Arizona Laws 14-7406. Distribution to residuary and remainder beneficiaries
A. Each beneficiary described in section 14-7405, paragraph 4 is entitled to receive a portion of the net income equal to the beneficiary‘s fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one who does not receive part of the distribution, is entitled, as of each distribution date, to the net income the fiduciary has received after the date of death or terminating event or earlier distribution date but has not distributed as of the current distribution date.
Terms Used In Arizona Laws 14-7406
- 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 , in the case of a decedent's estate, an heir, legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary. See Arizona Laws 14-7401
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means a personal representative or a trustee and includes an executor, an administrator, a successor personal representative, a special administrator and a person performing substantially the same function. See Arizona Laws 14-7401
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Income: means money or property that a fiduciary receives as current return from a principal asset and includes a portion of receipts from a sale, exchange or liquidation of a principal asset, to the extent provided in sections 14-7410 through 14-7424. See Arizona Laws 14-7401
- 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 article to or from income during the period. See Arizona Laws 14-7401
- 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.
- Person: means any individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or other legal or commercial entity. See Arizona Laws 14-7401
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Arizona Laws 14-7401
- Property: includes both real and personal property. See Arizona Laws 1-215
- Trust: includes an express trust, private or charitable, with any additions, wherever and however created. See Arizona Laws 14-1201
B. In determining a beneficiary’s share of net income, the following apply:
1. The beneficiary is entitled to receive a portion of the net income equal to the beneficiary’s fractional interest in the undistributed principal assets immediately before the distribution date, including assets that later may be sold to meet principal obligations.
2. The beneficiary’s fractional interest in the undistributed principal assets must be calculated without regard to property specifically given to a beneficiary and property required to pay pecuniary amounts not in trust.
3. The beneficiary’s fractional interest in the undistributed principal assets must be calculated on the basis of the aggregate value of those assets as of the distribution date without reducing the value by any unpaid principal obligation.
4. The distribution date for purposes of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which assets are actually distributed.
C. If a fiduciary does not distribute all of the collected but undistributed net income to each person as of a distribution date, the fiduciary shall maintain appropriate records showing the interest of each beneficiary in that net income.
D. A fiduciary may apply this section to the extent that the fiduciary considers it appropriate, to net gain or loss realized after the date of death or terminating event or earlier distribution date from the disposition of a principal asset if this section applies to the income from the asset.