North Dakota Code 59-16.3-01 – Definitions
For purposes of this chapter, unless the context otherwise requires:
Terms Used In North Dakota Code 59-16.3-01
- 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
- 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.
- Fiduciary: A trustee, executor, or administrator.
- Individual: means a human being. See North Dakota Code 1-01-49
- Inter vivos: Transfer of property from one living person to another living person.
- 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 an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Trustee: A person or institution holding and administering property in trust.
- year: means twelve consecutive months. See North Dakota Code 1-01-33
1. “Disinterested person” means a person who is not a related or subordinate party, as defined in section 672(c) of the Internal Revenue Code [26 U.S.C. 1, et seq.], with respect to the person then acting as trustee of the trust and excludes the settlor of the trust and any interested trustee.
2. “Income trust” means a trust, created by either an inter vivos or a testamentary instrument, which directs or permits the trustee to distribute the net income of the trust to one or more persons, either in fixed proportions, or in amounts, or proportions determined by the trustee. However, a trust that otherwise is an income trust may not qualify if it is subject to taxation under section 2001 or section 2501 of the Internal Revenue Code, until the expiration of the period for filing the return therefor.
3. “Interested distributee” means a person to whom distributions of income or principal can currently be made who has the power to remove the existing trustee and designate as successor a person who may be a related or subordinate party, as defined in section 672(c) of the Internal Revenue Code, with respect to such distributee.
4. “Interested trustee” means:
a. Any individual trustee to whom the net income or principal of the trust can currently be distributed or would be distributed if the trust were then to terminate and be distributed; and
b. An individual trustee whose legal obligation to support a beneficiary may be satisfied by distributions of income and principal of the trust.
5. “Total return unitrust” means an income trust that has been converted under and meets the provisions of this chapter.
6. “Trustee” means all persons acting as trustee of the trust, except where expressly noted otherwise, whether acting in their discretion, or on the direction of one or more persons acting in a fiduciary capacity.
7. “Settlor” means an individual who created an inter vivos or a testamentary trust.
8. “Unitrust” means a trust, the terms of which require or permit distribution of a unitrust amount, without regard to whether the trust has been converted to a unitrust in accordance with this chapter, or whether the trust is established by express terms of the governing instrument.
9. “Unitrust amount” means an amount equal to a percentage of a unitrust’s assets that may, or are required, to be distributed to one or more beneficiaries annually in accordance with the terms of the unitrust. The unitrust amount may be determined by reference to the net fair market value of the unitrust’s assets as of a particular date each year, or as an average determined on a multiple year basis.
10. “Current valuation year” means the accounting period of the trust for which the unitrust amount is being determined.
11. “Prior valuation year” means each of the two accounting periods of the trust immediately preceding the current valuation year.