(1) If a fiduciary determines that an allocation between income and principal required by Section 75A-5-409, 75A-5-410, 75A-5-411, 75A-5-412, or 75A-5-415 is insubstantial, the fiduciary may allocate the entire amount to principal, unless Subsection 75A-5-203(5) applies to the allocation.

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Terms Used In Utah Code 75A-5-408

  • Accounting period: includes a part of a calendar year or another period of 12 calendar months or approximately 12 calendar months that begins when an income interest begins or ends when an income interest ends. See Utah Code 75A-5-102
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Fiduciary: A trustee, executor, or administrator.
  • Fiduciary: includes :
         (8)(a) a trustee, trust director as defined in Section 75-12-102, personal representative, life tenant, holder of a term interest, and person acting under a delegation from a fiduciary;
         (8)(b) a person that holds property for a successor beneficiary whose interest may be affected by an allocation of receipts and expenditures between income and principal; and
         (8)(c) if there are two or more co-fiduciaries, all co-fiduciaries acting under the terms of the trust and applicable law. See Utah Code 75A-5-102
  • Income: includes a part of receipts from a sale, exchange, or liquidation of a principal asset to the extent provided in Part 4, Allocation of Receipts. See Utah Code 75A-5-102
  • Net income: includes an adjustment from principal to income under Section 75A-5-203. See Utah Code 75A-5-102
  • Principal: means property held in trust for distribution to, production of income for, or use by a current or successor beneficiary. See Utah Code 75A-5-102
(2) A fiduciary may presume an allocation is insubstantial under Subsection (1) if:

     (2)(a) the amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10%; and
     (2)(b) the asset producing the receipt to be allocated has a fair market value less than 10% of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
(3) The power to make a determination under Subsection (1) may be:

     (3)(a) exercised by a co-fiduciary in the manner described in Subsection 75A-5-203(6); or
     (3)(b) released or delegated for a reason described in Subsection 75A-5-203(7) and in the manner described in Subsection 75A-5-203(8).