Michigan Laws 555.804 – Principal; allocations
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A trustee shall allocate to principal all of the following:
(a) To the extent not allocated to income under this act, assets received from a transferor during the transferor’s lifetime, a decedent‘s estate, a trust with a terminating income interest, or a payer under a contract naming the trust or its trustee as beneficiary.
Terms Used In Michigan Laws 555.804
- Accounting period: means a calendar year unless another 12-month period is selected by a fiduciary. See Michigan Laws 555.502
- 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: means , in the case of a decedent's estate, an heir, legatee, or devisee and, in the case of a trust, an income beneficiary or remainder beneficiary. See Michigan Laws 555.502
- Contract: A legal written agreement that becomes binding when signed.
- Decedent: A deceased person.
- Income: means money or property that a fiduciary receives as current return from a principal asset. See Michigan Laws 555.502
- 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 Michigan Laws 555.502
- Mandatory income interest: means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute. See Michigan Laws 555.502
- 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 act to or from income during the period. See Michigan Laws 555.502
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Michigan Laws 555.502
- 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 Michigan Laws 555.502
(b) Money or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to this article.
(c) Amounts recovered from third parties to reimburse the trust because of disbursements described in section 502(1)(g) or for other reasons to the extent not based on the loss of income.
(d) Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.
(e) Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income.
(f) Other receipts as provided in section 408 to 415 of this article.