Cal. Prob. Code § 16347
Allocation of Receipts
Redline — January 1, 2011 → current.View current text →
Current — January 1, 2023
As of January 1, 2011
(a) For the purposes of this section, “undistributed income” means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal by the trust.
(b) Except as provided in subdivision (c), on the date when a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or to the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary’s share of the undistributed income that is not disposed of under the trust.
(c) If immediately before the income interest ends, the beneficiary under subdivision (b) has an unqualified power to revoke more than 5 percent of the trust, the undistributed income from the portion of the trust that may be revoked shall be added to principal.
(d) When a trustee’s obligation to pay a fixed annuity or a fixed fraction of the value of the trust’s assets ends, the trustee shall prorate the final payment.
(a) If a fiduciary determines that an allocation between income and principal required by Section 16348, 16349, 16350, 16351, or 16354 is insubstantial, the fiduciary may allocate the entire amount to principal, unless subdivision (e) of Section 16327 applies to the allocation.
(b) A fiduciary may presume an allocation is insubstantial under subdivision (a) if both of the following conditions are met:
(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.
(2) The asset producing the receipt to be allocated has a fair market value of 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 subdivision (a) may be either of the following:
(1) Exercised by a cofiduciary in the manner described in subdivision (f) of Section 16327.
(2) Released or delegated for a reason described in subdivision (g) of Section 16327, and in the manner described in subdivision (h) of Section 16327.
(d) This section does not impose a duty on the trustee to make an allocation under this section, and the trustee is not liable for failure to make an allocation under this section.
Official source: California Legislative Information. Reproduced from public-domain California statutes; confirm against the official source for the current text. Not legal advice.