NY Est Pow & Trusts L § 11-A-2.1 (2021)
2021 New York Laws EPT - Estates, Powers and Trusts Article 11-A - Uniform Principal and Income Act Part 2 - Decedent's Estate or Terminating Income Interest 11-A-2.1 - Determination and Distribution of Net Income

§ 11-A-2.1 Determination and distribution of net income   After  a  decedent  dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:  (1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal  receipts  received from  property  specifically  given  to a beneficiary under the rules in parts 3 through 5 which apply to trustees and  the  rules  in  paragraph (5).  The  fiduciary  shall  distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.  (2) A  fiduciary  shall  determine  the  remaining  net  income  of  a decedent's  estate  or  a terminating income interest under the rules in parts 3 through 5 which apply to trustees and by:  (A) including in net income all income from property used to discharge liabilities;  (B) paying from income or principal, in  the  fiduciary's  discretion, fees  of  attorneys, accountants, and fiduciaries; court costs and other expenses of  administration;  and  interest  on  death  taxes,  but  the fiduciary  may  pay  those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment  of  those  expenses  from income will not cause the reduction or loss of the deduction; and  (C)  paying from principal all other disbursements made or incurred in connection with the settlement of a decedent's estate or the winding  up of  a  terminating  income  interest, including debts, funeral expenses, disposition of remains, family allowances, and death taxes  and  related penalties  that  are  apportioned  to  the  estate or terminating income interest by the will, the terms of the trust, or applicable law.  (3) Unless otherwise provided by the  terms  of  the  will  or  trust, commencing  (A) seven months from either the date of death or other date a beneficiary is to receive a pecuniary amount outright if  letters  are not  required, unless the beneficiary is a genetic child, then such date shall  be  the  later  of  the  aforementioned  time  periods  in   this subparagraph  or  the  date  of  birth  of the genetic child entitled to inherit from the child's genetic parent  under  section  4-1.3  of  this chapter,   or   (B)  seven  months  from  the  time  letters,  including preliminary or temporary letters, are granted if letters  are  required, unless  the  beneficiary is a genetic child, then such date shall be the later of the aforementioned time period in this subparagraph or the date of birth of the genetic child  entitled  to  inherit  from  the  child's genetic  parent  under  section 4-1.3 of this chapter, a fiduciary shall distribute income to a  beneficiary  who  receives  a  pecuniary  amount outright,  from  net  income  determined  under  paragraph  (2)  or from principal to the extent that net income is insufficient,  of  an  amount equal  to  the  pecuniary  amount  multiplied by an income factor, which shall be set (or reset) on the first business day of each calendar  year and  fixed  for  that  calendar year at the target Federal funds rate as announced by the Federal Reserve Board  (or  in  the  event  the  target Federal funds rate is a range of rates, the high of that range) less one percent, but in no event less than one-half of one percent.  (4)  A  fiduciary  shall  distribute  the  net  income remaining after distributions required by paragraph  (3)  in  the  manner  described  in 11-A-2.2  to  all  other  beneficiaries,  including  a  beneficiary  who receives a pecuniary amount in trust, even if the beneficiary  holds  an unqualified  power  to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.  (5) A fiduciary may not  reduce  principal  or  income  receipts  from property  described  in  paragraph (1) because of a payment described in 11-A-5.1 or 11-A-5.2 to the extent that  the  will,  the  terms  of  the  trust, or applicable law requires the fiduciary to make the payment from assets  other  than  the  property  or  to the extent that the fiduciary recovers or expects to recover the payment from a third party.  The  net income  and  principal  receipts  from  the  property  are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the  date  of  a  decedent's  death  or  an  income  interest's terminating event, and by making a reasonable provision for amounts that the  fiduciary  believes  the  estate or terminating income interest may become obligated to pay after the property is distributed.