofthe[entity'sgross
63assets,asshownbytheentity'syear-endfinancialstatementsimmediatelyprecedingthe
64initialreceipt.
65 5.Moneyisnotreceivedinpartialliquidation,normayitbetakenintoaccount
66pursuanttosubdivision(2)ofsubsection4ofthissection,totheextentthatsuchmoneydoes
67notexceedtheamountofincometaxthatatrusteeorbeneficiaryshallpayontaxableincome
68oftheentitythatdistributesthemoney.
69 6.Atrusteemayrelyuponastatementmadebyanentityaboutthesourceor
70characterofadistributionifthestatementismadeatornearthetimeofdistributionbythe
71entity'sboardofdirectorsorotherpersonorgroupofpersonsauthorizedtoexercisepowersto
72paymoneyortransferpropertycomparabletothoseofacorporation'sboardofdirectors.] fair
73marketvalueofthefiduciary’sinterestintheentity;or
74 (3)Ifneithersubdivision(1)nor(2)ofthissubsectionapplies,byconsideringthe
75factorsinsubsection6ofthissectionandtheinformationknowntothefiduciaryor
76providedtothefiduciarybyoronbehalfoftheentity.
77 6.Inmakingadeterminationorestimateundersubdivision(3)ofsubsection5of
78thissection,afiduciarymayconsider:
79 (1)Acharacterizationofanentitydistributionprovidedbyoronbehalfofthe
80entity;
81 (2)Theamountofmoneyorpropertyreceivedin:
82 (a)Theentitydistribution;or
83 (b)Whatthefiduciarydeterminesisorwillbeaseriesofrelatedentity
84distributions;
85 (3)Theamountdescribedinsubdivision(2)ofthissubsectioncomparedtothe
86amountthefiduciarydeterminesorestimatesis,duringthecurrentorpreceding
87accountingperiods:
88 (a)Theentity’soperatingincome;
89 (b)Theproceedsoftheentity’ssaleorotherdispositionof:
90 a.Allorpartofthebusinessorotheractivityconductedbytheentity;
91 b.Oneormorebusinessassetsthatarenotsoldtocustomersintheordinary
92courseofthebusinessorotheractivityconductedbytheentity;or
93 c.Oneormoreassetsotherthanbusinessassets,unlesstheentity’sprimary
94activityistoinvestinassetstorealizegainonthedispositionofallorsomeoftheassets;
HB608 24 95 (c)Iftheentity’sprimaryactivityistoinvestinassetstorealizegainonthe
96dispositionofallorsomeoftheassets,thegainrealizedonthedisposition;
97 (d)Theentity’sregular,periodicentitydistributions;
98 (e)Theamountofmoneytheentityhasaccumulated;
99 (f)Theamountofmoneytheentityhasborrowed;
100 (g)Theamountofmoneytheentityhasreceivedfromthesourcesdescribedin
101sections469.433,469.439,469.441,and469.443;and
102 (h)Theamountofmoneytheentityhasreceivedfromasourcenototherwise
103describedinthisparagraph;and
104 (4)Anyotherfactorthefiduciarydeterminesisrelevant.
105 7.If,afterapplyingsubsections3to6ofthissection,afiduciarydeterminesthat
106apartofanentitydistributionisacapitaldistributionbutisindoubtabouttheamount
107oftheentitydistributionthatisacapitaldistribution,thefiduciaryshallallocateto
108principaltheamountoftheentitydistributionthatisindoubt.
109 8.Ifafiduciaryreceivesadditionalinformationabouttheapplicationofthis
110sectiontoanentitydistributionbeforethefiduciaryhaspaidpartoftheentity
111distributiontoabeneficiary,thefiduciarymayconsidertheadditionalinformation
112beforemakingthepaymenttothebeneficiaryandmaychangeadecisiontomakethe
113paymenttothebeneficiary.
114 9.Ifafiduciaryreceivesadditionalinformationabouttheapplicationofthis
115sectiontoanentitydistributionafterthefiduciaryhaspaidpartoftheentity
116distributiontoabeneficiary,thefiduciaryisnotrequiredtochangeorrecoverthe
117paymenttothebeneficiarybutmayconsiderthatinformationindeterminingwhether
118toexercisethepowertoadjustundersection469.405.
469.425.A[trustee] fiduciaryshallallocatetoincomeanamountreceivedasa
2distributionofincome, includingaunitrustdistributionundersections469.471to
3469.487,fromatrustor[an]estateinwhichthe[trust] fiduciaryhasaninterest, otherthan[a]
4aninterestthefiduciarypurchased[interest] inatrustthatisaninvestmententity, and
5shallallocatetoprincipalanamountreceivedasadistributionofprincipalfrom[sucha]the
6trustorestate.Ifa[trustee] fiduciarypurchases, orreceivesfromasettlor,aninterestina
7trustthatisaninvestmententity,[oradecedentordonortransfersaninterestinsuchatrustto
8atrustee,] section469.423[or],469.449[shallapply], or469.450appliestoareceiptfrom
9thetrust.
469.427.1.[Ifatrusteewhoconducts] Thissectionappliestoabusinessorother
2activityconductedbyafiduciaryifthefiduciarydeterminesthatitisinthe[bestinterest]
3interestsof[all]thebeneficiariestoaccountseparatelyforthebusinessorotheractivity
4insteadof:
HB608 25 5 (1)Accountingfor[it]thebusinessorotheractivityaspartofthe[trust's]
6fiduciary'sgeneralaccountingrecords[,]; or
7 (2)Conductingthe[trustee] businessorotheractivitythroughanentitydescribed
8inparagraph(a)ofsubdivision(2)ofsubsection1ofsection469.423.
9 2.Afiduciarymay[maintainseparateaccountingrecords] accountseparately
10underthissectionfor[its]thetransactionsofabusinessorotheractivity, whetherornot
11[its]assetsofthebusinessorotheractivityaresegregatedfromother[trust] assetsheldby
12thefiduciary.
13 [2.]3.A[trusteewho]fiduciarythataccountsseparatelyunderthissectionfora
14businessorotheractivity:
15 (1)Maydetermine:
16 (a)Theextenttowhichthenetcashreceipts[shall] ofthebusinessorotheractivity
17shallberetainedfor:
18 a.Workingcapital[,];
19 b.Theacquisitionorreplacementoffixedassets[,]; and
20 c.Otherreasonablyforeseeableneedsofthebusinessorotheractivity[,]; and
21 (b)Theextenttowhichtheremainingnetcashreceiptsareaccountedforasprincipal
22orincomeinthe[trust's] fiduciary'sgeneralaccountingrecords[. Ifatrusteesellsassetsof
23thebusinessorotheractivity,otherthanintheordinarycourseofthebusinessoractivity,the
24trustee] forthetrust;
25 (2)Maymakeadeterminationundersubdivision(1)ofthissubsection
26separatelyanddifferentlyfromthefiduciary’sdecisionsconcerningdistributionsof
27incomeorprincipal;and
28 (3)Shallaccountforthenetamountreceivedfromthesaleofanassetofthe
29businessorotheractivity,otherthanasaleintheordinarycourseofthebusinessor
30otheractivity,asprincipalinthe[trust's] fiduciary'sgeneralaccountingrecordsforthe
31trust,totheextentthe[trustee] fiduciarydeterminesthatthenetamountreceivedisno
32longerrequiredintheconductofthebusinessorotheractivity.
33 [3.]4.Activitiesforwhicha[trusteemaymaintainseparateaccountingrecords]
34fiduciarymayaccountseparatelyunderthissectioninclude:
35 (1)Retail,manufacturing,service, andothertraditionalbusinessactivities;
36 (2)Farming;
37 (3)Raisingandsellinglivestockandotheranimals;
38 (4)[Managementof]Managingrentalproperties;
39 (5)[Extractionof]Extractingminerals, water,andothernaturalresources;
40 (6)Growingandcuttingtimber[operations]; [and]
HB608 26 41 (7)[Activities] Anactivitytowhichsection469.447, 469.449,or469.450applies[.];
42and
43 (8)Anyotherbusinessconductedbythefiduciary.
469.429.A[trustee] fiduciaryshallallocatetoprincipal:
2 (1)Totheextentnotallocatedtoincome[pursuantto]undersections[469.401]
3469.399to[469.467] 469.487, [assets] anassetreceivedfrom[atransferor]:
4 (a)Anindividualduringthe[transferor's] individual'slifetime[, adecedent's];
5 (b)Anestate[,];
6 (c)Atrust[withaterminating] onterminationofanincomeinterest[,]; or
7 (d)Apayerunderacontractnamingthe[trustoritstrustee] fiduciaryasbeneficiary;
8 (2)Exceptasotherwiseprovidedinsections469.423to469.450,moneyorother
9propertyreceivedfromthesale,exchange,liquidation, orchangeinformofaprincipalasset[,
10includingrealizedprofit,subjecttosections469.423to469.467];
11 (3)[Amounts] Anamountrecoveredfromathird[parties] partytoreimbursethe
12[trust] fiduciarybecauseof[disbursements] adisbursementdescribedin[subdivision(7)of]
13subsection1ofsection469.453orfor[otherreasons] anotherreasontotheextentnotbased
14on[the]lossofincome;
15 (4)Proceedsofpropertytakenbyeminentdomain,[butaseparateawardmade]
16exceptthatproceedsawardedfor[the]lossofincome[withrespectto]inanaccounting
17period[duringwhich] areincomeifacurrentincomebeneficiaryhadamandatoryincome
18interest[isincome] duringtheperiod;
19 (5)Netincomereceivedinanaccountingperiodduringwhichthereisnobeneficiary
20to[whom] whicha[trustee] fiduciarymayorshalldistributeincome;and
21 (6)Otherreceiptsasprovidedinsections469.435to[469.449] 469.450.
469.431.Totheextent[thatatrusteeaccounts] afiduciarydoesnotaccountfor
2[receiptsfrom] themanagementofrentalproperty[pursuanttothissection] asabusiness
3undersection469.427, the[trustee] fiduciaryshallallocatetoincomeanamountreceivedas
4rentofrealorpersonalproperty,includinganamountreceivedforcancellationorrenewalof
5alease.Anamountreceivedasarefundabledeposit,includingasecuritydepositoradeposit
6thatistobeappliedasrentforfutureperiods[, shallbeaddedtoprincipalandheldsubjectto
7thetermsoftheleaseandisnotavailablefordistributiontoabeneficiaryuntilthetrustee's
8contractualobligationshavebeensatisfiedwithrespecttothatamount.]:
9 (1)Shallbeaddedtoprincipalandheldsubjecttothetermsofthelease,except
10asotherwiseprovidedbylawotherthansections469.399to469.487;and
11 (2)Isnotallocatedtoincomeoravailablefordistributiontoabeneficiaryuntil
12thefiduciary’scontractualobligationshavebeensatisfiedwithrespecttothatamount.
