reglab/statecodes huggingface dataset:
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 3 - Unitrust › Section 16336.

16336. (a) A unitrust plan shall provide the method for determining the fair market value of an asset for the purpose of determining the unitrust amount, including both of the following:
(1) The frequency of valuing the asset, which need not require a valuation in every period.
(2) The date for valuing the asset in each period in which the asset is valued.
(b) Except as otherwise provided in paragraph (2) of subdivision (b) of Section 16338, a unitrust plan may provide methods for determining the amount of the net fair market value of the trust to take into account in determining the applicable value, including all of the following:
(1) Obtaining an appraisal of an asset for which fair market value is not readily ascertainable.
(2) Exclusion of specific assets or groups or types of assets.
(3) Exceptions or modifications of the treatment of specific assets or groups or types of assets.
(4) Identification and treatment of money or property held for distribution.
(5) Use of either of the following:
(A) An average of fair market values over a stated number of preceding periods.
(B) Another mathematical blend of fair market values over a stated number of preceding periods.
(6) A limit on how much the applicable value of all assets, groups of assets, or individual assets may increase over either of the following:
(A) The corresponding applicable value for the preceding period.
(B) A mathematical blend of applicable values over a stated number of preceding periods.
(7) A limit on how much the applicable value of all assets, groups of assets, or individual assets may decrease below:
(A) The corresponding applicable value for the preceding period.
(B) A mathematical blend of applicable values over a stated number of preceding periods.
(8) The treatment of accrued income and other features of an asset that affect value.
(9) Determining the liabilities of the trust, including treatment of liabilities to conform to the treatment of assets under paragraphs (1) to (8), inclusive.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 3 - Unitrust › Section 16337.

16337. (a) A unitrust plan shall provide the period used under Sections 16335 and 16336. Except as otherwise provided in paragraph (3) of subdivision (b) of Section 16338, the period may be any of the following:
(1) A calendar year.
(2) A 12-month period other than a calendar year.
(3) A calendar quarter.
(4) A three-month period other than a calendar quarter.
(5) Another period.
(b) Except as otherwise provided in Section 16338, a unitrust plan may provide standards for any of the following:
(1) Using fewer preceding periods under subparagraph (B) of paragraph (2) of subdivision (a) of, or paragraph (3) or (4) of subdivision (b) of, Section 16335 if any of the following circumstances exists:
(A) The trust was not in existence in a preceding period.
(B) Market indices or other published data are not available for a preceding period.
(2) Using fewer preceding periods under subparagraph (A) or (B) of paragraph (5) of, subparagraph (B) of paragraph (6) of, or subparagraph (B) of paragraph (7) of subdivision (b) of, Section 16366, under either of the following circumstances:
(A) The trust was not in existence in a preceding period.
(B) Fair market values are not available for a preceding period.
(3) Prorating the unitrust amount on a daily basis for a part of a period in which the trust or the administration of the trust as a unitrust or the interest of any beneficiary commences or terminates.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 3 - Unitrust › Section 16338.

16338. (a) A unitrust plan may include any of the following:
(1) Provide methods and standards for all of the following:
(A) Determining the timing of distributions.
(B) Making distributions in money or in kind or partly in money and partly in kind.
(C) Correcting an underpayment or overpayment to a beneficiary based on the unitrust amount if there is an error in calculating the unitrust amount.
(2) Specify sources and the order of sources, including categories of income for federal income tax purposes, from which distributions of a unitrust amount are paid.
(3) Provide other standards and rules the fiduciary determines serve the interests of the beneficiaries.
(b) If a trust qualifies for a special tax benefit or a fiduciary is not an independent person:
(1) The unitrust rate established under Section 16335 may not be less than 3 percent or more than 5 percent.
(2) The only provisions of Section 16336 that apply are subdivision (a) and paragraphs (1), (4), and (9) of, and subparagraph (A) of paragraph (5) of, subdivision (b) of that section.
(3) The only period that may be used under Section 16337 is a calendar year under paragraph (1) of subdivision (a) of Section 16337.
(4) The only other provisions of Section 16337 that apply are subparagraph (A) of paragraph (2) of, and paragraph (3) of, subdivision (b) of that section.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16341.

