(a) Unless the trust provides otherwise, a beneficiary of a trust has a right to property that, by the terms of the trust, is to be specifically distributed to the beneficiary and to

(1) any amount of a condemnation award that is for the taking of the property and that is unpaid when the distribution becomes effective;

(2) any proceeds from fire or casualty insurance on, or other recovery for injury to, the property that are unpaid when the distribution becomes effective; and

(3) property owned by the settlor when the distribution becomes effective if the property is acquired as a result of foreclosure, or obtained in lieu of foreclosure, of the security interest for the specifically distributed obligation.

(b) Unless the covered trust provides otherwise, if property that is to be specifically distributed to a beneficiary of a covered trust is instead sold or mortgaged by a trustee of the covered trust, or if a condemnation award, insurance proceeds, or a recovery for injury to the property is paid to a trustee of the covered trust, the beneficiary has the right to a general pecuniary property distribution that is equal to the net sale price, the amount of the unpaid loan, the condemnation award, the insurance proceeds, or the recovery. In this subsection, “covered trust,” means a trust that was originally amendable or revocable by the settlor but that cannot be amended or revoked by the settlor because of the settlor's incapacity.

(c) The right of a beneficiary under (b) of this section is reduced by any right the beneficiary has under (a) of this section.

(d) [Repealed, § 3 ch 36 SLA 2001.]

(e) [Repealed, § 3 ch 36 SLA 2001.]