HB608 27 469.432.1.Thissectiondoesnotapplytoanobligationtowhichsection469.437,
2469.439,469.441,469.443,469.447,469.449,or469.450applies.
3 2.Afiduciaryshallallocatetoincome,withoutprovisionforamortizationof
4premium,anamountreceivedasinterest[, whetherdeterminedatafixed,variableorfloating
5rate,]onanobligationtopaymoneytothe[trustee] fiduciary, includinganamountreceived
6asconsiderationforprepayingprincipal[, shallbeallocatedtoincomewithoutanyprovision
7foramortizationofpremium].
8 [2.]3.A[trustee] fiduciaryshallallocatetoprincipalanamountreceivedfromthe
9sale,redemption, orotherdispositionofanobligationtopaymoneytothe[trusteemorethan
10oneyearafteritispurchasedoracquiredbythetrustee,includinganobligationwhose
11purchasepriceorvaluewhenitisacquiredislessthanitsvalueatmaturity.Iftheobligation
12matureswithinoneyearafteritispurchasedoracquiredbythetrustee,anamountreceivedin
13excessofitspurchasepriceoritsvaluewhenacquiredbythetrustshallbeallocatedto
14income] fiduciary.Afiduciaryshallallocatetoincometheincrementinvalueofabond
15orotherobligationforthepaymentofmoneybearingnostatedinterestbutpayableor
16redeemable,atmaturityoranotherfuturetime,inanamountthatexceedstheamount
17inconsiderationofwhichitwasissued.
18 [3.Thissectiondoesnotapplytoanobligationtowhichsection469.437,469.439,
19469.441,469.443,469.447or469.449applies.]
469.433.1.Thissectiondoesnotapplytoacontracttowhichsection469.437
2applies.
3 2.Exceptasotherwiseprovidedinsubsection[2]3ofthissection,a[trustee]
4fiduciaryshallallocatetoprincipaltheproceedsofalifeinsurancepolicyorothercontract
5[inwhichthetrustoritstrusteeisnamed] receivedbythefiduciaryasbeneficiary,including
6acontractthatinsures[thetrustoritstrustee] against[lossfor]damageto,destructionof,or
7lossoftitleto[atrust] anasset.The[trustee] fiduciaryshallallocatedividendsonan
8insurancepolicytoincome[if]totheextentpremiumsonthepolicyarepaidfromincome[,]
9andtoprincipal[if]totheextentpremiumsonthepolicyarepaidfromprincipal.
10 [2.]3.A[trustee] fiduciaryshallallocatetoincomeproceedsofacontractthat
11insuresthe[trustee] fiduciaryagainstlossof:
12 (1)Occupancyorotheruseby[anincomebeneficiary,lossof]acurrentincome[,]
13beneficiary;
14 (2)Income;or[,]
15 (3)Subjecttosection469.427,[lossof]profitsfromabusiness.
16 [3.Thissectiondoesnotapplytoacontracttowhichsection469.437applies.]
469.435.1.Ifa[trustee] fiduciarydeterminesthatanallocationbetweenincome
2andprincipal[andincome] requiredbysection469.437,469.439,469.441,469.443or
HB608 28 3469.449isinsubstantial,the[trustee] fiduciarymayallocatetheentireamounttoprincipal,
4unless[oneofthecircumstancesdescribedin]subsection[3]5ofsection469.405appliesto
5theallocation.[Thispower]
6 2.Afiduciarymay[beexercisedbyacotrusteeinthecircumstancesdescribedin
7subsection4ofsection469.405andmaybereleasedforthereasonsandinthemanner
8describedinsubsection5ofsection469.405.] presumeanallocationis[presumedtobe]
9insubstantialundersubsection1ofthissectionif:
10 (1)Theamountoftheallocationwouldincreaseordecreasenetincomeinan
11accountingperiod,asdeterminedbeforetheallocation,bylessthantenpercent;[or]and
12 (2)[Thevalueof]Theassetproducingthereceipt[forwhichtheallocationwould] to
13be[madeis]allocatedhasafairmarketvaluelessthantenpercentofthetotalfairmarket
14valueofthe[trust's] assetsownedorheldbythefiduciaryatthebeginningofthe
15accountingperiod.
16 3.Thepowertomakeadeterminationundersubsection1ofthissectionmaybe:
17 (1)Exercisedbyaco-fiduciaryinthemannerdescribedinsubsection6ofsection
18469.405;or
19 (2)Releasedordelegatedforareasondescribedinsubsection7ofsection
20469.405andinthemannerdescribedinsubsection8ofsection469.405.
469.437.1.Asusedinthissection,thefollowingtermsmean:
2 (1)["Payment",anamountthatis:
3 (a)Receivedorwithdrawnfromaplan;or
4 (b)Oneofaseriesofdistributionsthathavebeenorwillbereceivedoverafixed
5numberofyearsorduringthelifeofoneormoreindividualsunderanycontractualorother
6arrangement,orisasinglepaymentfromaplanthatthetrusteecouldhavereceivedovera
7fixednumberofyearsorduringthelifeofoneormoreindividuals;
8 (2)"Plan",acontractual,custodial,trustorotherarrangementthatprovidesfor
9distributionstothetrust,including,butnotlimitedto,qualifiedretirementplans,Individual
10RetirementAccounts,RothIndividualRetirementAccounts,publicandprivateannuities,and
11deferredcompensation,includingpaymentsreceiveddirectlyfromanentityasdefinedin
12section469.423regardlessofwhetherornotsuchdistributionsaremadefromaspecificfund
13oraccount.
14 2.Ifanyportionofapaymentischaracterizedasadistributiontothetrusteeof
15interest,dividendsoradividendequivalent,thetrusteeshallallocatetheportionso
16characterizedtoincome.Thetrusteeshallallocatethebalanceofthatpaymenttoprincipal.
17 3.Ifnopartofapaymentisallocatedtoincomepursuanttosubsection2ofthis
18section,thenforeachaccountingperiodofthetrustthatanypaymentisreceivedbythetrust
19withrespecttothetrust'sinterestinaplan,thetrusteeshallallocatetoincomethatportionof
HB608 29 20theaggregatevalueofallpaymentsreceivedbythetrusteeinthataccountingperiodequalto
21theamountofplanincomeattributabletothetrust'sinterestintheplanforthatcalendaryear.
22Thetrusteeshallallocatethebalanceofthatpaymenttoprincipal.
23 4.Forpurposesofthissection,ifapaymentisreceivedfromaplanthatmaintainsa
24separateaccountorfundforitsparticipantsoraccountholders,including,butnotlimitedto,
25definedcontributionretirementplans,IndividualRetirementAccounts,RothIndividual
26RetirementAccounts,andsometypesofdeferredcompensationplans,thephrase"plan
27income"shallmeaneithertheamountoftheplanaccountorfundheldforthebenefitofthe
28trustthat,iftheplanaccountorfundwereatrust,wouldbeallocatedtoincomepursuantto
29sections469.401to469.467forthataccountingperiod,orfourpercentofthevalueofthe
30planaccountorfundonthefirstdayofthataccountingperiod.Themethodofdetermining
31planincomepursuanttothissubsectionshallbechosenbythetrusteeinthetrustee's
32discretion.Thetrusteesmaychangethemethodofdeterminingplanincomepursuanttothis
33subsectionforanyfutureaccountingperiod.
34 5.Forpurposesofthissectionifthepaymentisreceivedfromaplanthatdoesnot
35maintainaseparateaccountorfundforitsparticipantsoraccountholders,includingbyway
36ofexampleandnotlimitationdefinedbenefitretirementplansandsometypesofdeferred
37compensationplans,theterm"planincome"shallmeanfourpercentofthetotalpresentvalue
38ofthetrust'sinterestintheplanasofthefirstdayoftheaccountingperiod,basedon
39reasonableactuarialassumptionsasdeterminedbythetrustee.
40 6.Notwithstandingsubsections1to5ofthissection,withrespecttoatrustwherean
41electiontoqualifyforamaritaldeductionunderSection2056(b)(7)orSection2523(f)ofthe
42InternalRevenueCodeof1986,asamended,hasbeenmade,oratrustthatqualifiedforthe
43maritaldeductionundereitherSection2056(b)(5)orSection2523(e)oftheInternalRevenue
44Codeof1986,asamended,atrusteeshalldeterminetheplanincomefortheaccounting
45periodasiftheplanwereatrustsubjecttosections469.401to469.467.Uponrequestofthe
46survivingspouse,thetrusteeshalldemandthatthepersonadministeringtheplandistribute
47theplanincometothetrust.Thetrusteeshallallocateapaymentfromtheplantoincometo
48theextentoftheplanincomeanddistributethatamounttothesurvivingspouse.Thetrustee
49shallallocatethebalanceofthepaymenttoprincipal.Uponrequestofthesurvivingspouse,
50thetrusteeshallallocateprincipaltoincometotheextenttheplanincomeexceedspayments
51madefromtheplantothetrustduringtheaccountingperiod.
52 7.If,toobtainanestateorgifttaxmaritaldeductionforatrust,atrusteeshallallocate
53moreofapaymenttoincomethanprovidedforbythissection,thetrusteeshallallocateto
54incometheadditionalamountnecessarytoobtainthemaritaldeduction.] "Internalincome
55ofaseparatefund",theamountdeterminedundersubsection2ofthissection;
56 (2)"Maritaltrust",atrust:
HB608 30 57 (a)Ofwhichthesettlor'ssurvivingspouseistheonlycurrentincomebeneficiary
58andisentitledtoadistributionofallthecurrentnetincomeofthetrust;and
59 (b)Thatqualifiesforamaritaldeductionwithrespecttothesettlor'sestate
60under26U.S.C.Section2056,asamended,because:
61 a.Anelectiontoqualifyforamaritaldeductionunder26U.S.C.Section2056(b)
62(7),asamended,hasbeenmade;or
63 b.Thetrustqualifiesforamaritaldeductionunder26U.S.C.Section2056(b)(5),
64asamended;
65 (3)"Payment",anamountafiduciarymayreceiveoverafixednumberofyears
66orduringthelifeofoneormoreindividualsbecauseofservicesrenderedorproperty
67transferredtothepayerinexchangeforfutureamountsthefiduciarymayreceive.The
68termincludesanamountreceivedinmoneyorpropertyfromthepayer’sgeneralassets
69orfromaseparatefundcreatedbythepayer;
70 (4)"Separatefund",includesaprivateorcommercialannuity,anindividual
71retirementaccount,andapension,profit-sharing,stockbonus,orstock-ownershipplan.
