16345. (a) An income beneficiary is entitled to net income from the
date on which the income interest begins. An income interest begins
on the date specified in the trust or, if no date is specified, on
the date an asset becomes subject to a trust or successive income
(b) An asset becomes subject to a trust at the following times:
(1) In the case of an asset that is transferred to a trust during
the transferor's life, on the date it is transferred to the trust.
(2) In the case of an asset that becomes subject to a trust by
reason of a will, even if there is an intervening period of
administration of the testator's estate, on the date of the testator'
(3) In the case of an asset that is transferred to a fiduciary by
a third party because of the individual's death, on the date of the
(c) An asset becomes subject to a successive income interest on
the day after the preceding income interest ends, as determined under
subdivision (d), even if there is an intervening period of
administration to wind up the preceding income interest.
(d) An income interest ends on the day before an income
beneficiary dies, or another terminating event occurs, or on the last
day of a period during which there is no beneficiary to whom a
trustee may distribute income.
16346. (a) A trustee shall allocate an income receipt or
disbursement other than one to which subdivision (a) of Section 16340
applies to principal if its due date occurs before a decedent dies
in the case of an estate or before an income interest begins in the
case of a trust or successive income interest.
(b) A trustee shall allocate an income receipt or disbursement to
income if its due date occurs on or after the date on which a
decedent dies or an income interest begins and it is a periodic due
date. An income receipt or disbursement shall be treated as accruing
from day to day if its due date is not periodic or it has no due
date. The portion of the receipt or disbursement accruing before the
date on which a decedent dies or an income interest begins shall be
allocated to principal and the balance shall be allocated to income.
(c) An item of income or an obligation is due on the date the
payer is required to make a payment. If a payment date is not stated,
there is no due date for the purposes of this chapter. Distributions
to shareholders or other owners from an entity to which Section
16350 applies are deemed to be due on the date fixed by the entity
for determining who is entitled to receive the distribution or, if no
date is fixed, on the declaration date for the distribution. A due
date is periodic for receipts or disbursements that must be paid at
regular intervals under a lease or an obligation to pay interest or
if an entity customarily makes distributions at regular intervals.
16347. (a) For the purposes of this section, "undistributed income"
means net income received before the date on which an income
interest ends. The term does not include an item of income or expense
that is due or accrued or net income that has been added or is
required to be added to principal by the trust.
(b) Except as provided in subdivision (c), on the date when a
mandatory income interest ends, the trustee shall pay to a mandatory
income beneficiary who survives that date, or to the estate of a
deceased mandatory income beneficiary whose death causes the interest
to end, the beneficiary's share of the undistributed income that is
not disposed of under the trust.
(c) If immediately before the income interest ends, the
beneficiary under subdivision (b) has an unqualified power to revoke
more than 5 percent of the trust, the undistributed income from the
portion of the trust that may be revoked shall be added to principal.
(d) When a trustee's obligation to pay a fixed annuity or a fixed
fraction of the value of the trust's assets ends, the trustee shall
prorate the final payment.