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19-3A-201
Section 19-3A-201 Determination and distribution of net income. After the decedent's death,
in the case of a decedent's estate, or after an income interest in a trust ends, the following
rules apply: (a) If property is specifically given to a beneficiary by will or by trust, then
the fiduciary of the decedent's estate or of the terminating income interest shall distribute
the net income and net principal receipts to the beneficiary who is to receive the specifically
given property, subject to the following rules: (1) The net income and principal receipts
from the specifically given property are determined by including all of the amounts the fiduciary
receives or pays with respect to the specifically given property, whether such amounts accrued
or became due before, on, or after the date of the decedent's death or the date upon which
an income interest in a trust terminates, and by making a reasonable provision for amounts
that the fiduciary believes the decedent's estate or terminating...
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19-3A-202
Section 19-3A-202 Distribution to residuary and remainder beneficiaries. (a) Each beneficiary
described in Section 19-3A-201(d) is entitled to receive a portion of the net income equal
to the beneficiary's fractional interest in undistributed principal assets, using inventory
values as of the appropriate distribution dates. (b) In determining a beneficiary's share
of net income, the following rules apply: (1) The beneficiary's fractional interest in the
undistributed principal assets shall be calculated without regard to property specifically
given to the beneficiary and property required to pay pecuniary amounts not in trust. (2)
The beneficiary's fractional interest in the undistributed principal assets shall be calculated
on the basis of the aggregate inventory value of those assets as of the distribution date
without reducing the value by any unpaid principal obligation. (c) If a fiduciary does not
distribute all of the collected but undistributed net income to each person as of a...
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19-3A-104
including, but not limited to: (1) The nature, purpose, and expected duration of the trust;
(2) The intent of the settlor; (3) The identity and circumstances of the beneficiaries; (4)
The needs for liquidity for the trust; (5) The regularity of income to the trust; (6) The
need for preservation and appreciation of capital; (7) The nature of the assets held in the
trust and the extent to which they consist of financial assets, interests in closely held
enterprises, tangible and intangible personal property, or real property; (8) The extent
to which an asset is used by a beneficiary; (9) Whether an asset was purchased by the trustee
or received from the settlor; (10) The net amount allocated to income under the other sections
of this chapter and the increase or decrease in the value of the principal assets, which the
trustee may estimate as to assets for which market values are not readily available; (11)
Whether and to what extent the terms of the trust a. give the trustee the power...
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40-18-1
existed on December 31, 2007. (8) CORPORATION. The term includes associations, joint stock
companies, and any other entity classified as an association taxable as a corporation for
federal income tax purposes. (9) DISREGARDED ENTITY. Any entity which is disregarded for federal
income tax purposes. (10) DOMESTIC. When applied to a corporation or subchapter K entity means
created or organized under the laws of the State of Alabama. (11) FIDUCIARY. A guardian, trustee,
executor, administrator, personal representative, receiver, conservator, or any person
acting in any fiduciary capacity for any person. (12) FISCAL YEAR. An accounting period of
12 months ending on the last day of any month other than December. (13) FOREIGN. When applied
to a corporation or a subchapter K entity means created or organized under a jurisdiction
other than the State of Alabama. (14) GEOTHERMAL. Any geothermal reservoir in Alabama consisting
of natural heat which is stored in rocks or in an aqueous liquid or...
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19-3A-404
Section 19-3A-404 Principal receipts. A fiduciary shall allocate to principal: (1) To the extent
not allocated to income under this chapter, assets received from a transferor during the transferor's
lifetime, a decedent's estate, a trust with a terminating income interest, or a payer under
a contract naming the trust or its fiduciary as beneficiary; (2) Subject to any contrary rules
in Section 19-3A-401 through Section 19-3A-415, money or other property received from the
sale, exchange, liquidation, or change in form of a principal asset, including realized profit;
(3) Amounts recovered from third parties to reimburse the trust because of disbursements described
in Section 19-3A-502(c) or for other reasons not based on the loss of income; (4) Proceeds
of property taken by eminent domain, but a separate award made for the loss of income with
respect to an accounting period during which a current income beneficiary had a mandatory
income interest is income; (5) Net income received in an...
