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Title 2 Wills, Decedents' Estates and Probate Code

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Contents: 465 provisions

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465 provisions

2-3-608. Repealed By Laws 2001, Ch. 11, § 2.

Repealed By Laws 2001, Ch. 11, § 2.

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2-3-609. Repealed By Laws 2001, Ch. 11, §2.

Repealed By Laws 2001, Ch. 11, §2.

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2-3-610. Repealed By Laws 2001, Ch. 11, § 2.

Repealed By Laws 2001, Ch. 11, § 2.

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2-3-611. Repealed By Laws 2001, Ch. 11, § 2.

Repealed By Laws 2001, Ch. 11, § 2.

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2-3-612. Repealed By Laws 2001, Ch. 11, § 2.

Repealed By Laws 2001, Ch. 11, § 2.

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2-3-613. Repealed By Laws 2001, Ch. 11, § 2.

Repealed By Laws 2001, Ch. 11, § 2.

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2-3-614. Repealed By Laws 2001, Ch. 11, § 2.

Repealed By Laws 2001, Ch. 11, § 2.

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2-3-701. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-702. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-703. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-704. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-705. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-706. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-707. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-708. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-709. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-710. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-711. Repealed By Laws 1996, ch. 65, § 4.

Repealed By Laws 1996, ch. 65, § 4.

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2-3-801. Short title.

This act shall be known and may be cited as the "Wyoming Uniform Principal and Income Act".

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2-3-802. Definitions.

(a) As used in this act: (i) "Accounting period" means a calendar year unless another twelve-month period is selected by a fiduciary. The term includes a portion of a calendar year or other twelve-month period that begins when an income interest begins or ends when an income interest ends; (ii) "Beneficiary" includes, in the case of a decedent's estate, an heir, legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary; (iii) "Fiduciary" means a personal representative or a trustee. The term includes an executor, administrator, successor personal representative, special administrator and a person performing substantially the same function; (iv) "Income" means money or property that a fiduciary receives as current return from a principal asset. The term includes a portion of receipts from a sale, exchange or liquidation of a principal asset, to the extent provided in W.S. 2-3-811 through 2-3-825; (v) "Income beneficiary" means a person to whom net income of a trust is or may be payable; (vi) "Income interest" means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion; (vii) "Mandatory income interest" means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute; (viii) "Net income" means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under this act to or from income during the period; (ix) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture; government, governmental subdivision, agency or instrumentality; public corporation; or any other legal or commercial entity; (x) "Principal" means property held in trust for distribution to a remainder beneficiary when the trust terminates; (xi) "Remainder beneficiary" means a person entitled to receive principal when an income interest ends; (xii) "Terms of a trust" means the manifestation of the intent of a settlor or decedent with respect to the trust, expressed in a manner that admits of its proof in a judicial proceeding, whether by written or spoken words or by conduct; (xiii) "Trustee" includes an original, additional or successor trustee, whether or not appointed or confirmed by a court; (xiv) "This act" means W.S. 2-3-801 through 2-3-834.

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2-3-803. Fiduciary duties; general principles.

(a) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of W.S. 2-3-806 through 2-3-810, a fiduciary: (i) Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in this act; (ii) May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this act, and no inference that the fiduciary has improperly exercised the discretion arises from the fact that the fiduciary has made an allocation contrary to a provision of this act; (iii) Shall administer a trust or estate in accordance with this act if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration; and (iv) Shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust and this act do not provide a rule for allocating the receipt or disbursement to or between principal and income. (b) In exercising the power to adjust under W.S. 2-3-804(a) or a discretionary power of administration regarding a matter within the scope of this act, whether granted by the terms of a trust, a will, or this act, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one (1) or more of the beneficiaries. A determination in accordance with this act is presumed to be fair and reasonable to all of the beneficiaries.

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2-3-804. Trustee's power to adjust; liability of trustee.