16341. A fiduciary shall allocate to income an amount received as a distribution of income, including a unitrust distribution under Article 3 (commencing with Section 16330), from a trust or estate in which the fiduciary has an interest, other than an interest the fiduciary purchased in a trust that is an investment entity, and shall allocate to principal an amount received as a distribution of principal from the trust or estate. If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, Section 16340, 16354, or 16355 applies to a receipt from the trust.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16342.

16342. (a) This section applies to a business or other activity conducted by a fiduciary if the fiduciary determines that it is in the interests of the beneficiaries to account separately for the business or other activity instead of doing either of the following:
(1) Accounting for the business or other activity as part of the fiduciary’s general accounting records.
(2) Conducting the business or other activity through an entity described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 16340.
(b) A fiduciary may account separately under this section for the transactions of a business or other activity, whether or not assets of the business or other activity are segregated from other assets held by the fiduciary.
(c) A fiduciary that accounts separately under this section for a business or other activity:
(1) May determine the extent to which the net money receipts of the business or other activity shall be retained for any of the following purposes:
(A) Working capital.
(B) The acquisition or replacement of fixed assets.
(C) Other reasonably foreseeable needs of the business or other activity.
(2) May determine the extent to which the remaining net money receipts are accounted for as principal or income in the fiduciary’s general accounting records for the trust.
(3) May make a determination under paragraph (1) separately and differently from the fiduciary’s decisions concerning distributions of income or principal.
(4) Shall account for the net amount received from the sale of an asset of the business or other activity, other than a sale in the ordinary course of the business or other activity, as principal in the fiduciary’s general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.
(d) Activities for which a fiduciary may account separately under this section include all of the following:
(1) Retail, manufacturing, service, and other traditional business activities.
(2) Farming.
(3) Raising and selling livestock and other animals.
(4) Managing rental properties.
(5) Extracting minerals, water, and other natural resources.
(6) Growing and cutting timber.
(7) An activity to which Section 16353, 16354, or 16355 applies.
(8) Any other business conducted by the fiduciary.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16343.

16343. A fiduciary shall allocate to principal any of the following:
(a) To the extent not allocated to income under this chapter, an asset received from any of the following:
(1) An individual, during the individual’s lifetime.
(2) An estate.
(3) A trust, on termination of an income interest.
(4) A payor under a contract naming the fiduciary as beneficiary.
(b) Except as otherwise provided in this article, money or other property received from the sale, exchange, liquidation, or change in form of a principal asset.
(c) An amount recovered from a third party to reimburse the fiduciary because of a disbursement described in subdivision (a) of Section 16361, or for another reason to the extent not based on loss of income.
(d) Proceeds of property taken by eminent domain, except that proceeds awarded for loss of income in an accounting period are income if a current income beneficiary had a mandatory income interest during the period.
(e) Net income received in an accounting period during which there is no beneficiary to which a fiduciary may or shall distribute income.
(f) Other receipts as provided in Article 3 (commencing with Section 16330).
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16344.

16344. To the extent a fiduciary does not account for the management of rental property as a business under Section 16342, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. Both of the following apply to an amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:
(1) The amount shall be added to principal and held subject to the terms of the lease, except as otherwise provided by law other than this chapter.
(2) The amount is not allocated to income or available for distribution to a beneficiary until the fiduciary’s contractual obligations have been satisfied with respect to that amount.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16345.

16345. (a) This section does not apply to an obligation to which Section 16348, 16349, 16350, 16351, 16353, 16354, or 16355 applies.
(b) A fiduciary shall allocate to income, without provision for amortization of premium, an amount received as interest on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal.
(c) A fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary. A fiduciary shall allocate to income the increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable, at maturity or another future time, in an amount that exceeds the amount in consideration of which it was issued.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16346.

