reglab/statecodes huggingface dataset:
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1045. Applicable value

A. A unitrust policy must provide the method for determining the fair market value of an asset for the purpose of determining the unitrust amount, including:
1. The frequency of valuing the asset, which need not require a valuation in every period; and
2. The date for valuing the asset in each period in which the asset is valued.
B. Except as otherwise provided in subdivision B 2 of § 64.2-1047, 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:
1. Obtaining an appraisal of an asset for which fair market value is not readily available;
2. Exclusion of specific assets or groups or types of assets;
3. Other exceptions or modifications of the treatment of specific assets or groups or types of assets;
4. Identification and treatment of cash or property held for distribution;
5. Use of:
a. An average of fair market values over a stated number of preceding periods; or
b. Another mathematical blend of fair market values over a stated number of preceding periods;
6. A limit on how much the applicable value of all assets, groups of assets, or individual assets may increase over:
a. The corresponding applicable value for the preceding period; or
b. A mathematical blend of applicable values over a stated number of preceding periods;
7. A limit on how much the applicable value of all assets, groups of assets, or individual assets may decrease below:
a. The corresponding applicable value for the preceding period; or
b. A mathematical blend of applicable values over a stated number of preceding periods;
8. The treatment of accrued income and other features of an asset that affect value; and
9. Determining the liabilities of the trust, including treatment of liabilities to conform with the treatment of assets under subdivisions 1 through 8.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1046. Period

A. A unitrust policy must provide the period used under §§ 64.2-1044 and 64.2-1045. Except as otherwise provided in subdivision B 3 of § 64.2-1047, the period may be:
1. A calendar year;
2. A 12-month period other than a calendar year;
3. A calendar quarter;
4. A three-month period other than a calendar quarter; or
5. Another period.
B. Except as otherwise provided in subsection B of § 64.2-1047, a unitrust policy may provide standards for:
1. Using fewer preceding periods under subdivision A 2 b, B 3, or B 4 of § 64.2-1044 if:
a. The trust was not in existence in a preceding period; or
b. Market indices or other published data are not available for a preceding period;
2. Using fewer preceding periods under subdivision B 5 a, B 5 b, B 6 b, or B 7 b of § 64.2-1045 if:
a. The trust was not in existence in a preceding period; or
b. Fair market values are not available for a preceding period; and
3. 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.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1047. Special tax benefits; other rules

A. A unitrust policy may:
1. Provide methods and standards for:
a. Determining the timing of distributions;
b. Making distributions in cash or in kind or partly in cash and partly in kind; or
c. Correcting an underpayment or overpayment to a beneficiary based on the unitrust amount if there is an error in calculating the unitrust amount;
2. 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
3. Provide other standards and rules the fiduciary determines serve the interests of the beneficiaries.
B. If a trust qualifies for a special tax benefit or a fiduciary is not an independent person:
1. The unitrust rate established under § 64.2-1044 may not be less than three percent or more than five percent;
2. The only provisions of § 64.2-1045 that apply are subsection A and subdivisions B 1, B 4, B 5 a, and B 9 of § 64.2-1045;
3. The only period that may be used under § 64.2-1046 is a calendar year under subdivision A 1 of § 64.2-1046; and
4. The only other provisions of § 64.2-1046 that apply are subdivisions B 2 a and B 3 of § 64.2-1046.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1049. Distribution from trust or estate

A fiduciary shall allocate to income an amount received as a distribution of income, including a unitrust distribution under Article 3 (§ 64.2-1039 et seq.), 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 shall allocate to principal an amount received as a distribution of principal from the trust or estate. If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, § 64.2-1048, 64.2-1062, or 64.2-1063 applies to a receipt from the trust.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1050. Business or other activity conducted by fiduciary

