Section 4.34 The Unitrust Alternative to the § 469.405, RSMo, Adjustment Power

• Library: Trusts and Powers 2013 Supp

E. (§4.34) The Unitrust Alternative to the § 469.405, RSMo, Adjustment Power

Missouri has adopted a unitrust alternative to the Adjustment Power. Section 469.411, RSMo Supp. 2005. In essence, this alternative generally allows a trustee to elect to determine net income as a unitrust amount for any trust created under an instrument that became irrevocable on, before, or after August 28, 2001. Section 469.411.5(2). In making this election, the trustee may specify the percentage to be used to determine the unitrust amount, provided that the percentage is between three and five percent. Id. The percentage is applied to the net fair market value of the trust—as calculated under numerous smoothing and other provisions set forth in the statute—to determine the unitrust amount. This unitrust amount is deemed to be the “net income” of the trust. See § 469.401(8), RSMo Supp. 2005. Thus, the traditional rules regarding the allocation of receipts and disbursements do not impact the calculation of “net income” for trusts making the unitrust election.

While the specific operation of the unitrust statute is beyond the scope of this chapter, it should be noted that, in making the unitrust election, a trustee is subject to the same limitations and conditions as apply to an adjustment between income and...