16346. (a) This section does not apply to a contract to which Section 16348 applies.
(b) Except as otherwise provided in subdivision (c), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset. The fiduciary shall allocate dividends on an insurance policy to income to the extent premiums on the policy are paid from income and to principal to the extent premiums on the policy are paid from principal.
(c) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of any of the following:
(1) Occupancy or other use by a current income beneficiary.
(2) Income.
(3) Subject to Section 16342, profits from a business.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16347.

16347. (a) If a fiduciary determines that an allocation between income and principal required by Section 16348, 16349, 16350, 16351, or 16354 is insubstantial, the fiduciary may allocate the entire amount to principal, unless subdivision (e) of Section 16327 applies to the allocation.
(b) A fiduciary may presume an allocation is insubstantial under subdivision (a) if both of the following conditions are met:
(1) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent.
(2) The asset producing the receipt to be allocated has a fair market value of less than 10 percent of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
(c) The power to make a determination under subdivision (a) may be either of the following:
(1) Exercised by a cofiduciary in the manner described in subdivision (f) of Section 16327.
(2) Released or delegated for a reason described in subdivision (g) of Section 16327, and in the manner described in subdivision (h) of Section 16327.
(d) This section does not impose a duty on the trustee to make an allocation under this section, and the trustee is not liable for failure to make an allocation under this section.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16349.

16349. (a) For purposes of this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a limited time. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.
(b) This section does not apply to a receipt subject to Section 16340, 16348, 16350, 16351, 16353, 16354, 16355, or 16362.
(c) A fiduciary shall make allocations in the following manner:
(1) To income:
(A) A receipt produced by a liquidating asset, to the extent the receipt does not exceed 4 percent of the value of the asset.
(B) If the fiduciary cannot determine the value of the asset, 10 percent of the receipt.
(2) To principal, the balance of the receipt.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16350.

16350. (a) To the extent a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under Section 16432, the fiduciary shall allocate the receipt in the following manner:
(1) To income, to the extent received:
(A) As delay rental or annual rent on a lease.
(B) As a factor for interest or the equivalent of interest under an agreement creating a production payment.
(C) On account of an interest in renewable water.
(2) To principal, if received from a production payment, to the extent subparagraph (B) of paragraph (1) does not apply.
(3) Between income and principal in a reasonable manner, to the extent received:
(A) On account of an interest in nonrenewable water.
(B) As a royalty, shut-in-well payment, take-or-pay payment, or bonus.
(C) From a working interest or any other interest not provided for in subparagraph (A) or (B), or paragraph (1) or (2).
(b) This section applies to an interest owned or held by a fiduciary whether or not a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.
(c) An allocation of a receipt under paragraph (3) of subdivision (a) is presumed to be reasonable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code of 1986, as amended (Title 26 of the United States Code, as amended), as a deduction for depletion of the interest.
(d) If a fiduciary owns or holds an interest in minerals, water, or other natural resources before the effective date of this chapter, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before the effective date of this chapter. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after the effective date of this chapter, the fiduciary shall allocate receipts from the interest as provided in this section.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16351.

16351. (a) To the extent a fiduciary does not account for receipts from the sale of timber and related products as a business under Section 16342, the fiduciary shall allocate the net receipts:
(1) To income, to the extent the amount of timber cut from the land does not exceed the rate of growth of the timber.
(2) To principal, to the extent the amount of timber cut from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber.
(3) Between income and principal, if the net receipts are from the lease of land used for growing and cutting timber or from a contract to cut timber from land, by determining the amount of timber cut from the land under the lease or contract and applying the rules in paragraphs (1) and (2).
(4) To principal, to the extent advance payments, bonuses, and other payments are not allocated under paragraph (1), (2), or (3).
(b) In determining net receipts to be allocated under subdivision (a), a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
(c) This section applies to land owned or held by a fiduciary whether or not a settlor was cutting timber from the land before the fiduciary owned or held the property.
(d) If a fiduciary owns or holds an interest in land used for growing and cutting timber before the effective date of this chapter, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the fiduciary before the effective date of this chapter. If the fiduciary acquires an interest in land used for growing and cutting timber on or after the effective date of this chapter, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16352.

