(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.
(b) To the extent that a trustee does not account under RCW 11.104A.120 for transactions in derivatives, the trustee shall allocate to principal receipts
from and disbursements made in connection with those transactions.
(c) 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 must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted
to a settlor of the trust for services rendered, must be allocated to principal.
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