ARTICLE 1 FIDUCIARY

Cross references: For bank and trust company fiduciaries and common trust funds, see articles 24 and 101 to 109 of title 11; for legal investments, see part 6 of article 75 of title 24 and article 60 of title 11; for investment of police officers' and firefighters' pension funds, see article 30.5 of title 31; for investments by veterans administration fiduciaries, see § 28-5-301; for investment by custodians under the "Colorado Uniform Transfers to Minors Act", see § 11-50-113; for abolition of the rule against perpetuities in cases of cemetery trust and employee pension trust, see §§ 38-30-110 to 38-30-112.

Section

PART 1 GENERAL PROVISIONS

PART 2 DISTRIBUTION BY FIDUCIARIES OF EXPRESS TRUSTS

PART 3 FIDUCIARY INVESTMENTS

PART 4 UNIFORM PRINCIPAL AND INCOME ACT

PART 5 FIDUCIARY PROPERTY - DEPOSITORY NOMINEES

PART 6 UNIFORM FIDUCIARY SECURITY TRANSFERS ACT

PART 7 FIDUCIARY INTERESTS IN ENTITIES

PART 8 POWERS

PART 9 DISCLAIMER OF SUCCESSION - NONTESTAMENTARY INSTRUMENTS

PART 10 CHARITABLE, EDUCATIONAL, RELIGIOUS, AND BENEVOLENT TRUSTS

PART 11 UNIFORM PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT

PART 12 LIFE ESTATE IN PROPERTY OF SURVIVING SPOUSE

PART 13 UNIFORM STATUTORY FORM POWER OF ATTORNEY ACT

PART 14 RESTRICTIONS ON EXERCISE OF CERTAIN FIDUCIARY POWERS

PART 15 REVISED UNIFORM FIDUCIARY ACCESS TO DIGITAL ASSETS ACT

15-1-101. Short title.

This part 1 shall be known and may be cited as the "Uniform Fiduciaries Law".

Source: L. 23: p. 178, § 14. CSA: C. 67, § 14. CRS 53: § 57-1-14. C.R.S. 1963: § 57-1-13.

15-1-102. Legislative declaration.

This part 1 shall be interpreted and construed so as to effectuate its general purpose to make uniform the law of those states which enact it.

Source: L. 23: p. 178, § 13. CSA: C. 67, § 13. CRS 53: § 57-1-13. C.R.S. 1963: § 57-1-12.

15-1-103. Definitions.

As used in this part 1, unless the context otherwise requires:

1. "Bank" includes any person or association of persons, whether incorporated or not, carrying on the business of banking.
2. "Fiduciary" includes a trustee under any trust, expressed, implied, resulting, or constructive, executor, administrator, personal representative, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust, or estate.
3. "Person" includes a corporation, partnership, or other association, or two or more persons having a joint or common interest.
4. "Principal" includes any person to whom a fiduciary as such owes an obligation.

Source: L. 23: p. 173, § 1. CSA: C. 67, § 1. CRS 53: § 57-1-1. C.R.S. 1963: § 57-1-1. L. 2002: (2) amended, p. 650, § 1, effective July 1.

15-1-104. Prior transactions.

The provisions of this part 1 shall not apply to transactions taking place prior to April 16, 1923.

Source: L. 23: p. 178, § 11. CSA: C. 67, § 11. CRS 53: § 57-1-11. C.R.S. 1963: § 57-1-10.

15-1-105. Application of payments to fiduciary.

A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.

Source: L. 23: p. 174, § 2. CSA: C. 67, § 2. CRS 53: § 57-1-2. C.R.S. 1963: § 57-1-2.

15-1-106. Transfer of negotiable instruments by fiduciary.

If any negotiable instrument payable or indorsed to a fiduciary as such is indorsed by the fiduciary, or if any negotiable instrument payable or indorsed to his principal is indorsed by a fiduciary empowered to indorse such instrument on behalf of his principal, the indorsee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in indorsing or delivering the instrument and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor or is transferred in any transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in transferring the instrument.

Source: L. 23: p. 174, § 4. CSA: C. 67, § 4. CRS 53: § 57-1-4. C.R.S. 1963: § 57-1-3.

15-1-107. Check drawn by fiduciary payable to third person, effect.

If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, the payee is not bound to inquire whether the fiduciary is committing a breach of his obligations as fiduciary in drawing or delivering the instrument and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor or is drawn and delivered in any transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the instrument.

Source: L. 23: p. 175, § 5. CSA: C. 67, § 5. CRS 53: § 57-1-5. C.R.S. 1963: § 57-1-4.

15-1-108. Check drawn by and payable to fiduciary, effect.

If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, payable to the fiduciary personally or payable to a third person and by him transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith.

Source: L. 23: p. 175, § 6. CSA: C. 67, § 6. CRS 53: § 57-1-6. C.R.S. 1963: § 57-1-5.

15-1-109. Deposit in name of fiduciary.

If a deposit is made in a bank to the credit of a fiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with the name in which such deposit is entered, without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.

Source: L. 23: p. 176, § 7. CSA: C. 67, § 7. CRS 53: § 57-1-7. C.R.S. 1963: § 57-1-6.

15-1-110. Check drawn upon account of principal by fiduciary.

If a check is drawn upon the account of his principal in a bank by a fiduciary who is empowered to draw checks upon his principal's account, the bank is authorized to pay such check without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing such check or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.

Source: L. 23: p. 176, § 8. CSA: C. 67, § 8. CRS 53: § 57-1-8. C.R.S. 1963: § 57-1-7.

15-1-111. Deposits in personal account of fiduciary.

If a fiduciary makes a deposit in a bank to his personal credit of checks drawn by him upon an account in his own name as fiduciary, or of checks payable to him as fiduciary, or of checks drawn by him upon an account in the name of his principal if he is empowered to draw checks on that account, or of checks payable to his principal and indorsed by him, if he is empowered to indorse such checks or if he otherwise makes a deposit of funds held by him as fiduciary, the bank receiving such deposit is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary by that action; and the bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal, unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in making such deposit or in drawing such check or with knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith.

Source: L. 23: p. 177, § 9. CSA: C. 67, § 9. CRS 53: § 57-1-9. C.R.S. 1963: § 57-1-8.

Cross references: For deposits by a fiduciary, see part 5 of this article.

15-1-112. Deposits in name of two or more trustees.

When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account by any trustee authorized by the other trustee to draw checks upon the trust account, neither the payee nor other holder nor the bank is bound to inquire whether it is a breach of trust to authorize such trustee to draw checks upon the trust account and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith.

Source: L. 23: p. 177, § 10. CSA: C. 67, § 10. CRS 53: § 57-1-10. C.R.S. 1963: § 57-1-9.

Cross references: For deposits by a fiduciary, see part 5 of this article.

15-1-112.5. Liability of a fiduciary for acts of predecessor fiduciary.

In the absence of actual knowledge or information which would cause a reasonable fiduciary to inquire further, a fiduciary shall be under no duty to examine the accounts and records of or inquire into the acts or omissions of a predecessor fiduciary and shall not be liable for failure to seek redress for any act or omission of any predecessor fiduciary.

Source: L. 77: Entire section added, p. 829, § 1, effective July 1.

15-1-113. Cases not provided for in law.

In any case not provided for in this part 1, the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments, and banking, shall continue to apply.

Source: L. 23: p. 178, § 12. CSA: C. 67, § 12. CRS 53: § 57-1-12. C.R.S. 1963: § 57-1-11.

15-1-201. When part 2 applicable.

This part 2 shall be applicable to all powers of appointment or disposition existing or created on or after April 1, 1953, the donees of which powers shall be living on such date.

Source: L. 53: p. 304, § 6. CRS 53: § 57-2-6. C.R.S. 1963: § 57-2-6.

15-1-201.5. Definitions.

As used in this part 2, "donee" has the same meaning as "powerholder" as set forth in section 15-2.5-102 (13).

Source: L. 2014: Entire section added, (HB 14-1353), ch. 209, p. 782, § 3, effective July 1, 2015.

15-1-202. Trustee not liable, when.

If a trustee of an express trust which includes property subject to a power of appointment or other power of disposition distributes such property to those persons who would take such property in default of appointment and such distribution is made not sooner than six months after the death of the donee of such power and without knowledge of the existence of an instrument exercising such power, he shall not be responsible to the appointee under the instrument exercising such power.

Source: L. 53: p. 303, § 1. CRS 53: § 57-2-1. C.R.S. 1963: § 57-2-1.

15-1-203. No liability if distribution under instrument.

If a trustee of an express trust which includes property subject to a power of appointment or other power of disposition distributes such property pursuant to an instrument exercising such power and without knowledge of any infirmity in such instrument and thereafter such instrument shall be held wholly or partially invalid, such trustee shall not be responsible to those persons who would take in default of appointment.

Source: L. 53: p. 303, § 2. CRS 53: § 57-2-2. C.R.S. 1963: § 57-2-2.

15-1-204. Rights of appointees.

Nothing in this part 2 shall be deemed to affect the right of the appointee of such property to trace such property into the hands of the distributee or to affect the cause of action of such appointee against such distributee.

Source: L. 53: p. 303, § 3. CRS 53: § 57-2-3. C.R.S. 1963: § 57-2-3.

15-1-205. Rights of persons entitled.

Nothing in this part 2 shall be deemed to affect the right of the person entitled to such property in default of appointment to trace such property into the hands of the appointee or to affect the cause of action of such person against such distributee.

Source: L. 53: p. 303, § 4. CRS 53: § 57-2-4. C.R.S. 1963: § 57-2-4.

15-1-206. Rights of bona fide purchasers.

Nothing in this part 2 shall be construed to impair the title or lien of a purchaser or mortgagee in good faith and for value from the person to whom such property was first conveyed pursuant to, or in default of, appointment, as the case may be.

Source: L. 53: p. 304, § 5. CRS 53: § 57-2-5. C.R.S. 1963: § 57-2-5.

15-1-301. Fiduciary defined.

The word "fiduciary" as used in this part 3 means original or successor administrators, special administrators, administrators cum testamento annexo, executors, guardians, conservators, and trustees, whether of express or implied trusts.

Source: L. 51: p. 841, § 5. CSA: C. 176, § 126(9). CRS 53: § 57-3-5. C.R.S. 1963: § 57-3-5.

15-1-302. Application.

The provisions of this part 3 shall apply to and govern all fiduciaries appointed or lawfully acting.

Source: L. 51: p. 841, § 3. CSA: C. 176, § 126(7). CRS 53: § 57-3-3. C.R.S. 1963: § 57-3-4.

15-1-303. Construction of part 3.

Nothing in this part 3 shall be construed as modifying or repealing either section 28-5-214 or section 28-5-301, C.R.S., with respect to investment of surplus funds by appointed guardians and conservators of minor and incompetent beneficiaries of the veterans administration.

Source: L. 51: p. 841, § 6. CSA: C. 176, § 126(10). CRS 53: § 57-3-6. C.R.S. 1963: § 57-3-6.

15-1-304. Standard for investments.

In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for the benefit of others, fiduciaries shall be required to have in mind the responsibilities which are attached to such offices and the size, nature, and needs of the estates entrusted to their care and shall exercise the judgment and care, under the circumstances then prevailing, which men of prudence, discretion, and intelligence exercise in the management of the property of another, not in regard to speculation but in regard to the permanent disposition of funds, considering the probable income as well as the probable safety of capital. Within the limitations of the foregoing standard, fiduciaries are authorized to acquire and retain every kind of property, real, personal, and mixed, and every kind of investment, specifically including, but not by way of limitation, bonds, debentures, and other corporate obligations, stocks, preferred or common, securities of any open-end or closed-end management type investment company or investment trust, and participations in common trust funds, which men of prudence, discretion, and intelligence would acquire or retain for the account of another.

Source: L. 51: p. 840, § 1. CSA: C. 176, § 126(5). CRS 53: § 57-3-1. C.R.S. 1963: § 57-3-1. L. 75: Entire section amended, p. 588, § 6, effective July 1.

Cross references: For investments by custodians under the "Colorado Uniform Transfers to Minors Act", see § 11-50-113; for legal investments, see part 6 of article 75 of title 24; for investments of police and fire pension funds, see § 31-31-302.

15-1-304.1. Standard for investments on and after July 1, 1995 - "Colorado Uniform Prudent Investor Act".

1. On and after July 1, 1995, when investing and managing assets, fiduciaries shall be governed by the standard for trustees set forth in the "Colorado Uniform Prudent Investor Act", article 1.1 of this title.
2. This section shall not apply to those persons, corporations, entities, or state agencies which were made subject to the provisions of section 15-1-304 by specific reference in another statute in existence prior to July 1, 1995.

Source: L. 95: Entire section added, p. 312, § 2, effective July 1.

15-1-305. Terms of instrument govern.

Nothing in this part 3 shall be construed as authorizing any departure from or variation of the express terms or limitations set forth in any will, agreement, court order, or other instrument creating or defining the fiduciary's duties and powers, but the terms "legal investment" or "authorized investment", or words of similar import as used in any such instrument, shall be taken to mean any investment which is permitted by the terms of section 15-1-304.

Source: L. 51: p. 840, § 2. CSA: C. 176, § 126(6). CRS 53: § 57-3-2. C.R.S. 1963: § 57-3-2.

15-1-306. Court not restricted.

Nothing in this part 3 shall be construed as restricting the power of a court of proper jurisdiction to permit a fiduciary to deviate from the terms of any will, agreement, or other instrument relating to the acquisition, investment, reinvestment, exchange, retention, sale, or management of estate or trust property.

Source: L. 51: p. 841, § 3. CSA: C. 176, § 126(7). CRS 53: § 57-3-3. C.R.S. 1963: § 57-3-3.

15-1-307. Powers of investment in persons other than fiduciary. (Repealed)

Source: L. 77: Entire section added, p. 829, § 2, effective July 1. L. 2014: Entire section repealed, (HB 14-1322), ch. 296, p. 1239, § 11, effective August 6.

15-1-308. Investments in United States government obligations.

In the absence of an express provision to the contrary, any fiduciary is authorized, whenever a governing instrument or order requires or permits investment in United States government obligations which are backed by the full faith and credit of the United States government, to invest in such obligations, either directly or in the form of the securities of or other interests in any open-end or closed-end management type investment company or investment trust registered under the federal "Investment Company Act of 1940", 15 U.S.C. sec. 80(a)-1 et seq., if the portfolio of such investment company or investment trust is limited to United States government obligations which are backed by the full faith and credit of the United States government and to repurchase agreements fully collateralized by such obligations and if any such investment company or investment trust actually takes delivery of such collateral, either directly or through an authorized custodian.

Source: L. 88: Entire section added, p. 645, § 1, effective April 6.

15-1-401 to 15-1-468. (Repealed)

Source: L. 2021: Entire part repealed, p. 841, § 2, effective January 1, 2022.

Editor's note: (1) This part 4 was numbered as article 4 of chapter 57, C.R.S. 1963. For amendments to this part 4 prior to its repeal in 2022, consult the 2021 Colorado Revised Statutes and the Colorado statutory research explanatory note beginning on page vii in the front of this volume.

(2) Section 15-1-468 provided for the repeal of this part 4, effective January 1, 2022. (See L. 2021, p. 841.)

15-1-501. Fiduciary property kept separate.

Every fiduciary shall keep fiduciary property separate and distinct from such fiduciary's own property and shall not invest or deposit the same with any person, association, or corporation in such fiduciary's own name. Except as provided in this part 5, every fiduciary shall keep the property of each fiduciary account separate and distinct from the property of every other fiduciary account, and all transactions shall be conducted in such fiduciary's name as fiduciary.