(a) Subject to subsections (b) and (c) of this section, a trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to the trust's income, and the trustee determines, after applying the rules in W.S. 2-3-803(a), and considering any power the trustee may have under the trust to invade principal or accumulate income, that the trustee is unable to comply with W.S. 2-3-803(b). (b) In deciding whether and to what extent to exercise the power conferred by subsection (a) of this section, a trustee shall consider all factors relevant to the trust and its beneficiaries, including the following factors to the extent they are relevant: (i) The nature, purpose and expected duration of the trust; (ii) The intent of the settlor; (iii) The identity and circumstances of the beneficiaries; (iv) The needs for liquidity, regularity of income and preservation and appreciation of capital; (v) The assets held in the trust; the extent to which they consist of financial assets, interests in closely held enterprises, tangible and intangible personal property, or real property; the extent to which an asset is used by a beneficiary; and whether an asset was purchased by the trustee or received from the settlor; (vi) The net amount allocated to income under the other sections of this act and the increase or decrease in the value of the principal assets, which the trustee may estimate as to assets for which market values are not readily available; (vii) Whether and to what extent the terms of the trust give the trustee the power to invade principal or accumulate income or prohibit the trustee from invading principal or accumulating income, and the extent to which the trustee has exercised a power from time to time to invade principal or accumulate income; (viii) The actual and anticipated effect of economic conditions on principal and income and effects of inflation and deflation; and (ix) The anticipated tax consequences of an adjustment. (c) A trustee may not make an adjustment: (i) That diminishes the income interest in a trust that requires all of the income to be paid at least annually to a spouse and for which an estate tax or gift tax marital deduction would be allowed, in whole or in part, if the trustee did not have the power to make the adjustment; (ii) That reduces the actuarial value of the income interest in a trust to which a person transfers property with the intent to qualify for a gift tax exclusion; (iii) That changes the amount payable to a beneficiary as a fixed annuity or a fixed fraction of the value of the trust assets; (iv) From any amount that is permanently set aside for charitable purposes under a will or the terms of a trust unless both income and principal are so set aside; (v) If possessing or exercising the power to make an adjustment causes an individual to be treated as the owner of all or part of the trust for income tax purposes, and the individual would not be treated as the owner if the trustee did not possess the power to make an adjustment; (vi) If possessing or exercising the power to make an adjustment causes all or part of the trust assets to be included for estate tax purposes in the estate of an individual who has the power to remove a trustee or appoint a trustee, or both, and the assets would not be included in the estate of the individual if the trustee did not possess the power to make an adjustment; (vii) If the trustee is a beneficiary of the trust; or (viii) If the trustee is not a beneficiary, but the adjustment would benefit the trustee directly or indirectly. (d) If paragraph (c)(v), (vi), (vii) or (viii) of this section applies to a trustee and there is more than one (1) trustee, a cotrustee to whom the provision does not apply may make the adjustment unless the exercise of the power by the remaining trustee or trustees is not permitted by the terms of the trust. (e) A trustee may release the entire power conferred by subsection (a) of this section or may release only the power to adjust from income to principal or the power to adjust from principal to income if the trustee is uncertain about whether possessing or exercising the power will cause a result described in paragraphs (c)(i) through (vi) or (viii) of this section or if the trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in subsection (c) of this section. The release may be permanent or for a specified period, including a period measured by the life of an individual. (f) Terms of a trust that limit the power of a trustee to make an adjustment between principal and income do not affect the application of this section unless it is clear from the terms of the trust that the terms are intended to deny the trustee the power of adjustment conferred by subsection (a) of this section. (g) Nothing in this section or in this act is intended to create or imply a duty to make an adjustment, and a trustee is not liable for not considering whether to make an adjustment or for choosing not to make an adjustment. (h) If a trustee elects to exercise the power to adjust under this statute, the trustee may, on an annual basis, include net realized capital gains in determining trust income and section 643(a) of the Internal Revenue Code distributable net income, if the allocation is reasonable and impartial.

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2-3-805. Notice of proposed action; objections of beneficiary; liability of trustee; proceedings.

