Among a trustee’s duties, properly allocating receipts between principal and income ranks near the top. Payment from an individual retirement account to a trust illustrates this point. The allocation impacts the amount of the IRA’s income the trustee must count as income of the trust and, per its terms, distribute to a current income beneficiary. Will all, a portion or none of the income earned inside the IRA become income of the trust and then pass down to this beneficiary?
The Death of Percentage Allocation Rules For IRA Payments to a Non-Marital Trust
Revised Section 409 of the Uniform Principal and Income Act creates a seismic shift in fiduciary accounting.