2023 New York Laws › EPT - Estates, Powers and Trusts › Article 11 - Fiduciary: Powers, Duties and Limitations; Actions by or Against in Representative or Individual Capacities › Part 2 - Investments by Fiduciaries: Powers and Duties Relating Thereto › 11-2.1 - Principal and Income

§ 11-2.1 Principal and income
(a) Duty of trustee as to receipts and expenditures.
(1)  A  trust  shall be administered with due regard to the respective
interests of income  beneficiaries  and  remaindermen.  A  trust  is  so
administered with respect to the allocation of receipts and expenditures
if  a  receipt  is  credited  or  an  expense is charged to income or to
principal or partly to each (A) in accordance  with  the  terms  of  the
trust  instrument,  notwithstanding  any  contrary  provisions  in  this
section; (B)  in  the  absence  of  any  contrary  terms  of  the  trust
instrument, in accordance with the provisions of this section; or (C) if
neither  of  the  preceding  rules  of  administration is applicable, in
accordance with  what  is  reasonable  and  equitable  in  view  of  the
interests  of  those  entitled  to  income  as well as those entitled to
principal and in view of the manner in which men of  ordinary  prudence,
discretion  and  judgment  would  act  in  the  management  of their own
affairs.
(2) If the trust instrument gives the trustee discretion in  crediting
a receipt or charging an expenditure to income or principal or partly to
each,  no inference that the trustee has or has not improperly exercised
such discretion arises from the  fact  that  the  trustee  has  made  an
allocation contrary to the provisions of this section.
(b) What is income and what is principal; definitions.
(1)  Income is the return in money or property derived from the use of
principal, including return received as:
(A) Rent from property, including sums received for  the  cancellation
or renewal of a lease.
(B)  Interest  on money lent, including sums received as consideration
for the privilege of prepayment  of  principal  except  as  provided  in
paragraph (f) on bond premium and discount.
(C) Income earned during the administration of a decedent's estate, as
provided in paragraph (d).
(D) Corporate distributions, as provided in paragraph (e).
(E) Accrued income on bonds or other obligations issued at a discount,
as provided in paragraph (f).
(F) Receipts from principal used in business, as provided in paragraph
(g).
(G)  Receipts  from  disposition  of natural resources, as provided in
paragraphs (h) and (i).
(H) Receipts from other principal subject to depletion, as provided in
paragraph (j).
(I) Receipts from disposition of underproductive property, as provided
in paragraph (k).
(2) Principal is property, disposed of in trust, the income from which
is payable to or to be accumulated for an  income  beneficiary  and  the
title  to  which  is  ultimately  to  vest in the person entitled to the
future estate. Principal includes:
(A) Consideration received  by  the  trustee  on  the  sale  or  other
transfer  of  principal,  on  repayment  of  a  loan  or  as  a  refund,
replacement or change in the form of principal.
(B) Proceeds of property taken on eminent domain proceedings.
(C) Proceeds of insurance upon property forming part of the  principal
except  proceeds  of  insurance  upon  a  separate interest of an income
beneficiary.
(D) Stock dividends, receipts on  liquidation  of  a  corporation  and
other corporate distributions, as provided in paragraph (e).
(E)  Receipts with respect to bonds and other obligations, as provided
in paragraph (f).
(F)  Royalties  and  other  receipts  from  disposition   of   natural
resources, as provided in paragraphs (h) and (i).
(G) Receipts from other principal subject to depletion, as provided in
paragraph (j).
(H)  Any  profit  resulting  from any change in the form of principal,
except as provided in paragraph (k) on underproductive property.
(I) Receipts from disposition of underproductive property, as provided
in paragraph (k).
(3) After determining income and  principal  in  accordance  with  the
terms  of  the  trust  instrument  or  of this section the trustee shall
charge to income or principal expenses and other charges as provided  in
paragraph (l).
(c)  When  right  to  income  arises; apportionment of income or other
receipt.
(1) An  income  beneficiary  is  entitled  to  income  from  the  date
specified  in  the  trust  instrument or, if none is specified, from the
date an asset becomes subject to the trust. In  the  case  of  an  asset
which becomes subject to a trust by reason of a will, it becomes subject
to  the  trust  as  of the date of the death of the testator even though
there is an intervening  period  of  administration  of  the  testator's
estate.