16352. (a) If a trust received property for which a gift or estate tax marital deduction was allowed and the settlor’s spouse holds a mandatory income interest in the trust, the spouse may require the trustee, to the extent the trust assets otherwise do not provide the spouse with sufficient income from or use of the trust assets to qualify for the deduction, to do any of the following:
(1) Make property productive of income.
(2) Convert property to property productive of income within a reasonable time.
(3) Exercise the power to adjust under Section 16327.
(b) The trustee may decide which action or combination of actions in subdivision (a) to take.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16353.

16353. (a) For purposes of this section, “derivative” means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event. The term includes stocks, fixed-income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit default events.
(b) To the extent a fiduciary does not account for a transaction in derivatives as a business under Section 16342, the fiduciary shall allocate 10 percent of receipts from the transaction and 10 percent of disbursements made in connection with the transaction to income and the balance to principal.
(c) Subdivision (d) applies under the following circumstances:
(1) If a fiduciary does any of the following:
(A) Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted.
(B) Grants an option that permits another person to sell property to the trust.
(C) Acquires an option to buy property for the trust or an option to sell an asset owned by the trust.
(2) The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.
(d) If this subdivision applies, the fiduciary shall allocate 10 percent to income and the balance to principal of the following amounts:
(1) An amount received for granting the option.
(2) An amount paid to acquire the option.
(3) Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16354.

16354. (a) Except as otherwise provided in subdivision (b), a fiduciary shall allocate to income a receipt from or related to an asset-backed security, to the extent the payor identifies the payment as being from interest or other current return, and to principal the balance of the receipt.
(b) If a fiduciary receives one or more payments in exchange for part or all of the fiduciary’s interest in an asset-backed security, including a liquidation or redemption of the fiduciary’s interest in the security, the fiduciary shall allocate to income 10 percent of receipts from the transaction and 10 percent of disbursements made in connection with the transaction, and to principal the balance of the receipts and disbursements.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 4 - Allocation of Receipts › Section 16355.

16355. A fiduciary shall allocate receipts from, or related to, a financial instrument or arrangement not otherwise addressed by this chapter. The allocation shall be consistent with the principles of Sections 16353 and 16354.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16360.

16360. Subject to Section 16363, and except as otherwise provided in paragraph (2) or (3) of subdivision (c) of Section 16370, a fiduciary shall disburse from income all of the following:
(a) One-half of both of the following:
(1) The regular compensation of the fiduciary and any person providing investment advisory, custodial, or other services to the fiduciary, to the extent income is sufficient.
(2) An expense for an accounting, judicial, or nonjudicial proceeding, or other matter that involves both income and successive interests, to the extent income is sufficient.
(b) The balance of the disbursements described in paragraph (1) of subdivision (a), to the extent a fiduciary that is an independent person determines that making those disbursements from income would be in the interests of the beneficiaries.
(c) Another ordinary expense incurred in connection with administration, management, or preservation of property and distribution of income, including interest, an ordinary repair, regularly recurring tax assessed against principal, and an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily an income interest, to the extent income is sufficient.
(d) A premium on insurance covering loss of a principal asset or income from or use of the asset.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16361.

