Montana Code 72-34-432. Undistributed income — definition — payment to beneficiary
72-34-432. Undistributed income — definition — payment to beneficiary. (1) (a) For the purposes of this section, “undistributed income” means net income received before the date on which an income interest ends.
Terms Used In Montana Code 72-34-432
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- 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
- Income: means money or property that a fiduciary receives as current return from a principal asset. See Montana Code 72-34-422
- Income beneficiary: means a person to whom net income of a trust is or may be payable. See Montana Code 72-34-422
- Income interest: means the right of an income beneficiary to receive all or part of net income, whether the trust requires it to be distributed or authorizes it to be distributed in the trustee's discretion. See Montana Code 72-34-422
- Mandatory income interest: means the right of an income beneficiary to receive net income that the trust requires the fiduciary to distribute. See Montana Code 72-34-422
- Net income: means the total receipts allocated to income during an accounting period minus the disbursements made from income during the accounting period, plus or minus transfers under this chapter to or from income during the accounting period. See Montana Code 72-34-422
- 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.
- Trustee: A person or institution holding and administering property in trust.
(b)The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal by the trust.
(2)Except as provided in subsection (3), on the date when a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date or to the estate of a deceased mandatory income beneficiary whose death causes the interest to end the beneficiary’s share of the undistributed income that is not disposed of under the trust.
(3)If immediately before the income interest ends, the beneficiary under subsection (2) has an unqualified power to revoke more than 5% of the trust, the undistributed income from the portion of the trust that may be revoked must be added to principal.
(4)When a trustee’s obligation to pay a fixed annuity or a fixed fraction of the value of the trust’s assets ends, the trustee shall prorate the final payment.