                                 CODE OF VIRGINIA

DEFINITIONS (§ 64.2-1033)

As used in this chapter, unless the context requires a different meaning:
		&#8220;Accounting period&#8221; means a calendar year, unless a fiduciary
selects another period of 12 calendar months or approximately 12 calendar
months. &#8220;Accounting period&#8221; includes a part of a calendar year or
another period of 12 calendar months or approximately 12 calendar months that
begins when an income interest begins or ends when an income interest ends.
		&#8220;Asset-backed security&#8221; means a security that is serviced
primarily by the cash flows of a discrete pool of fixed or revolving receivables
or other financial assets that by their terms convert into cash within a finite
time. &#8220;Asset-backed security&#8221; includes rights or other assets that
ensure the servicing or timely distribution of proceeds to the holder of the
asset-backed security. &#8220;Asset-backed security&#8221; does not include an
asset to which § 64.2-1048, 64.2-1056, or 64.2-1061 applies.
		&#8220;Beneficiary&#8221; includes:

1. For a trust, (i) a current beneficiary, including a current income
beneficiary and a beneficiary that may receive only principal; (ii) a remainder
beneficiary; and (iii) any other successor beneficiary;

2. For an estate, an heir, legatee, and devisee; and

3. For a life estate or term interest, a person that holds a life estate, term
interest, or remainder or other interest following a life estate or term
interest.
			&#8220;Court&#8221; means the court in the Commonwealth having jurisdiction
relating to a trust, estate, or life estate or other term interest described in
subdivision 2 of &#xA7; 64.2-1034.
			&#8220;Current income beneficiary&#8221; means a beneficiary to which a
fiduciary may distribute net income, whether or not the fiduciary also may
distribute principal to the beneficiary.
			&#8220;Distribution&#8221; means a payment or transfer by a fiduciary to a
beneficiary in the beneficiary&#8217;s capacity as a beneficiary, made under the
terms of the trust, without consideration other than the beneficiary&#8217;s
right to receive the payment or transfer under the terms of the trust.
&#8220;Distribute,&#8221; &#8220;distributed,&#8221; and
&#8220;distributee&#8221; have corresponding meanings.
			&#8220;Estate&#8221; means a decedent&#8217;s estate. &#8220;Estate&#8221;
includes the property of the decedent as the estate is originally constituted
and the property of the estate as it exists at any time during administration.
			&#8220;Fiduciary&#8221; includes a trustee, trust director under the Uniform
Directed Trust Act (&#xA7; 64.2-779.26 et seq.), personal representative, life
tenant, holder of a term interest, and person acting under a delegation from a
fiduciary. &#8220;Fiduciary&#8221; includes a person that holds property for a
successor beneficiary whose interest may be affected by an allocation of
receipts and expenditures between income and principal. If there are two or more
co-fiduciaries, &#8220;fiduciary&#8221; includes all co-fiduciaries acting under
the terms of the trust and applicable law.
			&#8220;Income&#8221; means money or other property a fiduciary receives as
current return from principal. &#8220;Income&#8221; includes a part of receipts
from a sale, exchange, or liquidation of a principal asset, to the extent
provided in Articles 4 (&#xA7; 64.2-1048 et seq.), 5 (&#xA7; 64.2-1051 et seq.),
and 6 (&#xA7; 64.2-1055 et seq.).
			&#8220;Income interest&#8221; means the right of a current income beneficiary
to receive all or part of net income, whether the terms of the trust require the
net income to be distributed or authorize the net income to be distributed in
the fiduciary&#8217;s discretion. &#8220;Income interest&#8221; includes the
right of a current beneficiary to use property held by a fiduciary.
			&#8220;Independent person&#8221; means a person that is not:

1. For a trust, (i) a qualified beneficiary determined under &#xA7; 64.2-701,
(ii) a settlor of the trust, or (iii) an individual whose legal obligation to
support a beneficiary may be satisfied by a distribution from the trust;

2. For an estate, a beneficiary;

3. A spouse, parent, brother, sister, or issue of an individual described in
subdivision 1 or 2;

4. A corporation, partnership, limited liability company, or other entity in
which persons described in subdivision 1, 2, or 3, in the aggregate, have voting
control; or

