Code of Alabama - Title 19: Fiduciaries and Trusts - Chapter 3A - Alabama Principal and Income Act

• Article 1 Definitions and Fiduciary Duties.
• Section 19-3A-101 Short title
  This chapter shall be known and may be cited as the "Alabama Principal and Income Act."
• Section 19-3A-102 Definitions
  As used in this chapter, the following terms are defined as follows: (1) ACCOUNTING PERIOD. A calendar year unless another 12-month period is selected by...
• Section 19-3A-103 Fiduciary duties; general principles
  (a) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of Article 2 and...
• Section 19-3A-104 Trustee's power to adjust
  (a) If the terms of the trust expressly provide by specific reference to this section, then a trustee may have the power to adjust between...
• Section 19-3A-105 Express unitrusts
  Except to the extent otherwise provided in the governing instrument, the following provisions shall apply to a trust which by its governing instrument requires distribution...
• Section 19-3A-106 Conversion to unitrust
  (a) Unless expressly prohibited by the governing instrument, a trustee may convert a trust into a unitrust as described in this section if all of...
• Article 2 Decedent's Estate or Terminating Income Interest.
• Section 19-3A-201 Determination and distribution of net income
  After the decedent's death, in the case of a decedent's estate, or after an income interest in a trust ends, the following rules apply: (a)...
• Section 19-3A-202 Distribution to residuary and remainder beneficiaries
  (a) Each beneficiary described in Section 19-3A-201(d) is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed...
• Article 3 Apportionment at Beginning and End of Income Interest.
• Section 19-3A-301 When right to income begins and ends
  (a) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date...
• Section 19-3A-302 Apportionment of receipts and disbursements upon decedent's death or when income interest begins
  (a) A fiduciary shall allocate an income receipt or disbursement, other than one to which Section 19-3A-201(a) applies, to principal in the following instances: (1)...
• Section 19-3A-303 Apportionment when income interest ends
  (a) For the purposes of this section, "undistributed income" means net income received before the date on which an income interest ends. The term does...
• Article 4 Allocation of Receipts During Administration.
• Section 19-3A-401 Character of receipts
  (a) For purposes of this section, "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or...
• Section 19-3A-402 Distributions from trust or decedent's estate
  A fiduciary shall allocate to income an amount received as a distribution of income from a trust or a decedent's estate in which the trust...
• Section 19-3A-403 Business and other activities conducted by fiduciary
  (a) If a fiduciary who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account...
• Section 19-3A-404 Principal receipts
  A fiduciary shall allocate to principal: (1) To the extent not allocated to income under this chapter, assets received from a transferor during the transferor's...
• Section 19-3A-405 Rental property
  To the extent the fiduciary does not account for receipts from rental property pursuant to Section 19-3A-403, the fiduciary shall allocate to income an amount...
• Section 19-3A-406 Bonds and other obligations
  (a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on a bond or an obligation to pay money to...
• Section 19-3A-407 Insurance policies and similar contracts
  (a) Except as otherwise provided in subsection (b), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract in...
• Section 19-3A-408 Insubstantial allocations not required
  (a) If a fiduciary determines that an allocation between principal and income required by Section 19-3A-409, Section 19-3A-410, Section 19-3A-411, Section 19-3A-412, or Section 19-3A-415...
• Section 19-3A-409 Deferred compensation, annuities, and similar payments
  (a) In this section: (1) "Payment" means a payment that a fiduciary may receive over a fixed number of years or during the life of...
• Section 19-3A-410 Liquidating assets
  (a) In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a...
• Section 19-3A-411 Minerals, water, and other natural resources
  (a) To the extent that a fiduciary accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the fiduciary...
• Section 19-3A-412 Timber
  (a) To the extent that a fiduciary accounts for receipts from the sale of timber and related products pursuant to this section, the fiduciary shall...
• Section 19-3A-413 Property not productive of income
  (a) If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the...
• Section 19-3A-415 Asset-backed securities
  (a) In this section, "asset-backed security" means an asset whose value is based upon the right it gives the owner to receive distributions from the...
• Section 19-3A-414 Derivative instruments and options
  (a) In this section, "derivative instrument" means a contract, a financial instrument, or a combination of contracts and financial instruments which gives a trust the...
• Article 5 Allocation of Disbursements During Administration of Trust or Decendent's Estate.
• Section 19-3A-501 Disbursements from income
  A trustee shall make the following disbursements from income to the extent that they are not disbursements to which Section 19-3A-201(c)(2) or Section 19-3A-201(c)(3) applies:...
• Section 19-3A-502 Disbursements from principal
  (a) A trustee shall make the following disbursements from principal: (1) An amount, not to exceed fifty percent (50%), of the disbursements described in Section...
• Section 19-3A-503 Transfers from income to principal for depreciation
  (a) In this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a...
• Section 19-3A-504 Transfers from income to reimburse principal
  (a) If a fiduciary makes or expects to make a principal disbursement described in this section, then the fiduciary may transfer an appropriate amount from...
• Section 19-3A-505 Income taxes
  (a) A tax required to be paid by a fiduciary based on receipts allocated to income shall be paid from income. (b) A tax required...
• Section 19-3A-506 Adjustments between principal and income because of taxes
  (a) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder...
• Article 6 Miscellaneous Provisions.
• Section 19-3A-601 Uniformity of application and construction
  In applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject...
• Section 19-3A-602 Severability clause
  If any provision of this chapter or its application to any person or circumstance is held invalid, then the invalidity does not affect other provisions...
• Section 19-3A-603 Effective date
  This chapter shall become effective on January 1, 2001, and shall apply to every trust and decedent's estate created on or after such date.
• Section 19-3A-604 Application to existing trusts and estates
  This chapter shall become applicable on January 1, 2001, to every trust and decedent's estate already in existence on January 1, 2001, and to every...
• Section 19-3A-605 Consent of beneficiaries
  A fiduciary may at any time obtain the written consent of all of the current income beneficiaries and presumptive remainder beneficiaries of a trust or...
• Section 19-3A-606 Applicability to tenant and remainder interests
  This chapter shall govern the ascertainment of income and principal, and the apportionment of receipts and disbursements between tenant and remainderman, in all cases where...
• Section 19-3A-607 Applicability of Section 19-3A-409
  Section 19-3A-409, as amended by Act 2012-550, applies to a trust described in Section 19-3A-409(d) on and after the following dates: (1) If the trust...
• Section 19-3A-608 Application of Alabama Uniform Trust Code
  The provisions of the Alabama Uniform Trust Code apply to the Alabama Principal and Income Act, except to the extent the provisions are inconsistent with...

Last modified: May 3, 2021