reglab/statecodes huggingface dataset:
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-9 - Apportionment when income interest ends

3B:19B-9. Apportionment when income interest ends
9. Apportionment When Income Interest Ends. a. As used in this section, "undistributed income" means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
b. 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 five percent 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.
c. 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.
L.2001,c.212,s.9.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-10 - Character of receipts

3B:19B-10. Character of receipts
10. Character of Receipts. a. As used in this section, "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund or any other organization in which a trustee has an interest other than a trust or estate to which section 11 of this act applies, a business or activity to which section 12 of this act applies or an asset-backed security to which section 23 of this act applies.
b. Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.
c. 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.
d. Money is received in partial liquidation:
(1) to the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or
(2) if the total amount of money and property received in a distribution or series of related distributions is greater than 20 percent of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.
e. Money is not received in partial liquidation, nor may it be taken into account under paragraph (2) of subsection d. of this section, 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.
f. 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.
L.2001,c.212,s.10.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-11 - Distribution from trust or estate

3B:19B-11. Distribution from trust or estate
11. Distribution from Trust or Estate. 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 10 or 23 of this act applies to a receipt from the trust.
L.2001,c.212,s.11.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-12 - Business and other activities conducted by trustee

3B:19B-12. Business and other activities conducted by trustee
12. Business and Other Activities Conducted by Trustee. 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 the extent to which its net cash receipts are to 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 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 22 of this act applies.
L.2001,c.212,s.12.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-13 - Principal receipts

3B:19B-13. Principal receipts
13. Principal Receipts. A trustee shall allocate to principal:
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 sections 10 through 23 of this act;
c. Amounts recovered from third parties to reimburse the trust because of disbursements described in paragraph (9) of subsection a. of section 25 of this act 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 shall distribute income; and
f. Other receipts as provided in sections 17 through 23 of this act.
L.2001,c.212,s.13.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-14 - Rental property

3B:19B-14. Rental property
14. Rental Property. 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.
L.2001,c.212,s.14.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-15 - Obligation to pay money

3B:19B-15. Obligation to pay money
15. Obligation to Pay Money. 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 prepaying principal, shall be allocated to income without any provision for amortization of premium.
b. 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 one 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 one 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 shall be allocated to income.
c. This section does not apply to an obligation to which section 17, 18, 19, 20, 22 or 23 of this act applies.
L.2001,c.212,s.15.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-16 - Insurance policies and similar contracts

3B:19B-16. Insurance policies and similar contracts
16. Insurance Policies and Similar Contracts. a. Except as otherwise provided in subsection b. of this section, 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 of this act, loss of profits from a business.
c. This section does not apply to a contract to which section 17 of this act applies.
L.2001,c.212,s.16.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-17 - Deferred compensation, retirement benefits, annuities, and similar payments

3B:19B-17. Deferred compensation, retirement benefits, annuities, and similar payments
17. Deferred Compensation, Retirement Benefits, Annuities, and Similar Payments. a. As used in this section, "payment" means a payment that a trustee may receive over a fixed period of time or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer or by another, including a private or commercial annuity, an individual retirement account and a pension, profit-sharing, stock-bonus, or stock-ownership plan.
b. To the extent that a trustee can readily ascertain the part of a payment from a separate fund held for the benefit of the trust that represents the then undistributed net income of the fund realized since the trust acquired its interest in the fund, a trustee shall allocate that part to income. The trustee shall allocate to principal the balance of the payment.
c. If no part of a payment is allocated to income under subsection b. of this section, and all or part of the payment is required to be made, a trustee shall allocate to income 10 percent 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" to the extent that it is made because the trustee exercises a right of withdrawal.
d. If, to obtain an estate tax or gift tax marital deduction for a trust, the trustee must 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.
e. This section does not apply to payments to which section 18 of this act applies.
L.2001,c.212,s.17.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-18 - Liquidating asset

3B:19B-18. Liquidating asset
18. Liquidating Asset. a. 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. The term includes a leasehold, patent, copyright, royalty right and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to section 17 of this act, resources subject to section 19 of this act, timber subject to section 20 of this act, an activity subject to section 22 of this act, an asset subject to section 23 of this act, or any asset for which the trustee establishes a reserve for depreciation under section 26 of this act.
b. A trustee shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.
L.2001,c.212,s.18.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-19 - Minerals, water and other natural resources