5. An employee of a person described in subdivision 1, 2, 3, or 4.
			&#8220;Mandatory income interest&#8221; means the right of a current income
beneficiary to receive net income that the terms of the trust require the
fiduciary to distribute.
			&#8220;Net income&#8221; means the total allocations during an accounting
period to income under the terms of a trust and this chapter minus the
disbursements during the period, other than distributions, allocated to income
under the terms of the trust and this chapter. To the extent the trust is a
unitrust under Article 3 (&#xA7; 64.2-1039 et seq.), &#8220;net income&#8221;
means the unitrust amount determined under Article 3. &#8220;Net income&#8221;
includes an adjustment from principal to income under &#xA7; 64.2-1038.
&#8220;Net income&#8221; does not include an adjustment from income to principal
under &#xA7; 64.2-1038.
			&#8220;Person&#8221; means an individual, estate, trust, business or
nonprofit entity, public corporation, government or governmental subdivision,
agency, or instrumentality, or other legal entity.
			&#8220;Personal representative&#8221; means an executor, administrator,
successor personal representative, special administrator, or person that
performs substantially the same function with respect to an estate under the law
governing the person&#8217;s status.
			&#8220;Principal&#8221; means property held in trust for distribution to,
production of income for, or use by a current or successor beneficiary.
			&#8220;Record&#8221; means information that is inscribed on a tangible medium
or that is stored in an electronic or other medium and is retrievable in
perceivable form.
			&#8220;Settlor&#8221; has the same meaning as the definition provided in
&#xA7; 64.2-701.
			&#8220;Special tax benefit&#8221; means:

1. Exclusion of a transfer to a trust from gifts described in &#xA7; 2503(b) of
the Internal Revenue Code of 1986, as amended, because of the qualification of
an income interest in the trust as a present interest in property;

2. Status as a qualified subchapter S trust described in &#xA7; 1361(d)(3) of
the Internal Revenue Code of 1986, as amended, at a time the trust holds stock
of an S corporation described in &#xA7; 1361(a)(1) of the Internal Revenue Code
of 1986, as amended;

3. An estate or gift tax marital deduction for a transfer to a trust under
&#xA7; 2056 or 2523 of the Internal Revenue Code of 1986, as amended, which
depends or depended in whole or in part on the right of the settlor&#8217;s
spouse to receive the net income of the trust;

4. Exemption in whole or in part of a trust from the federal generation-skipping
transfer tax imposed by &#xA7; 2601 of the Internal Revenue Code of 1986, as
amended, because the trust was irrevocable on September 25, 1985, if there is
any possibility that (i) a taxable distribution, as defined in &#xA7; 2612(b) of
the Internal Revenue Code of 1986, as amended, could be made from the trust or
(ii) a taxable termination, as defined in &#xA7; 2612(a) of the Internal Revenue
Code of 1986, as amended, could occur with respect to the trust; or

5. An inclusion ratio, as defined in &#xA7; 2642(a) of the Internal Revenue Code
of 1986, as amended, of the trust that is less than one, if there is any
possibility that (i) a taxable distribution, as defined in &#xA7; 2612(b) of the
Internal Revenue Code of 1986, as amended, could be made from the trust or (ii)
a taxable termination, as defined in &#xA7; 2612(a) of the Internal Revenue Code
of 1986, as amended, could occur with respect to the trust.
			&#8220;Successive interest&#8221; means the interest of a successor
beneficiary.
			&#8220;Successor beneficiary&#8221; means a person entitled to receive income
or principal or to use property when an income interest or other current
interest ends.
			&#8220;Terms of a trust&#8221; means:

1. Except as otherwise provided in subdivision 2, the manifestation of the
settlor&#8217;s intent regarding a trust&#8217;s provisions as (i) expressed in
the trust instrument or (ii) established by other evidence that would be
admissible in a judicial proceeding;

2. The trust&#8217;s provisions as established, determined, or amended by (i) a
trustee or trust director in accordance with applicable law, (ii) court order,
or (iii) a nonjudicial settlement agreement under &#xA7; 64.2-709;

3. For an estate, a will; or

4. For a life estate or term interest, the corresponding manifestation of the
rights of the beneficiaries.
			&#8220;Trust&#8221; includes all trusts described in &#xA7; 64.2-700.
			&#8220;Trustee&#8221; means a person, other than a personal representative,
that owns or holds property for the benefit of a beneficiary.
&#8220;Trustee&#8221; includes an original, additional, or successor trustee,
whether or not appointed or confirmed by a court.
			&#8220;Will&#8221; means any testamentary instrument recognized by applicable
law that makes a legally effective disposition of an individual&#8217;s
property, effective at the individual&#8217;s death. &#8220;Will&#8221; includes
a codicil or other amendment to a testamentary instrument.

HISTORY: 2022, c. 354.