(a) Unless a trust instrument requires otherwise, a trustee may give notice of proposed action regarding a matter governed by this act as provided in this section. For the purpose of this section, a proposed action includes a course of action and a decision not to take action. (b) If a trustee elects to give notice under this section, the trustee shall mail notice of the proposed action to all beneficiaries who are receiving, or are entitled to receive, income under the trust or to receive a distribution of principal if the trust were terminated at the time the notice is given. (c) Notice of proposed action need not be given to any person who consents in writing to the proposed action. The consent may be executed at any time before or after the proposed action is taken. (d) The notice of proposed action shall state that it is given pursuant to this section and shall state all of the following: (i) The name and mailing address of the trustee; (ii) The name and telephone number of a person who may be contacted for additional information; (iii) A description of the action proposed to be taken and an explanation of the reasons for the action; (iv) The time within which objections to the proposed action can be made, which shall be at least thirty (30) days from the mailing of the notice of proposed action; and (v) The date on or after which the proposed action may be taken or is effective. (e) A beneficiary may object to the proposed action by mailing a written objection to the trustee at the address stated in the notice of proposed action within the time period specified in the notice of proposed action. (f) Except for good cause shown, a trustee is not liable to a beneficiary for an action regarding a matter governed by this act if the trustee does not receive a written objection to the proposed action from the beneficiary within the applicable period and the other requirements of this section are satisfied. If no beneficiary entitled to notice objects under this section, the trustee is not liable to any current or future beneficiary with respect to the proposed action. (g) If the trustee receives a written objection within the applicable period, either the trustee or a beneficiary may petition the court to have the proposed action taken as proposed, taken with modifications, or denied. In the proceeding, a beneficiary objecting to the proposed action has the burden of proving that the trustee's proposed action should not be taken. A beneficiary who has not objected is not estopped from opposing the proposed action in the proceeding. If the trustee decides not to implement the proposed action, the trustee shall notify the beneficiaries of the decision not to take the action and the reasons for the decision, and the trustee's decision not to implement the proposed action does not itself give rise to liability to any current or future beneficiary. A beneficiary may petition the court to have the action taken, and has the burden of proving that it should be taken.

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2-3-806. Determination and distribution of net income.

(a) After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply: (i) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary under the rules in W.S. 2-3-808 through 2-3-831 which apply to trustees and the rules in paragraph (v) of this subsection. The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property; (ii) A fiduciary shall determine the remaining net income of a decedent's estate or a terminating income interest under the rules in W.S. 2-3-808 through 2-3-831 which apply to trustees and by: (A) Including in net income all income from property used to discharge liabilities; (B) Paying from income or principal, in the fiduciary's discretion, fees of attorneys, accountants and fiduciaries; court costs and other expenses of administration; and interest on death taxes, but the fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment of those expenses from income will not cause the reduction or loss of the deduction; and (C) Paying from principal all other disbursements made or incurred in connection with the settlement of a decedent's estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust or applicable law. (iii) A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright the interest or any other amount provided by the will, the terms of the trust, or applicable law from net income determined under paragraph (ii) of this subsection or from principal to the extent that net income is insufficient. If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends and no interest or other amount is provided for by the terms of the trust or applicable law, the fiduciary shall distribute the interest or other amount to which the beneficiary would be entitled under applicable law if the pecuniary amount were required to be paid under a will; (iv) A fiduciary shall distribute the net income remaining after distributions required by paragraph (iii) of this subsection in the manner described in W.S. 2-3-807 to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust; (v) A fiduciary may not reduce principal or income receipts from property described in paragraph (i) of this subsection because of a payment described in W.S. 2-3-826 or 2-3-827 to the extent that the will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent that the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the date of a decedent's death or an income interest's terminating event, and by making a reasonable provision for amounts that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed.

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2-3-807. Distribution to residuary and remainder beneficiaries.

(a) Each beneficiary described in W.S. 2-3-806(a)(iv) is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one (1) distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one who does not receive part of the distribution, is entitled, as of each distribution date, to the net income the fiduciary has received after the date of death or terminating event or earlier distribution date but has not distributed as of the current distribution date. (b) In determining a beneficiary's share of net income, the following rules apply: (i) The beneficiary is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date, including assets that later may be sold to meet principal obligations; (ii) The beneficiary's fractional interest in the undistributed principal assets must be calculated without regard to property specifically given to a beneficiary and property required to pay pecuniary amounts not in trust; (iii) The beneficiary's fractional interest in the undistributed principal assets must be calculated on the basis of the aggregate value of those assets as of the distribution date without reducing the value by any unpaid principal obligation; and (iv) The distribution date for purposes of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which assets are actually distributed. (c) If a fiduciary does not distribute all of the collected but undistributed net income to each person as of a distribution date, the fiduciary shall maintain appropriate records showing the interest of each beneficiary in that net income. (d) A fiduciary may apply the rules in this section, to the extent that the fiduciary considers it appropriate, to net gain or loss realized after the date of death or terminating event or earlier distribution date from the disposition of a principal asset if this section applies to the income from the asset.

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2-3-808. When right to income begins and ends.