(2)  In  the  case  of a decedent's estate, a testamentary trust or an
asset received under a will by a trustee: (A) receipts due but not  paid
at  the date of death of the testator are principal; (B) receipts in the
form  of  periodic  payments  (other  than  corporate  distributions  to
stockholders   and   savings  bank  and  savings  and  loan  association
dividends), such as rent, interest or annuities payable from any source,
not due at the date of death  of  the  testator,  shall  be  treated  as
accruing  from  day  to  day.    That portion of such a receipt accruing
before the date of death is principal and the balance is income.
(3) In all other cases any receipt from an income producing  asset  is
income even though the receipt was earned or accrued in whole or in part
before the date when the asset became subject to the trust.
(4) On termination of an income interest, the income beneficiary whose
interest  is  terminated  or  his  estate  is  entitled  to:  (A) income
undistributed on the date of termination; (B) income due but not paid to
the trustee on the date of  termination;  (C)  income  in  the  form  of
periodic  payments  (other  than corporate distributions to stockholders
and savings bank and savings and loan  association  dividends)  such  as
rent, interest or annuities, not due on the date of termination, accrued
from day to day.
(d) Income earned during administration of a decedent's estate.
(1) Unless the will provides otherwise and subject to subparagraph (2)
hereof,  all  expenses  incurred  in connection with the settlement of a
decedent's estate, including but not limited to debts, funeral expenses,
estate  taxes,  interest  and   penalties   concerning   taxes,   family
allowances,    fees   of   attorneys   and   commissions   of   personal
representatives (other than commissions  on  estate  income)  and  court
fees,  costs and other charges shall be charged against the principal of
the estate.
(2) Unless the will provides otherwise, income from the  assets  of  a
decedent's   estate   after   the  death  of  the  testator  and  before
distribution,  including  income  from  property   used   to   discharge
liabilities, shall be determined in accordance with the rules applicable
to  a  trustee  under  this  section  and distributed as follows: (A) to
specific beneficiaries the net income from the property disposed  of  to
them  respectively; (B) to all other beneficiaries, except beneficiaries
of pecuniary dispositions not in trust, the balance of the net income in

proportion to their respective interests in the undistributed assets  of
the  estate  computed at times of distribution on the basis of inventory
value; provided, however, (i) that the amount of  income  earned  during
the  further  administration  of  the  estate from and after the date of
payment of any estate or inheritance tax shall be  distributed  to  such
beneficiaries  in  proportion  to  their  respective  interests  in  the
undistributed assets of the estate after the making of such  payment  on
the  basis of the fair market value of such assets immediately after the
making of such payment, and (ii) any amount allowed as a  tax  deduction
to  the  estate for income payable to a charitable organization shall be
paid, without diminution  for  taxes,  to  the  charitable  organization
entitled to receive such income. This subparagraph does not apply to any
sums  made  payable in policies of insurance of any description or under
any contract for an annuity, including a variable annuity.
(3) (A) The residuary beneficiaries are entitled to the rent from  the
decedent's real property, not specifically disposed of, from the date of
death,  in  proportion  to  their  respective  interests under the will,
unless the fiduciary,  pursuant  to  a  power  to  distribute  in  kind,
allocates  all or part of such property in whole or partial satisfaction
of a pecuniary disposition in trust, in which event the  rent  from  the
property  so allocated shall be distributed, as of the date of death, to
the trustee of such disposition.
(B) This subparagraph applies to wills of decedents dying  before,  on
or  after its effective date, provided, however, that it shall not be so
applied as to require residuary beneficiaries to repay to the estate any
distributions of income from real property,  not  specifically  disposed
of,  which  were  actually  made  to  such  beneficiaries  prior to such
effective date.
(4) Income and rent received by a trustee under subparagraphs  (2)  or
(3) shall be treated as income of the trust.
(e) Distributions of corporations or associations.
(1)  Notwithstanding the provisions of this paragraph, a will, deed or
other instrument which creates or declares  a  trust  may  provide  with
respect to all matters covered by this section, and direct the manner of
ascertaining income and principal and the apportionment thereof or grant
discretion to the trustee or another person to do so, and such provision
or direction, where otherwise not contrary to law, controls.
(2)  A  distribution by a corporation or association made to a trustee
in the shares of the distributing corporation  or  association  held  in
such trust, whether in the form of a stock split or a stock dividend, at
the  rate  of  six per cent or less of the shares of such corporation or
association upon which the distribution is made,  is  income.  Any  such
distribution at a greater rate is principal.
