(1) This section applies when:

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Terms Used In Utah Code 75A-5-601

  • 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: includes :
         (3)(a) for a trust:
              (3)(a)(i) a current beneficiary, including a current income beneficiary and a beneficiary that may receive only principal;
              (3)(a)(ii) a remainder beneficiary; and
              (3)(a)(iii) any other successor beneficiary;
         (3)(b) for an estate, an heir and devisee; and
         (3)(c) for a life estate or term interest, a person that holds a life estate, term interest, or remainder, or other interest following a life estate or term interest. See Utah Code 75A-5-102
  • Court: means a court in this state with jurisdiction over a trust or estate, or a life estate or other term interest described in Subsection 75A-5-103(2). See Utah Code 75A-5-102
  • Decedent: A deceased person.
  • Estate: includes the property of the decedent as the estate is originally constituted and the property of the estate as it exists at any time during administration. See Utah Code 75A-5-102
  • 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
  • Income interest: includes the right of a current beneficiary to use property held by a fiduciary. See Utah Code 75A-5-102
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • 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
  • Property: includes both real and personal property. See Utah Code 68-3-12.5
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Terms of a trust: means :
         (22)(a) except as otherwise provided in Subsection (22)(b), the manifestation of the settlor's intent regarding a trust's provisions as:
              (22)(a)(i) expressed in the trust instrument; or
              (22)(a)(ii) established by other evidence that would be admissible in a judicial proceeding;
         (22)(b) the trust's provisions as established, determined, or amended by:
              (22)(b)(i) a trustee or trust director in accordance with applicable law;
              (22)(b)(ii) a court order; or
              (22)(b)(iii) a nonjudicial settlement agreement under Section 75-7-110;
         (22)(c) for an estate, a will; or
         (22)(d) for a life estate or term interest, the corresponding manifestation of the rights of the beneficiaries. See Utah Code 75A-5-102
  • Trust: includes :
              (23)(a)(i) an express trust, private or charitable, with additions to the trust, wherever and however created; and
              (23)(a)(ii) a trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. See Utah Code 75A-5-102
     (1)(a) the death of an individual results in the creation of an estate or trust; or
     (1)(b) an income interest in a trust terminates, regardless of whether the trust continues or is distributed.
(2) A fiduciary of an estate or trust with an income interest that terminates shall:

     (2)(a) determine, in accordance with Subsection (8) and Part 4, Allocation of Receipts, Part 5, Allocation of Disbursements, and Part 7, Apportionment at Beginning and End of Income Interest, the amount of net income and net principal receipts received from property specifically given to a beneficiary; and
     (2)(b) distribute the net income and net principal receipts to the beneficiary that is to receive the specific property.
(3) Subject to Subsection (4), a fiduciary shall determine the income and net income of an estate or income interest in a trust that terminates, other than the amount of net income determined in accordance with Subsection (2), and in accordance with Part 4, Allocation of Receipts, Part 5, Allocation of Disbursements, and Part 7, Apportionment at Beginning and End of Income Interest, and by:

     (3)(a) including in net income all income from property used or sold to discharge liabilities;
     (3)(b) paying from income or principal, in the fiduciary’s discretion:

          (3)(b)(i) fees of attorneys, accountants, and fiduciaries;
          (3)(b)(ii) court costs and other expenses of administration;
          (3)(b)(iii) interest on estate taxes, inheritance taxes, and other taxes imposed because of the decedent‘s death; and
     (3)(c) paying from principal other disbursements made or incurred in connection with the settlement of the estate or the winding up of an income interest that terminates, including:

          (3)(c)(i) to the extent authorized by the decedent’s will, the terms of the trust, or applicable law, debts, funeral expenses, disposition of remains, family allowances, estate and inheritance taxes, and other taxes imposed because of the decedent’s death; and
          (3)(c)(ii) related penalties that are apportioned, by the decedent’s will, the terms of the trust, or applicable law, to the estate or income interest that terminates.
(4) A fiduciary may pay the expenses from income of property passing to a trust for which the fiduciary claims a federal estate tax marital or charitable deduction only to the extent:

     (4)(a) the payment of the expenses from income will not cause the reduction or loss of the deduction; or
     (4)(b) the fiduciary makes an adjustment under Subsection 75A-5-507(2).
(5) If a decedent’s will, the terms of a trust, or applicable law provides for the payment of interest or the equivalent of interest to a beneficiary that receives a pecuniary amount outright, the fiduciary shall make the payment from net income determined under Subsection (3) or from principal to the extent that net income is insufficient.
(6) If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends because of an income beneficiary’s death, and no payment of interest or the equivalent of interest is provided for by the terms of the trust or applicable law, the fiduciary shall pay the interest or the equivalent of interest to which the beneficiary would be entitled under applicable law if the pecuniary amount were required to be paid under a will.
(7) A fiduciary shall distribute net income remaining after payments required by Subsections (5) and (6) in the manner described in Section 75A-5-602 to all other beneficiaries, including a beneficiary that receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.
(8)

     (8)(a) A fiduciary may not reduce principal or income receipts from property described in Subsection (2) because of a payment described in Section 75A-5-501 or 75A-5-502, to the extent the decedent’s will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent the fiduciary recovers or expects to recover the payment from a third party.
     (8)(b) The net income and principal receipts from the property shall be determined by including the amount the fiduciary receives or pays regarding the property, whether the amount accrued or became due before, on, or after the date of the decedent’s death or an income interest’s terminating event, and making a reasonable provision for an amount the estate or income interest may become obligated to pay after the property is distributed.
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