(a) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest. (b) An asset becomes subject to a trust: (i) On the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life; (ii) On the date of a testator's death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate; or (iii) On the date of an individual's death in the case of an asset that is transferred to a fiduciary by a third party because of the individual's death. (c) An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (d) of this section, even if there is an intervening period of administration to wind up the preceding income interest. (d) An income interest ends on the day before an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.

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2-3-809. Apportionment of receipts and disbursements when decedent dies or income interest begins.

(a) A trustee shall allocate an income receipt or disbursement other than one to which W.S. 2-3-806(a)(i) applies to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest. (b) A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins must be allocated to principal and the balance must be allocated to income. (c) An item of income or an obligation is due on the date the payer is required to make a payment. If a payment date is not stated, there is no due date for the purposes of this act. Distributions to shareholders or other owners from an entity to which W.S. 2-3-810 applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.

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2-3-810. Apportionment when income interest ends.

(a) In this section, "undistributed income" means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust. (b) When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than five percent (5%) of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked must be added to principal. (c) When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate or other tax requirements.

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2-3-811. Character of receipts.

(a) In this section, "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund or any other organization in which a trustee has an interest other than a trust or estate to which W.S. 2-3-811 applies, a business or activity to which W.S. 2-3-813 applies or an asset-backed security to which W.S. 2-3-825 applies. (b) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity. (c) A trustee shall allocate the following receipts from an entity to principal: (i) Property other than money; (ii) Money received in one (1) distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity; (iii) Money received in total or partial liquidation of the entity; and (iv) Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes. (d) Money is received in partial liquidation: (i) To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or (ii) If the total amount of money and property received in a distribution or series of related distributions is greater than twenty percent (20%) of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt. (e) Money is not received in partial liquidation, nor may it be taken into account under paragraph (d)(ii) of this section, to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money. (f) A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.

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2-3-812. Distribution from trust or estate.

A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest, and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in such a trust to a trustee, W.S. 2-3-811 or 2-3-825 applies to a receipt from the trust.

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2-3-813. Business and other activities conducted by trustee.

(a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets. (b) A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business. (c) Activities for which a trustee may maintain separate accounting records include: (i) Retail, manufacturing, service and other traditional business activities; (ii) Farming; (iii) Raising and selling livestock and other animals; (iv) Management of rental properties; (v) Extraction of minerals and other natural resources; (vi) Timber operations; and (vii) Activities to which W.S. 2-3-824 applies.

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2-3-814. Principal receipts.

(a) A trustee shall allocate to principal: (i) To the extent not allocated to income under this act, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest or a payer under a contract naming the trust or its trustee as beneficiary; (ii) Money or other property received from the sale, exchange, liquidation or change in form of a principal asset, including realized profit, subject to W.S. 2-3-811 through 2-3-825; (iii) Amounts recovered from third parties to reimburse the trust because of disbursements described in W.S. 2-3-827(a)(vii) or for other reasons to the extent not based on the loss of income; (iv) Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income; (v) Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income; and (vi) Other receipts as provided in W.S. 2-3-818 through 2-3-825.

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2-3-815. Rental property.

To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.

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2-3-816. Obligation to pay money.

(a) An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium. (b) A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to the trustee more than one (1) year after it is purchased or acquired by the trustee, including an obligation the purchase price or value of which when it is acquired is less than its value at maturity. If the obligation matures within one (1) year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income. (c) This section does not apply to obligations to which W.S. 2-3-819 through 2-3-822, 2-3-824 or 2-3-825 applies.

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2-3-817. Insurance policies and similar contracts.

(a) Except as otherwise provided in subsection (b) of this section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal. (b) A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to W.S. 2-3-813, loss of profits from a business. (c) This section does not apply to a contract to which W.S. 2-3-819 applies.

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2-3-818. Insubstantial allocation not required.

(a) If a trustee determines that an allocation between principal and income required by W.S. 2-3-819 through 2-3-822 or 2-3-825 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in W.S. 2-3-804(c) applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in W.S. 2-3-804(d) and may be released for the reasons and in the manner described in W.S. 2-3-804(e). An allocation is presumed to be insubstantial if: (i) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than ten percent (10%); or (ii) The value of the asset producing the receipt for which the allocation would be made is less than ten percent (10%) of the total value of the trust's assets at the beginning of the accounting period.

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2-3-819. Deferred compensation, annuities and similar payments.

