2010 Pennsylvania Code
Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES
Chapter 81 - Principal and Income
8121 - Determination and distribution of net income.

                               SUBCHAPTER B
                           DECEDENT'S ESTATE OR
                       TERMINATING INCOME INTEREST
     Sec.
     8121.  Determination and distribution of net income.
     8122.  Distribution to residuary and remainder beneficiaries.

        Cross References.  Subchapter B is referred to in section
     8149 of this title.
     § 8121.  Determination and distribution of net income.
        After a decedent dies in the case of an estate or after an
     income interest in a trust ends, the following rules apply:
            (1)  A fiduciary of an estate or of a terminating income
        interest shall determine the amount of net income and net
        principal receipts received from property specifically given
        to a beneficiary under paragraph (5) and the provisions
        applicable to trustees in Subchapters C (relating to
        apportionment at beginning and end of income interest), D
        (relating to allocation of receipts during administration of
        trust) and E (relating to allocation of disbursements during
        administration of trust). The fiduciary shall distribute the
        net income and net principal receipts to the beneficiary who
        is to receive the specific property.
            (2)  A fiduciary shall distribute to a beneficiary who
        receives a pecuniary amount outright and shall allocate to a
        pecuniary amount in trust the income or other amount provided
        by the governing instrument or section 3543 (relating to
        income on distributive shares) or 7799 (relating to income on
        distributive shares) from net income determined under
        paragraph (3) or from principal to the extent that net income
        is insufficient.
            (3)  A fiduciary shall determine the remaining net income
        of a decedent's estate or a terminating income interest under
        the provisions applicable to trustees in Subchapters C, D and
        E and by:
                (i)  including in net income all income from property
            used to discharge liabilities; and
                (ii)  paying from principal debts, funeral expenses,
            costs of disposition of remains, the family exemption,
            fees of personal representatives and their attorneys and
            accountants, and death taxes and related interest and
            penalties which are apportioned to the estate or
            terminating income interest by the governing instrument
            or applicable law.
            (4)  A fiduciary shall distribute the net income
        remaining after distributions required by paragraph (2) in
        the manner described in section 8122 (relating to
        distribution to residuary and remainder beneficiaries) to all
        other beneficiaries.
            (5)  A fiduciary may not reduce principal or income
        receipts from property described in paragraph (1) because of
        a payment described in section 8151 (relating to minerals,
        water and other natural resources) or 8152 (relating to
        timber) to the extent that the governing instrument or
        applicable law requires the fiduciary to make the payment
        from assets other than the property or to the extent that the
        fiduciary recovers or expects to recover the payment from a
        third party. The net income and principal receipts from the
        property are determined by:
                (i)  including all of the amounts the fiduciary
            receives or pays with respect to the property, whether
            those amounts accrued or became due before, on or after
            the date of a decedent's death or an income interest's
            terminating event; and
                (ii)  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.
     (July 7, 2006, P.L.625, No.98, eff. 120 days)

        2006 Amendment.  Act 98 amended par. (2).
        Cross References.  Section 8121 is referred to in sections
     8122, 8132 of this title.