Iowa Code 637.603 – Trustee requirements to convert or change computation method
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1. The trustee adopts a written policy for the trust as follows:
a. In the case of a trust being administered as an income trust, requiring that future distributions from the trust will be unitrust amounts rather than net income.
b. In the case of a trust being administered as a total return unitrust, requiring that future distributions from the trust will be net income rather than unitrust amounts.
c. Requiring that the method used to determine the fair market value of the trust will be changed as stated in the policy.
Terms Used In Iowa Code 637.603
- 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.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Income: means money or property a fiduciary receives as the current return from a principal asset. See Iowa Code 637.102
- Net income: means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period. See Iowa Code 637.102
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or any other legal or commercial entity. See Iowa Code 637.102
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Iowa Code 637.102
- 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 Iowa Code 637.102
- Trustor: The person who makes or creates a trust. Also known as the grantor or settlor.
2. The trustee sends written notice of the trustee’s intention to take any action described in section 637.602, along with copies of such written policy and this subchapter, to all of the following persons:
a. The trustor of the trust, if living.
b. All living persons who are currently receiving or eligible to receive distributions of income of the trust.
c. All living persons who would receive principal of the trust if the trust were to terminate at the time of the giving of such notice, without regard to the exercise of any power of appointment or, if the trust does not provide for its termination, all living persons who would receive or be eligible to receive distributions of income or principal of the trust if the persons identified in paragraph “b” were deceased.
d. All persons named in the governing instrument as adviser to or protector of the trust.
3. At least one person receiving notice under subsection 2, paragraphs “b” and “c”, is legally competent.
4. No person receiving such notice under subsection 2, objects, by written instrument delivered to the trustee, to the proposed action of the trustee within sixty days of receipt of such notice.