Mass. Gen. Laws » Part II Title II Chapter 203D
Massachusetts General Laws

Mass. Gen. Laws ch. 203D, § 18 (2026)

Deferred compensation, annuities and similar payments

✓ current as of July 2026
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Section 18. (a) If a payment is characterized as interest or a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend, or an equivalent payment.

(b) If no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income 10 per cent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not required to be made if it is made because the trustee exercises a right of withdrawal.

(c) If, to obtain an estate tax marital deduction for a trust, a trustee shall allocate more of a payment to income than provided for by this section, the trustee shall allocate to income the additional amount necessary to obtain the marital deduction.

(d) This section shall not apply to payments to which section 19 applies.

Notes of Decisions
Cited in 1 case, 2016–2016 · leading case: Heyn v. Dir. of the Off. of Medicaid, 48 N.E.3d 480 (Mass. App. Ct. 2016).
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Heyn v. Dir. of the Off. of Medicaid, 48 N.E.3d 480 (Mass. App. Ct. 2016). “In particular, the allocation of annuity payments as between principal and income is governed by G. L. c. 203D, § 18(a), which creates a statutory presumption that any amount received by the trust, not expressly characterized as dividend or interest income, shall be allocated to…”
Mass. Gen. Laws ch. 203D, § 18(a): 1 case
Heyn v. Dir. of the Off. of Medicaid, 48 N.E.3d 480 (Mass. App. Ct. 2016). “In particular, the allocation of annuity payments as between principal and income is governed by G. L. c. 203D, § 18(a), which creates a statutory presumption that any amount received by the trust, not expressly characterized as dividend or interest income, shall be allocated to…”
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