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19-3A-102
chapter, the following terms are defined as follows: (1) ACCOUNTING PERIOD. A calendar year
unless another 12-month period is selected by a fiduciary. The term includes a portion of
a calendar year or other 12-month period that begins when an income interest begins or ends
when an income interest ends. (2) BENEFICIARY. Includes, in the case of a decedent's estate,
an heir, legatee, and devisee and, in the case of a trust, an income beneficiary and a remainder
beneficiary. (3) FIDUCIARY. A personal representative or a trustee. The term includes
an executor, administrator, successor personal representative, special administrator,
and a person performing substantially the same function. (4) INCOME. Money or property that
a fiduciary receives as current return from a principal asset. The term also includes a portion
of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided
in Article 4. (5) INCOME BENEFICIARY. A person to whom net income of a trust is...
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19-3A-412
Section 19-3A-412 Timber. (a) To the extent that a fiduciary accounts for receipts from the
sale of timber and related products pursuant to this section, the fiduciary shall allocate
the net receipts first to principal, based upon the volume of the timber at the time of transfer
to the trust or decedent's estate. The balance shall be allocated eighty percent (80%) to
income and the balance to principal. (b) In determining net receipts as provided for in subsection
(a), a fiduciary shall deduct the following expenses related to the sale of timber and related
products from gross receipts: (1) Management expenses; (2) Legal and accounting expenses and
fees; (3) Sales commissions; (4) Reforestation expenses; and (5) Any necessary timber stand
improvement expense that is recognized and accepted as good forest management practice at
the time of sale. (c) This chapter applies whether or not a decedent or transferor was harvesting
timber from the property before it became subject to the trust...
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19-3A-106
Section 19-3A-106 Conversion to unitrust. (a) Unless expressly prohibited by the governing
instrument, a trustee may convert a trust into a unitrust as described in this section if
all of the following apply: (1) The trustee has concluded that the conversion will enable
the trustee to better carry out the intent of the settlor or testator and the purposes of
the trust. (2) The trustee gives written notice of the trustee's intention to convert the
trust into a unitrust, including the trustee's initial decisions as set forth below, to all
the qualified beneficiaries. The written notice shall include the following: a. An explanation
of how the unitrust will operate; b. The effective date of the conversion to a unitrust; c.
The unitrust percentage to be used; d. The provisions for prorating a unitrust distribution
for a short year in which a beneficiary's right to payments commences or ceases; e. Whether
the net fair market value of the trust assets will be determined annually or averaged...
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19-3-125
Section 19-3-125 Life, endowment, or annuity contracts. In addition to any other investment
now permitted by law, a guardian or trustee may invest the funds of his ward or of the beneficiary
of the trust in life, endowment or annuity contracts of legal reserve life insurance companies
duly qualified and authorized to write such business in the State of Alabama; provided, however,
that the annual premium or premiums on such contracts purchased by such guardian or trustee
shall not exceed 25 percent of the income of the ward or the beneficiary for any calendar
year preceding the date of such purchase. The contract must contain the following options
after it has been in force for three years or less: a cash surrender value option, a paid-up
insurance or endowment option, and an extended insurance or endowment option. Such contract
may be issued on the life or lives of the ward or wards, or beneficiary or beneficiaries of
the trust or upon the life or lives of persons in whose life or...
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26-2A-136
over the estate and business affairs which the person could exercise if present and not under
disability, except the power to make a will. Subject to subsection (c), those powers include,
but are not limited to, power to make gifts; to convey or release contingent and expectant
interests in property, including marital property rights and any right of survivorship incident
to joint tenancy or tenancy by the entirety; to exercise or release powers held by the protected
person as trustee, personal representative, custodian for minors, conservator, or donee
of a power of appointment; to enter into contracts; to create revocable or irrevocable trusts
of property of the estate which may extend beyond the disability or life of the protected
person; to exercise options of the protected person to purchase securities or other property;
to exercise rights to elect options and change beneficiaries under insurance and annuity policies
and to surrender the policies for their cash value; to...
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