§ 637.502

637.502 Disbursements from principal. 1. A trustee shall make disbursements from principal according to the following:a. The remaining one-half of the disbursements described in section 637.501, subsections 1 and 2. b. All of the trustee’s compensation calculated on principal as an acceptance, distribution, or termination fee, and disbursements made to prepare property for sale. c. Payments on the principal of a trust debt.d. Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property. e. Insurance premiums paid on a policy not described in section 637.501, subsection 4, of which the trust is the owner and beneficiary. f. Estate, inheritance, and other transfer taxes, including penalties, apportioned to the trust. g. Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases ofsubstances, collecting amounts from persons liable or potentially liable for the costs of thoseactivities, penalties imposed under

tivities and the release of substances, preventing future releases ofsubstances, collecting amounts from persons liable or potentially liable for the costs of thoseactivities, penalties imposed under environmental laws or regulations and other paymentsmade to comply with those laws or regulations, statutory or common law claims by thirdparties, and defending claims based on environmental matters. 2. If a trust owns a policy of insurance on the life of an individual and the trust is not the beneficiary of the policy, premiums paid on the policy are a distribution from principal to thepolicy beneficiary. 3. If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to incomean amount equal to the income paid to the creditor in reduction of the obligation’s principalbalance. 99 Acts, ch 124, §25Referred to in §637.201, 637.410, 637.504 Sat Dec 23 12:19:19 2023 Iowa Code 2024, Section 637.502 (17, 0)