A. 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:
1. Accounting for the business or other activity as part of the fiduciary's general accounting records; or
2. Conducting the business or other activity through an entity defined in subsection A of § 64.2-1048.
B. 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.
C. A fiduciary that accounts separately under this section for a business or other activity:
1. May determine:
a. The extent to which the net cash receipts of the business or other activity must be retained for:
(1) Working capital;
(2) The acquisition or replacement of fixed assets; and
(3) Other reasonably foreseeable needs of the business or other activity; and
b. The extent to which the remaining net cash receipts are accounted for as principal or income in the fiduciary's general accounting records for the trust;
2. May make a determination under subdivision 1 separately and differently from the fiduciary's decisions concerning distributions of income or principal; and
3. 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.
D. Activities for which a fiduciary may account separately under this section include:
1. Retail, manufacturing, service, and other traditional business activities;
2. Farming;
3. Raising and selling livestock and other animals;
4. Managing rental properties;
5. Extracting minerals, water, and other natural resources;
6. Growing and cutting timber;
7. An activity to which § 64.2-1061, 64.2-1062, or 64.2-1063 applies; and
8. Any other business conducted by the fiduciary.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1051. Principal receipts

A fiduciary shall allocate to principal:
1. To the extent not allocated 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 article, 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 A of § 64.2-1065 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 period;
5. Net income received in an accounting period during which there is no beneficiary to which a fiduciary may or must distribute income; and
6. Other receipts as provided in Article 6 (§ 64.2-1055 et seq.).
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1052. Rental property

To the extent a fiduciary does not account for the management of rental property as a business under § 64.2-1050, 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. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:
1. 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
2. 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.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1053. Receipt on obligation to be paid in money

A. This section does not apply to an obligation to which § 64.2-1056, 64.2-1057, 64.2-1058, 64.2-1059, 64.2-1061, 64.2-1062, or 64.2-1063 applies.
B. 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.
C. 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. 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.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1054. Insurance policy or contract

A. This section does not apply to a contract to which § 64.2-1056 applies.
B. Except as otherwise provided in subsection C, 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. The fiduciary shall allocate dividends on an insurance policy to income to the extent premiums on the policy are paid from income and to principal to the extent premiums on the policy are paid from principal.
C. A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of:
1. Occupancy or other use by a current income beneficiary;
2. Income; or
3. Subject to § 64.2-1050, profits from a business.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1055. Insubstantial allocation not required

A. If a fiduciary determines that an allocation between income and principal required by § 64.2-1056, 64.2-1057, 64.2-1058, 64.2-1059, or 64.2-1062 is insubstantial, the fiduciary may allocate the entire amount to principal, unless subsection E of § 64.2-1038 applies to the allocation.
B. A fiduciary may presume an allocation is insubstantial under subsection A if:
1. The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; and
2. The asset producing the receipt to be allocated has a fair market value less than 10 percent of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
C. The power to make a determination under subsection A may be:
1. Exercised by a co-fiduciary in the manner described in subsection F of § 64.2-1038; or
2. Released or delegated for a reason described in subsection G of § 64.2-1038 and in the manner described in subsection H of § 64.2-1038.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1057. 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 limited time. "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.
B. This section does not apply to a receipt subject to § 64.2-1048, 64.2-1056, 64.2-1058, 64.2-1059, 64.2-1061, 64.2-1062, 64.2-1063, or 64.2-1066.
C. A fiduciary shall allocate:
1. To income:
a. A receipt produced by a liquidating asset, to the extent the receipt does not exceed four percent of the value of the asset; or
b. If the fiduciary cannot determine the value of the asset, 10 percent of the receipt; and
2. To principal, the balance of the receipt.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1058. Minerals, water, and other natural resources

A. To the extent a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under § 64.2-1050, the fiduciary shall allocate the receipt:
1. To income, to the extent received:
a. As delay rental or annual rent on a lease;
b. As a factor for interest or the equivalent of interest under an agreement creating a production payment; or
c. On account of an interest in renewable water;
2. To principal, if received from a production payment, to the extent subdivision 1 b does not apply; or
3. Between income and principal equitably, to the extent received:
a. On account of an interest in nonrenewable water;
b. As a royalty, shut-in-well payment, take-or-pay payment, or bonus; or
c. From a working interest or any other interest not provided for in subdivision 1 or 2 or subdivision a or b.
B. This section applies to an interest owned or held by a fiduciary whether or not a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.
C. An allocation of a receipt under subdivision A 3 is presumed to be equitable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code of 1986, as amended, as a deduction for depletion of the interest.
D. If a fiduciary owns or holds an interest in minerals, water, or other natural resources before July 1, 2022, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before July 1, 2022. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after July 1, 2022, the fiduciary shall allocate receipts from the interest as provided in this section.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1059. Timber

