reglab/statecodes huggingface dataset:
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 1 - General Provisions › Section 103 - Scope.

Effective 7/1/2020
22-3-103.
Scope.
Except as otherwise provided in the terms of a trust or this chapter, this chapter applies to:
(1) a trust or estate; and
(2) a life estate or other term interest in which the interest of one or more persons will be succeeded by the interest of one or more other persons.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 1 - General Provisions › Section 104 - Governing law.

Effective 7/1/2020
22-3-104.
Governing law.
(1) Except as otherwise provided in the terms of a trust or this chapter, this chapter applies when this state is:
(a) the principal place of administration of a trust or estate; or
(b) the situs of property that is not held in a trust or estate and is subject to a life estate or other term interest described in Subsection 22-3-103(2).
(2) By accepting the trusteeship of a trust having the trust's principal place of administration in this state or by moving the principal place of administration of a trust to this state, the trustee submits to the application of this chapter to any matter within the scope of this chapter involving the trust.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 2 - Fiduciary Duties and Judicial Review › Section 202 - Judicial review of exercise of discretionary power -- Request for instruction.

Effective 7/1/2020
22-3-202.
Judicial review of exercise of discretionary power -- Request for instruction.
(1) In this section, "fiduciary decision" means:
(a) a fiduciary's allocation between income and principal or other determination regarding income and principal required or authorized by the terms of the trust or this chapter;
(b) the fiduciary's exercise or nonexercise of a discretionary power regarding income and principal granted by the terms of the trust or this chapter, including the power to:
(i) adjust under Section 22-3-203;
(ii) convert an income trust to a unitrust under Subsection 22-3-303(1)(a);
(iii) change the percentage or method used to calculate a unitrust amount under Subsection 22-3-303(1)(b); or
(iv) convert a unitrust to an income trust under Subsection 22-3-303(1)(c); or
(c) the fiduciary's implementation of a decision described in Subsection (1)(a) or (b).
(2) The court may not order a fiduciary to change a fiduciary decision, unless the court determines that the fiduciary decision was an abuse of the fiduciary's discretion.
(3)
(a) If the court determines that a fiduciary decision was an abuse of the fiduciary's discretion, the court may order a remedy authorized by law, including a remedy authorized in Section 75-7-1001.
(b) To place the beneficiaries in the positions that the beneficiaries would have occupied if there had not been an abuse of the fiduciary's discretion, the court may order:
(i) the fiduciary to exercise or refrain from exercising the power to adjust under Section 22-3-203;
(ii) the fiduciary to exercise or refrain from exercising the power to:
(A) convert an income trust to a unitrust under Subsection 22-3-303(1)(a);
(B) change the percentage or method used to calculate a unitrust amount under Subsection 22-3-303(1)(b); or
(C) convert a unitrust to an income trust under Subsection 22-3-303(1)(c);
(iii) the fiduciary to distribute an amount to a beneficiary;
(iv) a beneficiary to return some or all of a distribution; or
(v) the fiduciary to withhold an amount from one or more future distributions to a beneficiary.
(4)
(a) On petition by a fiduciary for instruction, the court may determine whether a proposed fiduciary decision will result in an abuse of the fiduciary's discretion.
(b) A beneficiary that opposes the proposed decision has the burden to establish that the proposed decision will result in an abuse of the fiduciary's discretion if the petition:
(i) describes the proposed decision;
(ii) contains sufficient information to inform the beneficiary of the reasons for making the proposed decision and the facts on which the fiduciary relies; and
(iii) explains how the beneficiary will be affected by the proposed decision.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 301 - Definitions.

