(a) Subject to Kan. Stat. Ann. 2023 Supp. 58-9a-505, and amendments thereto, and except as otherwise provided in Kan. Stat. Ann. 2023 Supp. 58-9a-601(c)(2), and amendments thereto, a fiduciary shall disburse from principal:

(1) The balance of the disbursements described in Kan. Stat. Ann. 2023 Supp. 58-9a-501(a) and (c), and amendments thereto, after application of Kan. Stat. Ann. 2023 Supp. 58-9a-501(b), and amendments thereto;

(2) the fiduciary’s compensation calculated on principal as a fee for acceptance, distribution or termination;

(3) a payment of an expense to prepare for or execute a sale or other disposition of property;

(4) a payment on the principal of a trust debt;

(5) 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;

(6) a payment of a premium for insurance, including title insurance, not described in Kan. Stat. Ann. 2023 Supp. 58-9a-501(d), and amendments thereto, of which the fiduciary is the owner and beneficiary;

(7) 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

(8) a payment:

(A) Related to environmental matters, including:

(i) Reclamation;

(ii) assessing environmental conditions;

(iii) remedying and removing environmental contamination;

(iv) monitoring remedial activities and the release of substances;

(v) preventing future releases of substances;

(vi) collecting amounts from persons liable or potentially liable for the costs of activities described in clauses (i) through (v);

(vii) penalties imposed under environmental laws or regulations;

(viii) other actions to comply with environmental laws or regulations;

(ix) statutory or common law claims by third parties; and

(x) defending claims based on environmental matters; and

(B) for a premium for insurance for matters described in subparagraph (A).

(b) 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.