{"data":{"id":"us-ky/krs-386.456","jurisdiction":"us-ky","citation":"KRS 386.456","heading":"Determination and distribution of net income.","body":"After a decedent dies, in the case of an estate, or after an income interest in a trust ends,\nthe following rules apply:\n(1) A fiduciary of an estate or of a terminating income interest shall determine the\namount of net income and net principal receipts re ceived from property specifically\ngiven to a beneficiary under the rules in Articles 3, 4, and 5 of the Kentucky\nPrincipal and Income Act that apply to trustees and the rules in subsection (5) of\nthis section. The fiduciary shall distribute the net income and net principal receipts\nto the beneficiary who is to receive the specific property.\n(2) A fiduciary shall determine the remaining net income of a decedent's estate or a\nterminating income interest under the rules in Articles 3, 4, and 5 of the Kentucky\nPrincipal and Income Act that apply to trustees and by:\n(a) Including in net income all income from property used to discharge liabilities;\n(b) Paying from income or principal, in the fiduciary's discretion, fees to\nattorneys, accountants, and fiduciaries;  court costs and other expenses of\nadministration; and interest on death taxes, but the fiduciary may pay those\nexpenses from income of property passing to a trust for which the fiduciary\nclaims an estate tax marital or charitable deduction only to the ext ent that the\npayment of those expenses from income will not cause the reduction or loss of\nthe deduction; and\n(c) Paying from principal all other disbursements made or incurred in connection\nwith the settlement of a decedent's estate or the winding up of a  terminating\nincome interest, including debts, funeral expenses, disposition of remains,\nfamily allowances, and death taxes and related penalties that are apportioned\nto the estate or terminating income interest by the will, the terms of the trust,\nor applicable law.\n(3) A fiduciary shall distribute to a beneficiary who receives a pecuniary amount\noutright the interest or any other amount provided by the will, the terms of the trust,\nor applicable law from net income determined under subsection (2) of this section,\nor from principal to the extent that net income is insufficient. If a beneficiary is to\nreceive a pecuniary amount outright from a trust after an income interest ends and\nno interest or other amount is provided for by the terms of the trust or app licable\nlaw, the fiduciary shall distribute the interest or other amount to which the\nbeneficiary would be entitled under applicable law if the pecuniary amount were\nrequired to be paid under a will.\n(4) A fiduciary shall distribute the net income remainin g after distributions required by\nsubsection (3) of this section in the manner described in KRS 386.458 to all other\nbeneficiaries, including a beneficiary who receives a pecuniary amount in trust,\neven if the beneficiary holds an unqualified power to with draw assets from the trust\nor other presently exercisable general power of appointment over the trust.\n(5) A fiduciary shall not reduce principal or income receipts from property described in\nsubsection (1) of this section because of a payment described in KRS 386.490 to the\nextent that the will, the terms of the trust, or applicable law requires the fiduciary to\nmake the payment from assets other than the property or to the extent that the\nfiduciary recovers or expects to recover the payment from a third p arty. The net\nincome and principal receipts from the property are determined by including all of\nthe amounts the fiduciary receives or pays with respect to the property, whether\nthose amounts accrued or became due before, on, or after the date of a deceden t's\ndeath or an income interest's terminating event, and by making a reasonable\nprovision for amounts that the fiduciary believes the estate or terminating income\ninterest may become obligated to pay after the property is distributed.","path":["KRS Chapter 386"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=35920","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:16Z","sha256":"8544f3efaecacbce44fa9ad14025e94435855f05555c08651b444b114124f0ca","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386.454","next":"us-ky/krs-386.458"},"notice":"GroundRules: Original legal text. Not legal advice."}