3B:19B-19. Minerals, water and other natural resources
19. Minerals, Water and Other Natural Resources. a. 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:
(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 shall 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 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 percent 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) of this subsection a., 90 percent 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 percent of the amount shall be allocated to principal and the balance to income.
c. 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.
d. 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.
L.2001,c.212,s.19.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-20 - Timber

3B:19B-20. Timber
20. Timber. a. 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:
(1) 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;
(2) 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;
(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) of this subsection a.; or
(4) to principal to the extent that advance payments, bonuses and other payments are not allocated pursuant to paragraph (1), (2) or (3) of this subsection a.
b. In determining net receipts to be allocated pursuant to subsection a. of this section, a trustee shall deduct and transfer to principal a reasonable amount for depletion.
c. This section applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
d. 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.
L.2001,c.212,s.20.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-21 - Property not productive of income

3B:19B-21. Property not productive of income
21. Property Not Productive of Income. 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 of this act 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 section 4 of this act. The trustee may decide which action or combination of actions to take.
b. In cases not governed by subsection a. of this section, 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.
L.2001,c.212,s.21.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-22 - Derivatives and options

3B:19B-22. Derivatives and options
22. Derivatives and Options. a. As used in this section, "derivative" means a contract or financial instrument or a combination of contracts and financial instruments which 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.
b. To the extent that a trustee does not account under section 12 of this act for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
c. 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 shall be allocated to principal. An amount paid to acquire the option shall 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, shall be allocated to principal.
L.2001,c.212,s.22.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-23 - Asset-backed securities

3B:19B-23. Asset-backed securities
23. Asset-backed Securities. a. 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. The term 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. The term does not include an asset to which section 10 or 17 of this act applies.
b. If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment which the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
c. If a trust receives one or more payments in exchange for the trust's entire interest in an asset-backed security in one accounting period, the trustee shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust's interest in the security over more than one accounting period, the trustee shall allocate 10 percent of the payment to income and the balance to principal.
L.2001,c.212,s.23.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-24 - Disbursements from income

3B:19B-24. Disbursements from income
24. Disbursements from Income. A trustee shall make the following disbursements from income to the extent that they are not disbursements to which paragraph (1) or (2) of subsection b. of section 5 of this act applies:
a. commissions allowed by law to a trustee on income receipts, if properly chargeable to the trust;
b. one-half of the fees paid to banks and other financial institutions for custodial services to the fiduciary if properly chargeable to the trust;
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 paid by the trustee, including interest on death taxes, regularly recurring taxes assessed against any portion of the principal, water rates, bond premiums, and the expenses, including court costs, attorneys' fees, and accountants' fees, of an accounting, judicial proceeding or other matter that concerns primarily the income interest, unless the court directs otherwise; and
d. recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.
L.2001,c.212,s.24.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-25 - Disbursements from principal

3B:19B-25. Disbursements from principal
25. Disbursements from Principal. a. A trustee shall make the following disbursements from principal:
(1) commissions allowed by law to a trustee on principal receipts or distributions or on termination of the trust estate;
(2) the remaining one-half of the fees paid to banks and other financial institutions for custodial services, if properly chargeable to the trust;
(3) fees paid to banks and other financial institutions and registered investment advisors for investment advisory or investment management services, if properly chargeable to the trust;
(4) costs of investing and reinvesting principal and payments on the principal of an indebtedness, including a mortgage or security interest amortized by periodic payments of principal;
(5) extraordinary repairs or expenses incurred in making a capital improvement, including special assessments, and disbursements made to prepare property for sale;
(6) court costs, attorneys' fees, accountants' fees and other fees, incurred on an accounting or judicial proceeding or in maintaining or defending any action to construe a will or a trust, protect it or the trust estate, or assure the title of any property, unless properly chargeable to income under subsection c. of section 24 of this act or the court otherwise directs;
(7) premiums paid on an insurance policy not described in subsection d. of section 24 of this act of which the trust is the owner and beneficiary;
(8) estate, inheritance and other transfer taxes, including penalties apportioned to the trust;
(9) 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 cost 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; and
(10) if an estate or inheritance tax is levied in respect of a trust in which both an income beneficiary and remainderman have an interest, any amount apportioned to the trust, including penalties, even though the income beneficiary also has rights in the principal.
b. If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
L.2001,c.212,s.25.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-26 - Transfers from income to principal for depreciation

