reglab/statecodes huggingface dataset:
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 56 of 1957 - Corporate Fiduciary Stockholders (555.441 - 555.447) › Section 555.443 - Records of Corporation to Show Ownership of Stock or Other Securities Held by Corporation as Fiduciary; Manner of Keeping Stocks and Other Securities Separate From Assets of Corporation.

555.443 Records of corporation to show ownership of stock or other securities held by corporation as fiduciary; manner of keeping stocks and other securities separate from assets of corporation.
Sec. 3.
The records of the corporation shall show the ownership of the shares of stock or other securities held by it as fiduciary. The shares of stock or other securities shall be kept separate from the assets of the corporation and may be kept by the corporation either in a manner that the certificates representing the securities from time to time constituting the assets of a particular estate, trust, or other fiduciary account are held separate from those of all other estates, trusts, or fiduciary accounts; or in a manner that, without certification as to ownership attached, certificates representing securities of the same class of the same issuer and from time to time constituting assets of particular estates, trusts, or other fiduciary accounts, are held in bulk, including to the extent feasible, the merging of certificates of small denomination into 1 or more certificates of large denomination.
History:
1957, Act 56, Eff. Sept. 27, 1957 ;-- Am. 1975, Act 310, Imd. Eff. Dec. 22, 1975
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 56 of 1957 - Corporate Fiduciary Stockholders (555.441 - 555.447) › Section 555.444 - Deposit of Securities With Federal Reserve Bank; Crediting Deposit; Designating Fiduciary Account; Records to Show Ownership of Securities Held in Account; Transfer of Securities.

555.444 Deposit of securities with federal reserve bank; crediting deposit; designating fiduciary account; records to show ownership of securities held in account; transfer of securities.
Sec. 4.
A corporation when acting as fiduciary, as provided in section 1, may deposit, or arrange for the deposit, with a federal reserve bank, of securities, the principal and interest of which the United States or a department, agency, or instrumentality thereof has agreed to pay, or has guaranteed payment. The deposit of securities shall be credited to 1 or more accounts on the books of the federal reserve bank in the name of the corporation, and designated a fiduciary account, as distinguished from a safekeeping account, to which account other similar securities may be credited. The records of the corporation depositing securities shall show the ownership of the securities held in the account. Ownership of, and other interests in, the securities credited to the account, may be transferred by entries on the books of the federal reserve bank without physical delivery of securities.
History:
Add. 1975, Act 310, Imd. Eff. Dec. 22, 1975
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 56 of 1957 - Corporate Fiduciary Stockholders (555.441 - 555.447) › Section 555.446 - Rules.

555.446 Rules.
Sec. 6.
Pursuant to Act No. 306 of the Public Acts of 1969, as amended, being sections 24.201 to 24.315 of the Michigan Compiled Laws, the commissioner of the financial institutions bureau may promulgate rules to effectuate the purposes and to execute and enforce this act. Nothing in this act shall preclude the attorney general of this state from promulgating rules pursuant to Act No. 101 of the Public Acts of 1961, being sections 14.251 to 14.266 of the Michigan Compiled Laws.
History:
Add. 1975, Act 310, Imd. Eff. Dec. 22, 1975
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 56 of 1957 - Corporate Fiduciary Stockholders (555.441 - 555.447) › Section 555.447 - Applicability of Amendatory Act.

555.447 Applicability of amendatory act.
Sec. 7.
This amendatory act which added this section shall apply to any corporation acting as a fiduciary, as provided in section 1, which was so acting on or after the effective date of this amendatory act, regardless of the date of the will or other instrument pursuant to which the securities were transferred to it.
History:
Add. 1975, Act 310, Imd. Eff. Dec. 22, 1975
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Repealed - Act 83 of 1962 - Uniform Testamentary Additions to Trusts Act (555.461 - 555.464)

UNIFORM TESTAMENTARY ADDITIONS TO TRUSTS ACT
Act 83 of 1962
555.461-555.464 Repealed. 1998, Act 386, Eff. Apr. 1, 2000.
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Repealed - Act 108 of 1968 - Distribution in Kind of Pecuniary Bequests and Trust Interests (555.481 - 555.485)

DISTRIBUTION IN KIND OF PECUNIARY BEQUESTS AND TRUST INTERESTS
Act 108 of 1968
555.481-555.485 Repealed. 1978, Act 642, Eff. July 1, 1979.
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 1 - (555.501...555.505) › Section 555.501 - Short Title.

