72-34-428. Rules applicable after decedent's death or termination of income interest. - Montana Statutes

     72-34-428. Rules applicable after decedent's death or termination of income interest. 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:
     (1) 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:
     (a) 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 that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed; and
     (b) the fiduciary may not reduce income and principal receipts from the specifically given property on account of a payment described in 72-34-447 to the extent that the will or the trust requires payment from other property or to the extent that the fiduciary recovers the payment from a third person.
     (2) 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, or 72-3-913 from the remaining net income determined under subsection (3) of this section or from principal to the extent that net income is insufficient.
     (3) The fiduciary shall determine the remaining net income of the decedent's estate or terminating income interest as provided in this part and by doing the following:
     (a) including in net income all income from property used to discharge liabilities;
     (b) 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;
     (c) 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 Title 72, chapter 16, part 6.
     (4) After distributions required by subsection (2), the fiduciary shall distribute the remaining net income determined under subsection (3) in the manner provided in 72-34-429 to all other beneficiaries.

     History: En. Sec. 8, Ch. 506, L. 2003.