Source: L. 77: Entire part R&RE, p. 826, § 1, effective July 1.

Editor's note: This section is similar to former § 15-1-501 as it existed prior to 1977.

15-1-502. Nominees.

Any fiduciary may register or hold the title to fiduciary property in the name of a nominee.

Source: L. 77: Entire part R&RE, p. 826, § 1, effective July 1.

Editor's note: This section is similar to former § 15-1-501 as it existed prior to 1977.

15-1-503. Fiduciary property deposits.

Any fiduciary may deposit fiduciary property with a bank or trust company, including a federal reserve bank, or with a clearing corporation, as defined in section 4-8-102 (a)(5), C.R.S., as depository, and such fiduciary property so deposited may be registered in such depository's name as nominee for the fiduciary or may be registered in the name of a nominee of such depository.

Source: L. 77: Entire part R&RE, p. 826, § 1, effective July 1. L. 96: Entire section amended, p. 245, § 23, effective July 1.

Editor's note: This section is similar to former § 15-1-502 as it existed prior to 1977.

15-1-504. Holding of securities by fiduciary or depository of fiduciary property.

Any bank or trust company or clearing corporation acting as a fiduciary or depository of fiduciary property may merge and hold securities held as fiduciary property, without certification as to ownership attached, with other securities held as fiduciary property, in one or more certificates representing securities of the same class of the same issuer. Ownership of such securities may be transferred by bookkeeping entry on the books of the fiduciary or of the depository without physical delivery of certificates representing such securities.

Source: L. 77: Entire part R&RE, p. 826, § 1, effective July 1.

Editor's note: This section is similar to former § 15-1-503 as it existed prior to 1977.

15-1-505. Records.

The records of every fiduciary shall at all times show the ownership of any fiduciary property held by such fiduciary or in the name of its nominee or held in a depository.

Source: L. 77: Entire part R&RE, p. 827, § 1, effective July 1.

Editor's note: This section is similar to former § 15-1-505 as it existed prior to 1977.

15-1-506. Liability of issuer.

No issuer of securities or agent thereof shall be liable for registering or causing to be registered on the books of such issuer any securities in the name of any nominee or, when the transfer is made on the authorization of the nominee, for transferring or causing to be transferred on the books of the issuer any securities theretofore registered by the issuer in the name of any nominee.

Source: L. 77: Entire part R&RE, p. 827, § 1, effective July 1.

Editor's note: This section is similar to former § 15-1-506 as it existed prior to 1977.

15-1-507. Custodian as fiduciary.

For purposes of this part 5, a bank or trust company acting as custodian shall be deemed to be a fiduciary, and property held in custody by a bank or trust company shall be deemed to be fiduciary property.

Source: L. 77: Entire part R&RE, p. 827, § 1, effective July 1.

Editor's note: This section is similar to former § 15-1-507 as it existed prior to 1977.

15-1-508. Individual and corporate fiduciaries.

1. For purposes of this part 5, a bank or trust company acting as a fiduciary, alone or jointly with any cofiduciary, may take any action authorized by this part 5 without regard to the language or provisions, or any limitations, in the will or trust instrument or other instrument establishing the fiduciary relationship.
2. For purposes of this part 5, any fiduciary other than a bank or trust company may take any action authorized by this part 5, unless limited by the language or provisions in the will or trust instrument or other instrument establishing the fiduciary relationship expressing a clear intention that an action otherwise authorized by this part 5 shall be denied to such fiduciary.
3. Nothing in subsection (2) of this section shall be construed to limit the authority of a bank or trust company serving as a cofiduciary with one or more other fiduciaries or serving as a depository to take any action authorized by this part 5 which it could take if serving as sole fiduciary.

Source: L. 77: Entire part R&RE, p. 827, § 1, effective July 1.

15-1-509. Fiduciary duty.

In the exercise of any of the powers granted in this part 5, a fiduciary has a duty to act reasonably and equitably with due regard for his obligations and responsibilities toward the interests of beneficiaries and creditors and the estate or trust involved and the purposes thereof and with due regard for the manner in which men of prudence, discretion, and intelligence would act in the management of the property of another.

Source: L. 77: Entire part R&RE, p. 827, § 1, effective July 1.

15-1-510. Application.

This part 5 shall apply to every fiduciary, regardless of the date of the agreement, instrument, or court order by which the fiduciary is appointed.

Source: L. 77: Entire part R&RE, p. 827, § 1, effective July 1.

15-1-601 to 15-1-611. (Repealed)

Source: L. 96: Entire part repealed, p. 246, § 25, effective July 1.

Editor's note: This part 6 was numbered as article 6 of chapter 57, C.R.S. 1963. For amendments to this part 6 prior to its repeal in 1996, consult the Colorado statutory research explanatory note and the table itemizing the replacement volumes and supplements to the original volume of C.R.S. 1973 beginning on page vii in the front of this volume.

15-1-701. Power to become partner.

Subject to the terms of the partnership agreement, if permitted by the trust instrument or will under which the fiduciary serves or by order of a court having jurisdiction of the estate or trust, a fiduciary may enter into a partnership agreement and accept the assignment of or otherwise acquire, hold, and dispose of an interest in a partnership and in so doing may become either a general or a limited partner.

Source: L. 63: p. 496, § 1. C.R.S. 1963: § 57-7-1. L. 2002: Entire section amended, p. 650, § 2, effective July 1.

15-1-702. Family business interests - maintenance of entity - formation of successor entity.

1. As used in this section, unless the context otherwise requires:
   1. "Family" means an individual, such individual's spouse, parents, the descendants of either of such parents or of such spouse, or the spouses of such descendants or any combination of such persons.
   2. "Family business" means a business enterprise with respect to which the aggregate interests of the family are substantial in relation to the total outstanding interests in the business enterprise.
   3. "Interest" and "interests" include beneficial interests as beneficiaries of any estate or trust and indirect interests through any other form of entity.
   4. "Successor entity" includes the entity holding the family business where such entity survives a consolidation, merger, acquisition, or other combination.
2. Any fiduciary acting under a will or trust instrument that evidences an intent to retain an interest in a family business may maintain the interest in any form of entity or successor entity. Such a successor entity may be formed by consolidation, merger, acquisition, or other combination and shall be considered the same enterprise for purposes of maintaining the interest in the family business where the interests of the beneficiaries in the successor entity are substantial.
3. Except as otherwise provided in the instrument under which the fiduciary is acting:
   1. A fiduciary may proceed as provided in this subsection (3) with the formation of such a successor entity where the fiduciary believes in good faith that the formation is on a favorable basis considering only the overall interests of the beneficiaries including the maintenance of a substantial interest on the part of the beneficiaries in the enterprise and the value of such interest in the long term.
   2. A fiduciary may vote and otherwise deal with respect to interests in the family business as the fiduciary believes in the good faith exercise of the fiduciary's business judgment, under the business judgment rule, to be necessary or appropriate to complete such formation on such a favorable basis.
   3. A fiduciary may, in the good faith exercise of such judgment, accept a reduced participation in equity, voting, and other rights and preferences including a reduction in voting rights that results in less than voting control of the successor entity.
   4. A fiduciary may proceed without notice to the beneficiaries where disclosure is forbidden by law or where the fiduciary believes in the good faith exercise of such judgment, that nondisclosure is necessary to complete such formation on such a favorable basis.
4. This section shall apply to any interests held by an estate or trust in a family business on or after May 26, 2000, and to the formation of any entity or successor entity completed after May 26, 2000.

Source: L. 2000: Entire section added, p. 1171, § 1, effective May 26.

15-1-801. Short title.

This part 8 shall be known and may be cited as the "Colorado Fiduciaries' Powers Act".

Source: L. 67: p. 766, § 1. C.R.S. 1963: § 57-8-1.

15-1-802. Definitions.

As used in this part 8, unless the context otherwise requires:

1. "Court" means the district or probate court having jurisdiction over the administration of the estate or trust.
2. "Estate" means the estate of a decedent or a person under disability.
3. 1. "Fiduciary" means the one or more persons designated in a will, trust instrument, or otherwise, whether corporate or natural persons and including successors and substitutes, who are acting in any of the following capacities:
      1. Personal representatives, including executors, administrators, administrators with the will annexed (cum testamento annexo), administrators in succession acting under a will (de bonis non), ancillary administrators acting under a will, and ancillary executors;
      2. Special administrators;
      3. Conservators; and
      4. Trustees.
   2. "Fiduciary" does not include a guardian, special fiduciary, or public administrator, except when the public administrator has been appointed a fiduciary as defined in this subsection (3).
4. "Trust" means any express trust created by a will, trust instrument, or other instrument, whereby there is imposed upon a trustee the duty to administer a trust asset, for the benefit of a named or otherwise described income or principal beneficiary, or both. A trust shall not include trusts for the benefit of creditors, resulting or constructive trusts, business trusts where certificates of beneficial interest are issued to the beneficiary, investment trusts, voting trusts, security instruments such as deeds of trust and mortgages, trusts created by the judgment or decree of a court, liquidation or reorganization trusts, or trusts for the sole purpose of paying dividends, interest, interest coupons, salaries, wages, pensions, or profits, instruments wherein one or more persons are mere nominees for another, or trusts created in deposits in any banking institution or savings and loan institution.
5. "Will" means a will of a decedent and includes a testament or codicil.

Source: L. 67: p. 766, § 1. C.R.S. 1963: § 57-8-2. L. 73: p. 1647, § 7. L. 75: (3) R&RE, p. 588, § 7, effective July 1.

15-1-803. Powers conferred on fiduciaries.

Fiduciaries have all powers conferred upon them by the provisions of this part 8, unless limited by the language or provisions in the will or trust instrument expressing a clear intention that powers conferred under this part 8 shall be denied to the fiduciary. They have, in addition to the powers conferred in this part 8, such other or further powers as are set forth in the will or trust instrument or as are provided by other statutes or by court rule or order. If any power specifically conferred on a fiduciary by the will or trust instrument conflicts with any power conferred by this part 8, the fiduciary shall be deemed to have only the power specifically conferred by the will or trust instrument and not the conflicting power conferred by this part 8. Provisions in articles 10 to 20 of this title concerning the exercise of powers in the administration of an estate by an executor having powers under a will shall apply to executors having powers conferred under this part 8.

Source: L. 67: p. 767, § 1. C.R.S. 1963: § 57-8-3. L. 73: p. 1648, § 8.

15-1-804. Powers available.

1. During the period of administration of the estate or trust and until final distribution, a fiduciary has the power to perform, without court authorization, every act reasonably necessary to administer the estate or trust, including but not limited to the powers specified in subsection (2) of this section. In the exercise of any of his powers, whether derived from this part 8 or from any other source, a fiduciary has a duty to act reasonably and equitably with due regard for his obligations and responsibilities toward the interests of beneficiaries and creditors, the estate or trust involved, and the purposes thereof and with due regard for the manner in which men of prudence, discretion, and intelligence would act in the management of the property of another.
2. Subject to subsection (1) of this section, a fiduciary has the power:
   1. To receive, take possession of, recover, and preserve the assets of the estate or trust, both real and personal, coming to his attention or knowledge and the rents, issues, and profits arising therefrom;
   2. To retain the initial assets of the estate or trust without liability for loss, depreciation, or diminution in value resulting from such retention until, in the judgment of the fiduciary, disposition of such assets should be made;
   3. To accept additions to the estate or trust, not only from the estate of the decedent or the settlor of the trust, but also from other sources;
   4. To acquire an undivided interest in an estate or trust asset in which the fiduciary, in a fiduciary or individual capacity, also holds an undivided interest;
   5. To invest and reinvest assets of the estate or trust, as provided by law;
   6. To effect and keep in force fire, rent, title, liability, casualty, or other insurance to protect the assets of the estate or trust and the fiduciary against hazards usually insured against;
   7. With respect to real property or any interest in real property owned by the estate or trust, except where such real property, or interest in real property, is specifically devised:
      1. To grant options to sell and to sell and convey the same at public or private sale, for cash or on credit, upon fair, reasonable, and equitable terms;
      2. To lease the same, even for a term extending beyond the duration of the administration of the estate or trust, and, in any such case, to include or exclude the right to explore for and remove mineral or other natural resources, and in connection with mineral leases to enter into pooling and unitization agreements;
      3. To encumber the same;
      4. To make repairs or alterations in buildings, or other structures; to improve or demolish any improvements; to raze existing party walls or buildings and erect new party walls or buildings together with owners of adjoining or adjacent property or to enter into agreements with respect thereto; to subdivide, develop, and dedicate to public use; to make or obtain the vacation of public plats; to adjust boundaries; to adjust differences in valuation on exchange or partition by giving or receiving money or money's worth; and to dedicate and grant easements to public use without consideration;
   8. With respect to personal property or any interest in personal property, owned by the estate or trust, except where such personal property is specifically bequeathed:
      1. To grant options to sell and to sell the same at public or private sale, for cash or on credit, upon fair, reasonable, and equitable terms;
      2. To lease personal property, even for a term extending beyond the duration of the administration of the estate or trust;
      3. To encumber the same;
      4. To make repairs to the personal property of the estate or trust;
   9. With respect to any indebtedness owed to the estate or trust, secured or unsecured:
      1. To continue the same upon and after maturity, with or without renewal or extension, upon such terms as the fiduciary deems advisable;
      2. To foreclose any security for such indebtedness, to purchase any property securing such indebtedness, and to acquire any property by conveyance from the debtor in lieu of foreclosure;
   10. To perform, in the case of an estate, any and all valid and legally enforceable executory contracts to which at the time of his death the decedent was a party and which at the time of such death had not been fully performed by such decedent and to discharge all obligations of the estate arising under or by reason of such contracts if such obligations are legally enforceable against the estate;
   11. To enter into contracts which are reasonably incident to the administration of the estate or trust;
   12. To continue or to participate in the operation of any business activity or enterprise, including a sole proprietorship or partnership, existing at the inception of the estate or trust (in the case of an estate having due regard for those having claims against the estate) and to incorporate or otherwise change its form;
   13. To deposit funds of the estate or trust in one or more banks, including the banking department of a corporate fiduciary;
   14. To deposit fiduciary property with others, to the extent permitted by part 5 of this article, so long as the cost thereof does not constitute an additional charge against the estate or trust but is payable out of compensation otherwise properly payable to the fiduciary;
   15. To hold title to fiduciary property in the name of a nominee, without disclosure of the estate or trust, to the extent permitted by part 5 of this article;
   16. To borrow money from any source, including the commercial department of a corporate fiduciary, with any such indebtedness being repayable solely from assets of the estate or trust and to pledge or encumber estate or trust assets as security for such loans;
   17. To advance money for the protection of the estate, or the trust, or the assets thereof and for all expenses, losses, and liabilities incurred in or by the collection, care, administration, or protection of the estate, or trust, or the assets thereof. For all such advances, the fiduciary shall have a lien on the estate or trust assets and may reimburse himself with interest at a reasonable rate out of the estate or trust.
   18. To pay, contest, or otherwise settle claims by or against the estate or trust, including taxes, assessments, and expenses, by compromise, arbitration, or otherwise;
   19. To determine all matters of estate and trust accounting as the fiduciary deems to be proper and equitable;
   20. In the case of a trust, to advance trust income to or for the use of a beneficiary, for which advance the fiduciary shall have a lien on the future benefits of such beneficiary from the trust;
   21. To make distributions in kind, in money, or partially in each, at fair market values on the effective date of distribution, as determined by the fiduciary, and without requiring pro rata distribution of specific assets;
   22. In the case of a trust, to abandon, charge off, or otherwise dispose of any property held by or on behalf of the trust which is of no value or of insufficient value to justify collection, care, administration, or protection;
   23. To execute and deliver all legal instruments which are necessary or appropriate for the administration of the estate or trust;
   24. 1. To employ attorneys or other advisors to advise or assist the fiduciary in the performance of his or her duties or, instead of acting personally, to employ one or more agents to do any ministerial act required to be done by the fiduciary in the performance of his or her duties;
       2. In accordance with section 15-1.1-109 of the "Colorado Uniform Prudent Investor Act", to delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances;
   25. In the case of the survivors of the holders of a power given to or imposed upon two or more fiduciaries, to exercise or perform such power, unless the exercise of such power would be contrary to any express provision of the will, trust instrument, or other instrument;
   26. As successor or substitute fiduciary, to succeed to all of the powers and duties of an original, successor, or prior substitute fiduciary, unless contrary to any express provision of the will, trust instrument, or other instrument;
   27. To vote in person or by proxy shares of stock or other securities which are assets of the estate or trust;
   28. To pay calls, assessments, and any other sums chargeable to or accruing against or on account of shares of stock or other securities which are assets of the estate or trust whenever such payments may be legally enforceable against the fiduciary or any property of the estate or trust or whenever the fiduciary deems payment expedient and for the best interests of the estate or trust;
   29. To sell or exercise stock subscription or conversion rights, participate in foreclosures, reorganizations, consolidations, mergers, or liquidations; to enter into voting trust agreements or other similar arrangements; and to consent to corporate sales, leases, and encumbrances. In the exercise of such powers, the fiduciary shall be authorized, whenever he deems such course expedient, to deposit stocks or other securities which are assets of the estate or trust with any protective or other similar committee or with voting trustees under such terms and conditions respecting the deposit thereof as the fiduciary may approve.
   30. In the case of a trustee, to hold the assets of two or more trusts or parts of such trusts created by the same instrument or by two or more instruments if the trust provisions are substantially similar, as an undivided whole, without separation as between the assets of such trusts or parts of such trusts; but such separate trusts or parts of such trusts shall have undivided interests in such assets; and no such holding shall defer the vesting of any estate in possession or otherwise;
   31. In the case of an estate, to join with the surviving spouse, his conservator, his guardian, the executor of his will, or the administrator of his estate, in the execution and filing of a joint income tax return for any period prior to the death of a decedent for which he has not filed a return, a federal gift tax return on gifts made by the decedent's surviving spouse, or a Colorado gift tax return on gifts made before January 1, 1980, by the decedent's surviving spouse, and to consent to said gifts being made one-half by the decedent, for any period prior to a decedent's death, and to pay such taxes thereon as are chargeable to the decedent;
   32. With respect to stock of a corporation held in an estate or trust where the powers of investment conferred upon the fiduciary by the governing instrument or by this part 8 include the power to retain assets initially contributed, or subsequently added from the estate of the decedent or by the settlor of the trust or from any other source, to retain such stock, to exchange or convert such stock for the stock or other securities of an affiliate of the corporation issuing such stock, and to retain such new stock and other securities. For the purposes of this paragraph (ff), "corporation" includes the corporate fiduciary as well as any other corporation, and "affiliate" of a corporation means any corporation controlling, controlled by, or under common control with such corporation, or any corporation formed as a result of or for the purpose of effectuating any merger, consolidation, or reorganization of such corporation. The powers conferred by this paragraph (ff) are hereby conferred upon the fiduciaries of all estates and trusts, unless otherwise limited by language or provisions in the will or trust agreement expressing a clear intention to the contrary.
   33. In the case of a bank acting as a corporate fiduciary, to invest fiduciary funds awaiting investment or distribution in short-term investments, including, but not limited to, a collective investment fund. A bank acting as a corporate fiduciary may also deposit fiduciary funds awaiting investment or distribution in the commercial department of such bank or in an affiliate bank. For the purposes of this paragraph (gg), the term "bank" includes a state bank or bank and trust company which is chartered by this state or as a national bank.
   34. To grant a conservation easement in gross, as defined in section 38-30.5-102, C.R.S., whether for consideration or gratuitously; except that, if such grant is for less than fair market value, the consent of interested persons, as defined in section 15-10-201 (27), shall be obtained in writing or an order of the court shall be obtained after notice to interested persons, unless a will or trust instrument directs, permits, or requires a donation of a conservation easement in gross, in which case no such consent or order shall be required;
   35. Subject to the terms of the documents controlling the entity concerned, to retain or acquire interests in any entity in which the fiduciary does not have general liability, regardless of form, including but not limited to any partnership, corporation, limited liability company, and joint venture, and to become a shareholder, partner, member, or joint venturer.

