How Each Beneficiary's Share Is Calculated
Residuary and remainder beneficiaries do not get a flat amount. Instead, each one gets a share of net income based on their fractional interest in the remaining assets.
That fraction uses asset values as of the distribution date. In other words, the math stays tied to current values, not old 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 hands out assets in stages, the math resets each time. Each beneficiary gets the net income collected since the last distribution. This applies even if a beneficiary does not get assets in that round.
What Gets Left Out of the Calculation
The fractional interest does not count property given to a specific beneficiary. It also leaves out property set aside for fixed dollar gifts not held in trust. This prevents double counting.
When a surviving spouse is one of several residuary beneficiaries, estate income taxes can shrink the pool. The fiduciary must handle these costs before paying out shares.
If the fiduciary cannot pay out all collected net income at once, the law requires proper records. These records must show each beneficiary's interest. The fiduciary may also use these rules for gains or losses from selling principal assets.