3B:19B-26. Transfers from income to principal for depreciation
26. Transfers from Income to Principal for Depreciation.
a. 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 one year.
b. 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 any amount for depreciation:
(1) of that portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary;
(2) during the administration of a decedent's estate; or
(3) under this section if the trustee is accounting under section 12 of this act for the business or activity in which the asset is used.
c. An amount transferred to principal need not be held as a separate fund.
L.2001,c.212,s.26.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-27 - Transfer from income to reimburse principal

3B:19B-27. Transfer from income to reimburse principal
27. Transfer from Income to Reimburse Principal. a. 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 one or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements.
b. Principal disbursements to which subsection a. of this section 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:
(1) an amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;
(2) disbursements made to prepare property for rental, including tenant allowances, leasehold improvements and broker's commissions; and
(3) 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.
c. 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 a. of this section.
L.2001,c.212,s.27.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-28 - Income taxes

3B:19B-28. Income taxes
28. Income Taxes. a. A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income.
b. 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.
c. A tax required to be paid by a trustee on the trust's share of an entity's taxable income shall be paid proportionately:
(1) from income to the extent that receipts from the entity are allocated to income; and
(2) from principal to the extent that:
(a) receipts from the entity are allocated to principal; and
(b) the trust's share of the entity's taxable income exceeds the total receipts described in paragraph (1) and subparagraph (a) of this paragraph (2).
d. For purposes of this section, receipts allocated to principal or income shall be reduced by the amount distributed to a beneficiary from principal or income for which the trust receives a deduction in calculating the tax.
L.2001,c.212,s.28.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-29 - Uniformity of application and construction

3B:19B-29. Uniformity of application and construction
29. Uniformity of Application and Construction. In applying and construing this act, consideration shall be given to the fact that this is a uniform act, and there is a need to promote uniformity of the act with respect to its subject matter among states that enact it.
L.2001,c.212,s.29.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:19B-30 - Application of act to existing and future trusts and estates

3B:19B-30. Application of act to existing and future trusts and estates
30. Application of Act to Existing and Future Trusts and Estates. This act applies to every trust or decedent's estate existing on or after the effective date of this act, except as otherwise expressly provided in the will or terms of the trust or in this act.
L.2001,c.212,s.30.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-1 - Definitions

3B:20-1 Definitions
3B:20-1. Definitions. As used in this chapter:
a. "Trust instrument" means and includes a will, deed, agreement, court order or other instrument pursuant to which money or other property is entrusted to a fiduciary;
b. "Fiduciary" means an individual or corporation that is authorized to act as or acts as a trustee, personal representative, conservator, guardian, and every other individual or corporation charged with the duty of administering a trust estate;
c. "Trust estate" or "trust assets" means money or other property entrusted to a fiduciary;
d. (Deleted by amendment, P.L.1997, c.26.)
e. "Beneficiary" means an individual or corporation for whose benefit a fiduciary acts or is authorized to act.
Amended 1983, c.192, s.2; 1995, c.48, s.1; 1997, c.26, s.13.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-3 - Corporate fiduciary may register securities in name of nominee without disclosing fiduciary capacity

3B:20-3. Corporate fiduciary may register securities in name of nominee without disclosing fiduciary capacity
Any bank may, when acting as sole fiduciary or when acting as cofiduciary, with the consent of a cofiduciary or cofiduciaries, cause any certificates for shares of stock, bonds, debentures, notes or other securities, herein denominated "securities" , held in fiduciary capacities, to be registered and held in the name of a nominee of the corporate fiduciary without disclosing the fiduciary capacity in which the securities are held; provided, that
a. The records of the fiduciary or fiduciaries and all accounts rendered by it or them shall at all times clearly show the ownership of the securities so registered,
b. The securities shall at all times be kept separate and apart from the assets of the fiduciary or fiduciaries, and
c. The nominee shall not have possession of or access to the securities.
L.1981, c. 405, s. 3B:20-3, eff. May 1, 1982.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-4 - Corporate fiduciary liable for loss caused by acts of nominee

3B:20-4. Corporate fiduciary liable for loss caused by acts of nominee
The fiduciary or fiduciaries shall be liable for any loss caused by the acts of the nominee with respect to securities registered as provided in N.J.S. 3B:20-3.
L.1981, c. 405, s. 3B:20-4, eff. May 1, 1982.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-5 - Limitation on authority to register securities in name of nominee

