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2009 SESSION

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HB 2435 Uniform Principal and Income Act; trustee required to demand certain distributions if requested.

Introduced by: William R. Janis | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED HOUSE: (all summaries)

Uniform Principal and Income Act (UPIA).  Revises the Act to address a 2006 IRS ruling regarding marital deductions to ensure that an IRA or other retirement arrangement that is payable to a marital deduction trust qualifies for the federal estate tax marital deduction. The trustee will be required to demand certain distributions if the surviving spouse so requests because the IRS requires that the surviving spouse be separately entitled to demand the fund’s income. The bill also clarifies how a trust that is required to pay income to a beneficiary keeps enough money to pay its taxes and distribute the balance of the income to the mandatory income beneficiary. The bill also allows for the creation of grantor-created unitrusts to be administered in the manner of a total return unitrust. Current law allows for the conversion of income trusts into total return unitrusts but does not allow unitrusts to be otherwise created. The bill also provides that a qualified beneficiary of a trust, other than the attorney general of the Commonwealth, may petition the circuit court to convert an income trust to a total return unitrust, convert a total return unitrust to an income trust, or change the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust assets. Currently, only the trustee may file such a petition.


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