(3)  For  the  purpose  of  determining  whether a will, deed or other
instrument which creates  or  declares  a  trust  has  directed  that  a
distribution  of  shares  described  in  subparagraph (2) is income in a
manner other than that provided in subparagraph (2), the following rules
apply unless different rules are provided in the  will,  deed  or  other
instrument:
(A)  A  distribution  in the shares of the distributing corporation or
association means a distribution in such shares, whether in the form  of
a  stock  split or a stock dividend, at the rate of six per cent or less
of the  shares  of  such  corporation  or  association  upon  which  the
distribution is made.
(B)  A  distribution  in the shares of the distributing corporation or
association, whether in the form of a stock split or a  stock  dividend,
at the rate of six per cent or less of the shares of such corporation or

association upon which the distribution is made, is ordinary and regular
and shall be deemed to be in lieu of a cash dividend.
(C)  If the will, deed or other instrument which creates or declares a
trust grants to the trustee or another person discretion to allocate  to
income  or principal or between income and principal any distribution in
the  shares  of  the  distributing  corporation  or  association,   such
discretion may be exercised with respect to any such distribution in the
shares  of  the  distributing corporation or association, whether in the
form of a  stock  split  or  a  stock  dividend,  and  no  inference  of
imprudence  or  partiality shall arise from the fact that the trustee or
other  person  has  made  an  allocation  contrary  to  a  provision  of
subparagraph (2) or of this subparagraph.
(4)  (A) A right issued by the distributing corporation or association
to subscribe to shares or other securities,  whether  in  the  stock  or
other  securities of the distributing corporation or association or of a
corporation or association other than the  distributing  corporation  or
association,   accruing  to  shareholders  on  account  of  their  stock
ownership, and the proceeds of any sale of such rights, are principal.
(B) A distribution by a corporation or association made to  a  trustee
in  the  shares of the distributing corporation, but of a different type
than the shares held  in  such  trust,  or  a  distribution  of  shares,
securities  or  obligations  of  a corporation or association other than
those of the distributing corporation or association (or the proceeds of
such a distribution) shall be principal.
(5) When a corporation or association calls in shares of stock or when
a corporation or association succeeds another by merger,  consolidation,
reorganization  or other method of acquiring its assets, shares of stock
issued for the shares so called in or shares of stock in the  succeeding
corporation or association are principal.
(6)  When  a  corporation  or association is being wholly or partially
liquidated, shares of stock and cash  or  other  assets  distributed  to
shareholders   are   principal,   except  that  if  the  corporation  or
association  indicates  that  some  part  of  such  distribution  is   a
settlement  of  preferred  or  guaranteed  dividends,  that  part of the
distribution settling dividends accruing  since  the  trustee  became  a
shareholder is income. For the purposes of this paragraph, a corporation
or  association  is  in  liquidation  if  the corporation or association
indicates that the distribution is in total or partial  liquidation,  or
if  the  corporation  or  association is making a distribution of assets
other than cash pursuant to a court decree or final administrative order
by a government agency  ordering  the  distribution  of  the  particular
assets,  unless  the  distributing  corporation or association indicates
that a distribution pursuant to such court or  administrative  order  is
wholly or partly in lieu of an ordinary cash dividend, in which case the
distribution is to that extent income.
(7)  Distributions made from ordinary income by a regulated investment
company or by a trust qualifying and electing under federal  law  to  be
taxed   as  a  real  estate  investment  trust  are  income.  All  other
distributions made by such company  or  trust,  including  distributions
from  capital  gains,  depreciation or depletion, whether in the form of
cash or an option to take new shares or cash or an  option  to  purchase
additional shares, are principal.
(8) If the distributing corporation or association gives a shareholder
an  option to receive a distribution, whether in the form of cash or its
own shares or cash or an option to purchase new shares, the distribution
chosen is income.
(9) Except as provided in subparagraphs (2), (4), (5),  (6)  and  (7),
all distributions of corporations or associations are income including:
(A) Cash dividends.
(B) Share distributions, as provided in subparagraphs (2) and (3).
(C)  Preferred  or  guaranteed  dividends, as provided in subparagraph
(6).
