(a) Except as provided in subsection (b), proceeds from a life insurance policy or other contract whose beneficiary is the trust or its trustee, including a contract that insures the trust or its trustee against loss for the damage or destruction of, or loss of title to, a principal asset shall be allocated to principal. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal. This section shall not apply to a contract to which section 557A-409 applies.
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Terms Used In Hawaii Revised Statutes 557A-407

  • 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 and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary. See Hawaii Revised Statutes 557A-102
  • Contract: A legal written agreement that becomes binding when signed.
  • Income: means money or property a fiduciary receives as the current return from a principal asset. See Hawaii Revised Statutes 557A-102
  • Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Hawaii Revised Statutes 557A-102
  • 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 Hawaii Revised Statutes 557A-102
(b) Insurance proceeds shall be allocated to income if they are from a policy that insures the trustee against the loss of occupancy or other use by an income beneficiary, the loss of income, or, subject to § 557A-403, the loss of profits from a business.

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