Cal. Prob. Code § 16360
Allocation of Disbursements
Redline — January 1, 2011 → current.View current text →
Current — January 1, 2023
As of January 1, 2011
(a) If a trustee determines that an allocation between principal and income required by Section 16361, 16362, 16363, 16364, or 16367 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in subdivision (b) of Section 16336 applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in subdivision (c) of Section 16336 and may be released for the reasons and in the manner provided in subdivisions (d) and (e) of Section 16336.
(b) An allocation is presumed to be insubstantial in either of the following cases:
(1) Where 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) Where the value of the asset producing the receipt for which the allocation would be made is less than 10 percent of the total value of the trust’s assets at the beginning of the accounting period.
(c) Nothing in this section imposes 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.
Subject to Section 16363, and except as otherwise provided in paragraph (2) or (3) of subdivision (c) of Section 16370, a fiduciary shall disburse from income all of the following:
(a) One-half of both of the following:
(1) 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.
(2) 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.
(b) The balance of the disbursements described in paragraph (1) of subdivision (a), 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.
(c) 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.
(d) A premium on insurance covering loss of a principal asset or income from or use of the asset.
Official source: California Legislative Information. Reproduced from public-domain California statutes; confirm against the official source for the current text. Not legal advice.