reglab/statecodes huggingface dataset:
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 11 - Third Person Dealing With One Purporting to Act as Trustee

Section 11. A third person in good faith and without a court order may act on instructions of, or otherwise deal with, a person purporting to make a transfer as, or purporting to act in the capacity of, a custodial trustee. In the absence of knowledge to the contrary, the third person shall not be responsible for determining:
(1) the validity of the purported custodial trustee's designation;
(2) the propriety of, or the authority under this chapter for, any action of the purported custodial trustee;
(3) the validity or propriety of an instrument executed or instruction given pursuant to this chapter either by the person purporting to make a transfer or declaration or by the purported custodial trustee; or
(4) the propriety of the application of property vested in the purported custodial trustee.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 12 - Claims Against Trust Property; Trustee, Beneficiary Liability

Section 12. (a) A claim based on a contract entered into by a custodial trustee acting in a fiduciary capacity, an obligation arising from the ownership or control of custodial trust property, or a tort committed in the course of administering the custodial trust, may be asserted by a third person against the custodial trust property by proceeding against the custodial trustee in a fiduciary capacity, whether or not the custodial trustee or the beneficiary is personally liable.
(b) A custodial trustee shall not be personally liable to a third person:
(1) on a contract properly entered into in a fiduciary capacity unless the custodial trustee fails to reveal such capacity or to identify the custodial trust in the contract; or
(2) for an obligation arising from control of custodial trust property or for a tort committed in the course of the administration of the custodial trust unless the custodial trustee is personally at fault.
(c) A beneficiary shall not be personally liable to a third person for an obligation arising from beneficial ownership of custodial trust property or for a tort committed in the course of administration of the custodial trust unless the beneficiary is personally in possession of the custodial trust property giving rise to the liability or is personally at fault.
(d) Subsections (b) and (c) shall not preclude actions or proceedings to establish liability of the custodial trustee or beneficiary to the extent the person sued is protected as the insured by liability insurance.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 14 - Expenses; Bond

Section 14. Except as otherwise provided in the instrument creating the custodial trust, in an agreement with the beneficiary, or by court order, a custodial trustee:
(1) shall be entitled to reimbursement from custodial trust property for reasonable expenses incurred in the performance of fiduciary services;
(2) shall have a noncumulative election, to be made no later than six months after the end of each calendar year, to charge a reasonable compensation for fiduciary services performed during such year; and
(3) need not furnish a bond or other security for the faithful performance of fiduciary duties.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 15 - Written Statement of Property and Administration; Petition for Accounting

Section 15. (a) Upon the acceptance of custodial trust property, the custodial trustee shall provide a written statement describing the custodial trust property and shall thereafter provide a written statement of the administration of the custodial trust property (i) once each year, (ii) upon request at reasonable times by the beneficiary or the beneficiary's legal representative, (iii) upon resignation or removal of the custodial trustee, and (iv) upon termination of the custodial trust. The statements shall be provided to the beneficiary or to the beneficiary's legal representative, if any. Upon termination of the beneficiary's interest, the custodial trustee shall furnish a current statement to the person to whom the custodial trust property is to be delivered.
(b) A beneficiary, the beneficiary's legal representative, an adult member of the beneficiary's family, a person interested in the custodial trust property, or a person interested in the welfare of the beneficiary may petition the court for an accounting by the custodial trustee or the custodial trustee's legal representative.
(c) A successor custodial trustee may petition the court for an accounting by a predecessor custodial trustee.
(d) In an action or proceeding under this chapter or in any other proceeding, the court may require or permit the custodial trustee or the custodial trustee's legal representative to account. The custodial trustee or the custodial trustee's legal representative may petition the court for approval of final accounts.
(e) If a custodial trustee is removed, the court shall require an accounting and order delivery of the custodial trust property and records to the successor custodial trustee and the execution of all instruments required for transfer of the custodial trust property.
(f) On petition of the custodial trustee or any person who could petition for an accounting, the court, after notice to interested persons, may issue instructions to the custodial trustee or review the propriety of the acts of a custodial trustee or the reasonableness of compensation determined by the custodial trustee for the services of the custodial trustee or others.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 16 - Claims for Relief; Time Limitations