(a) As used in this section: (i) "Payment" means a payment that a trustee may receive over a fixed number of years or during the life of one (1) or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer. For the purposes of subsections (d) through (g) of this section, the term also includes any payment from any separate fund, regardless of the reason for the payment; (ii) "Separate fund" includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus or stock-ownership plan. (b) To the extent that a payment is characterized by the separate fund as interest, a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend or an equivalent payment. (c) If no part of a payment is characterized by the separate fund as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income ten percent (10%) of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of 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. (d) Except as otherwise provided in subsection (e) of this section, subsections (f) and (g) of this section shall apply, and subsection (b) and (c) of this section shall not apply in determining the allocation of a payment made from a separate fund to: (i) A trust to which an election to qualify for a marital deduction under section 2056(b)(7) of the Internal Revenue Code has been made; (ii) A trust that qualifies for the marital deduction under section 2056(b)(5) of the Internal Revenue Code; or (iii) A trust which requires payment of all trust income to the trust beneficiaries during the accounting period. (e) Paragraph (d)(i) and subsections (f) and (g) of this section shall not apply if, and to the extent that, the series of payments would, without the application of paragraph (d)(i) of this section, qualify for the marital deduction under section 2056(b)(7)(C) of the Internal Revenue Code. (f) A trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a separate trust fund subject to this act. Upon request of the surviving spouse or other trust beneficiaries with the right to all the trust income, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to or for the benefit of the surviving spouse or other trust beneficiaries with the right to all the trust income. The trustee shall allocate the balance of the payment to the principal. Upon request of the surviving spouse or other trust beneficiaries with the right to all the trust income, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period. (g) If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal three percent (3%) of the fund's value, according to the most recent statement of value preceding the beginning of the accounting period. If the trustee can determine neither the internal income of the separate fund nor the fund's value, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under section 7520 of the Internal Revenue Code for the month preceding the accounting period for which the computation is made. (h) This section does not apply to payments to which W.S. 2-3-820 applies.

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2-3-820. Liquidating asset.

(a) In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right and right to receive payments during a period of more than one (1) year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to W.S. 2-3-819, resources subject to W.S. 2-3-821, timber subject to W.S. 2-3-822, an activity subject to W.S. 2-3-824, an asset subject to W.S. 2-3-825 or any asset for which the trustee establishes a reserve for depreciation under W.S. 2-3-828. (b) A trustee shall allocate to income ten percent (10%) of the receipts from a liquidating asset and the balance to principal.

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2-3-821. Minerals, water and other natural resources.

(a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows: (i) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income; (ii) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal; (iii) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus or delay rental is more than nominal, twenty-seven and one-half percent (27.5%) must be allocated to principal and the balance to income; (iv) If an amount is received from a working interest or any other interest not provided for in paragraph (i), (ii) or (iii) of this subsection, twenty-seven and one-half percent (27.5%) of the net amount received must be allocated to principal and the balance to income. (b) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, twenty-seven and one-half percent (27.5%) of the amount must be allocated to principal and the balance to income. (c) This act applies whether or not a decedent or donor was extracting minerals, water or other natural resources before the interest became subject to the trust. (d) If a trust owns an interest in minerals, water or other natural resources on the effective date of this act, the trustee may allocate receipts from the interest as provided in this act or in the manner used by the trustee before the effective date of this act. If the trust acquires an interest in minerals, water or other natural resources after the effective date of this act, the trustee shall allocate receipts as provided in this act.

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2-3-822. Timber.

(a) To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts: (i) To income to the extent that the amount of timber removed from the land does not exceed the estimated rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest; (ii) To principal to the extent that the amount of timber removed from the land exceeds the estimated rate of growth of the timber or the net receipts are from the sale of standing timber; (iii) To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease or contract and applying the rules in paragraphs (i) and (ii) of this subsection; or (iv) To principal to the extent that advance payments, bonuses and other payments are not allocated pursuant to paragraph (i), (ii) or (iii) of this subsection. (b) In determining net receipts to be allocated pursuant to subsection (a) of this section, a trustee shall deduct and transfer to principal a reasonable amount for depletion. (c) This act applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust. (d) If a trust owns an interest in timberland on the effective date of this act, the trustee may allocate net receipts from the sale of timber and related products as provided in this act or in the manner used by the trustee before the effective date of this act. If the trust acquires an interest in timberland after the effective date of this act, the trustee shall allocate net receipts from the sale of timber and related products as provided in this act.

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