Effective 7/1/2020
22-3-301.
Definitions.
In this part:
(1) "Applicable value" means the amount of the net fair market value of a trust taken into account under Section 22-3-307.
(2) "Express unitrust" means a trust for which, under the terms of the trust without regard to this part, income or net income is permitted or required to be calculated as a unitrust amount.
(3) "Income trust" means a trust that is not a unitrust.
(4) "Net fair market value of a trust" means the fair market value of the assets of the trust minus the noncontingent liabilities of the trust.
(5)
(a) "Unitrust" means a trust for which net income is a unitrust amount.
(b) "Unitrust" includes an express unitrust.
(6) "Unitrust amount" means:
(a) an amount computed by multiplying a determined value of a trust by a determined percentage; and
(b) for a unitrust administered under a unitrust policy, the applicable value multiplied by the unitrust rate.
(7) "Unitrust policy" means a policy described in Sections 22-3-305 through 22-3-309 and adopted under Section 22-3-303.
(8) "Unitrust rate" means the rate used to compute the unitrust amount under Subsection (6) for a unitrust administered under a unitrust policy.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 302 - Application -- Duties and remedies.

Effective 7/1/2020
22-3-302.
Application -- Duties and remedies.
(1) Except as otherwise provided in Subsection (2), this part applies to:
(a) an income trust, unless the terms of the trust expressly prohibit use of this part by:
(i) a specific reference to this part; or
(ii) an explicit expression of intent that net income not be calculated as a unitrust amount; and
(b) an express unitrust, except to the extent the terms of the trust explicitly:
(i) prohibit use of this part by a specific reference to this part;
(ii) prohibit conversion to an income trust; or
(iii) limit changes to the method of calculating the unitrust amount.
(2) This part does not apply to a trust described in Section 170(f)(2)(B), 642(c)(5), 664(d), 2702(a)(3)(A)(ii) or (iii), or 2702(b) of the Internal Revenue Code.
(3)
(a) An income trust to which this part applies under Subsection (1)(a) may be converted to a unitrust under this part regardless of the terms of the trust concerning distributions.
(b) Conversion to a unitrust under this part does not affect other terms of the trust concerning distributions of income or principal.
(4)
(a) This part applies to an estate only to the extent a trust is a beneficiary of the estate.
(b) To the extent of the trust's interest in the estate, and in the same manner as for a trust under this part:
(i) the estate may be administered as a unitrust;
(ii) the administration of the estate as a unitrust may be discontinued; or
(iii) the percentage or method used to calculate the unitrust amount may be changed.
(5) This part does not create a duty to take or consider action under this part or to inform a beneficiary about the applicability of this part.
(6) A fiduciary that in good faith takes or fails to take an action under this part is not liable to a person affected by the action or inaction of the fiduciary.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 304 - Notice.

Effective 7/1/2020
22-3-304.
Notice.
(1) A fiduciary shall send a notice required by Subsection 22-3-303(2)(b) in a manner authorized under Section 75-7-109 to:
(a) the qualified beneficiaries determined under Subsection 75-7-103(1)(h);
(b) each person acting, in accordance with Title 75, Chapter 12, Uniform Directed Trust Act, as trust director of the trust; and
(c) each person that is granted a power by the terms of the trust to appoint or remove a trustee or person described in Subsection (1)(b), to the extent the power is exercisable when the person that exercises the power is not then serving as trustee or is a person described in Subsection (1)(b).
(2) The representation provisions of Sections 75-7-301 through 75-7-305 apply to notice under this section.
(3)
(a) A person may consent in a record at any time to action proposed under Subsection 22-3-303(2)(b).
(b) If a person required to receive a notice under Subsection (1) consents under Subsection (3)(a) to not receive the notice, the fiduciary is not required to send the person the notice.
(4) A notice required by Subsection 22-3-303(2)(b) shall include:
(a) the action proposed under Subsection 22-3-303(2)(b);
(b) for a conversion of an income trust to a unitrust, a copy of the unitrust policy adopted under Subsection 22-3-303(1)(a);
(c) for a change in the percentage or method used to calculate the unitrust amount, a copy of the unitrust policy or amendment or replacement of the unitrust policy adopted under Subsection 22-3-303(1)(b);
(d) a statement that the person to which the notice is sent may object to the proposed action by stating in a record the basis for the objection and sending or delivering the record to the fiduciary;
(e) the date by which the fiduciary shall receive an objection under Subsection (4)(d), which shall be at least 30 days after the date the notice is sent;
(f) the date on which the action is proposed to be taken and the date on which the action is proposed to take effect;
(g) the name and contact information of the fiduciary; and
(h) the name and contact information of a person that may be contacted for additional information.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 305 - Unitrust policy.