72 2.Foreachaccountingperiod,thefollowingrulesapplytoaseparatefund:
73 (1)Thefiduciaryshalldeterminetheinternalincomeoftheseparatefundasif
74theseparatefundwasatrustsubjecttosections469.399to469.487;
75 (2)Ifthefiduciarycannotdeterminetheinternalincomeoftheseparatefund
76undersubdivision(1)ofthissubsection,theinternalincomeoftheseparatefundis
77deemedtoequalthreepercentofthevalueoftheseparatefund,accordingtothemost
78recentstatementofvalueprecedingthebeginningoftheaccountingperiod;and
79 (3)Ifthefiduciarycannotdeterminethevalueoftheseparatefundunder
80subdivision(2)ofthissubsection,thevalueoftheseparatefundisdeemedtoequalthe
81presentvalueoftheexpectedfuturepayments,asdeterminedunder26U.S.C.Section
827520,asamended,forthemonthprecedingthebeginningoftheaccountingperiodfor
83whichthecomputationismade.
84 3.Afiduciaryshallallocateapaymentreceivedfromaseparatefundduringan
85accountingperiodtoincome,totheextentoftheinternalincomeoftheseparatefund
86duringtheperiod,andthebalancetoprincipal.
87 4.Thefiduciaryofamaritaltrustshall:
88 (1)Withdrawfromaseparatefundtheamountthecurrentincomebeneficiary
89ofthetrustrequeststhefiduciarytowithdraw,notgreaterthantheamountbywhich
90theinternalincomeoftheseparatefundduringtheaccountingperiodexceedsthe
91amountthefiduciaryotherwisereceivesfromtheseparatefundduringtheperiod;
92 (2)Transferfromprincipaltoincometheamountthecurrentincome
93beneficiaryrequeststhefiduciarytotransfer,notgreaterthantheamountbywhich
HB608 31 94theinternalincomeoftheseparatefundduringtheperiodexceedstheamountthe
95fiduciaryreceivesfromtheseparatefundduringtheperiodaftertheapplicationof
96subdivision(1)ofthissubsection;and
97 (3)Distributetothecurrentincomebeneficiaryasincome:
98 (a)Theamountoftheinternalincomeoftheseparatefundreceivedor
99withdrawnduringtheperiod;and
100 (b)Theamounttransferredfromprincipaltoincomeundersubdivision(2)of
101thissubsection.
102 5.Foratrust,otherthanamaritaltrust,ofwhichoneormorecurrentincome
103beneficiariesareentitledtoadistributionofallthecurrentnetincome,thefiduciary
104shalltransferfromprincipaltoincometheamountbywhichtheinternalincomeofa
105separatefundduringtheaccountingperiodexceedstheamountthefiduciaryreceives
106fromtheseparatefundduringtheperiod.
469.439.1.[Asused]Inthissection,[thephrase] "liquidatingasset"meansanasset
2whosevaluewilldiminishorterminatebecausetheassetisexpectedtoproducereceiptsfora
3[periodof]limited[duration] time. The[phrase] termincludesaleasehold,patent,
4copyright,royaltyright,andrighttoreceivepaymentsduringaperiodofmorethanoneyear
5underanarrangementthatdoesnotprovideforthepaymentofinterestontheunpaidbalance.
6[Thephrase]
7 2.Thissectiondoesnot[includeapayment] applytoareceiptsubjecttosection
8469.423,469.437,[resourcessubjecttosection] 469.441,[timbersubjecttosection] 469.443,
9[anactivitysubjecttosection] 469.447,[anassetsubjecttosection] 469.449,469.450,or[any
10assetforwhichthetrusteeestablishesareservefordepreciationpursuanttosection] 469.455.
11 [2.]3.A[trustee] fiduciaryshallallocate:
12 (1)Toincome[tenpercentofthereceiptsfrom]:
13 (a)Areceiptproducedbyaliquidatingasset[andthebalance], totheextentthe
14receiptdoesnotexceedthreepercentofthevalueoftheasset;or
15 (b)Ifthefiduciarycannotdeterminethevalueoftheasset,tenpercentofthe
16receipt;and
17 (2)Toprincipal, thebalanceofthereceipt.
469.441.1.Totheextent[thatatrusteeaccountsforreceipts] afiduciarydoesnot
2accountforareceiptfromaninterestinminerals, water,orothernaturalresources[pursuant
3tothissection] asabusinessundersection469.427, the[trustee] fiduciaryshallallocate
4[themasfollows] thereceipt:
5 (1)[If]Toincome,totheextentreceived:
6 (a)As[nominal] delayrentalor[nominal] annualrentonalease[, areceiptshallbe
7allocatedtoincome];
HB608 32 8 (b)Asafactorforinterestortheequivalentofinterestunderanagreement
9creatingaproductionpayment;or
10 (c)Onaccountofaninterestinrenewablewater;
11 (2)Toprincipal,ifreceivedfromaproductionpayment,[areceiptshallbeallocated
12toincomeifandtotheextentthattheagreementcreatingtheproductionpaymentprovidesa
13factorforinterestoritsequivalent.Thebalanceshallbeallocatedtoprincipal;] totheextent
14paragraph(b)ofsubdivision(1)ofthissubsectiondoesnotapply;or
15 (3)[Ifanamountreceived] Betweenincomeandprincipalequitably,totheextent
16received:
17 (a)Onaccountofaninterestinnonrenewablewater;
18 (b)Asaroyalty,shut-in-wellpayment,take-or-paypayment,orbonus[ordelay
19rentalismorethannominal,ninetypercentshallbeallocatedtoprincipalandthebalanceto
20income]; or
21 [(4)Ifanamountisreceived] (c)Fromaworkinginterestoranyotherinterestnot
22providedforinsubdivision(1)[,]or(2)[or(3)]ofthissubsection[, ninetypercentofthenet
23amountreceivedshallbeallocatedtoprincipalandthebalancetoincome] orparagraph(a)
24or(b)ofthissubdivision.
25 2.[Anamountreceivedonaccountof]Thissectionappliestoaninterest[inwater
26thatisrenewableshallbeallocatedtoincome.Ifthewaterisnotrenewable,ninetypercentof
27theamountshallbeallocatedtoprincipalandthebalancetoincome.
28 3.Sections469.401to469.467apply] ownedorheldbyafiduciarywhetherornota
29[decedentordonor] settlorwasextractingminerals,water, orothernaturalresourcesbefore
30thefiduciaryownedorheldtheinterest[becamesubjecttothetrust].
31 3.Anallocationofareceiptundersubdivision(3)ofsubsection1ofthissection
32ispresumedtobeequitableiftheamountallocatedtoprincipalisequaltotheamount
33allowedbyTitle26oftheUnitedStatesCode,asamended,asadeductionfordepletion
34oftheinterest.
35 4.Ifa[trust] fiduciaryownsorholdsaninterestinminerals,water, orothernatural
36resources[on]beforeAugust28,[2001] 2025, the[trustee] fiduciarymayallocatereceipts
37fromtheinterestasprovidedin[sections469.401to469.467] thissectionorinthemanner
38usedbythe[trustee] fiduciarybeforeAugust28,[2001] 2025. Ifthe[trust] fiduciary
39acquiresaninterestinminerals,water, orothernaturalresourcesonorafterAugust28,
40[2001] 2025, the[trustee] fiduciaryshallallocatereceiptsfromtheinterestasprovidedin
41[sections469.401to469.467] thissection.
469.443.1.Totheextent[thatatrusteeaccounts] afiduciarydoesnotaccountfor
2receiptsfromthesaleoftimberandrelatedproducts[pursuanttothissection] asabusiness
3undersection469.427, the[trustee] fiduciaryshallallocatethenetreceipts:
HB608 33 4 (1)Toincome, totheextent[that]theamountoftimber[removed] cutfromtheland
5doesnotexceedtherateofgrowthofthetimber[duringtheaccountingperiodsinwhicha
6beneficiaryhasamandatoryincomeinterest];
7 (2)Toprincipal, totheextent[that]theamountoftimber[removed] cutfromtheland
8exceedstherateofgrowthofthetimberorthenetreceiptsarefromthesaleofstanding
9timber;
10 (3)[Toor]Betweenincomeandprincipalifthenetreceiptsarefromtheleaseof
11[timberland] landusedforgrowingandcuttingtimberorfromacontracttocuttimber
12fromland[ownedbyatrust], bydeterminingtheamountoftimber[removed] cutfromthe
13landundertheleaseorcontractandapplyingtherulesinsubdivisions(1)and(2)ofthis
14subsection;or
15 (4)Toprincipal, totheextent[that]advancepayments,bonuses, andotherpayments
16arenotallocated[pursuanttoeither] undersubdivision(1),(2),or(3)ofthissubsection.
17 2.Indeterminingnetreceiptstobeallocated[pursuantto]undersubsection1ofthis
18section,a[trustee] fiduciaryshalldeductandtransfertoprincipalareasonableamountfor
19depletion.
20 3.[Sections469.401to469.467apply] Thissectionappliestolandownedorheld
21byafiduciarywhetherornota[decedentortransferor] settlorwas[harvesting] cutting
22timberfromthelandbeforethefiduciaryownedorheldtheproperty[beforeitbecame
23subjecttothetrust].
24 4.Ifa[trust] fiduciaryownsorholdsaninterestin[timberlandon]landusedfor
25growingandcuttingtimberbeforeAugust28,[2001] 2025, the[trustee] fiduciarymay
26allocatenetreceiptsfromthesaleoftimberandrelatedproductsasprovidedin[sections
27469.401to469.467] thissectionorinthemannerusedbythe[trustee] fiduciarybefore
28August28,[2001] 2025. Ifthe[trust] fiduciaryacquiresaninterestin[timberland] land
29usedforgrowingandcuttingtimberonorafterAugust28,[2001] 2025, the[trustee]
30fiduciaryshallallocatenetreceiptsfromthesaleoftimberandrelatedproductsasprovided
31in[sections469.401to469.467] thissection.