A. To the extent a fiduciary does not account for receipts from the sale of timber and related products as a business under § 64.2-1050, the fiduciary shall allocate the net receipts:
1. To income, to the extent the amount of timber cut from the land does not exceed the rate of growth of the timber;
2. To principal, to the extent 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;
3. 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 subdivisions 1 and 2; or
4. To principal, to the extent advance payments, bonuses, and other payments are not allocated under subdivisions 1, 2, or 3.
B. In determining net receipts to be allocated under subsection A, a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
C. This section applies to land owned or held by a fiduciary whether or not a settlor was cutting timber from the land before the fiduciary owned or held the property.
D. If a fiduciary owns or holds an interest in land used for growing and cutting timber before July 1, 2022, 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, 2022. If the fiduciary acquires an interest in land used for growing and cutting timber on or after July 1, 2022, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1060. Marital deduction property not productive of income

A. 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:
1. Make property productive of income;
2. Convert property to property productive of income within a reasonable time; or
3. Exercise the power to adjust under § 64.2-1038.
B. The trustee may decide which action or combination of actions in subsection A to take.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1061. Derivative or option

A. As used in this section, "derivative" means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which 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. "Derivative" includes stocks, fixed income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit-default events.
B. To the extent a fiduciary does not account for a transaction in derivatives as a business under § 64.2-1050, the fiduciary shall allocate 10 percent of receipts from the transaction and 10 percent of disbursements made in connection with the transaction to income and the balance to principal.
C. Subsection D applies if:
1. A fiduciary:
a. Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted;
b. Grants an option that permits another person to sell property to the trust; or
c. Acquires an option to buy property for the trust or an option to sell an asset owned by the trust; and
2. The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.
D. If this subsection applies, the fiduciary shall allocate 10 percent to income and the balance to principal of the following amounts:
1. An amount received for granting the option;
2. An amount paid to acquire the option; and
3. Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1062. Asset-backed security

A. Except as otherwise provided in subsection B, a fiduciary shall allocate to income a receipt from or related to an asset-backed security, to the extent the payor identifies the payment as being from interest or other current return, and to principal the balance of the receipt.
B. 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 to income 10 percent of receipts from the transaction and 10 percent of disbursements made in connection with the transaction and to principal the balance of the receipts and disbursements.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1063. Other financial instrument or arrangement

A fiduciary shall allocate receipts from or related to a financial instrument or arrangement not otherwise addressed by this chapter. The allocation must be consistent with §§ 64.2-1061 and 64.2-1062.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1064. Disbursement from income

Subject to § 64.2-1067, and except as otherwise provided in subdivision C 2 or 3 of § 64.2-1071, 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 subdivision 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.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1065. Disbursement from principal

A. Subject to § 64.2-1068, and except as otherwise provided in subdivision C 2 of § 64.2-1071, a fiduciary shall disburse from principal:
1. The balance of the disbursements described in subdivisions 1 and 3 of § 64.2-1064, after application of subdivision 2 of § 64.2-1064;
2. The fiduciary's compensation calculated on principal as a fee for acceptance, distribution, or termination;
3. A payment of an expense to prepare for or execute a sale or other disposition of property;
4. A payment on the principal of a trust debt;
5. 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;
6. A payment of a premium for insurance, including title insurance, not described in subdivision 4 of § 64.2-1064, of which the fiduciary is the owner and beneficiary;
7. 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
8. A payment:
a. Related to environmental matters, including:
(1) Reclamation;
(2) Assessing environmental conditions;
(3) Remedying and removing environmental contamination;
(4) Monitoring remedial activities and the release of substances;
(5) Preventing future releases of substances;
(6) Collecting amounts from persons liable or potentially liable for the costs of activities described in subdivisions (1) through (5);
(7) Penalties imposed under environmental laws or regulations;
(8) Other actions to comply with environmental laws or regulations;
(9) Statutory or common law claims by third parties; and
(10) Defending claims based on environmental matters; and
b. For a premium for insurance for matters described in subdivision a.
B. 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.
C. Notwithstanding any other provision of law and unless the terms of the trust provide to the contrary, a trustee may pay from the principal of the trust from time to time (i) the federal or state income taxes, or both, imposed upon the settlor on income of the trust that is not distributed to the settlor or (ii) such amounts that are required to reimburse the settlor for any federal or state income taxes, or both, imposed on the settlor on income of the trust that is not distributed to the settlor. The trustee shall not have the power to make payments pursuant to this subsection with respect to any trust where a charitable income, estate, or gift tax deduction has been allowed, in whole or in part, for the contributions to such trust if the exercise of such power would limit or reduce the amount of such deduction.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1066. Transfer 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 tangible asset having a useful life of more than one year.
B. 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:
1. Of the part of real property used or available for use by a beneficiary as a residence;
2. Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary; or
3. Under this section, to the extent the fiduciary accounts:
a. Under § 64.2-1057 for the asset; or
b. Under § 64.2-1050 for the business or other activity in which the asset is used.
C. An amount transferred to principal under this section need not be separately held.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1067. Reimbursement of income from principal

