2005 Idaho Code - 68-10-502 — DISBURSEMENTS FROM PRINCIPAL

                                  TITLE  68
                            TRUSTS AND FIDUCIARIES
                                  CHAPTER 10
                       UNIFORM PRINCIPAL AND INCOME ACT
                                   PART 5.
          ALLOCATION OF DISBURSEMENTS DURING ADMINISTRATION OF TRUST
    68-10-502.  DISBURSEMENTS FROM PRINCIPAL. (a) A trustee shall make the
following disbursements from principal:
    (1)  The remaining one-half (1/2) of the disbursements described in
    section 68-10-501(1) and (2), Idaho Code;
    (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
    68-10-501(4), Idaho Code, of which the trust is the owner and beneficiary;
    (6)  Estate, inheritance and other transfer taxes, including penalties,
    apportioned to the trust; and
    (7)  Disbursements related to environmental matters, including
    reclamation, assessing environmental conditions, remedying and removing
    environmental contamination, monitoring remedial activities and the
    release of substances, preventing future releases of substances,
    collecting amounts from persons liable or potentially liable for the costs
    of those activities, penalties imposed under environmental laws, rules or
    regulations and other payments made to comply with those laws, rules or
    regulations, statutory or common law claims by third parties, and
    defending claims based on environmental matters.
    (b)  If a principal asset is encumbered with an obligation that requires
income from that asset to be paid directly to the creditor, 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.