Effective 7/1/2020
22-3-305.
Unitrust policy.
(1) In administering a unitrust under this part, a fiduciary shall follow a unitrust policy:
(a) adopted under Subsection 22-3-303(1)(a) or (b); or
(b) amended or replaced under Subsection 22-3-303(1)(b).
(2) A unitrust policy shall provide:
(a) the unitrust rate or the method for determining the unitrust rate under Section 22-3-306;
(b) the method for determining the applicable value under Section 22-3-307; and
(c) the rules described in Sections 22-3-306 through 22-3-309 that apply in the administration of the unitrust, regardless of whether the rules are:
(i) mandatory, as provided in Subsections 22-3-307(1) and 22-3-308(1); or
(ii) optional, as provided in Section 22-3-306 and Subsections 22-3-307(2), 22-3-308(2), and 22-3-309(1), to the extent the fiduciary elects to adopt those rules.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 306 - Unitrust rate.

Effective 7/1/2020
22-3-306.
Unitrust rate.
(1) Except as otherwise provided in Subsection 22-3-309(2)(a), a unitrust rate may be:
(a) a fixed unitrust rate; or
(b) a unitrust rate that is determined for each period using:
(i) a market index or other published data; or
(ii) a mathematical blend of market indices or other published data over a stated number of preceding periods.
(2) Except as otherwise provided in Subsection 22-3-309(2)(a), a unitrust policy may provide:
(a) a limit on how high the unitrust rate determined under Subsection (1)(b) may rise;
(b) a limit on how low the unitrust rate determined under Subsection (1)(b) may fall;
(c) a limit on how much the unitrust rate determined under Subsection (1)(b) may increase over the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods;
(d) a limit on how much the unitrust rate determined under Subsection (1)(b) may decrease below the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods; or
(e) a mathematical blend of any of the unitrust rates determined under Subsection (1)(b) and Subsections (2)(a) through (d).
Enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 307 - Applicable value.

Effective 7/1/2020
22-3-307.
Applicable value.
(1) A unitrust policy shall provide the method for determining the fair market value of an asset for the purpose of determining the unitrust amount, including:
(a) the frequency of valuing the asset, which need not require a valuation in every period; and
(b) the date for valuing the asset in each period that the asset is valued.
(2) Except as otherwise provided in Subsection 22-3-309(2)(b), a unitrust policy may provide methods for determining the amount of the net fair market value of the trust to take into account in determining the applicable value, including:
(a) obtaining an appraisal of an asset for which fair market value is not readily available;
(b) exclusion of specific assets or groups or types of assets;
(c) other exceptions or modifications of the treatment of specific assets or groups or types of assets;
(d) identification and treatment of cash or property held for distribution;
(e) use of:
(i) an average of fair market values over a stated number of preceding periods; or
(ii) another mathematical blend of fair market values over a stated number of preceding periods;
(f) a limit on how much the applicable value of all assets, groups of assets, or individual assets may increase over:
(i) the corresponding applicable value for the preceding period; or
(ii) a mathematical blend of applicable values over a stated number of preceding time periods;
(g) a limit on how much the applicable value of all assets, groups of assets, or individual assets may decrease below:
(i) the corresponding applicable value for the preceding period; or
(ii) a mathematical blend of applicable values over a stated number of preceding periods;
(h) the treatment of accrued income and other features of an asset that affect value; and
(i) determining the liabilities of the trust, including treatment of liabilities to conform with the treatment of assets under Subsections (2)(a) through (h).
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 308 - Period.