469.445.1.Ifatrustreceivedpropertyforwhichagiftorestatetaxmarital
2deduction[isallowedforallorpartofatrustwhose] wasallowedandthesettlor’sspouse
3holdsamandatoryincomeinterestinthetrust,thespousemayrequirethetrustee,to
4theextentthetrustassets[consistsubstantiallyofpropertythatdoes] otherwisedonot
5providethespousewithsufficientincomefromoruseofthetrustassets[, andiftheamounts
6thatthetrusteetransfersfromprincipaltoincomepursuanttosection469.405anddistributes
7tothespousefromprincipalpursuanttothetermsofthetrustareinsufficienttoprovidethe
8spousewiththebeneficialenjoymentrequiredtoobtainthemarital] toqualifyforthe
9deduction,[thespousemayrequirethetrustee] to:
HB608 34 10 (1)Makepropertyproductiveofincome[,];
11 (2)Convertpropertytopropertyproductiveofincomewithinareasonabletime[,];
12or
13 (3)Exercisethepower[conferredbysubsection1of]toadjustundersection
14469.405.
15 2.Thetrusteemaydecidewhichactionorcombinationofactionsinsubsection1of
16thissectiontotake.
17 [2.Incasesnotgovernedbysubsection1ofthissection,proceedsfromthesaleor
18otherdispositionofanassetareprincipalwithoutregardtotheamountofincometheasset
19producesduringanyaccountingperiod.]
469.447.1.[Asused] Inthissection,[theterm] "derivative"meansacontract[or
2financial], instrument, otherarrangement,oracombinationofcontracts[andfinancial],
3instruments, orotherarrangements,thevalue,rights,andobligationsofwhich[givesa
4trusttherightorobligationtoparticipateinsomeorallchangesinthepriceofa]are,in
5wholeorinpart,dependentonorderivedfromanunderlyingtangibleorintangibleasset
6[orgroupofassets,orchangesinarate,anindexofpricesor],groupoftangibleor
7intangibleassets,index,oroccurrenceofanevent.Thetermincludesstocks,fixed
8incomesecurities,andfinancialinstrumentsandarrangementsbasedonindices,
9commodities,interestrates,[orothermarketindicatorforanassetoragroupofassets]
10weather-relatedevents,andcreditdefaultevents.
11 2.Totheextent[thatatrustee] afiduciarydoesnotaccount[pursuanttosection
12469.427fortransactions] foratransactioninderivatives[, thetrustee] asabusinessunder
13section469.427,thefiduciaryshallallocate[toprincipal] tenpercentofreceiptsfromthe
14transactionandtenpercentofdisbursementsmadeinconnectionwith[thosetransactions]
15thetransactiontoincomeandthebalancetoprincipal.
16 3.Subsection4ofthissectionappliesif:
17 (1)A[trustee] fiduciary:
18 (a)Grantsanoptiontobuypropertyfrom[the]atrust,whetherornotthetrustowns
19thepropertywhentheoptionisgranted[,];
20 (b)Grantsanoptionthatpermitsanotherpersontosellpropertytothetrust[,]; or
21 (c)Acquiresanoptiontobuypropertyforthetrustoranoptiontosellanassetowned
22bythetrust[,]; and
23 (2)The[trustee] fiduciaryorotherowneroftheassetisrequiredtodelivertheasset
24iftheoptionisexercised[,].
25 4.Ifthissubsectionapplies,thefiduciaryshallallocatetenpercenttoincome
26andthebalancetoprincipalofthefollowingamounts:
27 (1)Anamountreceivedforgrantingtheoption[shallbeallocatedtoprincipal.];
HB608 35 28 (2)Anamountpaidtoacquiretheoption[shallbepaidfromprincipal.A];and
29 (3)Gainorlossrealized[upon] ontheexercise[ofanoption,includinganoption
30grantedtoasettlor], exchange,settlement,offset,closing,orexpirationofthe[trustfor
31servicesrendered,shallbeallocatedtoprincipal] option.
469.449.1.[Asusedinthissection,thephrase"asset-backedsecurity"meansan
2assetwhosevalueisbasedupontherightitgivestheownertoreceivedistributionsfromthe
3proceedsoffinancialassetsthatprovidecollateralforthesecurity.Thephraseincludesan
4assetthatgivestheownertherighttoreceivefromthecollateralfinancialassetsonlythe
5interestorothercurrentreturnoronlytheproceedsotherthaninterestorcurrentreturn.The
6phrasedoesnotincludeanassettowhichsection469.423or469.437applies.
7 2.Ifatrustreceivesapaymentfrominterestorothercurrentreturnandfromother
8proceedsofthecollateralfinancialassets,thetrustee] Exceptasotherwiseprovidedin
9subsection2ofthissection,afiduciaryshallallocatetoincome[theportionof]areceipt
10fromorrelatedtoanasset-backedsecurity,totheextentthe[paymentwhichthe]payer
11identifiesthepaymentasbeingfrominterestorothercurrentreturn, and[shallallocate] to
12principalthebalanceofthe[paymenttoprincipal] receipt.
13 [3.]2.Ifa[trust] fiduciaryreceivesoneormorepaymentsinexchangeforpartor
14allofthe[trust'sentire] fiduciary'sinterestinanasset-backedsecurity[inoneaccounting
15period,thetrusteeshallallocatethepaymentstoprincipal.Ifapaymentisoneofaseriesof
16paymentsthatwillresultinthe],includingaliquidationorredemptionofthe[trust's]
17fiduciary'sinterestinthesecurity[overmorethanoneaccountingperiod], the[trustee]
18fiduciaryshallallocate[ten]toincometenpercentofreceiptsfromthe[paymentto
19income] transactionand[thebalancetoprincipal] tenpercentofdisbursementsmadein
20connectionwiththetransaction,andtoprincipalthebalanceofthereceiptsand
21disbursements.
469.450.Afiduciaryshallallocatereceiptsfromorrelatedtoafinancial
2instrumentorarrangementnototherwiseaddressedbysections469.399to469.487.The
3allocationshallbeconsistentwithsections469.447and469.449.
469.451.[Atrusteeshallmakethefollowingdisbursementsfromincometotheextent
2thattheyarenotdisbursementstowhichparagraph(b)or(c)of]Subjecttosection469.456,
3andexceptasotherwiseprovidedinsubdivision(2)or(3)ofsubsection3ofsection
4469.413[applies], afiduciaryshalldisbursefromincome:
5 (1)One-halfof:
6 (a)Theregularcompensationofthe[trustee] fiduciaryand[of]anypersonproviding
7investmentadvisory[or],custodial, orotherservicestothe[trustee] fiduciary,totheextent
8incomeissufficient; and
HB608 36 9 [(2)One-halfofallexpenses] (b)Anexpensefor[accountings] anaccounting,
10judicial[proceedings] ornonjudicialproceeding, orother[matters] matterthat[involve]
11involvesboth[the]incomeand[remainder] successiveinterests, totheextentincomeis
12sufficient;
13 [(3)Alloftheother] (2)Thebalanceofthedisbursementsdescribedin
14subdivision(1)ofthissection,totheextentafiduciarythatisanindependentperson
15determinesthatmakingthosedisbursementsfromincomewouldbeintheinterestsof
16thebeneficiaries;
17 (3)Anotherordinary[expenses] expenseincurredinconnectionwith[the]
18administration,management, orpreservationof[trust] propertyand[the]distributionof
19income,includinginterest,anordinary[repairs] repair,regularlyrecurring[taxes] tax
20assessedagainstprincipal,and[expenses] anexpenseof[a]anaccounting,judicialor
21nonjudicialproceeding, orothermatterthat[concerns] involvesprimarily[the]anincome
22interest, totheextentincomeissufficient; and
23 (4)[Recurringpremiums] Apremiumoninsurancecovering[the]lossofaprincipal
24assetor[thelossof]incomefromoruseoftheasset.
469.453.1.[Atrusteeshallmakethefollowingdisbursements] Subjecttosection
2469.457,andexceptasotherwiseprovidedinsubdivision(2)ofsubsection3ofsection
3469.413,afiduciaryshalldisbursefromprincipal:
4 (1)The[remainingone-half] balanceofthedisbursementsdescribedin[subdivisions
5(1)and(2)]subdivisions(1)and(3)ofsection469.451,afterapplicationofsubdivision(2)
6ofsection469.451;
7 (2)[Allof]The[trustee's] fiduciary'scompensationcalculatedonprincipalasafee
8foracceptance,distribution, ortermination[, anddisbursementsmadetopreparepropertyfor
9sale];
10 (3)[Payments] Apaymentofanexpensetopreparefororexecuteasaleorother
11dispositionofproperty;
12 (4)Apaymentontheprincipalofatrustdebt;
13 [(4)Expensesofa](5)Apaymentofanexpenseofanaccounting,judicialor
14nonjudicialproceeding, orothermatterthat[concerns] involvesprimarily[aninterestin]
15principal, includingaproceedingtoconstruethetermsofthetrustorprotectproperty;
16 [(5)Premiumspaidonapolicyof](6)Apaymentofapremiumforinsurance,
17includingtitleinsurance, notdescribedinsubdivision(4)ofsection469.451ofwhichthe
18[trust] fiduciaryistheownerandbeneficiary;
19 [(6)](7)Apaymentofanestate[,] orinheritance[andothertransfertaxes] taxor
20othertaximposedbecauseofthedeathofadecedent, includingpenalties,apportionedto
21thetrust;and
HB608 37 22 [(7)Extraordinaryexpensesincurredinconnectionwiththemanagementand
23preservationoftrustproperty;
24 (8)Expensesforacapitalimprovementtoaprincipalasset,whetherintheformof
25changestoanexistingassetortheconstructionofanewasset,includingspecialassessments;
26and
27 (9)Disbursements] (8)Apayment:
28 (a)Relatedtoenvironmentalmatters,including:
29 a.Reclamation[,];
30 b.Assessingenvironmentalconditions[,];
31 c.Remedyingandremovingenvironmentalcontamination[,];
32 d.Monitoringremedialactivitiesandthereleaseofsubstances[,];
33 e.Preventingfuturereleasesofsubstances[,];
34 f.Collectingamountsfrompersonsliableorpotentiallyliableforthecostsof[those]
35activities[,] describedinsubparagraphsa.toe.ofthisparagraph;
36 g.Penaltiesimposedunderenvironmentallawsorregulations[and];
37 h.Other[paymentsmade] actionstocomplywith[those] environmentallawsor
38regulations[,];
39 i.Statutoryorcommonlawclaimsbythirdparties[,]; and
40 j.Defendingclaimsbasedonenvironmentalmatters[.]; and
41 (b)Forapremiumforinsuranceformattersdescribedinparagraph(a)ofthis
42subdivision.