3B:20-5. Limitation on authority to register securities in name of nominee
A fiduciary or fiduciaries may not register securities in the name of a nominee where any will, trust instrument or any order appointing or relating to any fiduciary or fiduciaries prohibits securities from being registered in the name of a nominee.
L.1981, c. 405, s. 3B:20-5, eff. May 1, 1982.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-7 - Directions of court concerning the sale, conversion or retention of investments

3B:20-7 Directions of court concerning the sale, conversion or retention of investments
3B:20-7. Directions of court concerning the sale, conversion or retention of investments. When securities or other property come into possession of a fiduciary as part of the assets of the trust estate the fiduciary is to administer or manage, the fiduciary may apply to the court for direction as to the sale, conversion or retention of the securities or property.
The court shall make an order as it shall deem most advantageous to the trust estate and the interests of persons entitled to share therein.
Amended 1997, c.26, s.14.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-8 - Protection afforded fiduciary continuing investments under court order

3B:20-8 Protection afforded fiduciary continuing investments under court order
3B:20-8. Protection afforded fiduciary continuing investments under court order. A fiduciary shall not be held accountable for any loss by reason of continuing to hold the trust assets in accordance with an order pursuant to N.J.S.3B:20-7.
Amended 1997, c.26, s.15.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-9 - Application to court upon change in conditions

3B:20-9 Application to court upon change in conditions
3B:20-9. Application to court upon change in conditions. If, as a result of a change in conditions which occurs or which may be reasonably foreseen, the objects of the trust estate may be defeated in whole or in part by the investment or retention of investments of the trust estate in property to which the fiduciary is limited by the trust instrument, the fiduciary or any beneficiary of the trust may apply to the court to secure authority permitting or directing the fiduciary to invest all or any part of the trust estate in accordance with the provisions of N.J.S.3B:20-1 et seq.
Amended 1997, c.26, s.16.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-10 - Investments by court order upon change in conditions

3B:20-10 Investments by court order upon change in conditions
3B:20-10. Investments by court order upon change in conditions. If the court finds that by reason of a change in conditions which has occurred since the creation of the trust or which may be reasonably foreseen, the objects of the trust estate may be defeated in whole or in part by the investment or retention of the trust estate in property to which the fiduciary is limited by the trust instrument and that the objects of the trust estate and those interested in it would be promoted by the investment of all or part of the trust estate otherwise, the court shall authorize or direct the fiduciary to invest the whole of the trust estate or that part of it as shall be designated, in accordance with the provisions of N.J.S.3B:20-1 et seq.
Amended 1997, c.26, s.17.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.1 - Short title

3B:20-11.1 Short title
1. Sections 1 through 12 of this 1997 amendatory and supplementary act shall be known and may be cited as the "Prudent Investor Act."
L.1997,c.26,s.1.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.2 - Compliance by fiduciary with prudent investor rule

3B:20-11.2 Compliance by fiduciary with prudent investor rule
2. a. Except as provided in subsection b. of this section, a fiduciary who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule, as set forth in this act.
b. The prudent investor rule is a default rule that may be expanded, restricted, eliminated, or otherwise altered by express provisions of the trust instrument. A fiduciary is not liable to a beneficiary to the extent that the fiduciary acted in reasonable reliance on those express provisions. Nothing herein shall affect the jurisdiction of the Superior Court to order or authorize a fiduciary to deviate from the express terms or provisions of a trust instrument for the causes, in the manner, and to the extent otherwise provided by law.
L.1997,c.26,s.2.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.3 - Investments, management of trust assets by fiduciary

3B:20-11.3 Investments, management of trust assets by fiduciary
3. a. A fiduciary shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the fiduciary shall exercise reasonable care, skill, and caution.
b. A fiduciary's investment and management decisions respecting individual assets shall not be evaluated in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
c. Subject to the standards established in this act, a fiduciary may invest in any kind of property or type of investment. No specific investment or course of action is inherently imprudent.
d. Among the circumstances that the fiduciary shall consider in investing and managing trust assets are those of the following as are relevant to the trust and 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) the need for liquidity, for regularity of income, and for 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 or more of the beneficiaries as, for example, an interest in a closely-held enterprise, tangible and intangible personalty, or real estate.
e. The fiduciary shall take reasonable steps to verify facts relevant to the investment and management of trust assets and may rely and be fully protected in relying upon statistical, financial, corporate or other information as to a particular investment, and upon ratings or other opinion as to the financial or other status thereof, contained in or offered by any financial, statistical, investment, rating or other publication or service published for the use of and accepted as reliable by investors in like investments or upon a copy of the prospectus prepared and filed with the Securities and Exchange Commission in connection with a new issue.
f. A fiduciary who has special skills or expertise, or is named fiduciary in reliance upon representations of special skills or expertise, has a duty to use those special skills or expertise.
L.1997,c.26,s.3.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.4 - Diversification of investments