555.501 Short title.
Sec. 101.
This act shall be known and may be cited as the “uniform principal and income act”.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 1 - (555.501...555.505) › Section 555.502 - Definitions.

555.502 Definitions.
Sec. 102.
As used in this act:
(a) “Accounting period” means a calendar year unless another 12-month period is selected by a fiduciary. Accounting period includes a portion of a calendar year or other 12-month period that begins when an income interest begins or ends when an income interest ends.
(b) “Beneficiary” means, in the case of a decedent's estate, an heir, legatee, or devisee and, in the case of a trust, an income beneficiary or remainder beneficiary.
(c) “Fiduciary” means a personal representative or trustee. Fiduciary includes an executor, administrator, successor personal representative, special personal representative, and a person performing substantially the same function as 1 or more of them.
(d) “Income” means money or property that a fiduciary receives as current return from a principal asset. Income includes a portion of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided in article 4.
(e) “Income beneficiary” means a person to whom net income of a trust is or may be payable.
(f) “Income interest” means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion.
(g) “Mandatory income interest” means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute.
(h) “Net income” means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under this act to or from income during the period.
(i) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, or joint venture; governmental subdivision, agency, or instrumentality; public corporation; or another legal or commercial entity.
(j) “Principal” means property held in trust for distribution to a remainder beneficiary when the trust terminates.
(k) “Remainder beneficiary” means a person entitled to receive principal when an income interest ends.
(l) “Terms of a trust” means the manifestation of the intent of a settlor or decedent with respect to the trust, expressed in a manner that admits of its proof in a judicial proceeding, whether by written or spoken words or by conduct.
(m) “Trustee” includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 1 - (555.501...555.505) › Section 555.503 - Duties of Fiduciary; Allocation of Receipts and Disbursements to or Between Principal and Income; Discretionary Power; Impartiality.

555.503 Duties of fiduciary; allocation of receipts and disbursements to or between principal and income; discretionary power; impartiality.
Sec. 103.
(1) In allocating receipts and disbursements to or between principal and income, and with respect to any matter found within the scope of articles 2 and 3, a fiduciary shall do all of the following:
(a) 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 act.
(b) Administer a trust or estate in accordance with this act 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.
(c) Add a receipt or charge a disbursement to principal to the extent that the terms of the trust and this act do not provide a rule for allocating the receipt or disbursement to or between principal and income.
(2) A fiduciary 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 under this act.
(3) In exercising the power to adjust under section 104 or a discretionary power of administration regarding a matter within the scope of this act, whether granted by the terms of a trust or a will, or as provided in this act, 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 act is presumed to be fair and reasonable to all of the beneficiaries.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 2 - (555.601...555.602) › Section 555.602 - Beneficiary's Share of Net Income; Determination; Maintenance of Records by Fiduciary.

555.602 Beneficiary's share of net income; determination; maintenance of records by fiduciary.
Sec. 202.
(1) Each beneficiary described in section 201(d) 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. For purposes of this section, the fiduciary may estimate the value of assets for which market values are not readily available. If a fiduciary makes more than 1 distribution of assets to beneficiaries to whom this section applies, each beneficiary, including a beneficiary who does not receive part of the distribution, is entitled, as of each distribution date, to the net income the fiduciary has received after the date of death or terminating event or earlier distribution date but has not distributed as of the current distribution date.
(2) In determining a beneficiary's share of net income, the following apply:
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(3) 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.
(4) A fiduciary may apply the provisions 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.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 3 - (555.701...555.703) › Section 555.701 - Income Interest; Beginning and Ending Date; Conditions.

555.701 Income interest; beginning and ending date; conditions.
Sec. 301.
(1) 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.
(2) An asset becomes subject to a trust on 1 of the following:
(a) 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.
(b) The date of 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.
(c) The date of 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.
(3) An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (4), even if there is an intervening period of administration to wind up the preceding income interest.
(4) 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 whom a trustee may distribute income.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 3 - (555.701...555.703) › Section 555.702 - Allocation of Income Receipt or Disbursement; Occurrence of Due Date; Accrual.