43 2.Ifaprincipalassetisencumberedwithanobligationthatrequiresincomefrom
44[that]theassettobepaiddirectlyto[the]acreditor,the[trustee] fiduciaryshalltransferfrom
45principaltoincomeanamountequaltotheincomepaidtothecreditorinreductionofthe
46principalbalanceoftheobligation.
469.455.1.[Asused]Inthissection,[theterm]"depreciation"meansareductionin
2valueduetowear,tear,decay,corrosion, orgradualobsolescenceofa[fixed] tangibleasset
3havingausefullifeofmorethanoneyear.
4 2.A[trustee] fiduciarymaytransfertoprincipalareasonableamountofthenetcash
5receiptsfromaprincipalassetthatissubjecttodepreciation,but[may] shallnottransferany
6amountfordepreciation:
7 (1)Of[thatportion] thepartofrealpropertyusedoravailableforusebya
8beneficiaryasaresidence[or];
9 (2)Oftangiblepersonalpropertyheldormadeavailableforthepersonaluseor
10enjoymentofabeneficiary;or
11 [(2)Duringtheadministrationofadecedent'sestate;or]
HB608 38 12 (3)[Pursuantto]Underthissection[ifthetrusteeisaccountingpursuanttosection
13469.427], totheextentthefiduciaryaccounts:
14 (a)Undersection469.439fortheasset;or
15 (b)Undersection469.427forthebusinessorotheractivityinwhichtheassetis
16used.
17 3.Anamounttransferredtoprincipalunderthissectionneednotbeseparatelyheld
18[asaseparatefund].
469.456.1.Ifafiduciarymakesorexpectstomakeanincomedisbursement
2describedinsubsection2ofthissection,thefiduciarymaytransferanappropriate
3amountfromprincipaltoincomeinoneormoreaccountingperiodstoreimburse
4income.
5 2.Totheextentthefiduciaryhasnotbeenanddoesnotexpecttobereimbursed
6byathirdparty,incomedisbursementstowhichsubsection1ofthissectionapplies
7include:
8 (1)Anamountchargeabletoprincipalbutpaidfromincomebecauseprincipal
9isilliquid;
10 (2)Adisbursementmadetopreparepropertyforsale,includingimprovements
11andcommissions;and
12 (3)Adisbursementdescribedinsubsection1ofsection469.453.
13 3.Ifanassetwhoseownershipgivesrisetoanincomedisbursementbecomes
14subjecttoasuccessiveinterestafteranincomeinterestends,thefiduciarymaycontinue
15tomaketransfersundersubsection1ofthissection.
469.457.1.Ifa[trustee] fiduciarymakesorexpectstomakeaprincipal
2disbursementdescribedinsubsection2ofthissection,the[trustee] fiduciarymaytransferan
3appropriateamountfromincometoprincipalinoneormoreaccountingperiodstoreimburse
4principalor[to]provideareserveforfutureprincipaldisbursements.
5 2.Totheextentafiduciaryhasnotbeenanddoesnotexpecttobereimbursedby
6athirdparty,principaldisbursementstowhichsubsection1ofthissectionappliesinclude
7[thefollowing,butonlytotheextentthatthetrusteehasnotbeenanddoesnotexpecttobe
8reimbursedbyathirdparty]:
9 (1)Anamountchargeabletoincomebutpaidfromprincipalbecause[it]incomeis
10[unusuallylarge,includingextraordinaryrepairs] notsufficient;
11 (2)[Disbursements] Thecostofanimprovementtoprincipal,whetherachange
12toanexistingassetortheconstructionofanewasset,includingaspecialassessment;
13 (3)Adisbursementmadetopreparepropertyforrental,includingtenantallowances,
14leaseholdimprovements,and[broker's] commissions;
HB608 39 15 [(3)](4)Aperiodic[payments] paymentonanobligationsecuredbyaprincipal
16asset,totheextent[that]theamounttransferredfromincometoprincipalfordepreciationis
17lessthantheperiodic[payments] payment; and
18 [(4)Disbursements] (5)Adisbursementdescribedin[subdivision(7)of]subsection
191ofsection469.453.
20 3.If[the]anassetwhoseownershipgivesriseto[thedisbursements] aprincipal
21disbursementbecomessubjecttoasuccessive[income] interestafteranincomeinterest
22ends,[atrustee] thefiduciarymaycontinueto[transferamountsfromincometoprincipalas
23providedin]maketransfersundersubsection1ofthissection.
469.459.1.Ataxrequiredtobepaidbya[trustee] fiduciarythatisbasedon
2receiptsallocatedtoincomeshallbepaidfromincome.
3 2.Ataxrequiredtobepaidbya[trustee] fiduciarythatisbasedonreceiptsallocated
4toprincipalshallbepaidfromprincipal,evenifthetaxiscalledanincometaxbythetaxing
5authority.
6 3.Subjecttosubsection4ofthissectionandsections469.456,469.457,and
7469.462,ataxrequiredtobepaidbya[trustee] fiduciaryon[thetrust's] ashareofanentity's
8taxableincomeinanaccountingperiodshallbepaidfrom:
9 (1)[From] Incomeandprincipalproportionatelytothe[extentthat]allocation
10betweenincomeandprincipalofreceiptsfromtheentity[areallocatedtoincome] inthe
11period; and
12 (2)[From] Principaltotheextent[that]thetaxexceedsthereceiptsfromtheentity
13[areallocatedonlytoprincipal] intheperiod.
14 4.Afterapplyingsubsections1to3ofthissection,[thetrustee] afiduciaryshall
15adjustincomeorprincipalreceipts, totheextent[that]the[trust's] taxesthefiduciarypays
16arereducedbecause[thetrustreceives] ofadeductionforapaymentmadetoabeneficiary.
469.462.1.Afiduciarymaymakeanadjustmentbetweenincomeandprincipal
2tooffsettheshiftingofeconomicinterestsortaxbenefitsbetweencurrentincome
3beneficiariesandsuccessorbeneficiariesthatarisesfrom:
4 (1)Anelectionordecisionthefiduciarymakesregardingataxmatter,other
5thanadecisiontoclaimanincometaxdeductiontowhichsubsection2ofthissection
6applies;
7 (2)Anincometaxorothertaximposedonthefiduciaryorabeneficiaryasa
8resultofatransactioninvolvingthefiduciaryoradistributionbythefiduciary;or
9 (3)Ownershipbythefiduciaryofaninterestinanentity,apartofwhosetaxable
10income,whetherornotdistributed,isincludableinthetaxableincomeofthefiduciary
11orabeneficiary.
HB608 40 12 2.Iftheamountofanestatetaxmaritalorcharitabledeductionisreduced
13becauseafiduciarydeductsanamountpaidfromprincipalforincometaxpurposes
14insteadofdeductingitforestatetaxpurposesand,asaresult,estatetaxespaidfrom
15principalareincreasedandincometaxespaidbythefiduciaryorabeneficiaryare
16decreased,thefiduciaryshallchargeeachbeneficiarythatbenefitsfromthedecreasein
17incometaxtoreimbursetheprincipalfromwhichtheincreaseinestatetaxispaid.The
18totalreimbursementshallequaltheincreaseintheestatetax,totheextenttheprincipal
19usedtopaytheincreasewouldhavequalifiedforamaritalorcharitabledeductionbut
20forthepayment.Theshareofthereimbursementforeachfiduciaryorbeneficiary
21whoseincometaxesarereducedshallbethesameasitsshareofthetotaldecreasein
22incometax.
23 3.Afiduciarythatchargesabeneficiaryundersubsection2ofthissectionmay
24offsetthechargebyobtainingpaymentfromthebeneficiary,withholdinganamount
25fromfuturedistributionstothebeneficiary,oradoptinganothermethodorcombination
26ofmethods.
469.463.Inapplyingandconstruingsections[469.401] 469.399to[469.467]
2469.487, considerationshallbegiventotheneedtopromoteuniformityofthelawwith
3respecttoitssubjectmatteramongstatesthatenactit.
469.464.Sections469.399to469.487modify,limit,orsupersedetheElectronic
2SignaturesinGlobalandNationalCommerceAct,15U.S.C.Section7001etseq.,butdo
3notmodify,limit,orsupersede15U.S.C.Section7001(c)orauthorizeelectronicdelivery
4ofanyofthenoticesdescribedin15U.S.C.Section7003(b).
469.465.Ifanyprovisionofsections[469.401] 469.399to[469.467] 469.487or[the]
2itsapplication[ofthesesections] toanypersonorcircumstanceisheldinvalid,theinvalidity
3doesnotaffectotherprovisionsorapplicationsofsections[469.401] 469.399to[469.467]
4469.487whichcanbegiveneffectwithouttheinvalidprovisionorapplicationandtothis
5end,theprovisionsofsections469.399to469.487areseverable.
469.467.Sections[469.401] 469.399to[469.467] 469.487applyto[every] atrustor
2[decedent's] estateexistingorcreatedonorafterAugust28,[2001] 2025, exceptas
3otherwiseexpresslyprovidedinthe[willor]termsofthetrustor[in]sections[469.401]
4469.399to[469.467] 469.487.
469.471.Asusedinsections469.471to469.487,thefollowingtermsmean:
2 (1)"Applicablevalue",theamountofthenetfairmarketvalueofatrusttaken
3intoaccountundersection469.483;
4 (2)"Expressunitrust",atrustforwhich,underthetermsofthetrustwithout
5regardtosections469.471to469.487,incomeornetincomeshallormaybecalculated
6asaunitrustamount;
HB608 41 7 (3)"Incometrust",atrustthatisnotaunitrust;
8 (4)"Netfairmarketvalueofatrust",thefairmarketvalueoftheassetsofthe
9trust,lessthenoncontingentliabilitiesofthetrust;
10 (5)"Unitrust",atrustforwhichnetincomeisaunitrustamount.Theterm
11includesanexpressunitrust;
12 (6)"Unitrustamount",anamountcomputedbymultiplyingadeterminedvalue
13ofatrustbyadeterminedpercentage.Foraunitrustadministeredunderaunitrust
14policy,thetermmeanstheapplicablevaluemultipliedbytheunitrustrate;
15 (7)"Unitrustpolicy",apolicydescribedinsections469.479to469.487and
16adoptedundersection469.475;
17 (8)"Unitrustrate",therateusedtocomputetheunitrustamountforaunitrust
18administeredunderaunitrustpolicy.
