Beneficiary's share of net income
Sec. 19. (a) Each beneficiary described in section 18(4) of this
chapter is entitled to receive a portion of the net income equal to the
beneficiary's fractional interest in undistributed principal assets,
using values as of the distribution date. If a fiduciary makes more
than one (1) distribution of assets to beneficiaries to whom this
section applies, each beneficiary, including a beneficiary who does
not receive part of the distribution, is entitled, as of each distribution
date, to the net income the fiduciary has received after the date of
death or terminating event or earlier distribution date but has not
distributed as of the current distribution date.
(b) In determining a beneficiary's share of net income, the
following rules apply:
(1) The beneficiary is entitled to receive a portion of the net
income equal to the beneficiary's fractional interest in the
undistributed principal assets immediately before the
distribution date, including assets that later may be sold to meet
principal obligations.
(2) The beneficiary's fractional interest in the undistributed
principal assets must be calculated without regard to property
specifically given to a beneficiary and property required to pay
pecuniary amounts not in trust.
(3) The beneficiary's fractional interest in the undistributed
principal assets must be calculated on the basis of the aggregate
value of those assets as of the distribution date without reducing
the value by any unpaid principal obligation.
(4) The distribution date for purposes of this section may be the
date as of which the fiduciary calculates the value of the assets
if that date is reasonably near the date on which assets are
actually distributed.
(c) If a fiduciary does not distribute all of the collected but
undistributed net income to each person as of a distribution date, the
fiduciary shall maintain appropriate records showing the interest of
each beneficiary in that net income.
(d) A fiduciary may apply the rules in this section, to the extent
that the fiduciary considers it appropriate, to net gain or loss realized
after the date of death or terminating event or earlier distribution date
from the disposition of a principal asset if this section applies to the
income from the asset.
As added by P.L.84-2002, SEC.2.
Last modified: May 27, 2006