Section 16. (a) Except as provided in subsection (c), unless previously barred by adjudication, consent, or limitation, a claim for relief against a custodial trustee for accounting or breach of duty shall be barred as to a beneficiary, a person to whom custodial trust property is to be paid or delivered, or the legal representative of an incapacitated or deceased beneficiary or payee:
(1) who has received a final account or statement fully disclosing the matter unless an action or proceeding to assert the claim is commenced within two years after receipt of the final account or statement; or
(2) who has not received a final account or statement fully disclosing the matter unless an action or proceeding to assert the claim is commenced within three years after the termination of the custodial trust.
(b) Except as provided in subsection (c), a claim for relief to recover from a custodial trustee for fraud, misrepresentation, or concealment related to the final settlement of the custodial trust or concealment of the existence of the custodial trust, shall be barred unless an action or proceeding to assert the claim is commenced within five years after the termination of the custodial trust.
(c) A claim for relief shall not be barred by this section if the claimant:
(1) is a minor, until the earlier of two years after the claimant becomes an adult or dies;
(2) is an incapacitated adult, until the earliest of two years after (i) the appointment of a conservator, (ii) the removal of the incapacity, or (iii) the death of the claimant; or
(3) was an adult, now deceased, who was not incapacitated, until two years after the claimant's death.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 17 - Termination of Trust; Order of Distribution

Section 17. (a) Upon termination of a custodial trust, the custodial trustee shall transfer the unexpended custodial trust property:
(1) to the beneficiary, if not incapacitated or deceased;
(2) to the conservator or other recipient designated by the court for an incapacitated beneficiary; or
(3) upon the beneficiary's death, in the following order:
(i) as last directed in a writing signed by the deceased beneficiary while not incapacitated and received by the custodial trustee during the life of the deceased beneficiary;
(ii) to the survivor of multiple beneficiaries if survivorship is provided for pursuant to section six;
(iii) as designated in the instrument creating the custodial trust; or
(iv) to the estate of the deceased beneficiary.
(b) If, when the custodial trust would otherwise terminate, the distributee is incapacitated, the custodial trust shall continue for the use and benefit of the distributee as beneficiary until the incapacity is removed or the custodial trust is otherwise terminated.
(c) Death of a beneficiary shall not terminate the power of the custodial trustee to discharge obligations of the custodial trustee or beneficiary incurred before the termination of the custodial trust.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203b - Uniform Custodial Trust Act › Section 19 - Applicable Law; Place of Transfer

Section 19. (a) This chapter shall apply to a transfer or declaration creating a custodial trust that refers to this chapter if, at the time of the transfer or declaration, the transferor, beneficiary, or custodial trustee is a resident of or has its principal place of business in the commonwealth or custodial trust property is located in the commonwealth. The custodial trust remains subject to this chapter despite a later change in residence or principal place of business of the transferor, beneficiary, or custodial trustee, or removal of the custodial trust property from the commonwealth.
(b) A transfer made pursuant to a law of another state substantially similar to this chapter shall be governed by the law of such other state and may be enforced in the commonwealth.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 2 - Trustees Managing Trust Assets; Duty to Comply With Prudent Investor Rule

Section 2. (a) Except as provided in subsection (b), a trustee who invests and manages trust assets shall owe a duty to the beneficiaries of a trust to comply with the prudent investor rule set forth in this chapter.
(b) The prudent investor rule may be expanded, restricted, eliminated or otherwise altered by the provisions of a trust. A trustee shall not be liable to a beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the trust.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 3 - Investment and Management Decisions

