Cal. Prob. Code § 16335
Unitrust
Redline — January 1, 2011 → current.View current text →
Current — January 1, 2023
As of January 1, 2011
(a) In allocating receipts and disbursements to or between principal and income, and with respect to any other matter within the scope of this chapter, a fiduciary:
(1) Shall administer a trust or decedent’s estate in accordance with the trust or the will, even if there is a different provision in this chapter.
(2) May administer a trust or decedent’s estate by the exercise of a discretionary power of administration given to the fiduciary by the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this chapter, and no inference that the fiduciary has improperly exercised the discretion arises from the fact that the fiduciary has made an allocation contrary to a provision of this chapter.
(3) Shall administer a trust or decedent’s estate in accordance with this chapter if the trust or the will does not contain a different provision or does not give the fiduciary a discretionary power of administration.
(4) Shall add a receipt or charge a disbursement to principal to the extent that the trust or the will and this chapter do not provide a rule for allocating the receipt or disbursement to or between principal and income.
(b) In exercising a discretionary power of administration regarding a matter within the scope of this chapter, whether granted by a trust, a will, or this chapter, including the trustee’s power to adjust under subdivision (a) of Section 16336, and the trustee’s power to convert into a unitrust or reconvert or change the unitrust payout percentage pursuant to Sections 16336.4 to 16336.6, inclusive, the fiduciary shall administer the trust or decedent’s estate impartially, except to the extent that the trust or the will expresses an intention that the fiduciary shall or may favor one or more of the beneficiaries. The exercise of discretion in accordance with this chapter is presumed to be fair and reasonable to all beneficiaries.
(a) A unitrust rate may not be less than 3 percent, or greater than 5 percent, unless the unitrust plan has been approved by court order. If the unitrust plan has been approved by court order, any unitrust rate may be used. Except as otherwise provided in this subdivision and in paragraph (1) of subdivision (b) of Section 16338, a unitrust rate may be either of the following:
(1) A fixed unitrust interest rate.
(2) A unitrust rate that is determined for each period, using either of the following:
(A) A market index or other published data.
(B) A mathematical blend of market indices or other published data over a stated number of preceding periods.
(b) Except as otherwise provided in subdivision (a) of Section 16335 and paragraph (1) of subdivision (b) of Section 16338, a unitrust plan may provide any of the following:
(1) A limit on how high the unitrust rate determined under paragraph (2) of subdivision (a) may rise.
(2) A limit on how low the unitrust rate determined under paragraph (2) of subdivision (a) may fall.
(3) A limit on how much the unitrust rate determined under paragraph (2) of subdivision (a) may increase over the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods.
(4) A limit on how much the unitrust rate determined under paragraph (2) of subdivision (a) may decrease below the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods.
(5) A mathematical blend of any of the unitrust rates determined under paragraph (2) of subdivision (a) and paragraphs (1) to (4), inclusive, of this subdivision.
Official source: California Legislative Information. Reproduced from public-domain California statutes; confirm against the official source for the current text. Not legal advice.