A. If a fiduciary makes or expects to make an income disbursement described in subsection B, the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.
B. To the extent the fiduciary has not been and does not expect to be reimbursed by a third party, income disbursements to which subsection A applies include:
1. An amount chargeable to principal but paid from income because principal is illiquid;
2. A disbursement made to prepare property for sale, including improvements and commissions; and
3. A disbursement described in subsection A of § 64.2-1065.
C. 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 A.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1068. Reimbursement of principal from income

A. If a fiduciary makes or expects to make a principal disbursement described in subsection B, 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.
B. To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection A applies include:
1. An amount chargeable to income but paid from principal because income is not sufficient;
2. The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;
3. A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;
4. A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment; and
5. A disbursement described in subsection A of § 64.2-1065.
C. 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 A.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1069. Income taxes

A. A tax required to be paid by a fiduciary that is based on receipts allocated to income must be paid from income.
B. A tax required to be paid by a fiduciary that is based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
C. Subject to subsection D and §§ 64.2-1067, 64.2-1068, and 64.2-1070, a tax required to be paid by a fiduciary on a share of an entity's taxable income in an accounting period must be paid from:
1. Income and principal proportionately to the allocation between income and principal of receipts from the entity in the period; and
2. Principal, to the extent the tax exceeds the receipts from the entity in the period.
D. After applying subsections A, B, and C, a fiduciary shall adjust income or principal receipts, to the extent the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1070. Adjustment between income and principal because of taxes

A. A fiduciary may make an adjustment between income and principal to offset the shifting of economic interests or tax benefits between current income beneficiaries and successor beneficiaries that arises from:
1. An election or decision the fiduciary makes regarding a tax matter, other than a decision to claim an income tax deduction to which subsection B applies;
2. An income tax or other tax imposed on the fiduciary or a beneficiary as a result of a transaction involving the fiduciary or a distribution by the fiduciary; or
3. Ownership by the fiduciary of an interest in an entity a part of whose taxable income, whether or not distributed, is includable in the taxable income of the fiduciary or a beneficiary.
B. If the amount of an estate tax marital or charitable deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes and, as a result, estate taxes paid from principal are increased and income taxes paid by the fiduciary or a beneficiary are decreased, the fiduciary shall charge each beneficiary that benefits from the decrease in income tax to reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax, to the extent the principal used to pay the increase would have qualified for a marital or charitable deduction but for the payment. The share of the reimbursement for each fiduciary or beneficiary whose income taxes are reduced must be the same as its share of the total decrease in income tax.
C. A fiduciary that charges a beneficiary under subsection B may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of methods.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1072. Distribution to successor beneficiary