469.473.1.Exceptasotherwiseprovidedinsubsection2ofthissection,sections
2469.471to469.487applyto:
3 (1)Anincometrust,unlessthetermsofthetrustexpresslyprohibituseof
4sections469.471to469.487byaspecificreferencetothesesectionsoranexplicit
5expressionofintentthatnetincomenotbecalculatedasaunitrustamount;and
6 (2)Anexpressunitrust,excepttotheextentthetermsofthetrustexplicitly:
7 (a)Prohibituseofsections469.471to469.487byaspecificreferencetosuch
8sections;
9 (b)Prohibitconversiontoanincometrust;or
10 (c)Limitchangestothemethodofcalculatingtheunitrustamount.
11 2.Sections469.471to469.487donotapplytoatrustdescribedin26U.S.C.
12Section170(f)(2)(B),642(c)(5),664(d),2702(a)(3)(A)(ii)or(iii),or2702(b),asamended.
13 3.Anincometrusttowhichsections469.471to469.487applyundersubdivision
14(1)ofsubsection1ofthissectionmaybeconvertedtoaunitrustundersections469.471
15to469.487regardlessofthetermsofthetrustconcerningdistributions.Conversiontoa
16unitrustundersections469.471to469.487doesnotaffectothertermsofthetrust
17concerningdistributionsofincomeorprincipal.
18 4.Sections469.471to469.487applytoanestateonlytotheextentatrustisa
19beneficiaryoftheestate.Totheextentofthetrust’sinterestintheestate,theestatemay
20beadministeredasaunitrust,theadministrationoftheestateasaunitrustmaybe
21discontinued,orthepercentageormethodusedtocalculatetheunitrustamountmaybe
22changed,inthesamemannerasforatrustundersections469.471to469.487.
23 5.Sections469.471to469.487donotcreateadutytotakeorconsideraction
24undersections469.471to469.487ortoinformabeneficiaryabouttheapplicabilityof
25sections469.471to469.487.
HB608 42 26 6.Afiduciarythatingoodfaithtakesorfailstotakeanactionundersections
27469.471to469.487isnotliabletoapersonaffectedbytheactionorinaction.
469.475.1.Afiduciary,withoutcourtapproval,bycomplyingwithsubsections2
2and6ofthissection,may:
3 (1)Convertanincometrusttoaunitrustifthefiduciaryadoptsinarecorda
4unitrustpolicyforthetrustproviding:
5 (a)Thatinadministeringthetrustthenetincomeofthetrustwillbeaunitrust
6amountratherthannetincomedeterminedwithoutregardtosections469.471to
7469.487;and
8 (b)Thepercentageandmethodusedtocalculatetheunitrustamount;
9 (2)Changethepercentageormethodusedtocalculateaunitrustamountfora
10unitrustifthefiduciaryadoptsinarecordaunitrustpolicyoranamendmentor
11replacementofaunitrustpolicyprovidingchangesinthepercentageormethodusedto
12calculatetheunitrustamount;or
13 (3)Convertaunitrusttoanincometrustifthefiduciaryadoptsinarecorda
14determinationthat,inadministeringthetrust,thenetincomeofthetrustwillbenet
15incomedeterminedwithoutregardtosections469.471to469.487ratherthanaunitrust
16amount.
17 2.Afiduciarymaytakeanactionundersubsection1ofthissectionif:
18 (1)Thefiduciarydeterminesthattheactionwillassistthefiduciaryto
19administeratrustimpartially;
20 (2)Thefiduciarysendsanoticeinarecord,inthemannerrequiredbysection
21469.477,describingandproposingtotaketheaction;
22 (3)Thefiduciarysendsacopyofthenoticeundersubdivision(2)ofthis
23subsectiontoeachsettlorofthetrustthatis:
24 (a)Ifanindividual,living;or
25 (b)Ifnotanindividual,inexistence;
26 (4)Atleastonememberofeachclassofthequalifiedbeneficiariesdescribed
27undersection456.1-103receivingthenoticeundersubdivision(2)ofthissubsectionis:
28 (a)Ifanindividual,legallycompetent;
29 (b)Ifnotanindividual,inexistence;or
30 (c)Representedinthemannerprovidedinsubsection2ofsection469.477;and
31 (5)Thefiduciarydoesnotreceive,bythedatespecifiedinthenoticeunder
32subdivision(5)ofsubsection4ofsection469.477,anobjectioninarecordtotheaction
33proposedundersubdivision(2)ofthissubsectionfromapersontowhichthenotice
34undersubdivision(2)ofthissubsectionissent.
HB608 43 35 3.Ifafiduciaryreceives,notlaterthanthedatestatedinthenoticeunder
36subdivision(5)ofsubsection4ofsection469.477,anobjectioninarecorddescribedin
37subdivision(4)ofsubsection4ofsection469.477toaproposedaction,thefiduciaryora
38beneficiarymayrequestthecourttohavetheproposedactiontakenasproposed,taken
39withmodifications,orprevented.Apersondescribedinsubsection1ofsection469.477
40mayopposetheproposedactionintheproceedingunderthissubsection,whetherornot
41theperson:
42 (1)Consentedundersubsection3ofsection469.477;or
43 (2)Objectedundersubdivision(4)ofsubsection4ofsection469.477.
44 4.If,aftersendinganoticeundersubdivision(2)ofsubsection2ofthissection,a
45fiduciarydecidesnottotaketheactionproposedinthenotice,thefiduciaryshallnotify
46inarecordeachpersondescribedinsubsection1ofsection469.477ofthedecisionnotto
47taketheactionandthereasonsforthedecision.
48 5.Ifabeneficiaryrequestsinarecordthatafiduciarytakeanactiondescribed
49insubsection1ofthissectionandthefiduciarydeclinestoactordoesnotactwithin
50ninetydaysafterreceivingtherequest,thebeneficiarymayrequestthecourttodirect
51thefiduciarytotaketheactionrequested.
52 6.Indecidingwhetherandhowtotakeanactionauthorizedbysubsection1of
53thissection,orwhetherandhowtorespondtoarequestbyabeneficiaryunder
54subsection5ofthissection,afiduciaryshallconsiderallfactorsrelevanttothetrustand
55thebeneficiaries,includingrelevantfactorsinsubsection5ofsection469.403.
56 7.Afiduciarymayreleaseordelegatethepowertoconvertanincometrusttoa
57unitrustundersubdivision(1)ofsubsection1ofthissection,changethepercentageor
58methodusedtocalculateaunitrustamountundersubdivision(2)ofsubsection1ofthis
59section,orconvertaunitrusttoanincometrustundersubdivision(3)ofsubsection1of
60thissection,forareasondescribedinsubsection7ofsection469.405andinthemanner
61describedinsubsection8ofsection469.405.
469.477.1.Anoticerequiredbysubdivision(3)ofsubsection2ofsection
2469.475shallbesentinamannerauthorizedundersection456.1-109to:
3 (1)Thequalifiedbeneficiariesdefinedundersection456.1-103;
4 (2)Eachpersonactingastrustprotectorundersection456.8-808;and
5 (3)Eachpersonthatisgrantedapoweroverthetrustbythetermsofthetrust,
6totheextentthepowerisexercisablewhenthepersonisnotthenservingasatrustee:
7 (a)Includinga:
8 a.Powerovertheinvestment,management,ordistributionoftrustpropertyor
9othermattersoftrustadministration;and
HB608 44 10 b.Powertoappointorremoveatrusteeorpersondescribedinthisparagraph;
11and
12 (b)Excludinga:
13 a.Powerofappointment;
14 b.Powerofabeneficiaryoverthetrust,totheextenttheexerciseornonexercise
15ofthepoweraffectsthebeneficialinterestofthebeneficiaryoranotherbeneficiary
16representedbythebeneficiaryundersections456.3-301to456.3-305withrespecttothe
17exerciseornonexerciseofthepower;and
18 c.Poweroverthetrustifthetermsofthetrustprovidethatthepowerisheldin
19anonfiduciarycapacityandthepowershallbeheldinanonfiduciarycapacityto
20achieveataxobjectiveunderTitle26oftheUnitedStatesCode,asamended.
21 2.Therepresentationprovisionsofsections456.3-301to456.3-305applyto
22noticeunderthissection.
23 3.Apersonmayconsentinarecordatanytimetoactionproposedunder
24subdivision(2)ofsubsection2ofsection469.475.Anoticerequiredbysubdivision(2)of
25subsection2ofsection469.475neednotbesenttoapersonthatconsentsunderthis
26subsection.
27 4.Anoticerequiredbysubdivision(2)ofsubsection2ofsection469.475shall
28include:
29 (1)Theactionproposedundersubdivision(2)ofsubsection2ofsection469.475;
30 (2)Foraconversionofanincometrusttoaunitrust,acopyoftheunitrustpolicy
31adoptedundersubdivision(1)ofsubsection1ofsection469.475;
32 (3)Forachangeinthepercentageormethodusedtocalculatetheunitrust
33amount,acopyoftheunitrustpolicyoramendmentorreplacementoftheunitrust
34policyadoptedundersubdivision(2)ofsubsection1ofsection469.475;
35 (4)Astatementthatthepersontowhichthenoticeissentmayobjecttothe
36proposedactionbystatinginarecordthebasisfortheobjectionandsendingor
37deliveringtherecordtothefiduciary;
38 (5)Thedatebywhichanobjectionundersubdivision(4)ofthissubsectionshall
39bereceivedbythefiduciary,whichshallbeatleastthirtydaysafterthedatethenoticeis
40sent;
41 (6)Thedateonwhichtheactionisproposedtobetakenandthedateonwhich
42theactionisproposedtotakeeffect;
43 (7)Thenameandcontactinformationofthefiduciary;and
44 (8)Thenameandcontactinformationofapersonthatmaybecontactedfor
45additionalinformation.
HB608 45 469.479.1.Inadministeringaunitrustundersections469.471to469.487,a
2fiduciaryshallfollowaunitrustpolicyadoptedundersubdivision(1)or(2)ofsubsection
31ofsection469.475oramendedorreplacedundersubdivision(2)ofsection1ofsection
4469.475.