(D) Ordinary income from a  regulated  investment  trust  or  a  trust
qualifying  and  electing under federal law to be taxed as a real estate
investment trust, as provided in subparagraph (7).
(E) An option, as provided in subparagraph (8).
(10) The trustee or other person may rely upon any  statement  of  the
distributing  corporation  or association as to any fact, relevant under
any provision of this paragraph, concerning the source or  character  of
distributions.
(11) Where the shares of stock of a corporation or association of this
state  or  of any other jurisdiction constitute part of an estate, trust
or other fund, and the allocation of any other distribution  thereof  to
principal  or  income,  or  between successive interests, depends on the
date of accrual thereof, the date of accrual of any distribution on such
shares shall be the date specified by  the  corporation  or  association
declaring  such distribution as that on which the shareholders of record
entitled to such distribution are to be determined, or, if there  be  no
such  date  specified  by  the  corporation  or association, the date of
declaration of the distribution. For the purposes of this paragraph, the
"date of accrual" of a distribution means that date, on and after  which
the  distribution  shall be treated in the same manner as if it had been
declared and paid or distributed on such date.
(12) If a trustee or other person has  heretofore  received  or  shall
hereafter  receive any shares of stock distributed by any corporation or
association and is uncertain as to  whether  any  or  all  of  them  are
allocable to income, the trustee or other person shall have with respect
to  all  such shares and the proceeds thereof the same duties and powers
(including powers of sale, investment and reinvestment)  as  though  all
such  shares  constituted  part  of the principal of the trust fund. The
trustee or other person shall be under no obligation to  retain  any  of
such  shares  in kind even though it may subsequently be determined that
some or all of them  were  allocable  to  income.  If  and  when  it  is
determined  that any or all of such shares were allocable to income, the
shares allocable to income shall  be  distributed  in  kind  to  income,
except that, if prior to such determination, the trustee or other person
had sold any of the new shares comprising the distribution or any of the
original  shares  upon which the distribution was received, income shall
be entitled to receive its ratable portion of the shares  remaining,  if
any,  on  hand and an amount of cash equal to its ratable portion of the
proceeds received by the trustee or other person upon the sale  of  such
shares.  This subparagraph does not apply in any case in which a trustee
or other person has  heretofore,  in  good  faith,  made  any  different
allocation  of  the shares or the proceeds of any sale thereof, or both,
as between income and principal and has made distribution in  accordance
with such different allocation to income or to principal, or to both.
(13)  Subparagraphs  (1)  to  (6)  inclusive and (8) to (11) inclusive
apply to any trust, whether created or declared before, on or after  the
effective date hereof, except that subparagraphs (1) through (11) do not
apply  to  any  distribution  described  in this paragraph which accrued
prior to such effective date, and subparagraph  (7)  applies  to  trusts
created  on  and  after  its  effective date and to the wills of persons
dying on and after its effective date.
(f) Bond premium and discount.
(1) Bonds or other obligations for the payment of money are  principal
at  their  inventory  value,  except as provided in subparagraph (2) for

discount bonds. No provision shall be  made  for  amortization  of  bond
premiums  or  for  accumulation  of discount, except that in the case of
testamentary trusts created by the wills of  persons  dying,  and  inter
vivos  trusts created by instruments executed, prior to September first,
nineteen hundred forty-two, premiums  may,  in  the  discretion  of  the
trustee, be amortized if the bonds and other obligations for the payment
of money were acquired prior to June first, nineteen hundred sixty-five.
The  proceeds  of  a sale, redemption or other disposition of bonds or
other obligations are principal.
(2) The increment in value of a  bond  or  other  obligation  for  the
payment of money bearing no stated interest but payable or redeemable at
maturity  or  at  a  future time at an amount in excess of the amount in
consideration of which it was issued is income. If  the  income  accrues
pursuant   to   a   fixed   schedule  of  appreciation  such  income  is
distributable to the beneficiary at the time the  increment  occurs  and
the  trustee may transfer the amount thereof from principal to income on
each such date. Whenever unrealized increment is distributed  as  income
but  out  of principal the principal shall be reimbursed from the income
when realized.
(g) Business operations.
If a trustee uses any part of the principal in the  continuance  of  a
business  of  which  the  person who created or declared the trust was a
sole proprietor or a partner, the net profits of the business,  computed
in  accordance  with  generally  accepted  accounting  principles  for a
comparable business, are income. If a loss  results  in  any  fiscal  or
calendar year, the loss falls on principal and shall not be carried into
any  other  fiscal  or  calendar  year  for  purposes of calculating net
income.
