(201) Determination and distribution of net income
N.D. Cent. Code § 59-04.2-04
in effect59-04.2-04. (201) Determination and distribution of net income
After a decedent dies, in the case of an estate, or after an income interest in a trust ends,
the following rules apply:
1. A fiduciary of an estate or of a terminating income interest shall determine the amount
of net income and net principal receipts received from property specifically given to a
beneficiary under the rules in sections 59-04.2-06 through 59-04.2-29 which apply to
trustees and the rules in subsection 5. The fiduciary shall distribute the net income and
net principal receipts to the beneficiary who is to receive the specific property.
2. A fiduciary shall determine the remaining net income of a decedent's estate or a
terminating income interest under the rules in sections 59-04.2-06 through 59-04.2-29
which apply to trustees and by:
a. Including in net income all income from property used to discharge liabilities.
b. Paying from income or principal, in the fiduciary's discretion, fees of attorneys,
accountants, and fiduciaries; court costs and other expenses of administration;
and interest on death taxes, but the fiduciary may pay those expenses from
income of property passing to a trust for which the fiduciary claims an estate tax
marital or charitable deduction only to the extent that the payment of those
expenses from income will not cause the reduction or loss of the deduction.
c. Paying from principal all other disbursements made or incurred in connection with
the settlement of a decedent's estate or the winding up of a terminating income
interest, including debts, funeral expenses, disposition of remains, family
allowances, and death taxes and related penalties that are apportioned to the
estate or terminating income interest by the will, the terms of the trust, or
applicable law.
3. A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright
the interest or any other amount provided by the will, the terms of the trust, or
applicable law from net income determined under subsection 2 or from principal to the
extent that net income is insufficient. If a beneficiary is to receive a pecuniary amount
outright from a trust after an income interest ends and no interest or other amount is
provided for by the terms of the trust or applicable law, the fiduciary shall distribute the
interest or other amount to which the beneficiary would be entitled under applicable
law if the pecuniary amount were required to be paid under a will.
4. A fiduciary shall distribute the net income remaining after distributions required by
subsection 3 in the manner described in section 59-04.2-05 to all other beneficiaries,
including a beneficiary who receives a pecuniary amount in trust, even if the
beneficiary holds an unqualified power to withdraw assets from the trust or other
presently exercisable general power of appointment over the trust.
5. A fiduciary may not reduce principal or income receipts from property described in
subsection 1 because of a payment described in section 59-04.2-24 or 59-04.2-25 to
the extent that the will, the terms of the trust, or applicable law requires the fiduciary to
make the payment from assets other than the property or to the extent that the
fiduciary recovers or expects to recover the payment from a third party. The net
income and principal receipts from the property are determined by including all of the
amounts the fiduciary receives or pays with respect to the property, whether those
amounts accrued or became due before, on, or after the date of a decedent's death or
an income interest's terminating event, and by making a reasonable provision for
amounts that the fiduciary believes the estate or terminating income interest may
become obligated to pay after the property is distributed.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t59c04-2.pdf#nameddest=59-04p2-04Fetched: 10/16/2026