555.702 Allocation of income receipt or disbursement; occurrence of due date; accrual.
Sec. 302.
(1) Except as provided in section 201(a), a trustee shall allocate an income receipt or disbursement to principal if its due date occurs before the decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.
(2) A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which the decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement shall 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 before the date on which the decedent dies or an income interest begins shall be allocated to principal and the balance shall be allocated to income.
(3) 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 act. Distributions to shareholders or other owners from an entity to which section 401 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 must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 3 - (555.701...555.703) › Section 555.703 - Undistributed Income.

555.703 Undistributed income.
Sec. 303.
(1) As used in this section, “undistributed income” means net income received 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.
(2) Except as otherwise provided in this subsection, 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. If the beneficiary has an unqualified power to revoke more than 5% of the trust immediately before the income interest ends, the undistributed income from the portion of the trust that may be revoked shall be added to principal.
(3) 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 and to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate, or other tax requirements.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.801 - “Entity” Defined; Allocation to Income Money Received; Allocation of Receipts to Principal; Money Received in Partial Liquidation; Limitation; Statement by Entity on Source or Character of Distribution.

555.801 “Entity” defined; allocation to income money received; allocation of receipts to principal; money received in partial liquidation; limitation; statement by entity on source or character of distribution.
Sec. 401.
(1) As used in this section, “entity” means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or other organization in which a trustee has an interest, other than a trust or estate to which section 402 applies, a business or other activity to which section 403 applies, or an asset-backed security to which section 415 applies.
(2) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.
(3) A trustee shall allocate the following receipts from an entity to principal:
(a) Property other than money.
(b) Money received in 1 distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity.
(c) Money received in total liquidation of the entity, or in partial liquidation of the entity as prescribed by subsections (4) and (5).
(d) 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.
(4) Money is received in partial liquidation under either of the following circumstances:
(a) To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation.
(b) If the total amount of money and property received in a distribution or series of related distributions is greater than 20% of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.
(5) Money is not received in partial liquidation, nor may it be taken into account under subsection (4)(b), to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money.
(6) 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.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.802 - Income; Principal; Allocation of Amounts Received as Distributions From Trust or Purchased Interest.

555.802 Income; principal; allocation of amounts received as distributions from trust or purchased interest.
Sec. 402.
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 such a trust to a trustee, section 401 or 415 applies to a receipt from the trust.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.803 - Separate Accounting for Business or Other Activity.

555.803 Separate accounting for business or other activity.
Sec. 403.
(1) 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.
(2) A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts shall be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which 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 business.
(3) A business or other activity for which a trustee may maintain separate accounting records include all of the following:
(a) A retail, manufacturing, service, and other traditional business activity.
(b) Farming.
(c) Raising and selling livestock and other animals.
(d) Management of rental property.
(e) Extraction of minerals and other natural resources.
(f) A timber operation.
(g) An activity to which section 414 applies.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.804 - Principal; Allocations.

555.804 Principal; allocations.
Sec. 404.
A trustee shall allocate to principal all of the following:
(a) To the extent not allocated to income under this act, 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.
(b) Money or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to this article.
(c) Amounts recovered from third parties to reimburse the trust because of disbursements described in section 502(1)(g) or for other reasons to the extent not based on the loss of income.
(d) 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.
(e) Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income.
(f) Other receipts as provided in sections 408 to 415 of this article.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.805 - Receipts From Rental Property.

555.805 Receipts from rental property.
Sec. 405.
To the extent that 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, shall 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.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.806 - Interest Received; Allocation to Income; Proceeds of Sale; Allocation to Principal.

555.806 Interest received; allocation to income; proceeds of sale; allocation to principal.
Sec. 406.
(1) 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 prepaying principal, shall be allocated to income without any provision for amortization of premium.
(2) A trustee shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the trustee more than 1 year after it is purchased or acquired by the trustee, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within 1 year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income.
(3) This section does not apply to an obligation to which section 409, 410, 411, 412, 414, or 415 applies.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.807 - Life Insurance Proceeds; Other Contracts; Allocations.

