                                 CODE OF VIRGINIA

DISTRIBUTION TO SUCCESSOR BENEFICIARY (§ 64.2-1072)

A. Except to the extent Article 3 (&#xA7; 64.2-1039 et seq.) applies for a
beneficiary that is a trust, each beneficiary described in subsection F of
&#xA7; 64.2-1071 is entitled to receive a share of the net income equal to the
beneficiary&#8217;s fractional interest in undistributed principal assets, using
values as of the distribution date. If a fiduciary makes more than one
distribution of assets to beneficiaries to which this section applies, each
beneficiary, including a beneficiary that does not receive part of the
distribution, is entitled, as of each distribution date, to a share of the net
income the fiduciary received after the decedent&#8217;s death, an income
interest&#8217;s other terminating event, or the preceding distribution by the
fiduciary.

B. In determining a beneficiary&#8217;s share of net income under subsection A,
the following rules apply:

   1. The beneficiary is entitled to receive a share of the net income equal to
   the beneficiary&#8217;s fractional interest in the undistributed principal
   assets immediately before the distribution date.

   2. The beneficiary&#8217;s fractional interest under subdivision 1 must be
   calculated:
   				a. On the aggregate value of the assets as of the distribution date
   without reducing the value by any unpaid principal obligation; and
   				b. Without regard to:

      1. Property specifically given to a beneficiary under the decedent&#8217;s
      will or the terms of the trust; and

      2. Property required to pay pecuniary amounts not in trust.

   3. The distribution date under subdivision 1 may be the date as of which the
   fiduciary calculates the value of the assets if that date is reasonably near
   the date on which the assets are distributed.

C. To the extent a fiduciary does not distribute under this section all of the
collected but undistributed net income to each beneficiary as of a distribution
date, the fiduciary shall maintain records showing the interest of each
beneficiary in the net income.

D. If this section applies to income from an asset, a fiduciary may apply the
rules in this section to net gain or loss realized from the disposition of the
asset after the decedent&#8217;s death, an income interest&#8217;s terminating
event, or the preceding distribution by the fiduciary.

HISTORY: 2022, c. 354.