3B:20-11.4 Diversification of investments
4. A fiduciary shall diversify the investments of the trust unless the fiduciary reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.
L.1997,c.26,s.4.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.5 - Assets to be managed in interest of beneficiaries

3B:20-11.5 Assets to be managed in interest of beneficiaries
5. A fiduciary shall invest and manage the trust assets solely in the interest of the beneficiaries.
L.1997,c.26,s.5.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.6 - Impartiality of fiduciary

3B:20-11.6 Impartiality of fiduciary
6. If a trust has two or more beneficiaries, the fiduciary shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.
L.1997,c.26,s.6.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.7 - Review of trust assets

3B:20-11.7 Review of trust assets
7. Within six months after accepting trust assets, the fiduciary shall review the trust assets and shall make and implement decisions concerning the retention and disposition of assets received at the inception of the trust, in order to bring the trust portfolio into compliance with the provisions of the trust instrument or with the requirements of this act.
L.1997,c.26,s.7.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.8 - Incurrence of costs by fiduciary

3B:20-11.8 Incurrence of costs by fiduciary
8. In investing and managing trust assets, a fiduciary may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the trust, and the skills of the fiduciary. A fiduciary who delegates investment and management functions pursuant to section 10 of P.L.1997, c.26 (C.3B:20-11.10) shall control the overall costs of the delegation, including making a reduction in the amount of corpus commissions otherwise allowable to the fiduciary with respect to the trust assets for which investment responsibility has been delegated, which reduction shall take account of the duties and responsibilities retained by the fiduciary with respect to such assets.
L.1997,c.26,s.8.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.9 - Rule expresses standard of conduct

3B:20-11.9 Rule expresses standard of conduct
9. The prudent investor rule expresses a standard of conduct, not outcome. Compliance with the rule is determined in light of the facts and circumstances existing at the time of the fiduciary's decision or action.
L.1997,c.26,s.9.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.10 - Delegation of investment, management functions by fiduciary

3B:20-11.10 Delegation of investment, management functions by fiduciary
10. a. A fiduciary may delegate investment and management functions that a prudent fiduciary of comparable skills could properly delegate under the circumstances. The fiduciary shall exercise reasonable care, skill, and caution in:
(1) selecting an agent with special investment skills and expertise and of sound financial standing;
(2) establishing the scope and terms of the delegation consistent with the purpose and terms of the trust instrument; and
(3) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the scope and terms of the delegation.
b. In performing a delegated function, the agent shall owe to the trustee and the beneficiaries the same duties as the fiduciary and shall be held to the same standards as the fiduciary.
c. The fiduciary who complies with the requirements of subsection a. of this section 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 a trust function from the fiduciary of a trust that is subject to the law of New Jersey, the agent submits to the jurisdiction of the courts of New Jersey, even if the delegation agreement provides otherwise.
e. If there are two or more fiduciaries serving, only one of whom has special investment and management skills or expertise or has been named in reliance upon representations of such special skills or expertise, then the fiduciary or fiduciaries not possessed of such special skills or expertise may, pursuant to this section, delegate investment and management functions to the other fiduciary as if such other fiduciary were an agent selected in accordance with this section and subject to the provisions of this section.
f. A fiduciary shall provide reasonable advance written notice on each occasion upon which the fiduciary intends to delegate investment and management functions pursuant to this section, including the identity of the agent, to the beneficiary or beneficiaries eligible to receive income from the trust on the date of the intended delegation. Upon providing such notice, the fiduciary shall be authorized to delegate investment and management functions pursuant to this section.
L.1997,c.26,s.10.
2023 New Jersey Revised Statutes › Title 3B - Administration of Estates--Decedents and Others › Section 3B:20-11.11 - Construction of terms

3B:20-11.11 Construction of terms
11. The following terms or comparable language in a trust instrument, unless otherwise limited or modified by that instrument, shall be construed as authorizing any investment or strategy permitted under this act: "investments permissible by law for investment of trust funds," "legal investment," "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."
L.1997,c.26,s.11.