555.807 Life insurance proceeds; other contracts; allocations.
Sec. 407.
(1) Except as otherwise provided in subsection (2), 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.
(2) 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 403, loss of profits from a business.
(3) This section does not apply to a payment to which section 409 applies.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.808 - Insubstantial Allocation.

555.808 Insubstantial allocation.
Sec. 408.
If a trustee determines that an allocation between principal and income required by section 409, 410, 411, 412, or 415 is insubstantial, the trustee may allocate the entire amount to principal unless 1 or more of the circumstances described in section 104(4) apply to the allocation. This power may be exercised by a cofiduciary in the circumstances described in section 104(5) and may be released for the reasons and in the manner described in section 104(6). An allocation is presumed to be insubstantial if 1 or more of the following apply:
(a) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10%.
(b) The value of the asset producing the receipt for which the allocation would be made is less than 10% of the total value of the trust's assets at the beginning of the accounting period.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.810 - Liquidating Asset; Allocation of Receipts.

555.810 Liquidating asset; allocation of receipts.
Sec. 410.
(1) As used in this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. Liquidating asset includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than 1 year under an arrangement that does not provide for the payment of interest on the unpaid balance. Liquidating asset does not include a payment subject to section 409, natural resources subject to section 411, timber subject to section 412, an activity subject to section 414, an asset subject to section 415, or an asset for which the trustee establishes a reserve for depreciation under section 503.
(2) A trustee shall allocate to income 10% of the receipts from a liquidating asset and the balance to principal.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.811 - Receipts From Minerals, Water, or Other Natural Resources; Allocations.

555.811 Receipts from minerals, water, or other natural resources; allocations.
Sec. 411.
(1) Except as provided in subsection (4), to the extent that 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:
(a) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.
(b) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.
(c) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90% must be allocated to principal and the balance to income.
(d) If an amount is received from a working interest or any other interest not provided for in subdivision (a), (b), or (c), 90% of the net amount received must be allocated to principal and the balance to income.
(2) Except as provided in subsection (4), a trustee shall allocate to income an amount received on account of an interest in water that is renewable. If the interest in water is not renewable, the trustee shall allocate 90% of the amount to principal and the balance to income.
(3) This act applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
(4) If a trust owns an interest in minerals, water, or other natural resources on the effective date of this act, the trustee may allocate receipts from the interest as provided in this act or in the manner used by the trustee before the effective date of this act. If the trust acquires an interest in minerals, water, or other natural resources after the effective date of this act, the trustee shall allocate receipts from the interest as provided in this act.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.812 - Net Receipts From Sale of Timber; Allocations.

555.812 Net receipts from sale of timber; allocations.
Sec. 412.
(1) Except as provided in subsection (4), to the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts as follows:
(a) To income to the extent that 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.
(b) To principal to the extent that 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.
(c) 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 subdivisions (a) and (b).
(d) To principal to the extent that advance payments, bonuses, and other payments are not allocated pursuant to subdivision (a), (b), or (c).
(2) In determining net receipts to be allocated pursuant to subsection (1), a trustee may deduct and transfer to principal a reasonable amount for depletion.
(3) This act applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
(4) If a trust owns an interest in timberland on the effective date of this act, the trustee may allocate net receipts from the sale of timber and related products as provided in this act or in the manner used by the trustee before the effective date of this act. If the trust acquires an interest in timberland after the effective date of this act, the trustee shall allocate net receipts from the sale of timber and related products as provided in this act.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.813 - Marital Deduction; Insufficient Income From or Use of Trust Assets; Actions to Be Taken by Trustee.

555.813 Marital deduction; insufficient income from or use of trust assets; actions to be taken by trustee.
Sec. 413.
(1) 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 104 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 section 104(1). The trustee may decide which action or combination of actions to take.
(2) In cases not governed by subsection (1), 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.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.814 - Derivative Transactions; Gain or Loss Realized From Exercise of Option; Allocations.

555.814 Derivative transactions; gain or loss realized from exercise of option; allocations.
Sec. 414.
(1) As used in this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments that gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.
(2) To the extent that a trustee accounts for transactions in derivatives under this section, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
(3) If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a settlor of the trust for services rendered, must be allocated to principal.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 4 - (555.801...555.815) › Section 555.815 - Asset-Backed Security; Allocation of Payments.