Section 3. (a) A trustee shall invest and manage trust assets as a prudent investor would, considering the purposes, terms, and other circumstances of the trust, including those set forth in subsection (c). In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
(b) A trustee's investment and management decisions respecting individual assets shall be considered in the context of the trust portfolio as a part of an overall investment strategy reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to the trust or its beneficiaries:
(1) general economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences of investment decisions or strategies;
(4) the role that each investment or course of action plays within the overall trust portfolio;
(5) the expected total return from income and the appreciation of capital;
(6) other resources of the beneficiaries;
(7) needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(8) an asset's special relationship or special value, if any, to the purposes of the trust or to one of the beneficiaries.
(d) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
(e) A trustee may invest in any kind of property or type of investment consistent with the standards of this chapter.
(f) A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has such special skills or expertise, shall have a duty to use such special skills or expertise.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 4 - Diversification

Section 4. A trustee shall reasonably diversify the investments of the trust unless, under the circumstances, it is prudent not to do so.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 5 - Review of Assets

Section 5. Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, and the other circumstances of the trust, and with the requirements of this chapter.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 6 - Beneficiaries' Interests

Section 6. A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 7 - Two or More Beneficiaries

Section 7. If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 8 - Costs Incurred

Section 8. In investing and managing trust assets, a trustee shall incur only costs that are appropriate and reasonable in relation to the assets, the purpose of the trust, and the skills of the trustee.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 9 - Determination of Compliance With Prudent Investor Rule

Section 9. Compliance with the prudent investor rule shall be determined in light of the facts and circumstances existing at the time of a trustee's decision or action.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 10 - Delegation of Investment and Management Functions

Section 10. (a) A trustee may delegate investment and management functions if it is prudent to do so. A trustee shall exercise reasonable care, skill and caution in:
(1) selecting an agent;
(2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(3) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(b) In performing a delegated function, an agent shall owe a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
(c) A trustee who complies with the requirements of subsection (a) shall not be liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d) By accepting the delegation of trust functions from the trustee of a trust that is subject to the laws of the commonwealth, an agent submits to the jurisdiction of the courts of the commonwealth.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203c - Prudent Investment › Section 11 - Trust Provisions; Terms

Section 11. The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorize any investment or strategy permitted under this chapter and shall not be interpreted to be a restriction, elimination, or other alteration of the prudent investor rule for purposes of subsection (b) of section 2: ''investments permissible by law for investment of trust funds'', ''legal investments'', ''authorized investments'', ''using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital'', ''prudent man rule'', ''prudent trustee rule'', ''prudent person rule'', and ''prudent investor rule''.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 3 - Fiduciary Duties; General Principles

Section 3. (a) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of this chapter, a fiduciary:
(1) shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in this chapter;
(2) may administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this chapter;
(3) shall administer a trust or estate in accordance with this chapter if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration; and
(4) shall add a receipt or charge a disbursement to principal if the terms of the trust and this chapter do not provide a rule for allocating the receipt or disbursement to or between principal and income.
(b) In exercising the power to adjust under subsection (a) of section 4 or a discretionary power of administration regarding a matter within the scope of this chapter, whether granted by the terms of a trust, a will, or this chapter, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor 1 or more of the beneficiaries. A determination in accordance with this chapter is presumed to be fair and reasonable to all of the beneficiaries.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 5 - Judicial Control of Discretionary Powers

Section 5. (a) A court shall not change a trustee's decision to exercise or not to exercise a discretionary power conferred by this chapter unless it determines that the decision was an abuse of the trustee's discretion. A court shall not determine that a trustee abused his or her discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.
(b) The decisions to which subsection (a) applies include:—
(1) A determination under subsection (a) of section 4 of whether and to what extent an amount should be transferred from principal to income or income to principal.
(2) A determination of the factors that are relevant to the trust and its beneficiaries and the weight, if any, to be given to those factors in deciding whether to exercise the power conferred by subsection (a) of section 4.
(c) If a court determines that a trustee has abused his discretion, the remedy shall be to restore the income and remainder beneficiaries to the positions they would have occupied if the trustee had not abused his discretion, according to the following rules:—
(1) If the abuse of discretion has resulted in no distribution to a beneficiary or a distribution that is too small, the court shall require the trustee to distribute to the beneficiary an amount that the court determines will restore the beneficiary, in whole or in part, to his appropriate position.
(2) If the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court shall restore the beneficiaries, the trust, or both, in whole or in part to their appropriate positions by requiring the trustee to withhold an amount from 1 or more future distributions to the beneficiary who received the distribution that was too large or requiring that beneficiary to return some or all of the distribution to the trust.
(3) If the court is unable, after applying paragraphs (1) and (2), to restore the beneficiaries, the trust, or both, to the positions they would have occupied if the trustee had not abused his discretion, the court may require the trustee to pay an appropriate amount from his own funds to one or more of the beneficiaries or the trust or both.
(d) A trustee may seek court determination as to whether a proposed exercise or non-exercise by the trustee of a discretionary power will result in an abuse of discretion. A beneficiary objecting to the relief sought shall have the burden of establishing that an abuse of discretion will result.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 7 - Distribution to Residuary and Remainder Beneficiaries