Effective 7/1/2020
22-3-308.
Period.
(1)
(a) A unitrust policy shall provide the period used under Sections 22-3-306 and 22-3-307.
(b) Except as otherwise provided in Subsection 22-3-309(2)(c), the period may be:
(i) a calendar year;
(ii) a 12-month period other than a calendar year;
(iii) a calendar quarter;
(iv) a three-month period other than a calendar quarter; or
(v) another period.
(2) Except as otherwise provided in Subsection 22-3-309(2), a unitrust policy may provide standards for:
(a) using fewer preceding periods under Subsection 22-3-306(1)(b)(ii), (2)(c), or (2)(d) if:
(i) the trust was not in existence in a preceding period; or
(ii) market indices or other published data are not available for a preceding period;
(b) using fewer preceding periods under Subsection 22-3-307(2)(e)(i) or (ii), (f)(ii), or (g)(ii) if:
(i) the trust was not in existence in a preceding period; or
(ii) fair market values are not available for a preceding period; and
(c) prorating the unitrust amount on a daily basis for a part of a period in which the trust or the administration of the trust as a unitrust or the interest of any beneficiary commences or terminates.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 3 - Unitrust › Section 309 - Special tax benefits -- Other rules.

Effective 7/1/2020
22-3-309.
Special tax benefits -- Other rules.
(1) A unitrust policy may:
(a) provide methods and standards for:
(i) determining the timing of distributions;
(ii) making distributions in cash or in kind or partly in cash and partly in kind; or
(iii) correcting an underpayment or overpayment to a beneficiary based on the unitrust amount if there is an error in calculating the unitrust amount;
(b) specify sources and the order of sources, including categories of income for federal income tax purposes, from which distributions of a unitrust amount are paid; or
(c) provide other standards and rules the fiduciary determines serve the interests of the beneficiaries.
(2) If a trust qualifies for a special tax benefit or a fiduciary is not an independent person:
(a) the unitrust rate established under Section 22-3-306 may not be less than 3% or more than 5%;
(b) the only provisions of Section 22-3-307 that apply are Subsections 22-3-307(1) and (2)(a), (d), (e)(i), and (i);
(c) the only period that may be used under Section 22-3-308 is a calendar year under Subsection 22-3-308(1); and
(d) the only other provisions of Section 22-3-308 that apply are Subsection 22-3-308(2)(b)(i) and (c).
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 402 - Receipts from entity -- Distribution from trust or estate.

Effective 7/1/2020
22-3-402.
Receipts from entity -- Distribution from trust or estate.
(1) A fiduciary shall allocate:
(a) to income an amount received as a distribution of income, including a unitrust distribution under Part 3, Unitrust, from a trust or estate in which the fiduciary has an interest, other than an interest the fiduciary purchased in a trust that is an investment entity; and
(b) to principal an amount received as a distribution of principal from the trust or estate.
(2) If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, Section 22-3-401, 22-3-415, or 22-3-416 applies to a receipt from the trust.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 403 - Receipts from entity -- Business or other activity conducted by fiduciary.

Effective 7/1/2020
22-3-403.
Receipts from entity -- Business or other activity conducted by fiduciary.
(1) This section applies to a business or other activity conducted by a fiduciary if the fiduciary determines that it is in the interests of the beneficiaries to account separately for the business or other activity instead of:
(a) accounting for the business or other activity as part of the fiduciary's general accounting records; or
(b) conducting the business or other activity through an entity described in Subsection 22-3-401(1)(b)(i).
(2) A fiduciary may account separately under this section for the transactions of a business or other activity, whether or not assets of the business or other activity are segregated from other assets held by the fiduciary.
(3) A fiduciary that accounts separately under this section for a business or other activity:
(a) may determine:
(i) the extent to which the net cash receipts of the business or other activity shall be retained for:
(A) working capital;
(B) the acquisition or replacement of fixed assets; and
(C) other reasonably foreseeable needs of the business or other activity; and
(ii) the extent that the remaining net cash receipts are accounted for as principal or income in the fiduciary's general accounting records for the trust;
(b) may make a determination under Subsection (3)(a) separately and differently from the fiduciary's decisions concerning distributions of income or principal; and
(c) shall account for the net amount received from the sale of an asset of the business or other activity, other than a sale in the ordinary course of the business or other activity, as principal in the fiduciary's general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.
(4) A fiduciary may account separately under this section for activities that include:
(a) retail, manufacturing, service, and other traditional business activities;
(b) farming;
(c) raising and selling livestock and other animals;
(d) managing rental properties;
(e) extracting minerals, water, and other natural resources;
(f) growing and cutting timber;
(g) an activity to which Section 22-3-414, 22-3-415, or 22-3-416 applies; and
(h) any other business conducted by the fiduciary.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 404 - Receipts not normally apportioned -- Principal receipts.

