Trustees' Dilemma With Section 643

When a retirement plan death benefit is payable to a trust, what is the income beneficiary entitled to? Recently released Internal Revenue Service final regulations defining trust income defer to state law. The 1997 Uniform Principal and Income Act (UPIA) is now law in a majority of states, but its rules for retirement plan distributions may not meet the regulation's reasonable-apportionment test.

Natalie B. Choate | Jul 01, 2004

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When a retirement plan death benefit is payable to a trust, what “income” is the income beneficiary entitled to? Recently released Internal Revenue Service final regulations defining trust income defer to state law. The 1997 Uniform Principal and Income Act (UPIA) is now law in a majority of states, but its rules for retirement plan distributions may not meet the regulation's reasonable-apportionment test. Here are some possible solutions to the dilemma.

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