A. Except to the extent Article 3 (§ 64.2-1039 et seq.) applies for a beneficiary that is a trust, each beneficiary described in subsection F of § 64.2-1071 is entitled to receive a share of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to which this section applies, each beneficiary, including a beneficiary that does not receive part of the distribution, is entitled, as of each distribution date, to a share of the net income the fiduciary received after the decedent's death, an income interest's other terminating event, or the preceding distribution by the fiduciary.
B. In determining a beneficiary's share of net income under subsection A, the following rules apply:
1. The beneficiary is entitled to receive a share of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date.
2. The beneficiary's fractional interest under subdivision 1 must be calculated:
a. On the aggregate value of the assets as of the distribution date without reducing the value by any unpaid principal obligation; and
b. Without regard to:
(1) Property specifically given to a beneficiary under the decedent's will or the terms of the trust; and
(2) Property required to pay pecuniary amounts not in trust.
3. The distribution date under subdivision 1 may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which the assets are distributed.
C. To the extent a fiduciary does not distribute under this section all of the collected but undistributed net income to each beneficiary as of a distribution date, the fiduciary shall maintain records showing the interest of each beneficiary in the net income.
D. If this section applies to income from an asset, a fiduciary may apply the rules in this section to net gain or loss realized from the disposition of the asset after the decedent's death, an income interest's terminating event, or the preceding distribution by the fiduciary.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1073. When right to income begins and ends

A. An income beneficiary is entitled to net income in accordance with the terms of the trust from the date an income interest begins. The income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to:
1. The trust for the current income beneficiary; or
2. A successive interest for a successor beneficiary.
B. An asset becomes subject to a trust under subdivision A 1:
1. For an asset that is transferred to the trust during the settlor's life, on the date the asset is transferred;
2. For an asset that becomes subject to the trust because of a decedent's death, on the date of the decedent's death, even if there is an intervening period of administration of the decedent's estate; or
3. For an asset that is transferred to a fiduciary by a third party because of a decedent's death, on the date of the decedent's death.
C. An asset becomes subject to a successive interest under subdivision A 2 on the day after the preceding income interest ends, as determined under subsection D, even if there is an intervening period of administration to wind up the preceding income interest.
D. An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to which a fiduciary may or must distribute income.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1074. Apportionment of receipts and disbursements when decedent dies or income interest begins

A. A fiduciary shall allocate an income receipt or disbursement, other than a receipt to which subsection B of § 64.2-1071 applies, to principal if its due date occurs before the date on which:
1. For an estate, the decedent died; or
2. For a trust or successive interest, an income interest begins.
B. If the due date of a periodic income receipt or disbursement occurs on or after the date on which a decedent died or an income interest begins, a fiduciary shall allocate the receipt or disbursement to income.
C. If an income receipt or disbursement is not periodic or has no due date, a fiduciary shall treat the receipt or disbursement under this section as accruing from day to day. The fiduciary shall allocate to principal the portion of the receipt or disbursement accruing before the date on which a decedent died or an income interest begins and to income the balance.
D. A receipt or disbursement is periodic under subsections B and C if:
1. The receipt or disbursement must be paid at regular intervals under an obligation to make payments; or
2. The payor customarily makes payments at regular intervals.
E. An item of income or obligation is due under this section on the date the payor is required to make a payment. If a payment date is not stated, there is no due date.
F. Distributions to shareholders or other owners from an entity to which § 64.2-1048 applies are due:
1. On the date fixed by or on behalf of the entity for determining the persons entitled to receive the distribution;
2. If no date is fixed, on the date of the decision by or on behalf of the entity to make the distribution; or
3. If no date is fixed and the fiduciary does not know the date of the decision by or on behalf of the entity to make the distribution, on the date the fiduciary learns of the decision.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1075. Apportionment when income interest ends

A. As used in this section, "undistributed income" means net income received on or before the date on which an income interest ends. "Undistributed income" does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
B. Except as otherwise provided in subsection C, when a mandatory income interest of a beneficiary ends, the fiduciary shall pay the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust to the beneficiary or, if the beneficiary does not survive the date the interest ends, to the beneficiary's estate.
C. If a beneficiary has an unqualified power to withdraw more than five percent of the value of a trust immediately before an income interest ends:
1. The fiduciary shall allocate to principal the undistributed income from the portion of the trust which may be withdrawn; and
2. Subsection B applies only to the balance of the undistributed income.
D. When a fiduciary's obligation to pay a fixed annuity or a fixed fraction of the value of assets ends, the fiduciary shall prorate the final payment as required to preserve an income tax, gift tax, estate tax, or other tax benefit.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1076. Uniformity of application and construction

