§ 637.502 — Disbursements from principal

Iowa § 637.502

• Jurisdiction: Iowa
• Title XV: JUDICIAL BRANCH AND JUDICIAL PROCEDURES
• Ch. 637: UNIFORM PRINCIPAL AND INCOME ACT

Text

1. A trustee shall make disbursements from principal according to the following:
a. The remaining one-half of the disbursements described in section 637.501, subsections
1 and 2.
b. All of the trustee’s compensation calculated on principal as an acceptance, distribution,
or termination fee, and disbursements made to prepare property for sale.
c. Payments on the principal of a trust debt.
d. Expenses of a proceeding that concerns primarily principal, including a proceeding to
construe the trust or to protect the trust or its property.
e. Insurance premiums paid on a policy not described in section 637.501, subsection 4, of
which the trust is the owner and beneficiary.
f. Estate, inheritance, and other transfer taxes, including penalties, apportioned to the
trust.
g. Disbursements related to environmental matters, including reclamation, assessing
environmental conditions, remedying and removing environmental contamination,
monitoring remedial activities and the release of substances, preventing future releases of
substances, collecting amounts from persons liable or potentially liable for the costs of those
activities, penalties imposed under environmental laws or regulations and other payments
made to comply with those laws or regulations, statutory or common law claims by third
parties, and defending claims based on environmental matters.
2. If a trust owns a policy of insurance on the life of an individual and the trust is not the
beneficiary of the policy, premiums paid on the policy are a distribution from principal to the
policy beneficiary.
3. If a principal asset is encumbered with an obligation that requires income from that
asset to be paid directly to the creditor, the trustee shall transfer from principal to income

an amount equal to the income paid to the creditor in reduction of the obligation’s principal
balance.