Source: L. 67: p. 767, § 1. C.R.S. 1963: § 57-8-4. L. 70: p. 196, § 1. L. 73: p. 1648, § 9. L. 77: (2)(n) and (2)(o) amended, p. 827, § 2, effective July 1. L. 79: (2)(u) amended, p. 656, § 20, effective July 1. L. 81: (2)(ee) amended, p. 1885, § 6, effective May 27; (2)(g)(I) and (2)(g)(II) amended, p. 631, § 8, effective July 1. L. 92: (2)(gg) added, p. 1991, § 1, effective April 16. L. 95: (2)(x) amended, p. 312, § 3, effective July 1. L. 99: (2)(hh) added, p. 70, § 1, effective August 4. L. 2002: (2)(ii) added, p. 650, § 3, effective July 1.

15-1-805. Powers of fiduciary conferred by court.

The court having jurisdiction of the estate or trust may authorize the fiduciary to exercise any power not otherwise held by the fiduciary which, in the judgment of the court, is necessary for the proper collection, care, administration, and protection of the estate or the trust.

Source: L. 67: p. 770, § 1. C.R.S. 1963: § 57-8-5.

15-1-806. Third persons protected in dealing with fiduciary.

With respect to a third person dealing with a fiduciary or assisting a fiduciary in the conduct of a transaction, proper exercise of his powers by the fiduciary is to be presumed, and such third person shall not be bound to inquire whether the fiduciary has power to act or is properly exercising such powers, nor shall such third person be bound to see to the proper application of estate or trust assets paid or delivered to the fiduciary.

Source: L. 67: p. 770, § 1. C.R.S. 1963: § 57-8-6.

15-1-807. Applicability.

This part 8 shall apply to all trusts existing on January 1, 1968, which are later amended to make applicable this part 8, and to all estates and trusts which may come into existence after January 1, 1968.

Source: L. 67: p. 771, § 1. C.R.S. 1963: § 57-8-7.

15-1-901 to 15-1-907. (Repealed)

Editor's note: (1) This part 9 was numbered as article 9 of chapter 57, C.R.S. 1963. For amendments to this part 9 prior to its repeal in 1995, consult the Colorado statutory research explanatory note and the table itemizing the replacement volumes and supplements to the original volume of C.R.S. 1973 beginning on page vii in the front of this volume.

(2) Section 15-1-907 provided for the repeal of this part 9, effective July 1, 1995. (See L. 94, p. 1041.)

15-1-1001. Legislative declaration.

It is the purpose of this part 10 to preserve the intent of testators and grantors of testamentary and inter vivos trusts created prior to and after June 2, 1971, for charitable, educational, religious, and benevolent purposes, by minimizing the imposition of federal income and excise taxes, and federal estate and gift taxes, imposed upon the assets of such trusts, and thereby preserving the maximum amount of the trust assets for the charitable, educational, religious, and benevolent purposes for which they were intended. The attorney general of this state shall perform such acts as, in his or her opinion, will result in the effectuation of this declaration of purpose.

Source: L. 71: p. 589, § 1. C.R.S. 1963: § 57-10-1. L. 73: p. 638, § 1. L. 2016: Entire section amended, (HB 16-1094), ch. 94, p. 266, § 9, effective August 10.

15-1-1002. Prohibition of certain acts - amendment of governing instrument.

1. In the administration of any trust which is a private foundation as defined in section 509 of the federal "Internal Revenue Code of 1986", a charitable trust as defined in section 4947 (a)(1) of the federal "Internal Revenue Code of 1986", or a split-interest trust as defined in section 4947 (a)(2) of the federal "Internal Revenue Code of 1986", notwithstanding any provisions to the contrary in the governing instrument or in any other law of this state, and except as otherwise provided by court decree entered on or after June 2, 1971, the following acts shall be prohibited:
   1. Engaging in any act of "self-dealing", as defined in section 4941 (d) of the federal "Internal Revenue Code of 1986", which would give rise to any liability for the tax imposed by section 4941 (a) of the federal "Internal Revenue Code of 1986";
   2. Retaining any "excess business holdings", as defined in section 4943 (c) of the federal "Internal Revenue Code of 1986", which would give rise to any liability for the tax imposed by section 4943 (a) of the federal "Internal Revenue Code of 1986";
   3. Making any investments which would jeopardize the carrying out of any of the exempt purposes of the trust, within the meaning of section 4944 of the federal "Internal Revenue Code of 1986", so as to give rise to any liability for the tax imposed by section 4944 (a) of the federal "Internal Revenue Code of 1986"; and
   4. Making any "taxable expenditure", as defined in section 4945 (d) of the federal "Internal Revenue Code of 1986", which would give rise to any liability for the tax imposed by section 4945 (a) of the federal "Internal Revenue Code of 1986".
2. The provisions of subsection (1) of this section shall not apply either to those split-interest trusts or to amounts thereof which are not subject to the prohibitions applicable to private foundations by reason of the provisions of section 4947 of the federal "Internal Revenue Code of 1986".
3. Notwithstanding any provisions to the contrary in the governing instrument or in any other law of this state, the trustee of any charitable trust as defined in section 4947 (a)(1) or 4947 (a)(2) of the federal "Internal Revenue Code of 1986", with the consent of all the beneficiaries under the governing instrument, may, without application to any court and either before or after the funding of such trust, amend the governing instrument to conform to the provisions of sections 508 (e), 664, 2055 (e), and 2522 (c) of the federal "Internal Revenue Code of 1986", to the extent applicable, by executing a written amendment to the trust for that purpose. Consent shall not be required as to individual beneficiaries not living at the time of amendment or as to charitable beneficiaries not named or not in existence at the time of amendment. The possibility of beneficial interests arising after the amendment of the governing instruments shall not defeat the ability to amend. In the case of an individual beneficiary not competent to give consent, the consent of such beneficiary's guardian or conservator, if any, or the consent of a guardian ad litem appointed by a court of competent jurisdiction is treated as the consent of the beneficiary. A copy of the proposed amendment, executed by the trustee and consented to by all beneficiaries whose consent is required under this subsection (3), must be delivered in person or by registered mail to the attorney general. The attorney general may, within sixty days after such receipt, indicate by registered mail to the trustee his or her specific objections to such proposed amendment, in which event the provisions of subsection (4) of this section apply if he or she does not withdraw his or her objections. In the case of any amendment to a trust created by will or to a trust created by inter vivos instrument, unless otherwise provided, the amendment applies as of the date of death of the decedent or as of the date of gift.
4. In the event that all such trustees and beneficiaries under the governing instrument do not consent to such amendment or in the event that there are no named beneficiaries, any court of competent jurisdiction shall have the power to amend the governing instrument in accordance with subsection (3) of this section upon petition of the trustee or any beneficiary and upon a subsequent finding by the court that the testator's or the grantor's intention would not be defeated by such amendment. A copy of such petition shall be delivered in person or by registered mail to the attorney general.
5. Unless otherwise expressly provided in the governing instrument, any devise, bequest, or transfer in a testamentary or revocable inter vivos trust for religious, educational, charitable, or benevolent uses to be determined by the trustee or any other person shall be made only to organizations and for purposes within the meaning of section 2055 (a) of the federal "Internal Revenue Code of 1986".

Source: L. 71: p. 589, § 1. C.R.S. 1963: § 57-10-2. L. 73: p. 638, § 2. L. 2000: (1), (2), (3), and (5) amended, p. 1844, § 25, effective August 2. L. 2016: (3) amended, (HB 16-1094), ch. 94, p. 266, § 10, effective August 10.

15-1-1003. Requirement for distribution of certain amounts.

In the administration of any trust which is a private foundation, as defined in section 509 of the federal "Internal Revenue Code of 1986", or which is a charitable trust, as defined in section 4947 (a)(1) of the federal "Internal Revenue Code of 1986", there shall be distributed, for the purposes specified in the trust instrument, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by section 4942 (a) of the federal "Internal Revenue Code of 1986". No trustee of such a trust shall be required to reimburse the trust from his own property for the amount of any liability for such tax which is incurred by the trust if the trustee acted in a prudent manner and in good faith. No trustee of such a trust shall be required to reimburse the trust from his own property for any amount which he, acting prudently and in good faith, distributes from the trust, believing it to be required to be distributed in order to avoid the liability for such tax, but which later is determined not to have been required to be distributed for that purpose.

Source: L. 71: p. 590, § 1. C.R.S. 1963: § 57-10-3. L. 2000: Entire section amended, p. 1845, § 26, effective August 2.

15-1-1004. Applicability of sections 15-1-1002 and 15-1-1003.

The provisions of sections 15-1-1002 and 15-1-1003 shall not apply to any trust to the extent that a court of competent jurisdiction shall determine that such application would be contrary to the terms of the instrument governing such trust and that the terms of such instrument may not properly be changed to conform to such sections.

Source: L. 71: p. 590, § 1. C.R.S. 1963: § 57-10-4.

15-1-1005. Rights and powers of courts and attorney general not impaired.

Nothing in this part 10 shall impair the rights and powers of the courts or the attorney general of this state with respect to any trust.

Source: L. 71: p. 590, § 1. C.R.S. 1963: § 57-10-5.

15-1-1006. References to "Internal Revenue Code of 1954".

All references to sections of the "Internal Revenue Code of 1954" refer to the "Internal Revenue Code of 1954" as it exists on June 2, 1971; except that all references to the "Internal Revenue Code of 1954" in section 15-1-1002 (3) and (5) refer to the "Internal Revenue Code of 1954" as it exists on April 19, 1973.

Source: L. 71: p. 590, § 1. C.R.S. 1963: § 57-10-6. L. 73: p. 639, § 3.

15-1-1007. Application of part 10.

This part 10 shall apply to all trusts established after December 31, 1969, with the exceptions contained in section 4947 (a)(2) of the federal "Internal Revenue Code of 1986". This part 10 shall also apply to all trusts established before January 1, 1970, with the exceptions contained in section 508 (e)(2) and section 4947 (a)(2) of the federal "Internal Revenue Code of 1986". Section 15-1-1002 (3) to (5) shall apply in the case of all decedents dying after December 31, 1969, and in the case of all irrevocable inter vivos trusts created after July 31, 1969.

Source: L. 71: p. 591, § 1. C.R.S. 1963: § 57-10-7. L. 73: p. 639, § 4. L. 2000: Entire section amended, p. 1846, § 27, effective August 2.

15-1-1101. Short title.

This part 11 shall be known and may be cited as the "Uniform Prudent Management of Institutional Funds Act".

Source: L. 2008: Entire part R&RE, p. 559, § 1, effective September 1.

Editor's note: This section is similar to former § 15-1-1101 as it existed prior to 2008.

15-1-1102. Definitions.

