2006 Code of Virginia § 55-277.18 - Deferred compensation, annuities, and similar payments

55-277.18. Deferred compensation, annuities, and similar payments.

A. In this section, "payment" means a payment that a trustee may receiveover a fixed number of years or during the life of one or more individualsbecause of services rendered or property transferred to the payer in exchangefor future payments. The term includes a payment made in money or propertyfrom the payer's general assets or from a separate fund created by the payer,including a private or commercial annuity, an individual retirement account,and a pension, profit-sharing, stock-bonus, or stock-ownership plan.

B. To the extent that a payment is characterized as interest or a dividend ora payment made in lieu of interest or a dividend, a trustee shall allocate itto income. The trustee shall allocate to principal the balance of the paymentand any other payment received in the same accounting period that is notcharacterized as interest, a dividend, or an equivalent payment.

C. If no part of a payment is characterized as interest, a dividend, or anequivalent payment, and all or part of the payment is required to be made, atrustee shall allocate to income ten percent of the part that is required tobe made during the accounting period and the balance to principal. If no partof a payment is required to be made or the payment received is the entireamount to which the trustee is entitled, the trustee shall allocate theentire payment to principal. For purposes of this subsection, a payment isnot "required to be made" to the extent that it is made because the trusteeexercises a right of withdrawal.

D. If, to obtain an estate tax marital deduction for a trust, a trustee mustallocate more of a payment to income than provided for by this section, thetrustee shall allocate to income the additional amount necessary to obtainthe marital deduction.

E. This section does not apply to payments to which 55-277.19 applies.

(1999, c. 975.)