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1077. Relation to Electronic Signatures in Global and National Commerce Act

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq., but does not modify, limit, or supersede § 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices described in § 103(b) of that act, 15 U.S.C. § 7003(b).
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 10.1 - Uniform Fiduciary Income and Principal Act › § 64.2-1078. Application to trust or estate

This chapter applies to a trust or estate existing or created on or after July 1, 2022, except as otherwise expressly provided in the terms of the trust or this chapter.
2022, c. 354.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 11 - Uniform Prudent Management of Institutional Funds Act › § 64.2-1100. Definitions

In this chapter:
"Charitable purpose" means the relief of poverty, the advancement of education or religion, the promotion of health, the promotion of a governmental or municipal purpose, or any other purpose the achievement of which is beneficial to the community.
"Endowment fund" means an institutional fund or part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. The term does not include assets that an institution designates as an endowment fund for its own use.
"Gift instrument" means a record or records, including an institutional solicitation, under which property is granted to, transferred to, or held by an institution as an institutional fund.
"Institution" means:
1. A person, other than an individual, organized and operated exclusively for charitable purposes;
2. A government or governmental subdivision, agency, or instrumentality, to the extent that it holds funds exclusively for a charitable purpose; or
3. A trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated.
"Institutional fund" means a fund held by an institution exclusively for charitable purposes. The term does not include:
1. Program-related assets;
2. A fund held for an institution by a trustee that is not an institution, unless the fund is held by the trustee as a component trust of a community trust or foundation; or
3. A fund in which a beneficiary that is not an institution has an interest, other than an interest that could arise upon violation or failure of the purposes of the fund.
"Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
"Program-related asset" means an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for investment.
"Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
1973, c. 167, § 55-268.1; 1995, c. 199; 1997, c. 219; 2008, c. 184, § 55-268.12; 2012, c. 614.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 11 - Uniform Prudent Management of Institutional Funds Act › § 64.2-1102. Appropriation for expenditure or accumulation of endowment fund; rules of construction

A. Subject to the intent of a donor expressed in the gift instrument, an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors:
1. The duration and preservation of the endowment fund;
2. The purposes of the institution and the endowment fund;
3. General economic conditions;
4. The possible effect of inflation or deflation;
5. The expected total return from income and the appreciation of investments;
6. Other resources of the institution; and
7. The investment policy of the institution.
B. To limit the authority to appropriate for expenditure or accumulate under subsection A, a gift instrument shall specifically state the limitation.
C. Terms in a gift instrument designating a gift as an endowment, or a direction or authorization in the gift instrument to use only "income," "interest," "dividends," or "rents, issues, or profits," or "to preserve the principal intact," or words of similar import:
1. Create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purposes of the fund; and
2. Do not otherwise limit the authority to appropriate for expenditure or accumulate under subsection A.
1973, c. 167, §§ 55-268.2, 55-268.3; 2008, c. 184, § 55-268.14; 2012, c. 614.
2023 Code of Virginia › Title 64.2 - Wills, Trusts, and Fiduciaries › Chapter 11 - Uniform Prudent Management of Institutional Funds Act › § 64.2-1103. Delegation of management and investment functions

A. Subject to any specific limitation set forth in a gift instrument or in law other than this chapter, an institution may delegate to an external agent the management and investment of an institutional fund to the extent that an institution could prudently delegate under the circumstances. An institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in:
1. Selecting an agent;
2. Establishing the scope and terms of the delegation, consistent with the purposes of the institution and the institutional fund; 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 designated function, an agent owes a duty to the institution to exercise reasonable care to comply with the scope and terms of the delegation.
C. An institution that complies with subsection A is not liable for the decisions or actions of an agent to which the function was delegated.
D. By accepting delegation of a management or investment function from an institution that is subject to the laws of the Commonwealth, an agent submits to the jurisdiction of the courts of the Commonwealth in all proceedings arising from or related to the delegation or the performance of the delegated function.
E. An institution may delegate management and investment functions to its committees, officers, or employees as authorized by law of the Commonwealth other than this chapter.
1973, c. 167, § 55-268.5; 2008, c. 184, § 55-268.15; 2012, c. 614.