Indiana Code - Trusts and Fiduciaries - Title 30, Section 30-2-14-39

Disbursements from principal

Sec. 39. (a) A trustee shall make the following disbursements
from principal:
(1) the remaining one-half (1/2) of the disbursements described
in section 38(1) and 38(2) of this chapter;
(2) all of the trustee's compensation calculated on principal as
a fee for acceptance, distribution, or termination, and
disbursements made to prepare property for sale;
(3) payments on the principal of a trust debt;
(4) expenses of a proceeding that concerns primarily principal,
including a proceeding to construe the trust or to protect the
trust or its property;
(5) premiums paid on a policy of insurance not described in
section 38(4) of this chapter of which the trust is the owner and
beneficiary;
(6) estate, inheritance, and other transfer taxes, including
penalties, apportioned to the trust; and
(7) disbursements related to environmental matters, including
reclamation, assessing environmental conditions, remedying
and removing environmental contamination, monitoring
remedial activities and the release of substances, preventing
future releases of substances, collecting amounts from persons
liable or potentially liable for the costs of those activities,
penalties imposed under environmental laws or regulations and
other payments made to comply with those laws or regulations,
statutory or common law claims by third parties, and defending
claims based on environmental matters.
(b) If a principal asset is encumbered with an obligation that
requires income from that asset to be paid directly to the creditor, the
trustee shall transfer from principal to income an amount equal to the
income paid to the creditor in reduction of the principal balance of
the obligation.

As added by P.L.84-2002, SEC.2.

Last modified: May 27, 2006