Calculating Each Beneficiary's Share
Residuary and remainder beneficiaries do not receive a flat amount. Instead, each one is entitled to a portion of net income that matches their fractional interest in the undistributed principal assets. That fraction is calculated using asset values as of the distribution date, which keeps the calculation tied to current reality rather than outdated estimates.
Each beneficiary described in section 14-7405, paragraph 4 is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date.
A.R.S. § 14-7406(A)If a fiduciary distributes assets in stages, the calculation resets with each distribution. Every beneficiary is entitled to the net income the fiduciary received between the prior distribution date and the current one. That applies even to beneficiaries who do not receive assets in a particular round.
What Gets Excluded From the Calculation
The fractional interest is calculated without counting property that was specifically given to another beneficiary or property set aside to pay pecuniary amounts that are not in trust. This prevents double counting and ensures residuary beneficiaries share only in the assets that actually belong to the residuary pool.
If the fiduciary cannot distribute all collected but undistributed net income at once, the statute requires appropriate records showing each beneficiary's interest. The fiduciary may also apply these rules to net gains or losses from selling principal assets, to the extent the fiduciary considers it appropriate. This flexibility helps fiduciaries handle complex estates where income and principal are intertwined.