ORS 129.355
UPIA 409. Deferred compensation, annuities and similar payments


(1)

In this section, the following terms have the following meanings:

(a)

“Payment” means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer’s general assets or from a separate fund created by the payer. For purposes of subsections (4), (5), (6) and (7) of this section, the term also includes any payment from any separate fund, regardless of the reason for the payment.

(b)

“Separate fund” includes a private or commercial annuity, an individual retirement account and a pension, profit-sharing, stock-bonus or stock-ownership plan.

(2)

Except as provided in subsection (8) of this section, to the extent that a payment is characterized as interest, a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate that portion of the payment to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend or an equivalent payment.

(3)

Except as provided in subsection (8) of this section, if no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income 10 percent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not required to be made to the extent that it is made because the trustee exercises a right of withdrawal.

(4)

Except as provided in subsection (5) of this section, subsections (6) and (7) of this section apply, and subsections (2) and (3) of this section do not apply, in determining the allocation of a payment made from a separate fund to either of the following:

(a)

A trust for which an election has been made to qualify for a marital deduction under 26 U.S.C. 2056(b)(7), as in effect on June 9, 2011; or

(b)

A trust that qualifies for the marital deduction under 26 U.S.C. 2056(b)(5), as in effect on June 9, 2011.

(5)

Subsections (4), (6) and (7) of this section do not apply in determining the allocation of a series of payments made from a separate fund if and to the extent that the series of payments would, without the application of subsection (4) of this section, qualify for the marital deduction under 26 U.S.C. 2056(b)(7)(C), as in effect on June 9, 2011.

(6)

Except as provided in subsection (7) of this section, a trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to this chapter. Upon request of the surviving spouse, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The trustee shall allocate the balance of the payment to principal. Upon request of the surviving spouse, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.

(7)

If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal four percent of the fund’s value, according to the most recent statement of value preceding the beginning of the accounting period. If the trustee can determine neither the internal income of the separate fund nor the fund’s value, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under 26 U.S.C. 7520, as in effect on June 9, 2011, for the month preceding the accounting period for which the computation is made.

(8)

Intentionally left blank —Ed.

(a)

An increase in value of the following obligations over the value of the obligations at the time of acquisition by the trust is distributable as income:

(A)

A zero coupon security.

(B)

A deferred annuity contract surrendered wholly or partially before annuitization.

(C)

A life insurance contract surrendered wholly or partially before the death of the insured.

(D)

Any other obligation for the payment of money that is 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.

(b)

For purposes of this subsection, the increase in value of an obligation is available for distribution only when the trustee receives cash on account of the obligation. If the obligation is surrendered or partially liquidated, the cash available must be attributed first to the increase. The increase is distributable to the income beneficiary who is the beneficiary at the time the cash is received.

(9)

This section does not apply to a payment to which ORS 129.360 (UPIA 410. Liquidating asset) applies. [2003 c.279 §18; 2011 c.307 §1]
Note: Section 2, chapter 307, Oregon Laws 2011, provides:
Sec. 2. (1) Except as provided in subsection (2) of this section, the amendments to ORS 129.355 (UPIA 409. Deferred compensation, annuities and similar payments) by section 1 of this 2011 Act apply to the determination of the allocation of payments from separate funds made on or after January 1, 2011.

(2)

The amendments to ORS 129.355 (UPIA 409. Deferred compensation, annuities and similar payments) by section 1 of this 2011 Act apply to the determination of the allocation of payments from separate funds made on or after the death of the grantor if:

(a)

The trust established by the grantor is not funded on or before January 1, 2011; or

(b)

The trust established by the grantor is first funded in calendar year 2011. [2011 c.307 §2]

Source: Section 129.355 — UPIA 409. Deferred compensation, annuities and similar payments, https://www.­oregonlegislature.­gov/bills_laws/ors/ors129.­html.

129.200
UPIA 101. Short title
129.205
UPIA 102. Definitions
129.210
UPIA 103. Fiduciary duties
129.215
UPIA 104. Trustee’s power to adjust
129.220
UPIA 105. Judicial control of discretionary power
129.225
Conversion to unitrust
129.250
UPIA 201. Determination and distribution of net income
129.255
UPIA 202. Distribution to residuary and remainder beneficiaries
129.270
UPIA 301. When right to income begins and ends
129.275
UPIA 302. Apportionment of receipts and disbursements when decedent dies or income interest begins
129.280
UPIA 303. Apportionment when income interest ends
129.300
UPIA 401. Character of receipts
129.305
UPIA 402. Distribution from trust or estate
129.308
UPIA 403. Business and other activities conducted by trustee
129.310
UPIA 404. Principal receipts
129.315
UPIA 405. Rental property
129.320
UPIA 406. Obligation to pay money
129.325
UPIA 407. Insurance policies and similar contracts
129.350
UPIA 408. Insubstantial allocations not required
129.355
UPIA 409. Deferred compensation, annuities and similar payments
129.360
UPIA 410. Liquidating asset
129.365
UPIA 411. Minerals, water and other natural resources
129.370
UPIA 412. Timber
129.375
UPIA 413. Property not productive of income
129.380
UPIA 414. Derivatives and options
129.385
UPIA 415. Asset-backed securities
129.400
UPIA 501. Disbursements from income
129.405
UPIA 502. Disbursements from principal
129.410
UPIA 503. Transfers from income to principal for depreciation
129.415
UPIA 504. Transfers from income to reimburse principal
129.420
UPIA 505. Income taxes
129.425
UPIA 506. Adjustments between principal and income because of taxes
129.450
UPIA 601. Uniformity of application and construction
Green check means up to date. Up to date