As used in this part 11, unless the context otherwise requires:

1. "Charitable purpose" means the relief of poverty, the advancement of education or religion, the promotion of health, or any other charitable or eleemosynary purpose.
2. "Endowment fund" means an institutional fund or part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. The term does not include assets that an institution designates as an endowment fund for its own use.
3. "Gift instrument" means a record or records, including an institutional solicitation, under which property is granted to, transferred to, or held by an institution as an institutional fund.
4. "Institution" means:
   1. A person, other than an individual, organized and operated exclusively for charitable purposes;
   2. A government or governmental subdivision, agency, or instrumentality, to the extent that it holds funds exclusively for a charitable purpose; or
   3. A trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated.
5. "Institutional fund" means a fund held by an institution exclusively for charitable purposes. The term does not include funds held by the public employees' retirement association created by article 51 of title 24, C.R.S., or:

   (A) Program-related assets;

   (B) A fund held for an institution by a trustee that is not an institution; or

   (C) A fund in which a beneficiary that is not an institution has an interest, other than an interest that could arise upon violation or failure of the purposes of the fund.

6. "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
7. "Program-related asset" means an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for investment.
8. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

Source: L. 2008: Entire part R&RE, p. 559, § 1, effective September 1. L. 2009: IP(5) amended, (SB 09-282), ch. 288, p. 1398, § 61, effective January 1, 2010.

Editor's note: This section is similar to former § 15-1-1103 as it existed prior to 2008.

15-1-1103. Standard of conduct in managing and investing institutional fund.

1. Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.
2. In addition to complying with the duty of loyalty imposed by law other than this part 11, each person responsible for managing and investing an institutional fund shall manage and invest the institutional fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
3. In managing and investing an institutional fund, an institution:
   1. May incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution, and the skills available to the institution; and
   2. Shall make a reasonable effort to verify facts relevant to the management and investment of the institutional fund.
   3. Except as otherwise provided by law other than this part 11, an institution may invest in any kind of property or type of investment consistent with this section.
   4. An institution shall diversify the investments of an institutional fund unless the institution reasonably determines that, because of special circumstances, the purposes of the institutional fund are better served without diversification.
   5. Within a reasonable time after receiving property, an institution shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms, and distribution requirements of the institution as necessary to meet other circumstances of the institution and the requirements of this part 11.
   6. A person that has special skills or expertise, or is selected in reliance upon the person's representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds.
4. An institution may pool two or more institutional funds for purposes of management and investment.
5. Except as otherwise provided by a gift instrument, the following rules apply:

   (1) In managing and investing an institutional fund, the following factors, if relevant, must be considered:

   1. General economic conditions;
   2. The possible effect of inflation or deflation;
   3. The expected tax consequences, if any, of investment decisions or strategies;
   4. The role that each investment or course of action plays within the overall investment portfolio of the institutional fund;
   5. The expected total return from income and the appreciation of investments;
   6. Other resources of the institution;
   7. The needs of the institution and the institutional fund to make distributions and to preserve capital; and
   8. An asset's special relationship or special value, if any, to the charitable purposes of the institution.

      (2) Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the institutional fund's portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the institutional fund and to the institution.

Source: L. 2008: Entire part R&RE, p. 560, § 1, effective September 1.

Editor's note: This section is similar to former §§ 15-1-1106 and 15-1-1108 as they existed prior to 2008.

15-1-1104. Appropriation for expenditure of accumulation of endowment fund - rules of construction.

1. Subject to the intent of a donor expressed in the gift instrument, an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors:
   1. The duration and preservation of the endowment fund;
   2. The purposes of the institution and the endowment fund;
   3. General economic conditions;
   4. The possible effect of inflation or deflation;
   5. The expected total return from income and the appreciation of investments;
   6. Other resources of the institution; and
   7. The investment policy of the institution.
2. To limit the authority to appropriate for expenditure or accumulate under subsection (a) of this section, a gift instrument must specifically state the limitation.
3. Terms in a gift instrument designating a gift as an endowment, or a direction or authorization in the gift instrument to use only "income", "interest", "dividends", or "rents, issues, or profits", or "to preserve the principal intact", or words of similar import:

   (1) Create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the endowment fund; and

   (2) Do not otherwise limit the authority to appropriate for expenditure or accumulate under subsection (a) of this section.

Source: L. 2008: Entire part R&RE, p. 562, § 1, effective September 1.

Editor's note: This section is similar to former §§ 15-1-1104 and 15-1-1105 as they existed prior to 2008.

15-1-1105. Delegation of management and investment functions.

1. Subject to any specific limitation set forth in a gift instrument or in law other than this part 11, an institution may delegate to an external agent the management and investment of an institutional fund to the extent that an institution could prudently delegate under the circumstances. An institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in:
   1. Selecting an agent;
   2. Establishing the scope and terms of the delegation, consistent with the purposes of the institution and the institutional fund; and
   3. Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the scope and terms of the delegation.
2. In performing a delegated function, an agent owes a duty to the institution to exercise reasonable care to comply with the scope and terms of the delegation.
3. An institution that complies with subsection (a) of this section is not liable for the decisions or actions of an agent to which the function was delegated.
4. By accepting delegation of a management or investment function from an institution that is subject to the laws of this state, an agent submits to the jurisdiction of the courts of this state in all proceedings arising from or related to the delegation or the performance of the delegated function.
5. An institution may delegate management and investment functions to its committees, officers, or employees as authorized by law of this state other than this part 11.

Source: L. 2008: Entire part R&RE, p. 563, § 1, effective September 1.

Editor's note: This section is similar to former § 15-1-1107 as it existed prior to 2008.

15-1-1106. Release or modification of restrictions on management, investment, or purpose.

1. If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund. A release or modification may not allow an institutional fund to be used for a purpose other than a charitable purpose of the institution.
2. The court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the institutional fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the institutional fund. The institution shall notify the attorney general of the application, and the attorney general must be given an opportunity to be heard. To the extent practicable, any modification must be made in accordance with the donor's probable intention.
3. If a particular charitable purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the institutional fund or the restriction on the use of the institutional fund in a manner consistent with the charitable purposes expressed in the gift instrument. The institution shall notify the attorney general of the application, and the attorney general must be given an opportunity to be heard.
4. If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, sixty days after notification to the attorney general, may release or modify the restriction, in whole or part, if:
   1. The institutional fund, subject to the restriction, has a total value of less than one hundred thousand dollars; except that the dollar limit established in this paragraph (1) shall be adjusted for inflation in accordance with the annual percentage change in the United States department of labor, bureau of labor statistics, consumer price index for Denver-Aurora-Lakewood for all items and all urban consumers, or its applicable predecessor or successor index. On or before January 1, 2010, and each even-numbered year thereafter, the attorney general shall calculate the adjusted dollar amount for the next two-year cycle using inflation for the prior two calendar years as of the date of the calculation. The adjusted exemption shall be rounded upward to the nearest one-hundred-dollar increment. The attorney general shall certify the amount of the adjustment for the next two-year cycle and shall publish the amount on the attorney general's website.
   2. More than twenty years have elapsed since the institutional fund was established; and
   3. The institution uses the property in a manner consistent with the charitable purposes expressed in the gift instrument.

Source: L. 2008: Entire part R&RE, p. 563, § 1, effective September 1. L. 2018: (d)(1) amended, (HB 18-1375), ch. 274, p. 1697, § 11, effective May 29.

Editor's note: This section is similar to former § 15-1-1109 as it existed prior to 2008.

15-1-1107. Reviewing compliance.

Compliance with this part 11 is determined in light of the facts and circumstances existing at the time a decision is made or action is taken, and not by hindsight.

Source: L. 2008: Entire part R&RE, p. 564, § 1, effective September 1.

15-1-1108. Application to existing institutional funds.

This part 11 applies to institutional funds existing on or established after September 1, 2008. As applied to institutional funds existing on September 1, 2008, this part 11 governs only decisions made or actions taken on or after said date.

Source: L. 2008: Entire part R&RE, p. 565, § 1, effective September 1.

15-1-1109. Relation to "Electronic Signatures in Global and National Commerce Act".

This part 11 modifies, limits, and supersedes the "Electronic Signatures in Global and National Commerce Act", 15 U.S.C. sec. 7001 et seq., but does not modify, limit, or supersede section 101 (a) of that act, 15 U.S.C. sec. 7001 (a), or authorize electronic delivery of any of the notices described in section 103 (b) of that act, 15 U.S.C. sec. 7003 (b).

Source: L. 2008: Entire part R&RE, p. 565, § 1, effective September 1.

15-1-1110. Uniformity of application and construction.

In applying and construing this part 11, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Source: L. 2008: Entire part R&RE, p. 565, § 1, effective September 1.

Editor's note: This section is similar to former § 15-1-1102 as it existed prior to 2008.

15-1-1201. Life estate in property - rights of surviving spouse.

1. Unless the instrument provides otherwise, any devise of a life estate in property to a surviving spouse by a decedent spouse shall entitle the surviving spouse to:
   1. All income for life from the entire interest in or specific portion of the property, payable annually or at more frequent intervals;
   2. Exclusive beneficial enjoyment of the property during his life, including such income or use of the property as is consistent with the value of the property and its preservation; except that, during the surviving spouse's lifetime, no person other than the surviving spouse may receive any distribution of the property or its income; and
   3. Make the property productive or convert it into productive property within a reasonable time after the devise; except that, the exercise of such power shall be subject to the degree of judgment and care which a prudent person would use if he were the owner of the property. The proceeds of any such conversion shall be reinvested by the surviving spouse in a form subject to the life estate and remainder rights created by the decedent.
2. The provisions of this part 12 shall be interpreted consistently with the requirements of section 2056 (b)(7) of the federal "Internal Revenue Code of 1986", as amended, if the personal representative of the estate of the decedent spouse elects to treat such life estate as qualified terminable interest property under said Internal Revenue Code section.

Source: L. 88: Entire part added, p. 647, § 1, effective May 17. L. 2000: (2) amended, p. 1846, § 28, effective August 2.

15-1-1202. Applicability of part.

This part 12 shall apply to the estate of any person whose death occurred after December 31, 1981.

Source: L. 88: Entire part added, p. 648, § 1, effective May 17.

15-1-1301 to 15-1-1321. (Repealed)

Editor's note: (1) This part 13 was added in 1992. For amendments to this part 13 prior to its repeal in 2010, consult the Colorado statutory research explanatory note and the table itemizing the replacement volumes and supplements to the original volume of C.R.S. 1973 beginning on page vii in the front of this volume.

(2) Section 15-1-1321 provided for the repeal of this part 13, effective January 1, 2010. (See L. 2009, p. 427.)

15-1-1401. Restrictions on exercise of certain fiduciary powers.

1. 1. Due to the inherent conflict of interest that exists between a trustee who is a beneficiary of a trust and other beneficiaries of the trust, any of the following powers conferred upon a trustee shall not be exercised by such trustee:
      1. To make or cause to be made discretionary distributions of either principal or income to or for the direct or indirect benefit of such trustee; except that such a power may be exercised by such trustee to the extent that it may be exercised to provide for that trustee's health, education, maintenance, or support as described under sections 2041 and 2514 of the federal "Internal Revenue Code of 1986", as amended;
      2. To make discretionary distributions of either principal or income to satisfy any legal obligations of such trustee; or
      3. To make or cause to be made discretionary distributions of either principal or income to or for the direct or indirect benefit of any person who has the right to remove or replace such trustee; except that such a power may be exercised by such trustee to the extent that it may be exercised to provide for such person's health, education, maintenance, or support as described under sections 2041 and 2514 of the federal "Internal Revenue Code of 1986", as amended.
   2. Any of the powers prescribed in paragraph (a) of this subsection (1) that are conferred upon two or more trustees may be exercised by the trustees who are not so disqualified. If there is no trustee qualified to exercise such powers, any party in interest, as described in subsection (3) of this section, may apply to a court of competent jurisdiction to appoint an independent trustee, and such powers may be exercised by the independent trustee appointed by the court. Subparagraph (I) of paragraph (a) of this subsection (1) shall not prohibit a trustee from making payments, including reimbursement of and compensation of such trustee, for the protection of the trust, or the assets thereof, and for all expenses, losses, and liabilities incurred in or by the collection, care, administration, or protection of the trust or the assets thereof.
2. This section applies to every trust unless the terms of the trust as it may be amended in accordance with its terms provide expressly to the contrary and either specifically refer to this section or otherwise clearly demonstrate the intent that this rule not apply or unless, if the trust is irrevocable, all parties in interest, as described in subsection (3) of this section, elect affirmatively, in the manner prescribed in subsection (4) of this section, not to be subject to the application of this section. Such election shall be made on or before July 1, 1999, or three years after the date on which the trust becomes irrevocable, whichever occurs later.
3. For the purpose of subsection (1) or subsection (2) of this section:
   1. If the trust is revocable or amendable and the settlor is not incapacitated, the party in interest is the settlor.
   2. If the trust is revocable or amendable and the settlor is incapacitated, the party in interest is the settlor's legal representative under applicable law or the settlor's agent under a durable power of attorney that is sufficient to grant such authority.
   3. If the trust is not revocable or amendable, the parties in interest are:
      1. Each trustee then serving;
      2. Each income beneficiary then in existence or, if any such beneficiary has not attained majority or is otherwise incapacitated, the beneficiary's legal representative under applicable law or the beneficiary's agent under a durable power of attorney that is sufficient to grant such authority; and
      3. Each remainder beneficiary then in existence or, if any such remainder beneficiary has not attained majority or is otherwise incapacitated, the beneficiary's legal representative under applicable law or the beneficiary's agent under a durable power of attorney that is sufficient to grant such authority.
4. The affirmative election required under subsection (2) of this section shall be made:
   1. If the settlor is not incapacitated and the trust is revocable or amendable, through a revocation of or an amendment to the trust;
   2. If the settlor is incapacitated and the trust is revocable or amendable, through a written declaration executed in the manner prescribed for the acknowledgment of deeds in this state and delivered to the trustee; or
   3. If the trust is not revocable or amendable, through a written declaration executed in the manner prescribed for the acknowledgment of deeds in this state and delivered to the trustee.
5. A person who has the right to remove or to replace a trustee does not possess nor may that person be deemed to possess, by virtue of having that right, the powers proscribed in subparagraphs (I), (II), and (III) of paragraph (a) of subsection (1) of this section of the trustee that is subject to removal or to replacement.
6. 1. Subparagraphs (I) and (II) of paragraph (a) of subsection (1) of this section shall not apply to a trustee with respect to trust property and the income from such property where such property would, upon the death of such trustee, be included in the gross estate of such trustee for federal estate tax purposes for any reason other than the powers proscribed by subparagraphs (I) and (II) of paragraph (a) of subsection (1) of this section.
   2. Subparagraph (I) of paragraph (a) of subsection (1) of this section shall not apply to a trustee that may be appointed or removed by a person for whose benefit the proscribed powers may be exercised to distribute trust property or the income from such property where such property would, upon the death of such person, be included in the gross estate of such person for federal estate tax purposes for any reason other than such powers to appoint or remove such trustee.
7. The provisions of this section neither create a new cause of action nor impair any existing cause of action that, in either case, relates to any power proscribed by subsection (1) of this section that was exercised before July 1, 1996.

Source: L. 96: Entire part added, p. 654, § 4, effective July 1.

15-1-1501. Short title.

This part 15 may be cited as the "Revised Uniform Fiduciary Access to Digital Assets Act".

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 179, § 1, effective August 10.

15-1-1502. Definitions.

