N.Y. Estates, Powers & Trusts Law § 11-a-2.2: Distribution to residuary and remainder beneficiaries

§ 11-A-2.2 Distribution to residuary and remainder beneficiaries

(a) Each beneficiary described in paragraph 11-A-2.1 (4) 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, provided, however, that any amount allowed as

a tax deduction to the estate for income payable to a charitable

organization shall be paid, without diminution for taxes, to the

charitable organization entitled to receive such income. If a fiduciary

makes more than one 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:

(1) 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.

(2) 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.

(3) 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.

(4) 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.

(e) The portion of a beneficiary determined under paragraph (a) is

subject to the fiduciary's further power of adjustment under

subparagraph 11-2.3(b)(5), which adjustment if made shall be made to or

from the principal of such beneficiary's share. The fiduciary shall

maintain appropriate records showing the principal interest of each

beneficiary, as adjusted.