(h) Disposition of natural resources.
(1) If any part of the  principal  consists  of  a  right  to  receive
royalties,   overriding   or   limited   royalties,  working  interests,
production payments, net profit interests or other interests in minerals
or other natural resources in, on  or  under  land,  the  receipts  from
taking  the  natural  resources  from  the  land  shall  be allocated as
follows: (A) if received as rent on a lease or extension payments  on  a
lease  the  receipts  are  income;  (B)  if  received  from a production
payment, the receipts are  income  to  the  extent  of  any  factor  for
interest  or  its equivalent provided in the governing instrument. There
shall be allocated to principal the  fraction  of  the  balance  of  the
receipts  which  the unrecovered cost of the production payment bears to
the balance owed on the production payment, exclusive of any factor  for
interest  or its equivalent. The receipts not allocated to principal are
income; (C) if received as a royalty, overriding or limited royalty,  or
as  a  bonus,  or  from a working interest or from any other interest in
minerals or other natural resources, receipts not provided  for  in  the
preceding  subparagraphs  shall  be  apportioned  on  a  yearly basis in
accordance with this paragraph whether or not any natural  resource  was
being  taken  from the land at the time the trust was established. There
shall be added to principal as an allowance for depletion  such  portion
of  the  gross receipts as shall be allowed as a deduction for depletion
in computing taxable income for Federal income tax purposes. The balance
of the gross receipts, after payment therefrom of all  expenses,  direct
and indirect, is income.
(2)  If a trustee, on the effective date of this section, held an item
of depletable property of a type specified in this paragraph,  he  shall
allocate  receipts  from  the  property  in  the  manner used before the
effective date of  this  section  but  as  to  all  depletable  property

thereafter  acquired  by  an  existing  or  new  trust,  the  method  of
allocation provided herein shall be used.
(i) Sale of timber.
If  any part of the principal consists of land from which merchantable
timber may be removed, the receipts from taking the timber from the land
shall be allocated in accordance with subparagraph (1) (C) of  paragraph
(a).
(j) Other property subject to depletion.
Except  as  provided  in  paragraphs  (h)  and (i), if any part of the
principal  consists  of  property  subject   to   depletion,   including
leaseholds,  patents,  copyrights,  royalty rights and rights to receive
payments on a contract for deferred compensation, the receipts from such
property shall be allocated in accordance with subparagraph (1)  (C)  of
paragraph (a).
(k) Underproductive property.
(1)  Except  as otherwise provided in this paragraph (k), a portion of
the net proceeds of a sale by a fiduciary  as  defined  in  subparagraph
three of paragraph (A) of section 11-1.1 of any principal property of an
estate  or  trust, other than securities listed on a national securities
exchange or traded in over the counter, held for more than a year  which
has  not  produced over the period held an average net income of one per
cent per annum of its inventory value (including as income the value  of
any  beneficial use of the property by any income beneficiary), shall be
allocated to income as delayed income, as  provided  in  this  paragraph
(k). The net proceeds of such sale shall be the gross proceeds received,
including  the  value of any property other than cash received, less the
expenses of sale, including tax, if any, incurred on the gain  realized,
and less any carrying charges and expenses paid from the estate or trust
while such property was held by the fiduciary and was underproductive.
(2)  The  sum  allocated to income as delayed income is the difference
between the net proceeds of sale and the amount which, had  such  amount
been  invested  at  simple interest at five per cent per annum while the
property was underproductive, would have produced the amount of the  net
proceeds.  Such  sum,  plus  any  carrying  charges and expenses charged
against income while such property was held by such  fiduciary  and  the
property was underproductive, less any income actually received from the
property  during such period and less the value of any beneficial use of
the property by any income beneficiary, is income  and  the  balance  is
principal.
(3)  The  amount  allocated  to  income  as  delayed income under this
paragraph (k) shall be allocated and paid to the beneficiaries (or their
respective estates), if any,  who  were  entitled  under  the  governing
instrument  to receive income from the estate or trust from time to time
during the period the  property  was  held  by  the  fiduciary  and  was
underproductive.