In this part 15:

1. "Account" means an arrangement under a terms-of-service agreement in which a custodian carries, maintains, processes, receives, or stores a digital asset of the user or provides goods or services to the user.
2. "Agent" means an attorney-in-fact granted authority under a durable or nondurable power of attorney.
3. "Carries" means engages in the transmission of an electronic communication.
4. "Catalog of electronic communications" means information that identifies each person with which a user has had an electronic communication, the time and date of the communication, and the electronic address of the person.
5. "Conservator" means a person appointed by a court to manage the estate of a living individual. The term includes a limited conservator.
6. "Content of an electronic communication" means information concerning the substance or meaning of a communication that:
   1. Has been sent or received by a user;
   2. Is in electronic storage by a custodian providing an electronic-communication service to the public or is carried or maintained by a custodian providing a remote-computing service to the public; and
   3. Is not readily accessible to the public.
7. "Court" means the district court, except in the city and county of Denver where it is the probate court.
8. "Custodian" means a person that carries, maintains, processes, receives, or stores a digital asset of a user.
9. "Designated recipient" means a person chosen by a user using an on-line tool to administer digital assets of the user.
10. "Digital asset" means an electronic record in which an individual has a right or interest. The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record.
11. "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
12. "Electronic communication" has the meaning set forth in 18 U.S.C. sec. 2510(12), as amended.
13. "Electronic-communication service" means a custodian that provides to a user the ability to send or receive an electronic communication.
14. "Fiduciary" means an original, additional, or successor personal representative, conservator, agent, or trustee.
15. "Information" means data, text, images, videos, sounds, codes, computer programs, software, databases, or the like.
16. "On-line tool" means an electronic service provided by a custodian that allows the user, in an agreement distinct from the terms-of-service agreement between the custodian and user, to provide directions for disclosure or nondisclosure of digital assets to a third person.
17. "Person" means an individual; estate; business or nonprofit entity; public corporation; government or governmental subdivision, agency, or instrumentality; or other legal entity.
18. "Personal representative" means an executor, administrator, special administrator, or person that performs substantially the same function under law of this state other than this part 15.
19. "Power of attorney" means a record that grants an agent authority to act in the place of a principal.
20. "Principal" means an individual who grants authority to an agent in a power of attorney.
21. "Protected person" means an individual for whom a conservator has been appointed. The term includes an individual for whom an application for the appointment of a conservator is pending.
22. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
23. "Remote-computing service" means a custodian that provides to a user computer-processing services or the storage of digital assets by means of an electronic communications system, as defined in 18 U.S.C. sec. 2510(14), as amended.
24. "Terms-of-service agreement" means an agreement that controls the relationship between a user and a custodian.
25. "Trustee" means a fiduciary with legal title to property under an agreement or declaration that creates a beneficial interest in another. The term includes a successor trustee.
26. "User" means a person that has an account with a custodian.
27. "Will" includes a codicil, testamentary instrument that only appoints an executor, and instrument that revokes or revises a testamentary instrument.
    1. any wire or oral communication;
    2. any communication made through a tone-only paging device;
    3. any communication from a tracking device (as defined in section 3117 of this title); or
    4. electronic funds transfer information stored by a financial institution in a communications system used for the electronic storage and transfer of funds.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 179, § 1, effective August 10.

15-1-1503. Applicability.

1. This part 15 applies to:
   1. A fiduciary acting under a will or power of attorney executed before, on, or after August 10, 2016;
   2. A personal representative acting for a decedent who died before, on, or after August 10, 2016;
   3. A conservatorship proceeding commenced before, on, or after August 10, 2016; and
   4. A trustee acting under a trust created before, on, or after August 10, 2016.
2. This part 15 applies to a custodian if the user resides in this state or resided in this state at the time of the user's death.
3. 1. This part 15 does not apply to a digital asset of an employer used by an employee in the ordinary course of the employer's business.
   2. This part 15 does not apply to a digital asset of an entity used by a manager, owner, or other person in the course of the conduct of the internal affairs of the entity. The terms "entity", "manager", and "owner" in this paragraph (b) have the same meaning as defined in section 7-90-102, C.R.S.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 181, § 1, effective August 10.

15-1-1504. User direction for disclosure of digital assets.

1. A user may use an on-line tool to direct the custodian to disclose to a designated recipient or to not disclose some or all of the user's digital assets, including the content of electronic communications. If the on-line tool allows the user to modify or delete a direction at all times, a direction regarding disclosure using an on-line tool overrides a contrary direction by the user in a will, trust, power of attorney, or other record.
2. If a user has not used an on-line tool to give direction under subsection (1) of this section or if the custodian has not provided an on-line tool, the user may allow or prohibit in a will, trust, power of attorney, or other record, disclosure to a fiduciary of some or all of the user's digital assets, including the content of electronic communications sent or received by the user.
3. A user's direction under subsection (1) or (2) of this section overrides a contrary provision in a terms-of-service agreement that does not require the user to act affirmatively and distinctly from the user's assent to the terms of service.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 182, § 1, effective August 10.

15-1-1505. Terms-of-service agreement.

1. This part 15 does not change or impair a right of a custodian or a user under a terms-of-service agreement to access and use digital assets of the user.
2. This part 15 does not give a fiduciary or designated recipient any new or expanded rights other than those held by the user for whom, or for whose estate, the fiduciary or designated recipient acts or represents.
3. A fiduciary's or designated recipient's access to digital assets may be modified or eliminated by a user, by federal law, or by a terms-of-service agreement if the user has not provided direction under section 15-1-1504.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 182, § 1, effective August 10.

15-1-1506. Procedure for disclosing digital assets.

1. When disclosing digital assets of a user under this part 15, the custodian may at its sole discretion:
   1. Grant a fiduciary or designated recipient full access to the user's account;
   2. Grant a fiduciary or designated recipient partial access to the user's account sufficient to perform the tasks with which the fiduciary or designated recipient is charged; or
   3. Provide a fiduciary or designated recipient a copy in a record of any digital asset that, on the date the custodian received the request for disclosure, the user could have accessed if the user were alive and had full capacity and access to the account.
2. A custodian may assess a reasonable administrative charge for the cost of disclosing digital assets under this part 15.
3. A custodian need not disclose under this part 15 a digital asset deleted by a user.
4. If a user directs or a fiduciary requests a custodian to disclose under this part 15 some, but not all, of the user's digital assets, the custodian need not disclose the assets if segregation of the assets would impose an undue burden on the custodian. If the custodian believes the direction or request imposes an undue burden, the custodian or fiduciary may seek an order from the court to disclose:
   1. A subset limited by date of the user's digital assets;
   2. All of the user's digital assets to the fiduciary or designated recipient;
   3. None of the user's digital assets; or
   4. All of the user's digital assets to the court for review in camera.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 183, § 1, effective August 10.

15-1-1507. Disclosure of content of electronic communications of deceased user.

1. If a deceased user consented or a court directs disclosure of the contents of electronic communications of the user, the custodian shall disclose to the personal representative of the estate of the user the content of an electronic communication sent or received by the user if the representative gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. A certified copy of the death certificate of the user;
   3. A certified copy of the letter of appointment of the representative or a small-estate affidavit or court order;
   4. Unless the user provided direction using an on-line tool, a copy of the user's will, trust, power of attorney, or other record evidencing the user's consent to disclosure of the content of electronic communications; and
   5. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user's account;
      2. Evidence linking the account to the user; or
      3. A finding by the court that:
         1. The user had a specific account with the custodian, identifiable by the information specified in subparagraph (I) of this paragraph (e);
         2. Disclosure of the content of electronic communications of the user would not violate 18 U.S.C. sec. 2701, et seq., as amended; 47 U.S.C. sec. 222, as amended; or other applicable law;
         3. Unless the user provided direction using an on-line tool, the user consented to disclosure of the content of electronic communications; or
         4. Disclosure of the content of electronic communications of the user is reasonably necessary for administration of the estate.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 183, § 1, effective August 10.

15-1-1508. Disclosure of other digital assets of deceased user.

1. Unless the user prohibited disclosure of digital assets or the court directs otherwise, a custodian shall disclose to the personal representative of the estate of a deceased user a catalog of electronic communications sent or received by the user and digital assets, other than the content of electronic communications, of the user, if the representative gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. A certified copy of the death certificate of the user;
   3. A certified copy of the letter of appointment of the representative or a small-estate affidavit or court order; and
   4. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user's account;
      2. Evidence linking the account to the user;
      3. An affidavit stating that disclosure of the user's digital assets is reasonably necessary for administration of the estate; or
      4. A finding by the court that:
         1. The user had a specific account with the custodian, identifiable by the information specified in subparagraph (I) of this paragraph (d); or
         2. Disclosure of the user's digital assets is reasonably necessary for administration of the estate.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 184, § 1, effective August 10.

15-1-1509. Disclosure of content of electronic communications of principal.

1. To the extent a power of attorney expressly grants an agent authority over the content of electronic communications sent or received by the principal and unless directed otherwise by the principal or the court, a custodian shall disclose to the agent the content if the agent gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. An original or copy of the power of attorney expressly granting the agent authority over the content of electronic communications of the principal;
   3. A certification by the agent, under penalty of perjury, that the power of attorney is in effect; and
   4. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the principal's account; or
      2. Evidence linking the account to the principal.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 185, § 1, effective August 10.

15-1-1510. Disclosure of other digital assets of principal.

1. Unless otherwise ordered by the court, directed by the principal, or provided by a power of attorney, a custodian shall disclose to an agent with specific authority over digital assets or general authority to act on behalf of a principal a catalog of electronic communications sent or received by the principal and digital assets, other than the content of electronic communications, of the principal if the agent gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. An original or a copy of the power of attorney that gives the agent specific authority over digital assets or general authority to act on behalf of the principal;
   3. A certification by the agent, under penalty of perjury, that the power of attorney is in effect; and
   4. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the principal's account; or
      2. Evidence linking the account to the principal.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 185, § 1, effective August 10.

15-1-1511. Disclosure of digital assets held in trust when trustee is original user.

Unless otherwise ordered by the court or provided in a trust, a custodian shall disclose to a trustee that is an original user of an account any digital asset of the account held in trust, including a catalog of electronic communications of the trustee and the content of electronic communications.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 186, § 1, effective August 10.

15-1-1512. Disclosure of contents of electronic communications held in trust when trustee not original user.

1. Unless otherwise ordered by the court, directed by the user, or provided in a trust, a custodian shall disclose to a trustee that is not an original user of an account the content of an electronic communication sent or received by an original or successor user and carried, maintained, processed, received, or stored by the custodian in the account of the trust if the trustee gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. A certified copy of the trust instrument or a registration of the trust under part 2 of article 5 of this title 15 that includes consent to disclosure of the content of electronic communications to the trustee;
   3. A certification by the trustee, under penalty of perjury, that the trust exists and the trustee is a currently acting trustee of the trust; and
   4. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the trust's account; or
      2. Evidence linking the account to the trust.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 186, § 1, effective August 10. L. 2018: (1)(b) amended, (SB 18-180), ch. 169, p. 1192, § 6, effective January 1, 2019.

15-1-1513. Disclosure of other digital assets held in trust when trustee not original user.

1. Unless otherwise ordered by the court, directed by the user, or provided in a trust, a custodian shall disclose, to a trustee that is not an original user of an account, a catalog of electronic communications sent or received by an original or successor user and stored, carried, or maintained by the custodian in an account of the trust and any digital assets, other than the content of electronic communications, in which the trust has a right or interest if the trustee gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. A certified copy of the trust instrument or a registration of the trust under part 2 of article 5 of this title 15;
   3. A certification by the trustee, under penalty of perjury, that the trust exists and the trustee is a currently acting trustee of the trust; and
   4. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the trust's account; or
      2. Evidence linking the account to the trust.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 186, § 1, effective August 10. L. 2018: (1)(b) amended, (SB 18-180), ch. 169, p. 1192, § 7, effective January 1, 2019.

15-1-1514. Disclosure of digital assets to conservator of protected person.

1. After an opportunity for a hearing under article 14 of this title, the court may grant a conservator access to the digital assets of a protected person.
2. Unless otherwise ordered by the court or directed by the user, a custodian shall disclose to a conservator the catalog of electronic communications sent or received by a protected person and any digital assets, other than the content of electronic communications, in which the protected person has a right or interest if the conservator gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. A certified copy of the court order that gives the conservator authority over the digital assets of the protected person; and
   3. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the account of the protected person; or
      2. Evidence linking the account to the protected person.
3. A conservator with general authority to manage the assets of a protected person may request a custodian of the digital assets of the protected person to suspend or terminate an account of the protected person for good cause. A request made under this section must be accompanied by a certified copy of the court order giving the conservator authority over the protected person's property.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 187, § 1, effective August 10.

15-1-1515. Fiduciary duty and authority.

1. The legal duties imposed on a fiduciary charged with managing tangible property apply to the management of digital assets, including:
   1. The duty of care;
   2. The duty of loyalty; and
   3. The duty of confidentiality.
2. A fiduciary's or designated recipient's authority with respect to a digital asset of a user:
   1. Except as otherwise provided in section 15-1-1504, is subject to the applicable terms of service;
   2. Is subject to other applicable law, including copyright law;
   3. In the case of a fiduciary, is limited by the scope of the fiduciary's duties; and
   4. May not be used to impersonate the user.
3. A fiduciary with authority over the property of a decedent, protected person, principal, or settlor has the right to access any digital asset in which the decedent, protected person, principal, or settlor had a right or interest and that is not held by a custodian or subject to a terms-of-service agreement.
4. A fiduciary acting within the scope of the fiduciary's duties is an authorized user of the property of the decedent, protected person, principal, or settlor for the purpose of applicable computer-fraud and unauthorized-computer-access laws, including article 5.5 of title 18, C.R.S.
5. A fiduciary with authority over the tangible, personal property of a decedent, protected person, principal, or settlor:
   1. Has the right to access the property and any digital asset stored in it; and
   2. Is an authorized user for the purpose of computer-fraud and unauthorized-computer-access laws, including article 5.5 of title 18, C.R.S.
6. A custodian may disclose information in an account to a fiduciary of the user when the information is required to terminate an account used to access digital assets licensed to the user.
7. A fiduciary of a user may request a custodian to terminate the user's account. A request for termination must be in writing, in either physical or electronic form, and accompanied by:
   1. If the user is deceased, a certified copy of the death certificate of the user;
   2. A certified copy of the letter of appointment of the representative or a small-estate affidavit or court order, court order, power of attorney, or trust giving the fiduciary authority over the account; and
   3. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user's account;
      2. Evidence linking the account to the user; or
      3. A finding by the court that the user had a specific account with the custodian, identifiable by the information specified in subparagraph (I) of this paragraph (c).
8. A domiciliary foreign personal representative is not required to comply with the provisions of section 15-13-204, or with any other provision of article 13 of this title, as a condition to obtaining disclosure of a digital asset pursuant to this part 15.
9. A foreign conservator is not required to comply with the provisions of section 15-14-433 as a condition to obtaining disclosure of a digital asset pursuant to this part 15.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 187, § 1, effective August 10.

15-1-1516. Custodian compliance and immunity.

1. Not later than sixty days after receipt of the information required under sections 15-1-1507 to 15-1-1515, a custodian shall comply with a request under this part 15 from a fiduciary or designated recipient to disclose digital assets or terminate an account. If the custodian fails to comply, the fiduciary or designated recipient may apply to the court for an order directing compliance.
2. An order under subsection (1) of this section directing compliance must contain a finding that compliance is not in violation of 18 U.S.C. sec. 2702, as amended.
3. A custodian may notify the user that a request for disclosure or to terminate an account was made under this part 15.
4. A custodian may deny a request under this part 15 from a fiduciary or designated recipient for disclosure of digital assets or to terminate an account if the custodian is aware of any lawful access to the account following the receipt of the fiduciary's request.
5. This part 15 does not limit a custodian's ability to obtain, or to require a fiduciary or designated recipient requesting disclosure or termination under this part 15 to obtain, a court order that:
   1. Specifies that an account belongs to the protected person or principal;
   2. Specifies that there is sufficient consent from the protected person or principal to support the requested disclosure; and
   3. Contains a finding required by law other than this part 15.
6. A custodian and its officers, employees, and agents are immune from liability for an act or omission done in good faith in compliance with this part 15.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 189, § 1, effective August 10.