16361. (a) Subject to Section 16364, and except as otherwise provided in paragraph (2) of subdivision (c) of Section 16370, a fiduciary shall disburse from principal all of the following:
(1) The balance of the disbursements described in paragraph (1) of subdivision (a) of, and subdivision (c) of, Section 16360, after application of subdivision (b) of Section 16360.
(2) The fiduciary’s compensation calculated on principal as a fee for acceptance, distribution, or termination.
(3) A payment of an expense to prepare for or execute a sale or other disposition of property.
(4) A payment on the principal of a trust debt.
(5) A payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property.
(6) A payment of a premium for insurance, including title insurance, not described in subdivision (d) of Section 16360, of which the fiduciary is the owner and beneficiary.
(7) A payment of an estate or inheritance tax or other tax imposed because of the death of a decedent, including penalties, apportioned to the trust.
(8) The following payments:
(A) A payment related to environmental matters, including:
(i) Reclamation.
(ii) Assessment of environmental conditions.
(iii) Remedying and removing environmental contamination.
(iv) Monitoring remedial activities and the release of substances.
(v) Preventing future releases of substances.
(vi) Collecting amounts from persons liable or potentially liable for the costs of activities described in clauses (i) to (v), inclusive.
(vii) Penalties imposed under environmental laws or regulations.
(viii) Other actions to comply with environmental laws or regulations.
(ix) Statutory or common law claims by third parties.
(x) Defending claims based on environmental matters.
(B) A payment for a premium for insurance for matters described in subparagraph (A).
(9) Payments representing extraordinary repairs or expenses incurred in making a capital improvement to trust property, including special assessments.
(b) If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary 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.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16362.

16362. (a) For purposes of this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.
(b) A fiduciary may transfer to principal a reasonable amount of the net money receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:
(1) Of the part of real property used or available for use by a beneficiary as a residence.
(2) Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary.
(3) Under this section, to the extent the fiduciary accounts under either of the following:
(A) Section 16349, for the asset.
(B) Section 16342, for the business or other activity in which the asset is used.
(c) An amount transferred to principal under this section need not be separately held.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16363.

16363. (a) If a fiduciary makes or expects to make an income disbursement described in subdivision (b), the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.
(b) To the extent the fiduciary has not been, and does not expect to be, reimbursed by a third party, income disbursements to which subdivision (a) applies include all of the following:
(1) An amount chargeable to principal, but paid from income because principal is illiquid.
(2) A disbursement made to prepare property for sale, including improvements and commissions.
(3) A disbursement described in Section 16360.
(c) If an asset whose ownership gives rise to an income disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subdivision (a).
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16364.

16364. (a) If a fiduciary makes or expects to make a principal disbursement described in subdivision (b), the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.
(b) To the extent a fiduciary has not been, and does not expect to be, reimbursed by a third party, principal disbursements to which subdivision (a) applies include all of the following:
(1) An amount chargeable to income but paid from principal because income is not sufficient.
(2) The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment.
(3) A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions.
(4) A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment.
(5) A disbursement described in subdivision (a) of Section 16361.
(c) If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subdivision (a).
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16365.

16365. (a) A tax required to be paid by a fiduciary that is based on receipts allocated to income shall be paid from income.
(b) A tax required to be paid by a fiduciary that is based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing authority.
(c) Subject to subdivision (d) and Sections 16363, 16364, and 16366, a tax required to be paid by a fiduciary on a share of an entity’s taxable income in an accounting period shall be paid from the following:
(1) Income and principal, proportionately to the allocation between income and principal of receipts from the entity in the period.
(2) Principal, to the extent the tax exceeds the receipts from the entity in the period.
(d) After applying subdivisions (a) to (c), inclusive, a fiduciary shall adjust income or principal receipts, to the extent the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16366.

