2015 Code of Alabama
Title 19 - FIDUCIARIES AND TRUSTS.
Chapter 3A - ALABAMA PRINCIPAL AND INCOME ACT.
Article 5 - Allocation of Disbursements During Administration of Trust or Decendent's Estate.
Section 19-3A-502 - Disbursements from principal.
(a) A trustee shall make the following disbursements from principal:
(1) An amount, not to exceed fifty percent (50%), of the disbursements described in Section 19-3A-501(a) and Section 19-3A-501(b);
(2) All of the trustee's compensation calculated on principal as a fee for acceptance, distribution, or termination, and disbursements made to prepare property for sale;
(3) Payments on the principal of a trust debt;
(4) Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property;
(5) Premiums paid on a policy of insurance not described in Section 19-3A-501(d), of which the trust is the owner and beneficiary; and
(6) Estate, inheritance, and other transfer taxes, including penalties thereon, apportioned to the trust which carries the name of the estate.
(b) If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, then the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
(c) A trustee may charge all disbursements related to environmental matters to principal or income, as provided by applicable law.
(Act 2000-675, p. 1343, §1.)Disclaimer: These codes may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