Section 7. (a) Each beneficiary described in paragraph (4) of section 6 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 distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one 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; and
(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.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 8 - When Right to Income Begins and Ends

Section 8. (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 specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.
(b) An asset becomes subject to a trust:
(1) on the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life;
(2) on the day after a testator's death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate; or
(3) on the day after an individual's death in the case of an asset that is transferred to a fiduciary by a third party because of the individual's death.
(c) An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (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 an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 8a - Apportionment of Receipts and Disbursements When Decedent Dies or Income Interest Begins

Section 8A. (a) A trustee shall allocate an income receipt or disbursement other than one to which paragraph (1) of section 6 applies to principal if its due date occurs on or before the date on which a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.
(b) A trustee shall allocate an income receipt or disbursement to income if its due date occurs after the date on which a decedent dies or on or after an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing on or before the date on which a decedent dies or before an income interest begins shall be allocated to principal and the balance shall be allocated to income.
(c) An item of income or an obligation is due on the date the payer is required to make a payment. If a payment date is not stated, there is no due date for the purposes of this chapter. Distributions to shareholders or other owners from an entity to which section 10 applies are considered to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that shall be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 9 - Apportionment When Income Interest Ends

Section 9. (a) When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than 5 per cent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked shall be added to principal.
(b) When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment if required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate or other tax requirements.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 10 - Character of Receipts

Section 10. (a) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.
(b) A trustee shall allocate the following receipts from an entity to principal:
(1) property other than money;
(2) money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity;
(3) money received in total or partial liquidation of the entity; and
(4) money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
(c) A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 11 - Distribution From Trust or Estate

Section 11. A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest, and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in the trust to a trustee, section 10 or 24 applies to a receipt from the trust.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 12 - Business and Other Activities Conducted by Trustee

Section 12. (a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
(b) A trustee who accounts separately for a business or other activity may determine if its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets and other reasonably foreseeable needs of the business or activity, and if the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
(c) Activities for which a trustee may maintain separate accounting records include:
(1) retail, manufacturing, service, and other traditional business activities;
(2) farming;
(3) raising and selling livestock and other animals;
(4) management of rental properties;
(5) extraction of minerals and other natural resources;
(6) timber operations; and
(7) activities to which section 23 applies.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 13 - Principal Receipts

Section 13. If not allocated to income, a trustee shall allocate to principal:
(1) to the extent not allocated to income under this chapter, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest or a payer under a contract naming the trust or its trustee as beneficiary;
(2) money or other property received from the sale, exchange, liquidation or change in form of a principal asset, including realized profit;
(3) amounts recovered from third parties to reimburse the trust because of disbursements described in clause (7) of subsection (a) of section 26 or for other reasons to the extent not based on the loss of income;
(4) proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income;
(5) net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income; and
(6) other receipts.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 14 - Rental Property

Section 14. If a trustee accounts for receipts from rental property pursuant to this section, the trustee 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. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 15 - Obligation to Pay Money