555.815 Asset-backed security; allocation of payments.
Sec. 415.
(1) As used in this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. Asset-backed security includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return. Asset-backed security does not include an asset to which section 401 or 409 applies.
(2) If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets of an asset-backed security, the trustee shall allocate to income the portion of the payment that the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
(3) If a trust receives 1 or more payments in exchange for the trust's entire interest in an asset-backed security in 1 accounting period, the trustee shall allocate the payments to principal. If a payment is 1 of a series of payments that will result in the liquidation of the trust's interest in the security over more than 1 accounting period, the trustee shall allocate 10% of the payment to income and the balance to principal.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 5 - (555.901...555.906) › Section 555.901 - Income Disbursements.

555.901 Income disbursements.
Sec. 501.
A trustee shall make the following disbursements from income to the extent that they are not disbursements to which section 201(b)(ii) or (iii) applies:
(a) One-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee.
(b) One-half of all expenses for accountings, judicial proceedings, or other matters that involve both the income and remainder interests.
(c) All of the other ordinary expenses incurred in connection with the administration, management, or preservation of trust property and the distribution of income, including interest, ordinary repairs, regularly recurring taxes assessed against principal, and expenses of a proceeding or other matter that concerns primarily the income interest.
(d) Recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 5 - (555.901...555.906) › Section 555.902 - Principal Disbursements.

555.902 Principal disbursements.
Sec. 502.
(1) A trustee shall make the following disbursements from principal:
(a) The remaining 1/2 of the disbursements described in section 501(a) and (b).
(b) All of the trustee's compensation calculated on principal as a fee for acceptance, distribution, or termination, and disbursements made to prepare property for sale.
(c) Payments on the principal of a trust debt.
(d) Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property.
(e) Premiums paid on a policy of insurance not described in section 501(d) of which the trust is the owner and beneficiary.
(f) Estate, inheritance, and other transfer taxes, including penalties, apportioned to the trust.
(g) Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties, and defending claims based on environmental matters.
(2) If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 5 - (555.901...555.906) › Section 555.903 - Depreciation; Amount Transferred to Principal.

555.903 Depreciation; amount transferred to principal.
Sec. 503.
(1) As used in this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a useful life of more than 1 year.
(2) A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer an amount for depreciation as follows:
(a) An amount for that portion of real property used or available for use by a beneficiary as a residence or an amount for tangible personal property held or made available for the personal use or enjoyment of a beneficiary.
(b) An amount during the administration of a decedent's estate.
(c) An amount under this section, if the trustee is accounting under section 403 for the business or other activity in which the asset is used.
(3) An amount transferred to principal need not be held as a separate fund.
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 5 - (555.901...555.906) › Section 555.904 - Principal Disbursement; Transfer of Amount to Provide Reserve.

555.904 Principal disbursement; transfer of amount to provide reserve.
Sec. 504.
(1) If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in 1 or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements.
(2) Principal disbursements to which subsection (1) applies include the following, but only to the extent that the trustee has not been and does not expect to be reimbursed by a third party:
(a) An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs.
(b) A capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments.
(c) Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements, and broker's commissions.
(d) Periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments.
(e) Disbursements described in section 502(1)(g).
(3) If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends, a trustee may continue to transfer amounts from income to principal as provided in subsection (1).
History:
2004, Act 159, Eff. Sept. 1, 2004
2023 Michigan Compiled Laws › Chapter 555 - Uses and Trusts › Act 159 of 2004 - Uniform Principal and Income Act (555.501 - 555.1006) › Article 5 - (555.901...555.906) › Section 555.905 - Tax Payments.

555.905 Tax payments.
Sec. 505.
(1) A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income.
(2) A tax required to be paid by a trustee based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing authority.
(3) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid as follows:
(a) From income to the extent that receipts from the entity are allocated only to income.
(b) From principal to the extent that receipts from the entity are allocated only to principal.
(c) Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal.
(d) From principal to the extent that the tax exceeds the total receipts from the entity.
(4) After applying subsections (1) to (3), the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
History:
2004, Act 159, Eff. Sept. 1, 2004 ;-- Am. 2012, Act 302, Eff. Mar. 28, 2013