Effective 7/1/2020
22-3-404.
Receipts not normally apportioned -- Principal receipts.
A fiduciary shall allocate to principal:
(1) to the extent not allocated to income under this chapter, an asset received from:
(a) an individual during the individual's lifetime;
(b) an estate;
(c) a trust on termination of an income interest; or
(d) a payor under a contract naming the fiduciary as beneficiary;
(2) except as otherwise provided in this part, money or other property received from the sale, exchange, liquidation, or change in form of a principal asset;
(3) an amount recovered from a third party to reimburse the fiduciary because of a disbursement described in Subsection 22-3-502(1) or for another reason to the extent not based on loss of income;
(4) proceeds of property taken by eminent domain, except that proceeds awarded for loss of income in an accounting period are income if a current income beneficiary had a mandatory income interest during the accounting period;
(5) net income received in an accounting period during which there is no beneficiary to which a fiduciary is permitted or required to distribute income; and
(6) other receipts as provided in Part 3, Unitrust.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 405 - Receipts not normally apportioned -- Rental property.

Effective 7/1/2020
22-3-405.
Receipts not normally apportioned -- Rental property.
(1) To the extent a fiduciary does not account for the management of rental property as a business under Section 22-3-403, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease.
(2) An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:
(a) shall be added to principal and held subject to the terms of the lease, except as otherwise provided by law other than this chapter; and
(b) is not allocated to income or available for distribution to a beneficiary until the fiduciary's contractual obligations have been satisfied with respect to that amount.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 406 - Receipts not normally apportioned -- Receipt on obligation to be paid in money.

Effective 7/1/2020
22-3-406.
Receipts not normally apportioned -- Receipt on obligation to be paid in money.
(1) This section does not apply to an obligation to which Section 22-3-409, 22-3-410, 22-3-411, 22-3-412, 22-3-414, 22-3-415, or 22-3-416 applies.
(2) A fiduciary shall allocate to income, without provision for amortization of premium, an amount received as interest on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal.
(3)
(a) A fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary.
(b) A fiduciary shall allocate to income the increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable, at maturity or another future time, in an amount that exceeds the amount in consideration of which it was issued.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 407 - Receipts not normally apportioned -- Insurance policy or contract.

Effective 7/1/2020
22-3-407.
Receipts not normally apportioned -- Insurance policy or contract.
(1) This section does not apply to a contract to which Section 22-3-409 applies.
(2)
(a) Except as otherwise provided in Subsection (3), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset.
(b) The fiduciary shall allocate dividends on an insurance policy:
(i) to income, to the extent premiums on the policy are paid from income; and
(ii) to principal, to the extent premiums on the policy are paid from principal.
(3) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of:
(a) occupancy or other use by a current income beneficiary;
(b) income; or
(c) subject to Section 22-3-403, profits from a business.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 408 - Receipts normally apportioned -- Insubstantial allocation not required.

Effective 7/1/2020
22-3-408.
Receipts normally apportioned -- Insubstantial allocation not required.
(1) If a fiduciary determines that an allocation between income and principal required by Section 22-3-409, 22-3-410, 22-3-411, 22-3-412, or 22-3-415 is insubstantial, the fiduciary may allocate the entire amount to principal, unless Subsection 22-3-203(5) applies to the allocation.
(2) A fiduciary may presume an allocation is insubstantial under Subsection (1) if:
(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%; and
(b) the asset producing the receipt to be allocated has a fair market value less than 10% of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
(3) The power to make a determination under Subsection (1) may be:
(a) exercised by a co-fiduciary in the manner described in Subsection 22-3-203(6); or
(b) released or delegated for a reason described in Subsection 22-3-203(7) and in the manner described in Subsection 22-3-203(8).
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 410 - Receipts normally apportioned -- Liquidating asset.

