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PARRIS N. GLENDENING, Governor
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H.B. 881
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15-515.
(A) (1) 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
UNLESS ONE OF THE CIRCUMSTANCES DESCRIBED IN § 15-502.2(D) OF THIS SUBTITLE
APPLIES TO THE ALLOCATION.
(2) THIS POWER MAY BE EXERCISED BY A COTRUSTEE IN THE
CIRCUMSTANCES DESCRIBED IN § 15.502.2(E) OF THIS SUBTITLE, AND MAY BE
RELEASED FOR THE REASONS AND IN THE MANNER DESCRIBED IN § 15-502.2(F) OF
THIS SUBTITLE.
(B) An allocation is presumed to be insubstantial if:
(1) The amount of the allocation would increase or decrease net income
in an accounting period, as determined before the allocation, by less than 10 percent;
or
(2) The value of the asset producing the receipt for which the allocation
would be made is less than 10 percent of the total value of the trust's assets at the
beginning of the accounting period.
15-520.
(a) (1) If a marital deduction is allowed for all or part of a trust whose assets
consist substantially of property that does not provide the spouse with sufficient
income from or use of the trust assets, AND IF THE AMOUNTS THAT THE TRUSTEE
TRANSFERS FROM PRINCIPAL TO INCOME UNDER § 15-502.2(A) OF THIS SUBTITLE
AND DISTRIBUTES TO THE SPOUSE FROM PRINCIPAL IN ACCORDANCE WITH THE
TERMS OF THE TRUST ARE INSUFFICIENT TO PROVIDE THE SPOUSE WITH THE
BENEFICIAL ENJOYMENT REQUIRED TO OBTAIN THE MARITAL DEDUCTION, the
spouse may require the trustee to make property productive of income, [or] convert
property within a reasonable time, OR MAY REQUEST THE TRUSTEE EXERCISE THE
POWER CONFERRED BY § 15-502.2(A) OF THIS SUBTITLE.
(2) The trustee may decide which action or combination of actions to
take.
(b) In cases not governed by subsection (a) of this section, proceeds from the
sale or other disposition of an asset are principal without regard to the amount of
income the asset produces during any accounting period.
15-528.
(a) A fiduciary may make adjustments between principal and income to offset
the shifting of economic interests or tax benefits between income beneficiaries and
remainder beneficiaries which arise from:
(1) Elections and decisions, other than those described in subsection (b)
of this section, that the fiduciary makes from time to time regarding tax matters;
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- 5257 -
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