5 2.Aunitrustpolicyshallprovide:
6 (1)Theunitrustrateorthemethodfordeterminingtheunitrustrateunder
7section469.481;
8 (2)Themethodfordeterminingtheapplicablevalueundersection469.483;and
9 (3)Therulesdescribedinsections469.481to469.487thatapplyinthe
10administrationoftheunitrust,whethertherulesare:
11 (a)Mandatory,asprovidedinsubsection1ofsection469.483andsubsection1of
12section469.485;or
13 (b)Optional,asprovidedinsection469.481,subsection2ofsection469.483,
14subsection2ofsection469.485,andsubsection1ofsection469.487,totheextentthe
15fiduciaryelectstoadoptsuchrules.
469.481.1.Exceptasotherwiseprovidedinsubdivision(1)ofsubsection2of
2section469.487,aunitrustratemaybe:
3 (1)Afixedunitrustrate;or
4 (2)Aunitrustratethatisdeterminedforeachperiodusing:
5 (a)Amarketindexorotherpublisheddata;or
6 (b)Amathematicalblendofmarketindicesorotherpublisheddataovera
7statednumberofprecedingperiods.
8 2.Exceptasotherwiseprovidedinsubdivision(1)ofsubsection2ofsection
9469.487,aunitrustpolicymayprovide:
10 (1)Alimitonhowhightheunitrustratedeterminedundersubdivision(2)of
11subsection1ofthissectionmayrise;
12 (2)Alimitonhowlowtheunitrustratedeterminedundersubdivision(2)of
13subsection1ofthissectionmayfall;
14 (3)Alimitonhowmuchtheunitrustratedeterminedundersubdivision(2)of
15subsection1ofthissectionmayincreaseovertheunitrustratefortheprecedingperiod
16oramathematicalblendofunitrustratesoverastatednumberofprecedingperiods;
17 (4)Alimitonhowmuchtheunitrustratedeterminedundersubdivision(2)of
18subsection1ofthissectionmaydecreasebelowtheunitrustrateforthepreceding
19periodoramathematicalblendofunitrustratesoverastatednumberofpreceding
20periods;or
HB608 46 21 (5)Amathematicalblendofanyoftheunitrustratesdeterminedunder
22subdivision(2)ofsubsection1ofthissectionandsubdivisions(1)to(4)ofthis
23subsection.
469.483.1.Aunitrustpolicyshallprovidethemethodfordeterminingthefair
2marketvalueofanassetforthepurposeofdeterminingtheunitrustamount,including:
3 (1)Thefrequencyofvaluingtheasset,whichneednotrequireavaluationin
4everyperiod;and
5 (2)Thedateforvaluingtheassetineachperiodinwhichtheassetisvalued.
6 2.Exceptasotherwiseprovidedinsubdivision(2)ofsubsection2ofsection
7469.487,aunitrustpolicymayprovidemethodsfordeterminingtheamountofthenet
8fairmarketvalueofthetrusttotakeintoaccountindeterminingtheapplicablevalue,
9including:
10 (1)Obtaininganappraisalofanassetforwhichfairmarketvalueisnotreadily
11available;
12 (2)Exclusionofspecificassetsorgroupsortypesofassets;
13 (3)Otherexceptionsormodificationsofthetreatmentofspecificassetsor
14groupsortypesofassets;
15 (4)Identificationandtreatmentofcashorpropertyheldfordistribution;
16 (5)Useof:
17 (a)Anaverageoffairmarketvaluesoverastatednumberofprecedingperiods;
18or
19 (b)Anothermathematicalblendoffairmarketvaluesoverastatednumberof
20precedingperiods;
21 (6)Alimitonhowmuchtheapplicablevalueofallassets,groupsofassets,or
22individualassetsmayincreaseover:
23 (a)Thecorrespondingapplicablevaluefortheprecedingperiod;or
24 (b)Amathematicalblendofapplicablevaluesoverastatednumberofpreceding
25periods;
26 (7)Alimitonhowmuchtheapplicablevalueofallassets,groupsofassets,or
27individualassetsmaydecreasebelow:
28 (a)Thecorrespondingapplicablevaluefortheprecedingperiod;or
29 (b)Amathematicalblendofapplicablevaluesoverastatednumberofpreceding
30periods;
31 (8)Thetreatmentofaccruedincomeandotherfeaturesofanassetthataffect
32value;and
33 (9)Determiningtheliabilitiesofthetrust,includingtreatmentofliabilitiesto
34conformwiththetreatmentofassetsundersubdivisions(1)to(8)ofthissubsection.
HB608 47 469.485.1.Aunitrustpolicyshallprovidetheperiodusedundersections
2469.481and469.483.Exceptasotherwiseprovidedinsubdivision(3)ofsubsection2of
3section469.481,theperiodmaybe:
4 (1)Acalendaryear;
5 (2)Atwelve-monthperiodotherthanacalendaryear;
6 (3)Acalendarquarter;
7 (4)Athree-monthperiodotherthanacalendarquarter;or
8 (5)Anotherperiod.
9 2.Exceptasotherwiseprovidedinsubsection2ofsection469.487,aunitrust
10policymayprovidestandardsfor:
11 (1)Usingfewerprecedingperiodsunderparagraph(b)ofsubdivision(2)of
12subsection1ofsection469.481orsubdivision(3)or(4)ofsubsection2ofsection469.481
13if:
14 (a)Thetrustwasnotinexistenceinaprecedingperiod;or
15 (b)Marketindicesorotherpublisheddataarenotavailableforapreceding
16period;
17 (2)Usingfewerprecedingperiodsunderparagraph(a)or(b)ofsubdivision(5)
18ofsubsection2ofsection469.483,paragraph(b)ofsubdivision(6)ofsubsection2of
19section469.483,orparagraph(b)ofsubdivision(7)ofsubsection2ofsection469.483if:
20 (a)Thetrustwasnotinexistenceinaprecedingperiod;or
21 (b)Fairmarketvaluesarenotavailableforaprecedingperiod;and
22 (3)Proratingtheunitrustamountonadailybasisforapartofaperiodinwhich
23thetrustortheadministrationofthetrustasaunitrustortheinterestofanybeneficiary
24commencesorterminates.
469.487.1.Aunitrustpolicymay:
2 (1)Providemethodsandstandardsfor:
3 (a)Determiningthetimingofdistributions;
4 (b)Makingdistributionsincashorinkindorpartlyincashandpartlyinkind;
5or
6 (c)Correctinganunderpaymentoroverpaymenttoabeneficiarybasedonthe
7unitrustamountifthereisanerrorincalculatingtheunitrustamount;
8 (2)Specifysourcesandtheorderofsources,includingcategoriesofincomefor
9federalincometaxpurposes,fromwhichdistributionsofaunitrustamountarepaid;or
10 (3)Provideotherstandardsandrulesthefiduciarydeterminesservethe
11interestsofthebeneficiaries.
12 2.Ifatrustqualifiesforaspecialtaxbenefitorafiduciaryisnotanindependent
13person:
HB608 48 14 (1)Theunitrustrateestablishedundersection469.481shallnotbelessthan
15threepercentormorethanfivepercent;
16 (2)Theonlyprovisionsofsection469.483thatapplyaresubsection1ofsection
17469.483;subdivisions(1),(4),and(9)ofsubsection2ofsection469.483;andparagraph
18(a)ofsubdivision(5)ofsubsection2ofsection469.483;
19 (3)Theonlyperiodthatmaybeusedundersection469.485isacalendaryear
20undersubdivision(1)ofsubsection1ofsection469.485;and
21 (4)Theonlyotherprovisionsofsection469.485thatapplyareparagraph(a)of
22subdivision(2)ofsubsection2ofsection469.485andsubdivision(3)ofsubsection2of
23section469.485.
[469.409.1.Anyclaimforbreachofatrustee'sdutytoimpartially
2 administeratrustrelated,directlyorindirectly,toanadjustmentmadebya
3 fiduciarytotheallocationbetweenprincipalandincomepursuantto
4 subsection1ofsection469.405oranyallocationmadebythefiduciary
5 pursuanttoanyauthorityordiscretionspecifiedinsubsection1ofsection
6 469.403,unlesspreviouslybarredbyadjudication,consentorotherlimitation,
7 shallbebarredasprovidedinthissection.
8 (1)Anysuchclaimbroughtbyaqualifiedbeneficiaryisbarredifnot
9 assertedinajudicialproceedingcommencedwithintwoyearsafterthetrustee
10 hassentareporttothatqualifiedbeneficiarythatadequatelydisclosesthefacts
11 constitutingtheclaim.
12 (2)Anysuchclaimbroughtbyabeneficiary(otherthanaqualified
13 beneficiary)withanyinterestwhatsoeverinthetrust,nomatterhowremoteor
14 contingent,orwhetherornotthebeneficiaryisascertainableorhasthe
15 capacitytocontract,isbarredifnotassertedinajudicialproceeding
16 commencedwithintwoyearsafterthefirsttooccurof:
17 (a)Thedatethetrusteesentareporttoallqualifiedbeneficiariesthat
18 adequatelydisclosesthefactsconstitutingtheclaim;or
19 (b)Thedatethetrusteesentareporttoapersonthatrepresentsthe
20 beneficiaryundertheprovisionsofsubdivision(2)ofsubsection2ofthis
21 section.
22 2.Forpurposesofthissectionthefollowingrulesshallapply:
23 (1)Areportadequatelydisclosesthefactsconstitutingaclaimifit
24 providessufficientinformationsothatthebeneficiaryshouldknowofthe
25 claimorreasonablyshouldhaveinquiredintoitsexistence;
26 (2)Section469.402shallapplyindeterminingwhetherabeneficiary
27 (includingaqualifiedbeneficiary)hasreceivednoticeforpurposesofthis
28 section;
29 (3)Thedeterminationoftheidentityofallqualifiedbeneficiariesshall
30 bemadeonthedatethereportisdeemedtohavebeensent;and
31 (4)Thissectiondoesnotprecludeanactiontorecoverforfraudor
32 misrepresentationrelatedtothereport.]
HB608 49 [469.411.1.(1)Iftheprovisionsofthissectionapplytoatrust,the
2 unitrustamountdeterminedforeachaccountingyearofthetrustshallbea
3 percentagebetweenthreeandfivepercentoftheaveragenetfairmarketvalue
4 ofthetrust,asofthefirstdayofthetrust'scurrentaccountingyear.The
5 percentageapplicabletoatrustshallbethatpercentagespecifiedbytheterms
6 ofthegoverninginstrumentorbytheelectionmadeinaccordancewith
7 subdivision(2)ofsubsection5ofthissection.
