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§ 15-521. Derivatives and options

West's Annotated Code of MarylandEstates and TrustsEffective: October 1, 2019

West's Annotated Code of Maryland
Estates and Trusts (Refs & Annos)
Title 15. Fiduciaries (Refs & Annos)
Subtitle 5. Maryland Uniform Principal and Income Act (Refs & Annos)
Part IV. Allocation of Receipts During Administration of Trust (Refs & Annos)
Subpart C. Receipts Normally Apportioned (Refs & Annos)
Effective: October 1, 2019
MD Code, Estates and Trusts, § 15-521
§ 15-521. Derivatives and options
Currentness
Derivative defined
(a) In this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.
Transactions in derivatives allocated as principal
(b) To the extent that a trustee does not account under § 15-510 of this subtitle for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
Transactions involving options allocated as principal
(c)(1) If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option shall be allocated to principal.
(2) An amount paid to acquire the option shall be paid from principal.
(3) A gain or loss realized on the exercise of an option, including an option granted to a settlor of the trust for services rendered, shall be allocated to principal.

Credits

Added by Acts 2000, c. 292, § 2, eff. Oct. 1, 2000. Amended by Acts 2019, c. 197, § 1, eff. Oct. 1, 2019.
MD Code, Estates and Trusts, § 15-521, MD EST & TRST § 15-521
Current through legislation effective through April 25, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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