(a) If a fiduciary who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or other activity instead of accounting for it as part of the trust’s general accounting records, then the fiduciary may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
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Terms Used In Alabama Code 19-3A-403

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Fiduciary: A trustee, executor, or administrator.
(b) A fiduciary who accounts separately for a business or other activity may determine the extent to which net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets and the other reasonably foreseeable needs of the business or other activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust’s general accounting records. If a fiduciary sells assets of the business or other activity, other than in the ordinary course of the business or activity, then the fiduciary shall account for the net amount received as principal in the trust’s general accounting records to the extent the fiduciary determines that the amount received is no longer required in the conduct of the business or other activity.
(c) Businesses and other activities for which a fiduciary may maintain separate accounting records 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 and other natural resources;
(6) Timber operations; and
(7) Activities to which Section 19-3A-414 applies.
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