Washington Code 11.104B.410 – Disbursements — Disbursement from principal
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(1) Subject to RCW 11.104B.440, and except as otherwise provided in RCW 11.104B.500(3)(b), a fiduciary shall disburse from principal:
Terms Used In Washington Code 11.104B.410
- 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
- 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.
- Decedent: A deceased person.
- Fiduciary: A trustee, executor, or administrator.
- 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.
(a) The balance of the disbursements described in RCW 11.104B.400 (1) and (3) after application of RCW 11.104B.400(2);
(b) The fiduciary’s compensation calculated on principal as a fee for acceptance, distribution, or termination;
(c) A payment of an expense to prepare for or execute a sale or other disposition of property;
(d) A payment on the principal of a trust debt;
(e) A payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property;
(f) A payment of a premium for insurance, including title insurance, not described in RCW 11.104B.400(4), of which the fiduciary is the owner and beneficiary;
(g) A payment of an estate or inheritance tax or other tax imposed because of the death of a decedent, including penalties, apportioned to the trust; and
(h) A payment:
(i) Related to environmental matters, including:
(A) Reclamation;
(B) Assessing environmental conditions;
(C) Remedying and removing environmental contamination;
(D) Monitoring remedial activities and the release of substances;
(E) Preventing future releases of substances;
(F) Collecting amounts from persons liable or potentially liable for the costs of activities described in (h)(i)(A) through (E) of this subsection (1);
(G) Penalties imposed under environmental laws or regulations;
(H) Other actions to comply with environmental laws or regulations;
(I) Statutory or common law claims by third parties; and
(J) Defending claims based on environmental matters; and
(ii) For a premium for insurance for matters described in (h)(i) of this subsection (1).
(2) If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary 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.