8 (2)Theunitrustamountforthecurrentaccountingyearcomputed
9 pursuanttothissectionshallbeproportionatelyreducedforanydistributions,
10 inwholeorinpart,otherthandistributionsoftheunitrustamount,andforany
11 paymentsofexpenses,includingdebts,disbursementsandtaxes,fromthetrust
12 withinacurrentaccountingyearthatthetrusteedeterminestobematerialand
13 substantial,andshallbeproportionatelyincreasedforthereceipt,otherthana
14 receiptthatrepresentsareturnoninvestment,ofanyadditionalpropertyinto
15 thetrustwithinacurrentaccountingyear.
16 (3)Forpurposesofthissection,thenetfairmarketvaluesoftheassets
17 heldinthetrustonthefirstbusinessdayofaprioraccountingquartershallbe
18 adjustedtoreflectanyreduction,inthecaseofadistributionorpayment,or
19 increase,inthecaseofareceipt,fortheprioraccountingyearpursuantto
20 subdivision(1)ofthissubsection,asifthedistribution,paymentorreceipthad
21 occurredonthefirstdayoftheprioraccountingyear.
22 (4)Inthecaseofashortaccountingperiod,thetrusteeshallprorate
23 theunitrustamountonadailybasis.
24 (5)Inthecasewherethenetfairmarketvalueofanassetheldinthe
25 trusthasbeenincorrectlydeterminedinanyquarter,theunitrustamountshall
26 beincreasedinthecaseofanundervaluation,orbedecreasedinthecaseofan
27 overvaluation,byanamountequaltothedifferencebetweentheunitrust
28 amountdeterminedbasedonthecorrectvaluationoftheassetandtheunitrust
29 amountoriginallydetermined.
30 2.Asusedinthissection,thefollowingtermsmean:
31 (1)"Averagenetfairmarketvalue",arollingaverageofthefair
32 marketvalueoftheassetsheldinthetrustonthefirstbusinessdayofthe
33 lessorofthenumberofaccountingquartersofthetrustfromthedateof
34 inceptionofthetrusttothedeterminationofthetrust'saveragenetfairmarket
35 value,ortwelveaccountingquartersofthetrust,regardlessofwhetherthis
36 sectionappliedtotheascertainmentofnetincomeforallvaluationquarters;
37 (2)"Currentaccountingyear",theaccountingperiodofthetrustfor
38 whichtheunitrustamountisbeingdetermined.
39 3.Indeterminingtheaveragenetfairmarketvalueoftheassetsheldin
40 thetrust,thereshallnotbeincludedthevalueof:
41 (1)Anyresidentialpropertyoranytangiblepersonalpropertythat,as
42 ofthefirstbusinessdayofthecurrentvaluationyear,oneormoreincome
43 beneficiariesofthetrusthaveorhadtherighttooccupy,orhaveorhadthe
44 righttopossessorcontrol,otherthaninacapacityastrustee,andinsteadthe
45 rightofoccupancyortherighttopossessionorcontrolshallbedeemedtobe
46 theunitrustamountwithrespecttotheresidentialpropertyorthetangible
47 personalproperty;or
HB608 50 48 (2)Anyassetspecificallygiventoabeneficiaryunderthetermsofthe
49 trustandthereturnoninvestmentonthatasset,whichreturnoninvestment
50 shallbedistributabletothebeneficiary.
51 4.Indeterminingtheaveragenetfairmarketvalueoftheassetsheldin
52 thetrustpursuanttosubsection1ofthissection,thetrusteeshall,notlessoften
53 thanannually,determinethefairmarketvalueofeachassetofthetrustthat
54 consistsprimarilyofrealpropertyorotherpropertythatisnottradedona
55 regularbasisinanactivemarketbyappraisalorotherreasonablemethodor
56 estimate,andthatdetermination,ifmadereasonablyandingoodfaith,shallbe
57 conclusiveastoallpersonsinterestedinthetrust.Anyclaimbasedona
58 determinationmadepursuanttothissubsectionshallbebarredifnotasserted
59 inajudicialproceedingbroughtbyanybeneficiarywithanyinterest
60 whatsoeverinthetrustwithintwoyearsafterthetrusteehassentareporttoall
61 qualifiedbeneficiariesthatadequatelydisclosesthefactsconstitutingthe
62 claim.Therulessetforthinsubsection2ofsection469.409shallapplytothe
63 barringofclaimspursuanttothissubsection.
64 5.Thissectionshallapplytothefollowingtrusts:
65 (1)AnytrustcreatedafterAugust28,2001,withrespecttowhichthe
66 termsofthetrustclearlymanifestanintentthatthissectionapply;
67 (2)Anytrustcreatedunderaninstrumentthatbecameirrevocableon,
68 before,orafterAugust28,2001,ifthetrustee,inthetrustee'sdiscretion,elects
69 tohavethissectionapplyunlesstheinstrumentcreatingthetrustspecifically
70 prohibitsanelectionunderthissubdivision.Thetrusteeshalldelivernoticeto
71 allqualifiedbeneficiariesandthesettlorofthetrust,ifheorsheisthenliving,
72 ofthetrustee'sintenttomakesuchanelectionatleastsixtydaysbefore
73 makingthatelection.Thetrusteeshallhavesoleauthoritytomakethe
74 election.Section469.402shallapplyforallpurposesofthissubdivision.An
75 actionororderbyanycourtshallnotberequired.Theelectionshallbemade
76 byasignedwritingdeliveredtothesettlorofthetrust,ifheorsheisthen
77 living,andtoallqualifiedbeneficiaries.Theelectionisirrevocable,unless
78 revokedbyorderofthecourthavingjurisdictionofthetrust.Theelection
79 mayspecifythepercentageusedtodeterminetheunitrustamountpursuantto
80 thissection,providedthatsuchpercentageisbetweenthreeandfivepercent,
81 orifnopercentageisspecified,thenthatpercentageshallbethreepercent.In
82 makinganelectionpursuanttothissubsection,thetrusteeshallbesubjectto
83 thesamelimitationsandconditionsasapplytoanadjustmentbetweenincome
84 andprincipalpursuanttosubsections3and4ofsection469.405;and
85 (3)Noactionofanykindbasedonanelectionmadebyatrustee
86 pursuanttosubdivision(2)ofthissubsectionshallbebroughtagainstthe
87 trusteebyanybeneficiaryofthattrustthreeyearsfromtheeffectivedateof
88 thatelection.
89 6.(1)Oncetheprovisionsofthissectionbecomeapplicabletoatrust,
90 thenetincomeofthetrustshallbetheunitrustamount.
91 (2)Unlessotherwiseprovidedbythegoverninginstrument,the
92 unitrustamountdistributedeachyearshallbepaidfromthefollowingsources
93 forthatyearuptothefullvalueoftheunitrustamountinthefollowingorder:
94 (a)Netincomeasdeterminedifthetrustwerenotaunitrust;
HB608 51 95 (b)Otherordinaryincomeasdeterminedforfederalincometax
96 purposes;
97 (c)Assetsofthetrustprincipalforwhichthereisareadilyavailable
98 marketvalue;and
99 (d)Othertrustprincipal.
100 (3)Additionally,thetrusteemayallocatetotrustincomeforeach
101 taxableyearofthetrust,orportionthereof:
102 (a)Netshort-termcapitalgaindescribedintheInternalRevenueCode,
103 26U.S.C.Section1222(5),forsuchyear,orportionthereof,butonlytothe
104 extentthattheamountsoallocatedtogetherwithallotheramountstotrust
105 income,asdeterminedundertheprovisionsofthischapterwithoutregardto
106 thissection,forsuchyear,orportionthereof,doesnotexceedtheunitrust
107 amountforsuchyear,orportionthereof;
108 (b)Netlong-termcapitalgaindescribedintheInternalRevenueCode,
109 26U.S.C.Section1222(7),forsuchyear,orportionthereof,butonlytothe
110 extentthattheamountsoallocatedtogetherwithallotheramounts,including
111 amountsdescribedinparagraph(a)ofthissubdivision,allocatedtotrust
112 incomeforsuchyear,orportionthereof,doesnotexceedtheunitrustamount
113 forsuchyear,orportionthereof.
114 7.AtrustwithrespecttowhichthissectionappliesonAugust28,
115 2011,maycalculatetheunitrustamountinaccordancewiththeprovisionsof
116 thissection,asitexistedeitherbeforeoraftersuchdate,asthetrusteeofsuch
117 trustshalldetermineinawritingkeptwiththerecordsofthetrustinthe
118 trustee'sdiscretion.]
[469.461.1.Afiduciarymaymakeadjustmentsbetweenprincipaland
2 incometooffsettheshiftingofeconomicinterestsortaxbenefitsbetween
3 incomebeneficiariesandremainderbeneficiarieswhicharisefrom:
4 (1)Electionsanddecisions,otherthanthosedescribedinsubsection2
5 ofthissection,thatthefiduciarymakesfromtimetotimeregardingtax
6 matters;
7 (2)Anincometaxoranyothertaxthatisimposeduponthefiduciary
8 orabeneficiaryasaresultofatransactioninvolvingoradistributionfromthe
9 estateortrust;or
10 (3)Theownershipbyanestateortrustofaninterestinanentitywhose
11 taxableincome,whetherornotdistributed,isincludableinthetaxableincome
12 oftheestate,trustorabeneficiary.
13 2.Iftheamountofanestatetaxmaritaldeductionorcharitable
14 contributiondeductionisreducedbecauseafiduciarydeductsanamountpaid
15 fromprincipalforincometaxpurposesinsteadofdeductingitforestatetax
16 purposes,andasaresultestatetaxespaidfromprincipalareincreasedand
17 incometaxespaidbyanestate,trustorbeneficiaryaredecreased,eachestate,
18 trustorbeneficiarythatbenefitsfromthedecreaseinincometaxshall
19 reimbursetheprincipalfromwhichtheincreaseinestatetaxispaid.Thetotal
20 reimbursementshallequaltheincreaseintheestatetaxtotheextentthatthe
21 principalusedtopaytheincreasewouldhavequalifiedforamaritaldeduction
22 orcharitablecontributiondeductionbutforthepayment.Theproportionate
23 shareofthereimbursementforeachestate,trustorbeneficiarywhoseincome
HB608 52 24 taxesarereducedshallbethesameasitsproportionateshareofthetotal
25 decreaseinincometax.Anestateortrustshallreimburseprincipalfrom
26 income.]
✔
HB608 53