Effective 7/1/2020
22-3-410.
Receipts normally apportioned -- Liquidating asset.
(1) In this section:
(a) "Liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a limited time.
(b) "Liquidating asset" 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.
(2) This section does not apply to a receipt subject to Section 22-3-401, 22-3-409, 22-3-411, 22-3-412, 22-3-414, 22-3-415, 22-3-416, or 22-3-503.
(3) A fiduciary shall allocate:
(a) to income:
(i) a receipt produced by a liquidating asset, to the extent the receipt does not exceed 3% of the value of the asset; or
(ii) if the fiduciary cannot determine the value of the asset, 10% of the receipt; and
(b) to principal, the balance of the receipt.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 411 - Receipts normally apportioned -- Minerals, water, and other natural resources.

Effective 7/1/2020
22-3-411.
Receipts normally apportioned -- Minerals, water, and other natural resources.
(1) To the extent that a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under Section 22-3-403, the fiduciary shall allocate the receipt:
(a) to income, to the extent received:
(i) as delay rental or annual rent on a lease;
(ii) as a factor for interest or the equivalent of interest under an agreement creating a production payment; or
(iii) on account of an interest in renewable water;
(b) to principal, if received from a production payment, to the extent that Subsection (1)(a)(ii) does not apply; or
(c) between income and principal equitably, to the extent received:
(i) on account of an interest in nonrenewable water;
(ii) as a royalty, shut-in-well payment, take-or-pay payment, or bonus; or
(iii) from a working interest or any other interest not provided for in Subsection (1)(a) or (b) or Subsection (1)(c)(i) or (ii).
(2) This section applies to an interest owned or held by a fiduciary regardless of whether a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.
(3) An allocation of a receipt under Subsection (1)(c) is presumed to be equitable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code as a deduction for depletion of the interest.
(4)
(a) If a fiduciary owns or holds an interest in minerals, water, or other natural resources before July 1, 2020, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before July 1, 2020.
(b) If the fiduciary acquires an interest in minerals, water, or other natural resources on or after July 1, 2020, the fiduciary shall allocate receipts from the interest as provided in this section.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 412 - Receipts normally apportioned -- Timber.

Effective 7/1/2020
22-3-412.
Receipts normally apportioned -- Timber.
(1) To the extent that a fiduciary does not account for receipts from the sale of timber and related products as a business under Section 22-3-403, the fiduciary shall allocate the net receipts:
(a) to income, to the extent that the amount of timber cut from the land does not exceed the rate of growth of the timber;
(b) to principal, to the extent that the amount of timber cut from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(c) between income and principal if the net receipts are from the lease of land used for growing and cutting timber or from a contract to cut timber from land, by determining the amount of timber cut from the land under the lease or contract and applying the rules in Subsections (1)(a) and (b); or
(d) to principal, to the extent that advance payments, bonuses, and other payments are not allocated under Subsection (1)(a), (b), or (c).
(2) In determining net receipts to be allocated under Subsection (1), a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
(3) This section applies to land owned or held by a fiduciary regardless of whether a settlor was cutting timber from the land before the fiduciary owned or held the property.
(4)
(a) If a fiduciary owns or holds an interest in land used for growing and cutting timber before July 1, 2020, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the fiduciary before July 1, 2020.
(b) If the fiduciary acquires an interest in land used for growing and cutting timber on or after July 1, 2020, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 413 - Receipts normally apportioned -- Marital deduction property not productive of income.

Effective 7/1/2020
22-3-413.
Receipts normally apportioned -- Marital deduction property not productive of income.
(1) If a trust received property for which a gift or estate tax marital deduction was allowed and the settlor's spouse holds a mandatory income interest in the trust, the spouse may require the trustee, to the extent the trust assets otherwise do not provide the spouse with sufficient income from or use of the trust assets to qualify for the deduction, to:
(a) make property productive of income;
(b) convert property to property productive of income within a reasonable time; or
(c) exercise the power to adjust under Section 22-3-203.
(2) The trustee may decide which action or combination of actions in Subsection (1) to take.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 414 - Receipts normally apportioned -- Derivative or option.