(4)  If,  or to the extent to which, any principal property subject to
this paragraph (k) is  sold  or  disposed  of  by  conversion,  and  the
proceeds  of  sale  or  conversion  consist  of property which cannot be
readily apportioned, including, without limitation,  land  or  mortgages
(for  example, real property acquired by or in lieu of foreclosure), the
income beneficiary shall be entitled to the net income from any form  of
property  or  obligation  received  pursuant to such sale or conversion,
while the received  property  or  obligation  is  held,  and  when  such
property  or  obligation  is  later  sold  or  otherwise  disposed of by
conversion into easily apportionable property, no allocation  to  income
as provided in this paragraph (k) shall be made.
(5)  This  paragraph (k) shall not apply if the terms of the governing
instrument direct otherwise. A provision in a will or  trust  instrument

authorizing the fiduciary (A) to retain or to invest in property that is
unproductive  or  underproductive of income (described in the instrument
by the words "unproductive" or "underproductive"  or  words  of  similar
import),  or to retain or to invest in property expressly without regard
to whether it is productive of income, (B) to transfer  any  portion  of
receipts  from income to principal on account of depreciation, depletion
or amortization, or (C) to accumulate income and add  it  to  principal,
shall  be  deemed  to  be  a direction that this paragraph (k) shall not
apply.
(l) Charges against income and principal.
(1) The following charges shall be made against income:  (A)  ordinary
expenses  incurred in connection with the administration, management and
preservation of the trust property, including regularly recurring  taxes
assessed  against  any  portion of the principal, water rates, insurance
and bond premiums, interest paid by the trustee  and  ordinary  repairs;
(B) any tax levied upon receipts defined as income under this section or
the trust instrument and payable by the trustee.
(2)  If  the  court  shall find that any judicial proceeding primarily
concerns income and that it is equitable to charge the expense  of  such
proceeding,  or a part thereof, to income, the court may direct that all
or a specified  part  of  the  expense  of  such  proceeding,  including
attorneys' fees, shall be charged to income.
(3)  If  charges against income are of unusual amount, the trustee may
by means of reserves or  other  reasonable  means  charge  them  over  a
reasonable period of time and withhold from distribution sufficient sums
to regularize distributions.
(4) The following charges shall be made against principal: (A) charges
not provided for in subparagraphs (1) and (2), including court costs and
attorneys'  fees,  the  cost  of  investing  and  reinvesting principal,
payments on principal of an indebtedness (including a mortgage amortized
by periodic payments of principal), expenses of preparation of  property
for  sale, and, unless the court directs otherwise, expenses incurred in
maintaining or defending any action to protect or construe the trust  or
the  property  or assure the title of any trust property; (B) repairs or
expenses  incurred  in  making  a  capital  improvement  to   principal,
including  special assessments; (C) any tax levied upon profits, gain or
other receipts allocated to principal  notwithstanding  denomination  of
the tax as an income tax by the taxing authority.
(5)   Regularly   recurring  charges  payable  from  income  shall  be
apportioned to the same extent and in the same  manner  that  income  is
apportioned under paragraph (c) hereof.
(6)  Notwithstanding  the  provisions of subparagraphs one and four of
this paragraph, fees paid at least annually to  banks,  trust  companies
and registered investment advisers for investment advisory and custodial
services  shall  be  charged  one-third  against  income  and two-thirds
against principal.
(m) Application of section.
Except as specifically provided in the trust instrument, the  will  or
in  this  section,  this  section  shall apply to any receipt or expense
received or incurred after its effective date by any trust or decedent's
estate whether established before, on or after  the  effective  date  of
this  section and whether the asset involved was acquired by the trustee
before, on or after its effective date, provided that this section shall
not apply to any receipt or expense received or incurred by any trust or
decedent's estate after the effective date of article 11-A.
(n) Uniformity of interpretation.
This section shall be  so  construed  as  to  effectuate  its  general
purpose to make uniform the law of those states which enact it.
(o) Definitions.
As used in this section:
(1)  "Income beneficiary" means any person to whom income is presently
payable or for whom it is accumulated for distribution as income.
(2) "Remainderman" means any person entitled to  principal,  including
income which has been accumulated and added to principal.
(3)   "Trustee"  means  an  original  trustee  and  any  successor  or
substituted trustee.
(4) "Inventory value" means the cost  of  property  purchased  by  the
trustee  and  the market value of other property at the time it was made
subject to the trust.