Arizona Laws 14-7426. Disbursements from principal
A. A trustee shall make the following disbursements from principal:
Terms Used In Arizona Laws 14-7426
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Estate: includes the property of the decedent, trust or other person whose affairs are subject to this title as originally constituted and as it exists from time to time during administration. See Arizona Laws 14-1201
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Income: means money or property that a fiduciary receives as current return from a principal asset and includes a portion of receipts from a sale, exchange or liquidation of a principal asset, to the extent provided in sections 14-7410 through 14-7424. See Arizona Laws 14-7401
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Arizona Laws 14-7401
- Proceeding: includes action at law and suit in equity. See Arizona Laws 14-1201
- Property: includes both real and personal property. See Arizona Laws 1-215
- Trust: includes an express trust, private or charitable, with any additions, wherever and however created. See Arizona Laws 14-1201
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional or successor trustee, whether or not appointed or confirmed by a court. See Arizona Laws 14-7401
1. The remaining one-half of the disbursements described in section 14-7425, paragraphs 1 and 2.
2. All of the trustee‘s compensation calculated on principal as a fee for acceptance, distribution or termination and disbursements made to prepare property for sale.
3. Payments on the principal of a trust debt.
4. Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property.
5. Premiums paid on a policy of insurance not described in section 14-7425, paragraph 4 of which the trust is the owner and beneficiary.
6. Estate, inheritance and other transfer taxes, including penalties, apportioned to the trust.
7. Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties and defending claims based on environmental matters.
B. If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.