16366. (a) A fiduciary may make an adjustment between income and principal to offset the shifting of economic interests or tax benefits between current income beneficiaries and successor beneficiaries that arises from any of the following:
(1) An election or decision the fiduciary makes regarding a tax matter, other than a decision to claim an income tax deduction to which subdivision (b) applies.
(2) An income tax or other tax imposed on the fiduciary or a beneficiary as a result of a transaction involving the fiduciary or a distribution by the fiduciary.
(3) Ownership by the fiduciary of an interest in an entity, a part of whose taxable income, whether or not distributed, is includable in the taxable income of the fiduciary or a beneficiary.
(b) If the amount of an estate tax marital or charitable deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes and, as a result, estate taxes paid from principal are increased and income taxes paid by the fiduciary or a beneficiary are decreased, the fiduciary shall charge each beneficiary that benefits from the decrease in income tax to reimburse the principal from which the increase in estate tax is paid. The total reimbursement shall equal the increase in the estate tax, to the extent the principal used to pay the increase would have qualified for a marital or charitable deduction but for the payment. The share of the reimbursement for each fiduciary or beneficiary whose income taxes are reduced shall be the same as its share of the total decrease in income tax.
(c) A fiduciary that charges a beneficiary under subdivision (b) may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of methods.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 5 - Allocation of Disbursements › Section 16367.

16367. Unless otherwise provided by the governing instrument, determined by the trustee, or ordered by the court, distributions to beneficiaries shall be considered paid in the following order from the following sources:
(a) From net taxable income other than capital gains.
(b) From net realized short-term capital gains.
(c) From net realized long-term capital gains.
(d) From tax-exempt and other income.
(e) From principal of the trust.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 6 - Death of Individual or Termination of Income Interest › Section 16371.

16371. (a) Except to the extent that Article 3 (commencing with Section 16330) applies for a beneficiary that is a trust, each beneficiary described in subdivision (f) of Section 16370 is entitled to receive a share 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 distribution of assets to beneficiaries to which this section applies, each beneficiary, including a beneficiary that does not receive part of the distribution, is entitled, as of each distribution date, to a share of the net income the fiduciary received after the decedent’s death, an income interest’s other terminating event, or the preceding distribution by the fiduciary.
(b) In determining a beneficiary’s share of net income under subdivision (a), the following rules apply:
(1) The beneficiary is entitled to receive a share of the net income equal to the beneficiary’s fractional interest in the undistributed principal assets immediately before the distribution date.
(2) The beneficiary’s fractional interest under paragraph (1) shall be calculated on the aggregate value of the assets as of the distribution date without reducing the value by any unpaid principal obligation, and without regard to either of the following:
(A) Property specifically given to a beneficiary under the decedent’s will or the terms of the trust.
(B) Property required to pay pecuniary amounts not in trust.
(3) The distribution date under paragraph (1) 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 the assets are distributed.
(c) To the extent a fiduciary does not distribute under this section all the collected but undistributed net income to each beneficiary as of a distribution date, the fiduciary shall maintain records showing the interest of each beneficiary in the net income.
(d) If this section applies to income from an asset, a fiduciary may apply the rules in this section to net gain or loss realized from the disposition of the asset after the decedent’s death, an income interest’s terminating event, or the preceding distribution by the fiduciary.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 7 - Apportionment at Beginning and End of Income Interest › Section 16375.

16375. (a) An income beneficiary is entitled to net income in accordance with the terms of the trust from the date an income interest begins. The income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to either of the following:
(1) The trust for the current income beneficiary.
(2) A successive interest for a successor beneficiary.
(b) An asset becomes subject to a trust under paragraph (1) of subdivision (a) as follows:
(1) For an asset that is transferred to the trust during the settlor’s life, on the date the asset is transferred.
(2) For an asset that becomes subject to the trust because of a decedent’s death, on the date of the decedent’s death, even if there is an intervening period of administration of the decedent’s estate.
(3) For an asset that is transferred to a fiduciary by a third party because of a decedent’s death, on the date of the decedent’s death.
(c) An asset becomes subject to a successive interest under paragraph (2) of subdivision (a) on the day after the preceding income interest ends, as determined under subdivision (d), even if there is an intervening period of administration to wind up the preceding income interest.
(d) An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to which a fiduciary may, or is required to, distribute income.
(Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 7 - Apportionment at Beginning and End of Income Interest › Section 16376.

