637.201 Determination and distribution of net income. After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply: 1. A fiduciary of an estate or a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to abeneficiary under the rules in subchapters III through V that apply to trustees, and under therules in subsection 5. The fiduciary shall distribute the net income and net principal receiptsto the beneficiary who is to receive the specific property. 2. A fiduciary shall determine the remaining net income of a decedent’s estate or a terminating income interest under the rules in subchapters III through V that apply totrustees, and by doing the following: 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 intereston death taxes, but the fiduciary may pay those expenses from income of property passingto a trust for which the fiduciary claims an ies; court costs and other expenses of administration; and intereston death taxes, but the fiduciary may pay those expenses from income of property passingto a trust for which the fiduciary claims an estate tax marital or charitable deduction onlyto the extent that the payment of those expenses from income will not cause the loss of thededuction. 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 taxesand related penalties that are apportioned to the estate or terminating income interest by thewill, the terms of the trust, or applicable law. 3. A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright the amount, if any, provided by the will, the terms of the trust, or applicable law, from netincome determined under subsection 2 or from principal to the extent the net income isinsufficient. If a beneficiary is to receive a pecuniary amount outright from a trust after anincome interest ends and no amount is provided for by the terms of the trust the extent the net income isinsufficient. If a beneficiary is to receive a pecuniary amount outright from a trust after anincome interest ends and no amount is provided for by the terms of the trust or applicablelaw, the fiduciary shall distribute the amount to which the beneficiary would be entitled underapplicable law if the pecuniary amount were required to be paid under a will. 4. A fiduciary shall distribute the net income remaining after distributions required by subsection 3 in the manner described in section 637.202 to all other beneficiaries, includinga beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds anunqualified power to withdraw assets from the trust or other presently exercisable generalpower of appointment over the trust. 5. A fiduciary shall not reduce principal or income receipts from property described in subsection 1 because of a payment described in section 637.501 or 637.502 to the extent thatthe will, the terms of the trust, or applicable law requires the fiduciary to make the paymentfrom assets other than the property or to the extent that the fiduciary recovers or expectsto recover the payment from a third party. rust, or applicable law requires the fiduciary to make the paymentfrom assets other than the property or to the extent that the fiduciary recovers or expectsto recover the payment from a third party. The property’s net income and principal receiptsare determined by including all of the amounts the fiduciary receives or pays with respect tothe property, whether those amounts accrued or became due before, on, or after the date ofa decedent’s death or an income interest’s terminating event, and by making a reasonableprovision for amounts that the fiduciary believes the estate or terminating income interestmay become obligated to pay after the property is distributed. 99 Acts, ch 124, §4; 2021 Acts, ch 76, §150Referred to in §637.202, 637.302, 637.501 Sat Dec 23 12:19:05 2023 Iowa Code 2024, Section 637.201 (18, 0)
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