Effective 7/1/2020
22-3-414.
Receipts normally apportioned -- Derivative or option.
(1) In this section:
(a) "Derivative" means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, for which the value, rights, and obligations are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event.
(b) "Derivative" includes stocks, fixed income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit-default events.
(2) To the extent that a fiduciary does not account for a transaction in derivatives as a business under Section 22-3-403, the fiduciary shall allocate:
(a) 10% of receipts from the transaction and 10% of disbursements made in connection with the transaction to income; and
(b) the balance to principal.
(3) Subsection (4) applies if:
(a) a fiduciary:
(i) grants an option to buy property from a trust, regardless of whether the trust owns the property when the option is granted;
(ii) grants an option that permits another person to sell property to the trust; or
(iii) acquires an option to buy property for the trust or an option to sell an asset owned by the trust; and
(b) the fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.
(4) If this subsection applies, the fiduciary shall allocate 10% to income and the balance to principal of the following amounts:
(a) an amount received for granting the option;
(b) an amount paid to acquire the option; and
(c) gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 415 - Receipts normally apportioned -- Asset-backed security.

Effective 7/1/2020
22-3-415.
Receipts normally apportioned -- Asset-backed security.
(1) Except as otherwise provided in Subsection (2), a fiduciary shall allocate:
(a) to income, a receipt from or related to an asset-backed security, to the extent that the payor identifies the payment as being from interest or other current return; and
(b) to principal, the balance of the receipt.
(2) If a fiduciary receives one or more payments in exchange for part or all of the fiduciary's interest in an asset-backed security, including a liquidation or redemption of the fiduciary's interest in the security, the fiduciary shall allocate:
(a) to income, 10% of receipts from the transaction and 10% of disbursements made in connection with the transaction; and
(b) to principal, the balance of the receipts and disbursements.
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 4 - Allocation of Receipts › Section 416 - Receipts normally apportioned -- Other financial instrument or arrangement.

Effective 7/1/2020
22-3-416.
Receipts normally apportioned -- Other financial instrument or arrangement.
(1) A fiduciary shall allocate receipts from or related to a financial instrument or arrangement not otherwise addressed by this chapter.
(2) The allocation must be consistent with Sections 22-3-414 and 22-3-415.
Enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 5 - Allocation of Disbursements › Section 501 - Disbursement from income.

Effective 7/1/2020
22-3-501.
Disbursement from income.
Subject to Section 22-3-504, and except as otherwise provided in Subsection 22-3-601(3)(b) or (c), a fiduciary shall disburse from income:
(1) one-half of:
(a) the regular compensation of the fiduciary and any person providing investment advisory, custodial, or other services to the fiduciary, to the extent income is sufficient; and
(b) an expense for an accounting, judicial or nonjudicial proceeding, or other matter that involves both income and successive interests, to the extent income is sufficient;
(2) the balance of the disbursements described in Subsection (1), to the extent a fiduciary that is an independent person determines that making those disbursements from income would be in the interests of the beneficiaries;
(3) another ordinary expense incurred in connection with administration, management, or preservation of property and distribution of income, including interest, an ordinary repair, regularly recurring tax assessed against principal, and an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily an income interest, to the extent income is sufficient; and
(4) a premium on insurance covering loss of a principal asset or income from or use of the asset.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 5 - Allocation of Disbursements › Section 502 - Disbursement from principal.

