Sec. 45a-542d. Determination and distribution of income interest of decedent's estate or in trust after trust ends.
Sec. 45a-542d. Determination and distribution of income interest of decedent's estate or in trust after trust ends. 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 the rules in sections 45a-542f to 45a-542cc, inclusive, which
apply to trustees and the rules in subdivision (5) of this section. 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 determine the remaining net income of a decedent's estate or a
terminating income interest under the rules in sections 45a-542f to 45a-542cc, inclusive,
which apply to trustees and by:
(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, but the fiduciary may pay those 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 those expenses from income will not cause
the reduction or loss of the deduction; and
(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 terms of the trust or applicable law.
(3) A fiduciary shall distribute to a beneficiary who receives a pecuniary amount
outright the interest or any other amount provided by the will, the terms of the trust or
this subdivision from net income determined under subdivision (2) of this section or
from principal to the extent that net income is insufficient. Unless a will or trust waives
such interest or provides for its calculation in a different amount or manner, a pecuniary
amount payable outright shall bear simple interest in the amount of six per cent per year,
beginning one year after the date of death in the case of pecuniary amounts payable
under a will, or one year after the day the income interest ends in the case of pecuniary
amounts payable from a trust after an income interest ends, and ending on the day the
pecuniary amount is paid.
(4) A fiduciary shall distribute the net income remaining after distributions required
by subdivision (3) of this section in the manner described in section 45a-542e to all
other beneficiaries, including a beneficiary who receives a pecuniary amount in trust,
even if the beneficiary holds an unqualified power to withdraw assets from the trust or
other presently exercisable general power of appointment over the trust.
(5) A fiduciary may not reduce principal or income receipts from property described
in subdivision (1) of this section because of a payment described in sections 45a-542x
and 45a-542y to the extent that the will, the terms of the trust 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 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 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.
(P.A. 99-164, S. 5, 36.)
History: P.A. 99-164 effective January 1, 2000.