15-1-1517. Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 190, § 1, effective August 10.

15-1-1518. Relation to electronic signatures in global and national commerce act.

This part 15 modifies, limits, or supersedes the federal "Electronic Signatures in Global and National Commerce Act", 15 U.S.C. sec. 7001, et seq., but does not modify, limit, or supersede section 101(c) of that act, 15 U.S.C. sec. 7001(c), or authorize electronic delivery of any of the notices described in section 103(b) of that act, 15 U.S.C. sec. 7003(b).

Source: L. 2016: Entire part added, (SB 16-088), ch. 71, p. 190, § 1, effective August 10.

15-1.1-101. Prudent investor rule.

1. Except as otherwise provided in subsection (b) of this section, a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule set forth in this article.
2. The prudent investor rule, a default rule, may be expanded, restricted, eliminated, or otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the trust.

Source: L. 95: Entire article added, p. 309, § 1, effective July 1.

15-1.1-102. Standard of care - portfolio strategy - risk and return objectives.

1. A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
2. A trustee's investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
3. Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to the trust or its beneficiaries:
   1. General economic conditions;
   2. The possible effect of inflation or deflation;
   3. The expected tax consequences of investment decisions or strategies;
   4. The role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
   5. The expected total return from income and the appreciation of capital;
   6. Other resources of the beneficiaries;
   7. Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
   8. An asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
4. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
5. A trustee may invest in any kind of property or type of investment consistent with the standards of this article.
6. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.

Source: L. 95: Entire article added, p. 309, § 1, effective July 1.

15-1.1-103. Diversification.

A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

Source: L. 95: Entire article added, p. 310, § 1, effective July 1.

15-1.1-104. Duties at inception of trusteeship.

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirements of this article.

Source: L. 95: Entire article added, p. 310, § 1, effective July 1.

15-1.1-105. Loyalty.

A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.

Source: L. 95: Entire article added, p. 311, § 1, effective July 1.

15-1.1-106. Impartiality.

If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.

Source: L. 95: Entire article added, p. 311, § 1, effective July 1.

15-1.1-107. Investment costs.

In investing and managing trust assets, a trustee may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the trust, and the skills of the trustee.

Source: L. 95: Entire article added, p. 311, § 1, effective July 1.

15-1.1-108. Reviewing compliance.

Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.

Source: L. 95: Entire article added, p. 311, § 1, effective July 1.

15-1.1-109. Delegation of investment and management functions.

1. A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
   1. Selecting an agent;
   2. Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
   3. Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
2. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
3. A trustee who complies with the requirements of subsection (a) of this section is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
4. By accepting the delegation of a trust function from the trustee of a trust that is subject to the law of this State, an agent submits to the jurisdiction of the courts of this State.

Source: L. 95: Entire article added, p. 311, § 1, effective July 1.

15-1.1-110. Language invoking standard of article.

The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this article: "investments permissible by law for investment of trust funds," "legal investments," "authorized investments," "using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital," "prudent man rule," "prudent trustee rule," "prudent person rule," and "prudent investor rule."

Source: L. 95: Entire article added, p. 311, § 1, effective July 1.

15-1.1-111. Application to existing trusts.

This article applies to trusts existing on and created after July 1, 1995; except that, as applied to trusts existing on July 1, 1995, this article governs only decisions or actions occurring after said date.

Source: L. 95: Entire article added, p. 312, § 1, effective July 1.

15-1.1-112. Uniformity of application and construction.

This article shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this article among the states enacting it.

Source: L. 95: Entire article added, p. 312, § 1, effective July 1.

15-1.1-113. Short title.

This article shall be known and may be cited as the "Colorado Uniform Prudent Investor Act".

Source: L. 95: Entire article added, p. 312, § 1, effective July 1.

15-1.1-114. Severability.

If any provision of this article or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this article which can be given effect without the invalid provision or application, and to this end the provisions of this article are severable.

Source: L. 95: Entire article added, p. 312, § 1, effective July 1.

15-1.1-115. Colorado changes to uniform act - specific statutes control - use of term "trustee".

1. 1. The general assembly recognizes that persons, corporations, entities, or state agencies who have responsibility for investing funds may be subject to a standard that is specifically set forth in other statutes. Under such circumstances, such persons, corporations, entities, or state agencies shall comply with the standard of investment set forth in the other statute, and this article shall not modify or repeal that standard.
   2. In addition, as provided for in section 15-1-304.1, this article shall not apply to those persons, corporations, entities, or state agencies which were made subject to the provisions of section 15-1-304 by specific reference in another statute in existence prior to July 1, 1995.
2. As used in this article, "trustee" includes original or successor administrators, special administrators, administrators cum testamento annexo, executors, guardians, conservators, and trustees, whether of express or implied trusts.

Source: L. 95: Entire article added, p. 312, § 1, effective July 1.

15-1.2-101. Short title.

This article 1.2 may be cited as the "Uniform Fiduciary Income and Principal Act".

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 799, § 1, effective January 1, 2022.

15-1.2-102. Definitions.

In this article 1.2:

1. "Accounting period" means a calendar year, unless a fiduciary selects another period of twelve calendar months or approximately twelve calendar months. The term includes a part of a calendar year or another period of twelve calendar months or approximately twelve calendar months that begin when an income interest begins or ends when an income interest ends.
2. "Asset-backed security" means a security that is serviced primarily by the cash flows of a discrete pool of fixed or revolving receivables or other financial assets that by their terms convert into cash within a finite time. The term includes rights or other assets that ensure the servicing or timely distribution of proceeds to the holder of the asset-backed security. The term does not include an asset to which section 15-1.2-401, 15-1.2-409, or 15-1.2-414 applies.
3. "Beneficiary" includes:
   1. For a trust:
      1. A current beneficiary, including a current income beneficiary and a beneficiary that may receive only principal;
      2. A remainder beneficiary; and
      3. Any other successor beneficiary.
   2. For an estate, an heir, legatee, and devisee.
   3. Reserved.
4. "Court" means the court in this state having jurisdiction relating to a trust or estate.
5. "Current income beneficiary" means a beneficiary to which a fiduciary may distribute net income, whether or not the fiduciary also may distribute principal to the beneficiary.
6. "Distribution" means a payment or transfer by a fiduciary to a beneficiary in the beneficiary's capacity as a beneficiary, made under the terms of the trust, without consideration other than the beneficiary's right to receive the payment or transfer under the terms of the trust. "Distribute", "distributed", and "distributee" have corresponding meanings.
7. "Estate" means a decedent's estate. The term includes the property of the decedent as the estate is originally constituted and the property of the estate as it exists at any time during administration.
8. "Fiduciary" includes a trustee, personal representative, and person acting under a delegation from a fiduciary. The term includes a person that holds property for a successor beneficiary whose interest may be affected by an allocation of receipts and expenditures between income and principal. If there are two or more co-fiduciaries, the term includes all co-fiduciaries acting under the terms of the trust and applicable law.
9. "Income" means money or other property a fiduciary receives as current return from principal. The term includes a part of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided in part 4 of this article 1.2.
10. "Income interest" means the right of a current income beneficiary to receive all or part of net income, whether the terms of the trust require the net income to be distributed or authorize the net income to be distributed in the fiduciary's discretion. The term includes the right of a current beneficiary to use property held by a fiduciary.
11. "Independent person" means a person that is not:
    1. For a trust:
       1. A qualified beneficiary determined under section 15-5-103 (16) of the "Colorado Uniform Trust Code";
       2. A settlor of the trust; or
       3. An individual whose legal obligation to support a beneficiary may be satisfied by a distribution from the trust;
    2. For an estate, a beneficiary;
    3. A spouse, parent, brother, sister, or issue of an individual described in subsection (11)(a) or (11)(b) of this section;
    4. A corporation, partnership, limited liability company, or other entity in which persons described in subsections (11)(a) through (11)(c) of this section, in the aggregate, have voting control; or
    5. An employee of a person described in subsections (11)(a) through (11)(d) of this section.
12. "Mandatory income interest" means the right of a current income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute.
13. "Net income" means the total allocations during an accounting period to income under the terms of a trust and this article 1.2 minus the disbursements during the period, other than distributions, allocated to income under the terms of the trust and this article 1.2. To the extent the trust is a unitrust under part 3 of this article 1.2, the term means the unitrust amount determined under part 3 of this article 1.2. The term includes an adjustment from principal to income under section 15-1.2-203. The term does not include an adjustment from income to principal under section 15-1.2-203.
14. "Person" means an individual, estate, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity.
15. "Personal representative" means an executor, administrator, successor personal representative, special administrator, or person that performs substantially the same function with respect to an estate under the law governing the person's status.
16. "Principal" means property held in trust for distribution to, production of income for, or use by a current or successor beneficiary.
17. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
18. "Settlor" means a person, including a testator, that creates or contributes property to a trust. If more than one person creates or contributes property to a trust, the term includes each person, to the extent of the trust property attributable to that person's contribution, except to the extent another person has the power to revoke or withdraw that portion.
19. "Special tax benefit" means:
    1. Exclusion of a transfer to a trust from gifts described in section 2503 (b) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2503 (b), as amended, because of the qualification of an income interest in the trust as a present interest in property;
    2. Status as a qualified subchapter S trust, as described in section 1361 (d)(3) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 1361 (d)(3), as amended, at a time the trust holds stock of an S corporation, as described in section 1361 (a)(1) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 1361 (a)(1), as amended;
    3. An estate or gift tax marital deduction for a transfer to a trust under section 2056 or 2523 of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2056 or 26 U.S.C. sec. 2523, as amended, which depends or depended in whole or in part on the right of the settlor's spouse to receive the net income of the trust;
    4. Exemption in whole or in part of a trust from the federal generation-skipping transfer tax imposed by section 2601 of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2601, as amended, because the trust was irrevocable on September 25, 1985, if there is any possibility that:
       1. A taxable distribution, as defined in section 2612 (b) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2612 (b), as amended, could be made from the trust; or
       2. A taxable termination, as defined in section 2612 (a) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2612 (a), as amended, could occur with respect to the trust; or
    5. An inclusion ratio, as defined in section 2642 (a) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2642 (a), as amended, of the trust which is less than one, if there is any possibility that:
       1. A taxable distribution, as defined in section 2612 (b) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2612 (b), as amended, could be made from the trust; or
       2. A taxable termination, as defined in section 2612 (a) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2612 (a), as amended, could occur with respect to the trust.
20. "Successive interest" means the interest of a successor beneficiary.
21. "Successor beneficiary" means a person entitled to receive income or principal or to use property when an income interest or other current interest ends.
22. "Terms of a trust" means:
    1. Except as otherwise provided in subsection (22)(b) of this section, the manifestation of the settlor's intent regarding a trust's provisions as:
       1. Expressed in the trust instrument; or
       2. Established by other evidence that would be admissible in a judicial proceeding;
    2. The trust's provisions as established, determined, or amended by:
       1. A trustee or trust director in accordance with applicable law;
       2. A court order;
       3. A nonjudicial settlement agreement under section 15-5-111; or
       4. By alternative dispute resolution under section 15-5-113; or
    3. For an estate, a will.
    4. Reserved.
23. "Trust":
    1. Includes:
       1. An express trust, private or charitable, with additions to the trust, wherever and however created; and
       2. A trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust.
    2. Does not include:
       1. A constructive trust;
       2. A resulting trust, conservatorship, guardianship, multi-party account, custodial arrangement for a minor, business trust, voting trust, security arrangement, liquidation trust, or trust for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, retirement benefits, or employee benefits of any kind; or
       3. An arrangement under which a person is a nominee, escrowee, or agent for another.
24. "Trustee" means a person, other than a personal representative, that owns or holds property for the benefit of a beneficiary. The term includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court.
25. "Will" means any testamentary instrument recognized by applicable law which makes a legally effective disposition of an individual's property, effective at the individual's death. The term includes a codicil or other amendment to a testamentary instrument.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 799, § 1, effective January 1, 2022.

15-1.2-103. Scope.

1. Except as otherwise provided in the terms of a trust, a will, or this article 1.2, this article 1.2 applies to:
   1. A trust or estate.
   2. Reserved.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 804, § 1, effective January 1, 2022.

15-1.2-104. Governing law.

Except as otherwise provided in the terms of a trust or this article 1.2, this article 1.2 applies when this state is the principal place of administration of a trust or estate. By accepting the trusteeship of a trust having its principal place of administration in this state or by moving the principal place of administration of a trust to this state, the trustee submits to the application of this article 1.2 to any matter within the scope of this article 1.2 involving the trust.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 804, § 1, effective January 1, 2022.

15-1.2-201. Fiduciary duties - general principles.

1. In making an allocation or determination or exercising discretion under this article 1.2, a fiduciary shall:
   1. Act in good faith, based on what is fair and reasonable to all beneficiaries;
   2. Administer a trust or estate impartially, except to the extent the terms of the trust manifest an intent that the fiduciary shall or may favor one or more beneficiaries;
   3. Administer the trust or estate in accordance with the terms of the trust, even if there is a different provision in this article 1.2; and
   4. Administer the trust or estate in accordance with this article 1.2, except to the extent the terms of the trust provide otherwise or authorize the fiduciary to determine otherwise.
2. A fiduciary's allocation, determination, or exercise of discretion under this article 1.2 is presumed to be fair and reasonable to all beneficiaries. A fiduciary may exercise a discretionary power of administration given to the fiduciary by the terms of the trust, and an exercise of the power which produces a result different from a result required or permitted by this article 1.2 does not create an inference that the fiduciary abused the fiduciary's discretion.
3. A fiduciary shall:
   1. Add a receipt to principal, to the extent neither the terms of the trust nor this article 1.2 allocates the receipt between income and principal; and
   2. Charge a disbursement to principal, to the extent neither the terms of the trust nor this article 1.2 allocates the disbursement between income and principal.
4. A fiduciary may exercise the power to adjust under section 15-1.2-203, convert an income trust to a unitrust under section 15-1.2-303 (1)(a), change the percentage or method used to calculate a unitrust amount under section 15-1.2-303 (1)(b), or convert a unitrust to an income trust under section 15-1.2-303 (1)(c), if the fiduciary determines the exercise of the power will assist the fiduciary to administer the trust or estate impartially.
5. Factors the fiduciary must consider in making the determination under subsection (4) of this section include:
   1. The terms of the trust;
   2. The nature, distribution standards, and expected duration of the trust;
   3. The effect of the allocation rules, including specific adjustments between income and principal, under parts 4 through 7 of this article 1.2;
   4. The desirability of liquidity and regularity of income;
   5. The desirability of the preservation and appreciation of principal;
   6. The extent to which an asset is used or may be used by a beneficiary;
   7. The increase or decrease in the value of principal assets, reasonably determined by the fiduciary;
   8. Whether and to what extent the terms of the trust give the fiduciary power to accumulate income or invade principal or prohibit the fiduciary from accumulating income or invading principal;
   9. The extent to which the fiduciary has accumulated income or invaded principal in preceding accounting periods;
   10. The effect of current and reasonably expected economic conditions; and
   11. The reasonably expected tax consequences of the exercise of the power.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 804, § 1, effective January 1, 2022.

