Vermont Statutes Title 14 Sec. 3331
Terms Used In Vermont Statutes Title 14 Sec. 3331
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: includes , in the case of a decedent's estate, an heir, legatee, and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary. See
- Bequest: Property gifted by will.
- Decedent: A deceased person.
- Fees: shall mean earnings due for official services, aside from salaries or per diem compensation. See
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means a personal representative or a trustee. See
- following: when used by way of reference to a section of the law shall mean the next preceding or following section. See
- Income: means money or property that a fiduciary receives as current return from a principal asset. See
- Income interest: means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion. See
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Marital deduction: The deduction(s) that can be taken in the determination of gift and estate tax liabilities because of the existence of a marriage or marital relationship.
- Net income: means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under this chapter to or from income during the period. See
- Person: means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity. See
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
§ 3331. Determination and distribution of net income
After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:
(1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary under the rules in subchapters 3, 4, and 5 of this chapter which apply to trustees and under the rules in subdivision (5) of this section. The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.
(2) A fiduciary shall determine the remaining net income of a decedent’s estate or a terminating income interest under the rules in subchapters 3, 4, and 5 of this chapter which apply to trustees and by:
(A) including in net income all income from property used to discharge liabilities;
(B) paying from income or principal, in the fiduciary’s discretion, fees of attorneys, accountants, and fiduciaries; court costs and other expenses of administration; and interest on death taxes, but the fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment of those expenses from income will not cause the reduction or loss of the deduction; and
(C) paying from principal all other disbursements made or incurred in connection with the settlement of a decedent’s estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances, and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust, or applicable law.
(3) Unless the will or trust instrument otherwise provides, or the court otherwise directs, a fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright interest from the date that is one year following the date of death of the person whose death gives rise to the payment of the pecuniary bequest or the happening of the contingency that causes the income interest to end, from net income determined under subdivision (2) of this section or from principal to the extent that net income is insufficient. However, this subdivision shall not apply to a pecuniary bequest:
(A) to or for the benefit of a decedent’s surviving spouse that is or can be qualified for the federal estate tax marital deduction; or
(B) to or for the benefit of charitable organizations that are qualified for the federal estate tax charitable deduction, including a charitable remainder trust.
(4) A fiduciary shall distribute the net income remaining after distributions required by subdivision (3) of this section in the manner described in section 3332 of this title to all other beneficiaries.
(5) A fiduciary may not reduce principal or income receipts from property described in subdivision (1) of this section because of a payment described in section 3371 or 3372 of this title to the extent that the will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent that the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the date of a decedent’s death or an income interest’s terminating event, and by making a reasonable provision for amounts that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed. (Added 2011, No. 114 (Adj. Sess.), § 1.)