(a) In this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. Asset-backed securities includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return. Asset-backed securities does not include an asset to which § 35-6-401 or § 35-6-409 applies.
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Terms Used In Tennessee Code 35-6-415

  • Accounting period: means a calendar year unless another twelve-month period is selected by a fiduciary. See Tennessee Code 35-6-102
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Income: means money or property that a fiduciary receives as current return from a principal asset. See Tennessee Code 35-6-102
  • Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Tennessee Code 35-6-102
  • 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 Tennessee Code 35-6-102
(b) If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment which the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
(c) If a trust receives one (1) or more payments in exchange for the trust’s entire interest in an asset-backed security in one (1) accounting period, the trustee shall allocate the payments to principal. If a payment is one (1) of a series of payments that will result in the liquidation of the trust’s interest in the security over more than one (1) accounting period, the trustee shall allocate ten percent (10%) of the payment to income and the balance to principal.
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