15-1.2-202. Judicial review of exercise of discretionary power - definition.

1. In this section, "fiduciary decision" means:
   1. A fiduciary's allocation between income and principal or other determination regarding income and principal required or authorized by the terms of the trust or this article 1.2;
   2. The fiduciary's exercise or nonexercise of a discretionary power regarding income and principal granted by the terms of the trust or this article 1.2, including the power to adjust under section 15-1.2-203, convert an income trust to a unitrust under section 15-1.2-303 (1)(a), change the percentage or method used to calculate a unitrust amount under section 15-1.2-303 (1)(b), or convert a unitrust to an income trust under section 15-1.2-303 (1)(c); or
   3. The fiduciary's implementation of a decision described in subsection (1)(a) or (1)(b) of this section.
2. The court may not order a fiduciary to change a fiduciary decision unless the court determines that the fiduciary decision was an abuse of the fiduciary's discretion.
3. If the court determines that a fiduciary decision was an abuse of the fiduciary's discretion, the court may order a remedy authorized by law, including section 15-5-1001 of the "Colorado Uniform Trust Code" and part 5 of article 10 of this title 15. To place the beneficiaries in the positions the beneficiaries would have occupied if there had not been an abuse of the fiduciary's discretion, the court may order:
   1. The fiduciary to exercise or refrain from exercising the power to adjust under section 15-1.2-203;
   2. The fiduciary to exercise or refrain from exercising the power to convert an income trust to a unitrust under section 15-1.2-303 (1)(a), change the percentage or method used to calculate a unitrust amount under section 15-1.2-303 (1)(b), or convert a unitrust to an income trust under section 15-1.2-303 (1)(c);
   3. The fiduciary to distribute an amount to a beneficiary;
   4. A beneficiary to return some or all of a distribution; or
   5. The fiduciary to withhold an amount from one or more future distributions to a beneficiary.
4. Reserved.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 806, § 1, effective January 1, 2022. L. 2022: (3) introductory portion amended, (SB 22-212), ch. 421, p. 2968, § 24, effective August 10.

15-1.2-203. Fiduciary's power to adjust.

1. Except as otherwise provided in the terms of a trust or this section, a fiduciary, in a record, without court approval, may adjust between income and principal if the fiduciary determines the exercise of the power to adjust will assist the fiduciary to administer the trust or estate impartially.
2. This section does not create a duty to exercise or consider the power to adjust under subsection (1) of this section or to inform a beneficiary about the applicability of this section.
3. A fiduciary that in good faith exercises or fails to exercise the power to adjust under subsection (1) of this section is not liable to a person affected by the exercise or failure to exercise.
4. In deciding whether and to what extent to exercise the power to adjust under subsection (1) of this section, a fiduciary shall consider all factors the fiduciary considers relevant, including relevant factors in section 15-1.2-201 (5) and the application of sections 15-1.2-401 (9), 15-1.2-408, and 15-1.2-413.
5. A fiduciary may not exercise the power under subsection (1) of this section to make an adjustment or, under section 15-1.2-408, to make a determination that an allocation is insubstantial if:
   1. The adjustment or determination would reduce the amount payable to a current income beneficiary from a trust that qualifies for a special tax benefit, except to the extent the adjustment is made to provide for a reasonable apportionment of the total return of the trust between the current income beneficiary and successor beneficiaries;
   2. The adjustment or determination would change the amount payable to a beneficiary, as a fixed annuity or a fixed fraction of the value of the trust assets, under the terms of the trust;
   3. The adjustment or determination would reduce an amount that is permanently set aside for a charitable purpose under the terms of the trust, unless both income and principal are set aside for the charitable purpose;
   4. Possessing or exercising the power would cause a person to be treated as the owner of all or part of the trust for federal income tax purposes;
   5. Possessing or exercising the power would cause all or part of the value of the trust assets to be included in the gross estate of an individual for federal estate tax purposes;
   6. Possessing or exercising the power would cause an individual to be treated as making a gift for federal gift tax purposes;
   7. The fiduciary is not an independent person;
   8. The trust is irrevocable and provides for income to be paid to the settlor and possessing or exercising the power would cause the adjusted principal or income to be considered an available resource or available income under a public-benefit program; or
   9. The trust is a unitrust under part 3 of this article 1.2.
6. If subsection (5)(d), (5)(e), (5)(f), or (5)(g) of this section applies to a fiduciary:
   1. A co-fiduciary to which subsections (5)(d) through (5)(g) of this section do not apply may exercise the power to adjust, unless the exercise of the power by the remaining co-fiduciary or co-fiduciaries is not permitted by the terms of the trust or law other than this article 1.2; or
   2. If there is no co-fiduciary to which subsections (5)(d) through (5)(g) of this section do not apply, the fiduciary may appoint a co-fiduciary to which subsections (5)(d) through (5)(g) of this section do not apply, which may be a special fiduciary with limited powers, and the appointed co-fiduciary may exercise the power to adjust under subsection (1) of this section, unless the appointment of a co-fiduciary or the exercise of the power by a co-fiduciary is not permitted by the terms of the trust or law other than this article 1.2.
7. A fiduciary may release or delegate to a co-fiduciary the power to adjust under subsection (1) of this section if the fiduciary determines that the fiduciary's possession or exercise of the power will or may:
   1. Cause a result described in subsections (5)(a) through (5)(f) of this section or subsection (5)(h) of this section; or
   2. Deprive the trust of a tax benefit or impose a tax burden not described in subsections (5)(a) through (5)(f) of this section.
8. A fiduciary's release or delegation to a co-fiduciary under subsection (7) of this section of the power to adjust under subsection (1) of this section:
   1. Must be in a record;
   2. Applies to the entire power, unless the release or delegation provides a limitation, which may be a limitation to the power to adjust:
      1. From income to principal;
      2. From principal to income;
      3. For specified property; or
      4. In specified circumstances;
   3. For a delegation, may be modified by a re-delegation under this subsection by the co-fiduciary to which the delegation is made; and
   4. Subject to subsection (8)(c) of this section, is permanent, unless the release or delegation provides a specified period, including a period measured by the life of an individual or the lives of more than one individual.
9. Terms of a trust which deny or limit the power to adjust between income and principal do not affect the application of this section, unless the terms of the trust expressly deny or limit the power to adjust under subsection (1) of this section.
10. The exercise of the power to adjust under subsection (1) of this section in any accounting period may apply to the current period, the immediately preceding period, and one or more subsequent periods.
11. A description of the exercise of the power to adjust under subsection (1) of this section must be:
    1. Included in a report, if any, sent to beneficiaries under section 15-5-813 (3) of the "Colorado Uniform Trust Code"; or
    2. Communicated at least annually to the qualified beneficiaries determined under section 15-5-103 (16) of the "Colorado Uniform Trust Code", including the attorney general when applicable.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 807, § 1, effective January 1, 2022.

15-1.2-204. Notice of action - definitions.

1. In this section, the following definitions apply:
   1. "Objection period" means the period of time prior to the date by which an objection must be received as described in section 15-1.2-304 (4)(e).
   2. "Qualified beneficiary" has the same meaning as set forth in section 15-5-103 (16).
2. A fiduciary may give a notice of proposed action regarding a matter governed by this article 1.2 as provided in this section. For the purpose of this section, a proposed action includes a course of action and a decision not to take action.
3. The fiduciary shall mail notice of the proposed action to all qualified beneficiaries and the fiduciary may give notice to other beneficiaries. A beneficiary shall be bound under this section with respect to such proposed action if the beneficiary receives actual notice or if the beneficiary would be bound under the provisions of part 3 of article 5 of this title 15.
4. Notice of proposed action need not be given to any beneficiary who consents in writing to the proposed action. The consent may be executed at any time before or after the proposed action is taken.
5. The notice of proposed action shall state that it is given pursuant to this section and shall follow the procedures set out in section 15-1.2-304 regarding notice.
6. A beneficiary may object to the proposed action by mailing a written objection to the fiduciary at the address stated in the notice of proposed action within the objection period.
7. A fiduciary is not liable to a beneficiary to whom notice is given for an action regarding a matter governed by this part 2 if the fiduciary does not receive a written objection to the proposed action from the beneficiary within the objection period and the other requirements of this section are satisfied. If no beneficiary who receives notice objects under this section, the fiduciary is not liable to the beneficiaries receiving notice with respect to the proposed action.
8. If the fiduciary receives a written objection within the objection period, either the fiduciary or a beneficiary may petition the court to have the proposed action performed as proposed, performed with modifications, or denied. In the proceeding, a beneficiary objecting to the proposed action has the burden of proving that the fiduciary's proposed action should not be performed. A beneficiary who has not objected is not estopped from opposing the proposed action in the proceeding. If the fiduciary decides not to implement the proposed action, the fiduciary shall notify the beneficiaries of the decision not to take the action and the reasons for the decision, and the fiduciary's decision not to implement the proposed action does not itself give rise to liability to any beneficiary. A beneficiary may petition the court to have the action performed, and has the burden of provision that it should be performed.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 809, § 1, effective January 1, 2022.

15-1.2-301. Definitions.

In this part 3:

1. "Applicable value" means the amount of the net fair market value of a trust taken into account under section 15-1.2-307.
2. "Express unitrust" means a trust for which, under the terms of the trust without regard to this part 3, income or net income must or may be calculated as a unitrust amount.
3. "Income trust" means a trust that is not a unitrust.
4. "Net fair market value of a trust" means the fair market value of the assets of the trust, less the noncontingent liabilities of the trust.
5. "Unitrust" means a trust for which net income is a unitrust amount. The term includes an express unitrust.
6. "Unitrust amount" means an amount computed by multiplying a determined value of a trust by a determined percentage. For a unitrust administered under a unitrust policy, the term means the applicable value, multiplied by the unitrust rate.
7. "Unitrust policy" means a policy described in sections 15-1.2-305 through 15-1.2-309 and adopted under section 15-1.2-303.
8. "Unitrust rate" means the rate used to compute the unitrust amount under subsection (6) of this section for a unitrust administered under a unitrust policy.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 810, § 1, effective January 1, 2022.

15-1.2-302. Application - duties and remedies.

1. Except as otherwise provided in subsection (2) of this section, this part 3 applies to:
   1. An income trust, unless the terms of the trust expressly prohibit use of this part 3 by a specific reference to this part 3 or an explicit expression of intent that net income not be calculated as a unitrust amount; and
   2. An express unitrust, except to the extent the terms of the trust explicitly:
      1. Prohibit use of this part 3 by a specific reference to this part 3;
      2. Prohibit conversion to an income trust; or
      3. Limit changes to the method of calculating the unitrust amount.
2. This part 3 does not apply to a trust described in section 170 (f)(2)(B), 642 (c)(5), 664 (d), or 2702 of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 170 (f)(2)(B), 642 (c)(5), 664 (d), or 2702, as amended.
3. An income trust to which this part 3 applies under subsection (1)(a) of this section may be converted to a unitrust under this part 3 regardless of the terms of the trust concerning distributions. Conversion to a unitrust under this part 3 does not affect other terms of the trust concerning distributions of income or principal.
4. This part 3 applies to an estate only to the extent a trust is a beneficiary of the estate. To the extent of the trust's interest in the estate, the estate may be administered as a unitrust, the administration of the estate as a unitrust may be discontinued, or the percentage or method used to calculate the unitrust amount may be changed, in the same manner as for a trust under this part 3.
5. This part 3 does not create a duty to take or consider action under this part 3 or to inform a beneficiary about the applicability of this part 3.
6. A fiduciary that in good faith takes or fails to take an action under this part 3 is not liable to a person affected by the action or inaction.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 811, § 1, effective January 1, 2022.

15-1.2-303. Authority of fiduciary.

1. A fiduciary, without court approval, by complying with subsections (2) and (6) of this section, may:
   1. Convert an income trust to a unitrust if the fiduciary adopts in a record a unitrust policy for the trust providing:
      1. That in administering the trust the net income of the trust will be a unitrust amount rather than net income determined without regard to this part 3; and
      2. The percentage and method used to calculate the unitrust amount;
   2. Change the percentage or method used to calculate a unitrust amount for a unitrust if the fiduciary adopts in a record a unitrust policy or an amendment or replacement of a unitrust policy providing changes in the percentage or method used to calculate the unitrust amount; or
   3. Convert a unitrust to an income trust if the fiduciary adopts in a record a determination that, in administering the trust, the net income of the trust will be net income determined without regard to this part 3 rather than a unitrust amount.
2. A fiduciary may take an action under subsection (1) of this section if:
   1. The fiduciary determines that the action will assist the fiduciary to administer a trust impartially;
   2. The fiduciary sends a notice in a record, in the manner required by section 15-1.2-304, describing and proposing to take the action;
   3. The fiduciary sends a copy of the notice under subsection (2)(b) of this section to each settlor of the trust which is:
      1. If an individual, living; or
      2. If not an individual, in existence;
   4. At least one member of each class of the qualified beneficiaries determined under section 15-5-103 (16) of the "Colorado Uniform Trust Code", other than the attorney general, receiving the notice under subsection (2)(b) of this section is:
      1. If an individual, legally competent;
      2. If not an individual, in existence; or
      3. Represented in the manner provided in section 15-1.2-304 (2); and
   5. The fiduciary does not receive, by the date specified in the notice under section 15-1.2-304 (4)(e), an objection in a record to the action proposed under subsection (2)(b) of this section from a person to which the notice under subsection (2)(b) of this section is sent.
3. If a fiduciary receives, not later than the date stated in the notice under section 15-1.2-304, an objection in a record described in section 15-1.2-304 to a proposed action, the fiduciary or a beneficiary may request the court to have the proposed action taken as proposed, taken with modifications, or prevented. A person described in section 15-1.2-304 (1) may oppose the proposed action in the proceeding under this subsection (3), whether or not the person:
   1. Consented under section 15-1.2-304; or
   2. Objected under section 15-1.2-304.
4. If, after sending a notice under subsection (2)(b) of this section, a fiduciary decides not to take the action proposed in the notice, the fiduciary shall notify in a record each person described in section 15-1.2-304 (1) of the decision not to take the action and the reasons for the decision.
5. If a beneficiary requests in a record that a fiduciary take an action described in subsection (1) of this section and the fiduciary declines to act or does not act within ninety days after receiving the request, the beneficiary may request the court to direct the fiduciary to take the action requested.
6. In deciding whether and how to take an action authorized by subsection (1) of this section, or whether and how to respond to a request by a beneficiary under subsection (5) of this section, a fiduciary shall consider all factors relevant to the trust and the beneficiaries, including relevant factors in section 15-1.2-201 (5).
7. A fiduciary may release or delegate the power to convert an income trust to a unitrust under subsection (1)(a) of this section, change the percentage or method used to calculate a unitrust amount under subsection (1)(b) of this section, or convert a unitrust to an income trust under subsection (1)(c) of this section, for a reason described in section 15-1.2-203 (7) and in the manner described in section 15-1.2-203 (8).

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 812, § 1, effective January 1, 2022.

15-1.2-304. Notice.