Effective 7/1/2020
22-3-502.
Disbursement from principal.
(1) Subject to Section 22-3-505, and except as otherwise provided in Subsection 22-3-601(3)(b) or (c), a fiduciary shall disburse from principal:
(a) the balance of the disbursements described in Subsections 22-3-501(1) and (3), after application of Subsection 22-3-501(2);
(b) the fiduciary's compensation calculated on principal as a fee for acceptance, distribution, or termination;
(c) a payment of an expense to prepare for or execute a sale or other disposition of property;
(d) a payment on the principal of a trust debt;
(e) a payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property;
(f) a payment of a premium for insurance, including title insurance, not described in Subsection 22-3-501(4), of which the fiduciary is the owner and beneficiary;
(g) a payment of an estate or inheritance tax or other tax imposed because of the death of a decedent, including penalties, apportioned to the trust; and
(h) a payment:
(i) related to environmental matters, including:
(A) reclamation;
(B) assessing environmental conditions;
(C) remedying and removing environmental contamination;
(D) monitoring remedial activities and the release of substances;
(E) preventing future releases of substances;
(F) collecting amounts from persons liable or potentially liable for the costs of activities described in Subsections (1)(h)(i)(A) through (E);
(G) penalties imposed under environmental laws or regulations;
(H) other actions to comply with environmental laws or regulations;
(I) statutory or common law claims by third parties; and
(J) defending claims based on environmental matters; and
(ii) for a premium for insurance for matters described in Subsection (1)(h)(i).
(2) If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 5 - Allocation of Disbursements › Section 503 - Transfer from income to principal for depreciation.

Effective 7/1/2020
22-3-503.
Transfer from income to principal for depreciation.
(1) In this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.
(2) A fiduciary 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:
(a) of the part of real property used or available for use by a beneficiary as a residence;
(b) of tangible personal property held or made available for the personal use or enjoyment of a beneficiary; or
(c) under this section, to the extent the fiduciary accounts:
(i) under Section 22-3-410 for the asset; or
(ii) under Section 22-3-403 for the business or other activity in which the asset is used.
(3) An amount transferred to principal under this section need not be separately held.
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 5 - Allocation of Disbursements › Section 504 - Reimbursement of income from principal.

Effective 7/1/2020
22-3-504.
Reimbursement of income from principal.
(1) If a fiduciary makes or expects to make an income disbursement described in Subsection (2), the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.
(2) To the extent the fiduciary has not been and does not expect to be reimbursed by a third party, income disbursements to which Subsection (1) applies include:
(a) an amount chargeable to principal but paid from income because principal is illiquid;
(b) a disbursement made to prepare property for sale, including improvements and commissions; and
(c) a disbursement described in Subsection 22-3-502(1).
(3) If an asset whose ownership gives rise to an income disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under Subsection (1).
Repealed and Re-enacted by Chapter 495, 2019 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 5 - Allocation of Disbursements › Section 505 - Reimbursement of principal from income.

Effective 7/1/2020
22-3-505.
Reimbursement of principal from income.
(1) If a fiduciary makes or expects to make a principal disbursement described in Subsection (2), the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.
(2) To the extent that a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which Subsection (1) applies include:
(a) an amount chargeable to income but paid from principal because income is not sufficient;
(b) the cost of an improvement to principal, regardless of whether the improvement is a change to an existing asset or the construction of a new asset, including a special assessment;
(c) a disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;
(d) a periodic payment 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 payment; and
(e) a disbursement described in Subsection 22-3-502(1).
(3) If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under Subsection (1).
Amended by Chapter 348, 2020 General Session
2023 Utah Code › Title 22 - Fiduciaries and Trusts › Chapter 3 - Uniform Fiduciary Income and Principal Act › Part 5 - Allocation of Disbursements › Section 506 - Income taxes.

Effective 7/1/2020
22-3-506.
Income taxes.
(1) A tax required to be paid by a fiduciary that is based on receipts allocated to income shall be paid from income.
(2) A tax required to be paid by a fiduciary that is based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing authority.
(3) Subject to Subsection (4) and Sections 22-3-504, 22-3-505, and 22-3-507, a tax required to be paid by a fiduciary on a share of an entity's taxable income in an accounting period shall be paid from:
(a) income and principal proportionately to the allocation between income and principal of receipts from the entity in the period; and
(b) principal, to the extent that the tax exceeds the receipts from the entity in the accounting period.
(4) After applying Subsections (1) through (3), a fiduciary shall adjust income or principal receipts, to the extent that the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.
Amended by Chapter 348, 2020 General Session