72-34-451. Transfer from income to principal in anticipation of principal disbursement. (1) If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements.
(2) Principal disbursements to which subsection (1) applies include the following, but only to the extent that the trustee has not been and does not expect to be reimbursed by a third party:
(a) an amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;
(b) a capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments;
(c) disbursements made to prepare property for rental, including tenant allowances, leasehold improvements, and broker's commissions;
(d) periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments; and
(e) disbursements described in 72-34-449(1)(g).
(3) If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends, a trustee may continue to transfer amounts from income to principal as provided in subsection (1).
History: En. Sec. 31, Ch. 506, L. 2003.
Structure Montana Code Annotated
Title 72. Estates, Trusts, and Fiduciary Relationships
Chapter 34. Principal and Income
Part 4. Montana Uniform Principal and Income Act
72-34-413. through 72-34-415 reserved
72-34-417. through 72-34-420 reserved
72-34-423. Allocation between principal and income -- impartial exercise of discretion
72-34-424. Adjustments between principal and income
72-34-426. Proceedings relating to adjustments -- remedy
72-34-427. Application of part
72-34-428. Rules applicable after decedent's death or termination of income interest
72-34-429. Beneficiary's portion of net income -- maintenance of records -- distribution date
72-34-431. Allocation of income receipt or disbursement
72-34-432. Undistributed income -- definition -- payment to beneficiary
72-34-433. Allocation of receipts to income or principal -- entity defined
72-34-434. Allocation of amounts received from specified trusts or estates
72-34-435. Separate accounting records for business or other activity
72-34-436. Amounts allocated to principal
72-34-437. Amounts received from rental property allocation
72-34-438. Interest on obligation to pay money -- allocation
72-34-440. Insubstantial allocation -- allocation of entire amount to principal -- exceptions
72-34-442. Receipts from liquidating assets -- allocation
72-34-443. Receipts from mineral interests and other natural resources -- allocation
72-34-444. Receipts from sale of timber and related products -- allocation
72-34-445. Increasing income in order to maintain marital deduction
72-34-448. Disbursements from income
72-34-449. Disbursements from principal
72-34-451. Transfer from income to principal in anticipation of principal disbursement
72-34-453. Adjustments between principal and income in certain cases