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- Alaska Statutes.
- Title 13. Decedents' Estates, Guardianships, Transfers, and Trusts.
- Chapter 38. Principal and Income of Trusts
- Section 690. Retirement Benefits, Individual Retirement Accounts, Deferred Compensation, Annuities, and Similar Payments.
previous: Section 680
. Insubstantial Allocations Not Required.
next: Section 700
. Liquidating Asset.
AS 13.38.690. Retirement Benefits, Individual Retirement Accounts, Deferred Compensation, Annuities, and Similar Payments.
- (a) The trustee shall allocate to income the greater of the portion of a payment characterized by the payor as interest or
a dividend, as a remittance in place of interest or a dividend, or as imputed interest for federal income tax purposes.
The balance of the payment shall be allocated to principal.
- (b) If a part of a payment under a contract calling for equal installments over a fixed period of time is not allocable to
income under the provisions of (a) of this section, the difference between the trust's acquisition value of the
contract and the total expected return shall be considered to be interest. The trustee shall allocate to income the
portion of each payment equivalent to interest on the then unpaid principal balance at the rate specified in the
contract or at a rate necessary to amortize the difference between the expected return and the acquisition value, where
that rate is readily ascertainable by the trustee.
- (c) If there is not a portion of a payment from a separate fund held exclusively for the benefit of the trust that is
allocable to income under (a) or (b) of this section, but the internal net income of the fund determined as if the fund
were a separate trust subject to AS 13.38.500 - 13.38.860 is readily ascertainable by the trustee, the
portion of the payment equal to the then undistributed net income of the fund realized since the trust acquired its
interest in the fund is considered to be a distribution of income and shall be allocated to the trust income account.
The balance of the payment described in this subsection shall be allocated to principal.
- (d) A trustee shall allocate 10 percent of the part of the payment that is required to be made during the accounting
period to income and the balance to principal if there is not a part of the payment that is allocable to income under
(a) - (c) of this section and all or part of the payment is required to be made. The trustee shall allocate the entire
payment to principal if a part of a payment is not required to be made or the payment received is the entire amount to
which the trustee is entitled. In 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.
- (e) If, to obtain a federal estate or gift tax marital deduction for a trust, the trustee must allocate more of a payment
to income than provided for by this section, the trustee shall allocate the additional amount necessary to obtain the
marital deduction to income.
- (f) This section does not apply to payments to which AS 13.38.700
- (g) In this section, "payment" means a payment that a trustee may receive over a fixed period of time or during the life
of one or more individuals because of services rendered or property transferred to the payor in exchange for future
payments, and includes
- (1) a payment made in money or property from the payor's general assets or from a separate fund created by the payor or
- (2) a payment on or from
- (A) an installment contract or note;
- (B) a private or commercial annuity;
- (C) a deferred compensation agreement;
- (D) an employee death benefit;
- (E) an individual retirement account; or
- (F) a pension plan, profit-sharing plan, stock plan, bonus plan, or stock-ownership plan.
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