Section 15. (a) An amount received as interest, whether determined at a fixed, variable or floating rate on an obligation to pay money to the trustee, including an amount received as consideration for prepayment of principal, shall be allocated to income without any provision for amortization of premium.
(b) This section shall not apply to an obligation to which section 18, 19, 20, 21, 23 or 24 applies.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 16 - Insurance Policies and Similar Contracts

Section 16. (a) Except as otherwise provided in subsection (b), a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income and to principal if the premiums are paid from principal.
(b) A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to section 12, loss of profits from a business.
(c) This section shall not apply to a contract to which section 18 applies.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 17 - Insubstantial Allocations Not Required

Section 17. If a trustee determines that an allocation between principal and income required by section 18, 19, 20, 21 or 24 is insubstantial, the trustee may allocate the entire amount to principal unless 1 of the circumstances described in subsection (c) of section 4 applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in subsection (d) of said section 4 and may be released for the reasons and in the manner described in subsection (e) of said section 4. An allocation is presumed to be insubstantial if:
(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 per cent; or
(2) the value of the asset producing the receipt for which the allocation would be made is less than 10 per cent of the total value of the trust's assets at the beginning of the accounting period.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 18 - Deferred Compensation, Annuities and Similar Payments

Section 18. (a) If a payment is characterized as interest or a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend, or an equivalent payment.
(b) If no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income 10 per cent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not required to be made if it is made because the trustee exercises a right of withdrawal.
(c) If, to obtain an estate tax marital deduction for a trust, a trustee shall allocate more of a payment to income than provided for by this section, the trustee shall allocate to income the additional amount necessary to obtain the marital deduction.
(d) This section shall not apply to payments to which section 19 applies.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 19 - Liquidating Asset

Section 19. A trustee shall allocate to income 10 per cent of the receipts from a liquidating asset and the balance to principal.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 20 - Minerals, Water, and Other Natural Resources

Section 20. (a) If a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be allocated to income.
(2) If received from a production payment, a receipt must be allocated to income if the agreement creating the production payment provides a factor for interest or its equivalent. The balance shall be allocated to principal.
(3) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 per cent shall be allocated to principal and the balance to income.
(4) If an amount is received from a working interest or any other interest not provided for in paragraph (1), (2), or (3), 90 per cent of the net amount received shall be allocated to principal and the balance to income.
(b) An amount received on account of an interest in water that is renewable shall be allocated to income. If the water is not renewable, 90 per cent of the amount shall be allocated to principal and the balance to income.
(c) This chapter applies whether or not a decedent or donor was extracting minerals, water or other natural resources before the interest became subject to the trust.
(d) If a trust owns an interest in minerals, water, or other natural resources, the trustee may allocate receipts from the interest as provided in this chapter or in the manner used by the trustee. If the trust acquires an interest in minerals, water or other natural resources, the trustee shall allocate receipts from the interest as provided in this chapter.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 21 - Timber

Section 21. (a) If a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts:
(1) to income if the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest;
(2) to principal if the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(3) to or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease or contract and applying the rules in paragraphs (1) and (2); or
(4) to principal if the advance payments, bonuses, and other payments are not allocated pursuant to paragraph (1), (2), or (3).
(b) In determining net receipts to be allocated pursuant to subsection (a), a trustee shall deduct and transfer to principal a reasonable amount for depletion.
(c) This chapter applies whether or not a decedent or transferor was harvesting timber from the property before it become subject to the trust.
(d) If a trust owns an interest in timber land, the trustee may allocate net receipts from the sale of timber and related products as provided in this chapter or in the manner used by the trustee. If the trust acquires an interest in timber land, the trustee shall allocate net receipts from the sale of timber and related products as provided in this chapter.
2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title II - Descent and Distribution, Wills, Estates of Deceased Persons and Absentees, Guardianship, Conservatorship and Trusts › Chapter 203d - Principal and Income › Section 22 - Property Not Productive of Income

Section 22. (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 spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under section 4 and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time, or exercise the power conferred by subsection (a) of said section 4. The trustee may decide which action or combination of actions to take.
(b) In cases not governed by subsection (a), proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.