16376. (a) A fiduciary shall allocate an income receipt or disbursement, other than a receipt to which subdivision (b) of Section 16370 applies, to principal if its due date occurs before the date on which either of the following occurs:
(1) For an estate, the decedent died.
(2) For a trust or successive interest, an income interest begins.
(b) If the due date of a periodic income receipt or disbursement occurs on or after the date on which a decedent died or an income interest begins, a fiduciary shall allocate the receipt or disbursement to income.
(c) If an income receipt or disbursement is not periodic or has no due date, a fiduciary shall treat the receipt or disbursement under this section as accruing from day to day. The fiduciary shall allocate to principal the portion of the receipt or disbursement accruing before the date on which a decedent died or an income interest begins, and to income the balance.
(d) A receipt or disbursement is periodic under subdivisions (b) and (c) under either of the following circumstances:
(1) The receipt or disbursement shall be paid at regular intervals under an obligation to make payments.
(2) The payor customarily makes payments at regular intervals.
(e) An item of income or obligation is due under this section on the date the payor is required to make a payment. If a payment date is not stated, there is no due date.
(f) Distributions to shareholders or other owners from an entity to which Section 16340 applies are due at one of the following times:
(1) On the date fixed by or on behalf of the entity for determining the persons entitled to receive the distribution.
(2) If a date is not fixed, on the date of the decision by or on behalf of the entity to make the distribution.
(3) If a date is not fixed and the fiduciary does not know the date of the decision by or on behalf of the entity to make the distribution, on the date the fiduciary learns of the decision.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 7 - Apportionment at Beginning and End of Income Interest › Section 16377.

16377. (a) For purposes of this section, “undistributed income” means net income received on or before the date on which an income interest ends. “Undistributed income” does not include an item of income or expense that is due or accrued, or net income that has been added or is required to be added to principal under the terms of the trust.
(b) Except as otherwise provided in subdivision (c), when a mandatory income interest of a beneficiary ends, the fiduciary shall pay the beneficiary’s share of the undistributed income that is not disposed of under the terms of the trust to the beneficiary or, if the beneficiary does not survive the date the interest ends, to the beneficiary’s estate.
(c) If a beneficiary has an unqualified power to withdraw more than 5 percent of the value of a trust immediately before an income interest ends, both of the following shall apply:
(1) The fiduciary shall allocate to principal the undistributed income from the portion of the trust that may be withdrawn.
(2) Subdivision (b) applies only to the balance of the undistributed income.
(d) When a fiduciary’s obligation to pay a fixed annuity or a fixed fraction of the value of assets ends, the fiduciary shall prorate the final payment as required to preserve an income tax, gift tax, estate tax, or other tax benefit.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 8 - Miscellaneous Provisions › Section 16380.

16380. 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 matter among states that enact it.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 8 - Miscellaneous Provisions › Section 16381.

16381. This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act (15 U.S.C. Sec. 7001 et seq.), but does not modify, limit, or supersede Section 101(c) of that act (15 U.S.C. Sec. 7001(c)), or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 U.S.C. Sec. 7003(b)).
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 8 - Miscellaneous Provisions › Section 16382.

16382. This chapter applies to a trust or estate existing or created on or after the effective date of this chapter, except as otherwise expressly provided in the terms of the trust or this chapter.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 3 - Uniform Fiduciary Income and Principal Act › ARTICLE 8 - Miscellaneous Provisions › Section 16383.

16383. If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.
(Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)
2023 California Code › Probate Code - PROB › DIVISION 9 - TRUST LAW › PART 4 - TRUST ADMINISTRATION › CHAPTER 4 - Liability of Trustees to Beneficiaries › ARTICLE 1 - Liability for Breach of Trust › Section 16400.

16400. A violation by the trustee of any duty that the trustee owes the beneficiary is a breach of trust.
(Enacted by Stats. 1990, Ch. 79.)