SECTIONS 16340-16341 - California Statutes

PROBATE CODE

SECTION 16340-16341

16340. 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
trust, the fiduciary of the estate or of the terminating income
interest shall distribute the net income and principal receipts to
the beneficiary who is to receive the 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 property, whether the
amounts accrued or became due before, on, or after the decedent's
death or an income interest in a trust ends, and by making a
reasonable provision for amounts the fiduciary believes the estate or
terminating income interest may become obligated to pay after the
property is distributed.
(2) The fiduciary may not reduce income and principal receipts
from the specifically given property on account of a payment
described in Section 16370 or 16371, to the extent that the will, the
trust, or Section 12002 requires payment from other property or to
the extent that the fiduciary recovers the payment from a third
person.
(3) A specific gift distributable under a trust shall carry with
it the same benefits and burdens as a specific devise under a will,
as set forth in Chapter 8 (commencing with Section 12000) of Part 10
of Division 7.
(b) A general pecuniary gift, an annuity, or a gift of maintenance
distributable under a trust carries with it income and bears
interest in the same manner as a general pecuniary devise, an
annuity, or a gift of maintenance under a will, as set forth in
Chapter 8 (commencing with Section 12000) of Part 10 of Division 7.
The fiduciary shall distribute to a beneficiary who receives a
pecuniary amount, whether outright or in trust, the interest or any
other amount provided by the will, the trust, this subdivision, or
Chapter 8 (commencing with Section 12000) of Part 10 of Division 7,
from the remaining net income determined under subdivision (c) or
from principal to the extent that net income is insufficient.
(c) The fiduciary shall determine the remaining net income of the
decedent's estate or terminating income interest as provided in this
chapter and by doing the following:
(1) Including in net income all income from property used to
discharge liabilities.
(2) Paying from income or principal, in the fiduciary's
discretion, fees of attorneys, accountants, and fiduciaries, court
costs and other expenses of administration, and interest on death
taxes, except that the fiduciary may pay these expenses from income
of property passing to a trust for which the fiduciary claims an
estate tax marital or charitable deduction only to the extent that
the payment of these expenses from income will not cause the
reduction or loss of the deduction.
(3) Paying from principal all other disbursements made or incurred
in connection with the settlement of a decedent's estate or the
winding up of a terminating income interest, including debts, funeral
expenses, disposition of remains, family allowances, and death taxes
and related penalties that are apportioned to the estate or
terminating income interest by the will, the trust, or Division 10
(commencing with Section 20100).
(d) After distributions required by subdivision (b), the fiduciary
shall distribute the remaining net income determined under
subdivision (c) in the manner provided in Section 16341 to all other
beneficiaries.
(e) For purposes of this section, a reference in Chapter 8
(commencing with Section 12000) of Part 10 of Division 7 to the date
of the testator's death means the date of the settlor's death or of
the occurrence of some other event on which the distributee's right
to receive the gift depends.
(f) If a trustee has distributed a specific gift or a general
pecuniary gift before January 1, 2007, the trustee may allocate
income and principal as set forth in this chapter or in any other
manner permissible under the law in effect at the time of the
distribution. If the trustee distributes a specific gift or a general
pecuniary gift after December 31, 2006, then the trustee shall
allocate income and principal as provided in this chapter.

16341. (a) Each beneficiary described in subdivision (d) of Section
16340 is entitled to receive a portion of the net income equal to
the beneficiary's fractional interest in undistributed principal
assets, using values as of the distribution dates and without
reducing the values by any unpaid principal obligations.
(b) If a fiduciary does not distribute all of the collected but
undistributed net income to each beneficiary as of a distribution
date, the fiduciary shall maintain appropriate records showing the
interest of each beneficiary in that net income.
(c) The distribution date for purposes of this section may be the
date as of which the fiduciary calculates the value of the assets if
that date is reasonably near the date on which assets are actually
distributed.