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PARRIS N. GLENDENING, Governor
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Ch. 292
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(C) THIS SECTION DOES NOT APPLY TO A CONTRACT TO WHICH § 15-516 OF
THIS SUBTITLE APPLIES.
(D) (1) THIS SUBSECTION APPLIES TO ANY OBLIGATION FOR THE PAYMENT
OF MONEY AT A FUTURE TIME, PROVIDED THE OBLIGATION WAS HELD AS AN ASSET
OF A TRUST THAT WAS IRREVOCABLE ON OCTOBER 1, 2000 (REGARDLESS OF
WHETHER THE ASSET WAS ACQUIRED BEFORE OR AFTER OCTOBER 1, 2000), AND
PROVIDED THE TRUSTEE MAKES AN IRREVOCABLE ELECTION ON THE FIRST
YEAR-END ACCOUNTING OF THE TRUSTS PRINCIPAL AND INCOME STATED AFTER
SEPTEMBER 30, 2000 TO ALLOCATE DISTRIBUTIONS IN ACCORDANCE WITH THIS
SUBSECTION, INCLUDING:
(I) A BOND;
(II) A ZERO COUPON BOND;
(III) AN ANNUITY CONTRACT BEFORE UNITIZATION;
(IV) A LIFE INSURANCE CONTRACT BEFORE THE DEATH OF THE
INSURED; AND
(V) ' AN INTEREST IN A COMMON TRUST FUND AS DEFINED UNDER §
584 OF THE INTERNAL REVENUE CODE WITH RESPECT TO CHARITABLE REMAINDER
TRUSTS AS DEFINED UNDER § 664 OF THE INTERNAL REVENUE CODE AND POOLED
INCOME FUNDS AS DEFINED UNDER § 642(C)(5) OF THE INTERNAL REVENUE CODE.
(2) UNLESS OTHERWISE PROVIDED IN THE TRUST INSTRUMENT OR IN
THIS SUBTITLE, THE INCREMENT IN VALUE OF AN OBLIGATION FOR THE PAYMENT
OF MONEY PAYABLE AT A FUTURE TIME IN ACCORDANCE WITH A FIXED, VARIABLE,
OR DISCRETIONARY SCHEDULE OF APPRECIATION IN EXCESS OF THE PRICE AT
WHICH IT WAS ISSUED SHALL BE DISTRIBUTABLE AS INCOME.
(3) THE INCREMENT IN VALUE IS DISTRIBUTABLE TO THE BENEFICIARY
WHO WAS THE INCOME BENEFICIARY AT THE TIME OF THE INCREMENT FROM THE
FIRST PRINCIPAL CASH AVAILABLE OR, IF NONE IS AVAILABLE, WHEN REALIZED BY
SALE, REDEMPTION, OR OTHER DISPOSITION. WHENEVER UNREALIZED INCREMENT
IS DISTRIBUTED AS INCOME, BUT OUT OF PRINCIPAL, THE PRINCIPAL SHALL BE
REIMBURSED FOR THE INCREMENT WHEN REALIZED.
(4) FOR PURPOSES OF THIS SUBSECTION, THE INCREMENT IN VALUE OF
AN OBLIGATION FOR THE PAYMENT OF MONEY SHALL BE AVAILABLE FOR
DISTRIBUTION ONLY WHEN THE TRUSTEE RECEIVES CASH ON ACCOUNT OF THE
OBLIGATION.
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SUBPART C. RECEIPTS NORMALLY APPORTIONED.
15-515. INSUBSTANTIAL ALLOCATIONS NOT REQUIRED.
IF A TRUSTEE DETERMINES THAT AN ALLOCATION BETWEEN PRINCIPAL AND
INCOME REQUIRED BY § 15-516, § 15-517, § 15-518, § 15-519, OR § 15-522 OF THIS
SUBTITLE IS INSUBSTANTIAL, THE TRUSTEE MAY ALLOCATE THE ENTIRE AMOUNT
TO PRINCIPAL. AN ALLOCATION IS PRESUMED TO BE INSUBSTANTIAL IF:
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- 1713 -
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