Sec. 45a-542q. Deferred compensation, annuities and similar payments.
Sec. 45a-542q. Deferred compensation, annuities and similar payments. (a) In
this section, "payment" means a payment that a trustee may receive over a fixed number
of years or during the life of one or more individuals because of services rendered or
property transferred to the payer in exchange for future payments. The term includes a
payment made in money or property from 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.
The term shall not include a payment pursuant to an installment sale contract.
(b) To the extent that a payment is characterized as interest or a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The
trustee shall allocate to principal the balance of the payment and any other payment
received in the same accounting period that is not characterized as interest, a dividend
or an equivalent payment.
(c) If no part of a payment is characterized as interest, a dividend or an equivalent
payment, and all or part of the payment is required to be made, a trustee shall allocate
to income ten per cent of the part that is required to be made during the accounting
period and the balance to principal. If no part of a payment is required to be made or
the payment received is the entire amount to which the trustee is entitled, the trustee
shall allocate the entire payment to principal. For purposes of this subsection, a payment
is not "required to be made" to the extent that it is made because the trustee exercises
a right of withdrawal.
(d) If, to obtain an estate tax marital deduction for a trust, a trustee must allocate
more of a payment to income than provided for by this section, the trustee shall allocate
to income the additional amount necessary to obtain the marital deduction.
(e) This section does not apply to payments to which section 45a-542r applies.
(P.A. 99-164, S. 18, 36.)
History: P.A. 99-164 effective January 1, 2000.