1. A notice required by section 15-1.2-303 (2)(b) must be sent in a manner authorized under section 15-5-109 to:
   1. The qualified beneficiaries determined under section 15-5-103 (16), other than the attorney general; and
   2. Each person acting as trust director of the trust under the "Colorado Uniform Directed Trust Act", part 8 of article 16 of this title 15; and
   3. Each person that is granted a power by the terms of the trust to appoint or remove a trustee or person described in subsection (1)(b) of this section, to the extent that power is exercisable when the person is not then serving as a trustee or person described in subsection (1)(b) of this section.
2. The representation provisions of sections 15-5-301 through 15-5-305 apply to notice under this section.
3. A person may consent in a record at any time to action proposed under section 15-1.2-303 (2)(b). A notice required by section 15-1.2-303 (2)(b) need not be sent to a person that consents under this subsection (3).
4. A notice required by section 15-1.2-303 (2)(b) must include:
   1. The action proposed under section 15-1.2-303 (2)(b);
   2. For a conversion of an income trust to a unitrust, a copy of the unitrust policy adopted under section 15-1.2-303 (1)(a);
   3. For a change in the percentage or method used to calculate the unitrust amount, a copy of the unitrust policy or amendment or replacement of the unitrust policy adopted under section 15-1.2-303 (1)(b);
   4. A statement that the person to which the notice is sent may object to the proposed action by stating in a record the basis for the objection and sending or delivering the record to the fiduciary;
   5. The date by which an objection under subsection (4)(d) of this section must be received by the fiduciary, which must be at least thirty days after the date the notice is sent;
   6. The date on which the action is proposed to be taken and the date on which the action is proposed to take effect;
   7. The name and contact information of the fiduciary; and
   8. The name and contact information of a person that may be contacted for additional information.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 814, § 1, effective January 1, 2022.

15-1.2-305. Unitrust policy.

1. In administering a unitrust under this part 3, a fiduciary shall follow a unitrust policy adopted under section 15-1.2-303 (1)(a) or (1)(b) or amended or replaced under section 15-1.2-303 (1)(b).
2. A unitrust policy must provide:
   1. The unitrust rate or the method for determining the unitrust rate under section 15-1.2-306;
   2. The method for determining the applicable value under section 15-1.2-306; and
   3. The rules described in sections 15-1.2-306 through 15-1.2-309 which apply in the administration of the unitrust, whether the rules are:
      1. Mandatory, as provided in sections 15-1.2-307 (1) and 15-1.2-416; or
      2. Optional, as provided in sections 15-1.2-306, 15-1.2-307 (2), 15-1.2-308 (2), and 15-1.2-309 (1), to the extent the fiduciary elects to adopt those rules.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 815, § 1, effective January 1, 2022.

15-1.2-306. Unitrust rate.

1. Except as otherwise provided in section 15-1.2-309 (2)(a), a unitrust rate may be:
   1. A fixed unitrust rate; or
   2. A unitrust rate that is determined for each period using:
      1. A market index or other published data; or
      2. A mathematical blend of market indices or other published data over a stated number of preceding periods.
2. Except as otherwise provided in section 15-1.2-309 (2)(a), a unitrust policy may provide:
   1. A limit on how high the unitrust rate determined under subsection (1)(b) of this section may rise;
   2. A limit on how low the unitrust rate determined under subsection (1)(b) of this section may fall;
   3. A limit on how much the unitrust rate determined under subsection (1)(b) of this section may increase over the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods;
   4. A limit on how much the unitrust rate determined under subsection (1)(b) of this section may decrease below the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods; or
   5. A mathematical blend of any of the unitrust rates determined under subsection (1)(b) of this section and subsections (2)(a) through (2)(d) of this section.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 815, § 1, effective January 1, 2022.

15-1.2-307. Applicable value.

1. A unitrust policy must provide the method for determining the fair market value of an asset for the purpose of determining the unitrust amount, including:
   1. The frequency of valuing the asset, which need not require a valuation in every period; and
   2. The date for valuing the asset in each period in which the asset is valued.
2. Except as otherwise provided in section 15-1.2-309 (2)(b), a unitrust policy may provide methods for determining the amount of the net fair market value of the trust to take into account in determining the applicable value, including:
   1. Obtaining an appraisal of an asset for which fair market value is not readily available;
   2. Exclusion of specific assets or groups or types of assets;
   3. Other exceptions or modifications of the treatment of specific assets or groups or types of assets;
   4. Identification and treatment of cash or property held for distribution;
   5. Use of:
      1. An average of fair market values over a stated number of preceding periods; or
      2. Another mathematical blend of fair market values over a stated number of preceding periods;
   6. A limit on how much the applicable value of all assets, groups of assets, or individual assets may increase over:
      1. The corresponding applicable value for the preceding period; or
      2. A mathematical blend of applicable values over a stated number of preceding periods;
   7. A limit on how much the applicable value of all assets, groups of assets, or individual assets may decrease below:
      1. The corresponding applicable value for the preceding period; or
      2. A mathematical blend of applicable values over a stated number of preceding periods;
   8. The treatment of accrued income and other features of an asset which affect value; and
   9. Determining the liabilities of the trust, including treatment of liabilities to conform with the treatment of assets under subsections (2)(a) through (2)(h) of this section.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 816, § 1, effective January 1, 2022.

15-1.2-308. Period.

1. A unitrust policy must provide the period used under sections 15-1.2-306 and 15-1.2-307. Except as otherwise provided in section 15-1.2-309 (2)(c), the period may be:
   1. A calendar year;
   2. A twelve-month period other than a calendar year;
   3. A calendar quarter;
   4. A three-month period other than a calendar quarter; or
   5. Another period.
2. Except as otherwise provided in section 15-1.2-309 (2), a unitrust policy may provide standards for:
   1. Using fewer preceding periods under section 15-1.2-306 (1)(b)(II), (2)(c), or (2)(d) if:
      1. The trust was not in existence in a preceding period; or
      2. Market indices or other published data are not available for a preceding period;
   2. Using fewer preceding periods under section 15-1.2-307 (2)(e)(I), (2)(e)(II), (2)(f)(II), or (2)(g)(II) if:
      1. The trust was not in existence in a preceding period; or
      2. Fair market values are not available for a preceding period; and
   3. Prorating the unitrust amount on a daily basis for a part of a period in which the trust or the administration of the trust as a unitrust or the interest of any beneficiary commences or terminates.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 817, § 1, effective January 1, 2022.

15-1.2-309. Special tax benefits - rules.

1. A unitrust policy may:
   1. Provide methods and standards for:
      1. Determining the timing of distributions;
      2. Making distributions in cash or in kind or partly in cash and partly in kind; or
      3. Correcting an underpayment or overpayment to a beneficiary based on the unitrust amount if there is an error in calculating the unitrust amount;
   2. Specify sources and the order of sources, including categories of income for federal income tax purposes, from which distributions of a unitrust amount are paid; or
   3. Provide other standards and rules the fiduciary determines serve the interests of the beneficiaries.
2. If a trust qualifies for a special tax benefit or a fiduciary is not an independent person:
   1. The unitrust rate established under section 15-1.2-306 may not be less than three percent or more than five percent;
   2. The only provisions of section 15-1.2-307 which apply are section 15-1.2-307 (1), (2)(a), (2)(d), (2)(e)(I), and (2)(i);
   3. The only period that may be used under section 15-1.2-308 is a calendar year under section 15-1.2-308 (1)(a); and
   4. The only other provisions of section 15-1.2-308 which apply are section 15-1.2-308 (2)(b)(I) and (2)(c).
3. Unless otherwise provided by the terms of unitrust policy or the terms of the trust, the distribution amount each year shall be deemed to be paid from the following sources for that year in the following order:
   1. Net income determined as if the trust was not a unitrust;
   2. Other ordinary income as determined for federal income tax purposes;
   3. Net realized short-term capital gains as determined for federal income tax purposes;
   4. Net realized long-term capital gains as determined for federal income tax purposes;
   5. Trust principal comprising assets for which there is a readily available market value; and
   6. Other trust principal.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 817, § 1, effective January 1, 2022.

15-1.2-401. Character of receipts from entity - definitions.

1. In this section:
   1. "Capital distribution" means an entity distribution of money which is a:
      1. Return of capital; or
      2. Distribution in total or partial liquidation of the entity.
   2. "Entity":
      1. Means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization or arrangement in which a fiduciary owns or holds an interest, whether or not the entity is a taxpayer for federal income tax purposes; and
      2. Does not include:
         1. A trust or estate to which section 15-1.2-402 applies;
         2. A business or other activity to which section 15-1.2-403 applies which is not conducted by an entity described in subsection (1)(b)(I) of this section;
         3. An asset-backed security; or
         4. An instrument or arrangement to which section 15-1.2-416 applies.
   3. "Entity distribution" means a payment or transfer by an entity made to a person in the person's capacity as an owner or holder of an interest in the entity.
2. In this section, an attribute or action of an entity includes an attribute or action of any other entity in which the entity owns or holds an interest, including an interest owned or held indirectly through another entity.
3. Except as otherwise provided in subsections (4)(b) through (4)(d) of this section, a fiduciary shall allocate to income:
   1. Money received in an entity distribution; and
   2. Tangible personal property of nominal value received from the entity.
4. A fiduciary shall allocate to principal:
   1. Property received in an entity distribution which is not:
      1. Money; or
      2. Tangible personal property of nominal value;
   2. Money received in an entity distribution in an exchange for part or all of the fiduciary's interest in the entity, to the extent the entity distribution reduces the fiduciary's interest in the entity relative to the interests of other persons that own or hold interests in the entity;
   3. Money received in an entity distribution that the fiduciary determines or estimates is a capital distribution; and
   4. Money received in an entity distribution from an entity that is:
      1. A regulated investment company or real estate investment trust if the money received is a capital gain dividend for federal income tax purposes; or
      2. Treated for federal income tax purposes comparably to the treatment described in subsection (4)(d)(I) of this section.
5. A fiduciary may determine or estimate that money received in an entity distribution is a capital distribution:
   1. By relying without inquiry or investigation on a characterization of the entity distribution provided by or on behalf of the entity, unless the fiduciary:
      1. Determines, on the basis of information known to the fiduciary, that the characterization is or may be incorrect; or
      2. Owns or holds more than fifty percent of the voting interest in the entity;
   2. By determining or estimating, on the basis of information known to the fiduciary or provided to the fiduciary by or on behalf of the entity, that the total amount of money and property received by the fiduciary in the entity distribution or a series of related entity distributions is or will be greater than twenty percent of the fair market value of the fiduciary's interest in the entity; or
   3. If neither subsection (5)(a) nor (5)(b) of this section applies, by considering the factors in subsection (6) of this section and the information known to the fiduciary or provided to the fiduciary by or on behalf of the entity.
6. In making a determination or estimate under subsection (5)(c) of this section, a fiduciary may consider:
   1. A characterization of an entity distribution provided by or on behalf of the entity;
   2. The amount of money or property received in:
      1. The entity distribution; or
      2. What the fiduciary determines is or will be a series of related entity distributions;
   3. The amount described in subsection (6)(b) of this section compared to the amount the fiduciary determines or estimates is, during the current or preceding accounting periods:
      1. The entity's operating income;
      2. The proceeds of the entity's sale or other disposition of:
         1. All or part of the business or other activity conducted by the entity;
         2. One or more business assets that are not sold to customers in the ordinary course of the business or other activity conducted by the entity; or
         3. One or more assets other than business assets, unless the entity's primary activity is to invest in assets to realize gain on the disposition of all or some of the assets;
      3. If the entity's primary activity is to invest in assets to realize gain on the disposition of all or some of the assets, the gain realized on the disposition;
      4. The entity's regular, periodic entity distributions;
      5. The amount of money the entity has accumulated;
      6. The amount of money the entity has borrowed;
      7. The amount of money the entity has received from the sources described in sections 15-1.2-407, 15-1.2-410, 15-1.2-411, and 15-1.2-412; and
      8. The amount of money the entity has received from a source not otherwise described in this subsection (6)(c); and
   4. Any other factor the fiduciary determines is relevant.
7. If, after applying subsections (3) through (6) of this section, a fiduciary determines that a part of an entity distribution is a capital distribution but is in doubt about the amount of the entity distribution which is a capital distribution, the fiduciary shall allocate to principal the amount of the entity distribution which is in doubt.
8. If a fiduciary receives additional information about the application of this section to an entity distribution before the fiduciary has paid part of the entity distribution to a beneficiary, the fiduciary may consider the additional information before making the payment to the beneficiary and may change a decision to make the payment to the beneficiary.
9. If a fiduciary receives additional information about the application of this section to an entity distribution after the fiduciary has paid part of the entity distribution to a beneficiary, the fiduciary is not required to change or recover the payment to the beneficiary but may consider that information in determining whether to exercise the power to adjust under section 15-1.2-203.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 819, § 1, effective January 1, 2022.

15-1.2-402. Distribution from trust or estate.

A fiduciary shall allocate to income an amount received as a distribution of income, including a unitrust distribution under part 3 of this article 1.2, from a trust or estate in which the fiduciary has an interest, other than an interest the fiduciary purchased in a trust that is an investment entity, and shall allocate to principal an amount received as a distribution of principal from the trust or estate. If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, section 15-1.2-401, 15-1.2-415, or 15-1.2-416 apply to a receipt from the trust.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 822, § 1, effective January 1, 2022.

15-1.2-403. Business of other activity conducted by fiduciary.

1. This section applies to a business or other activity conducted by a fiduciary if the fiduciary determines that it is in the interests of the beneficiaries to account separately for the business or other activity instead of:
   1. Accounting for the business or other activity as part of the fiduciary's general accounting records; or
   2. Conducting the business or other activity through an entity described in section 15-1.2-401 (1)(b)(I).
2. A fiduciary may account separately under this section for the transactions of a business or other activity, whether or not assets of the business or other activity are segregated from other assets held by the fiduciary.
3. A fiduciary that accounts separately under this section for a business or other activity:
   1. May determine:
      1. The extent to which the net cash receipts of the business or other activity must be retained for:
         1. Working capital;
         2. The acquisition or replacement of fixed assets; and
         3. Other reasonably foreseeable needs of the business or other activity; and
      2. The extent to which the remaining net cash receipts are accounted for as principal or income in the fiduciary's general accounting records for the trust;
   2. May make a determination under subsection (3)(a) of this section separately and differently from the fiduciary's decisions concerning distributions of income or principal; and
   3. Shall account for the net amount received from the sale of an asset of the business or other activity, other than a sale in the ordinary course of the business or other activity, as principal in the fiduciary's general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.
4. Activities for which a fiduciary may account separately under this section include:
   1. Retail, manufacturing, service, and other traditional business activities;
   2. Farming;
   3. Raising and selling livestock and other animals;
   4. Managing rental properties;
   5. Extracting minerals, water, and other natural resources;
   6. Growing and cutting timber;
   7. An activity to which section 15-1.2-414, 15-1.2-415, or 15-1.2-416 applies; and
   8. Any other business conducted by the fiduciary.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 822, § 1, effective January 1, 2022.

15-1.2-404. Principal receipts.

1. A fiduciary shall allocate to principal:
   1. To the extent not allocated to income under this article 1.2, an asset received from:
      1. An individual during the individual's lifetime;
      2. An estate;
      3. A trust on termination of an income interest; or
      4. A payor under a contract naming the fiduciary as beneficiary;
   2. Except as otherwise provided in this part 4, money or other property received from the sale, exchange, liquidation, or change in form of a principal asset;
   3. An amount recovered from a third party to reimburse the fiduciary because of a disbursement described in section 15-1.2-502 (1) or for another reason to the extent not based on loss of income;
   4. Proceeds of property taken by eminent domain; except that proceeds awarded for loss of income in an accounting period are income if a current income beneficiary had a mandatory income interest during the period;
   5. Net income received in an accounting period during which there is no beneficiary to which a fiduciary may or must distribute income; and
   6. Other receipts as provided in sections 15-1.2-408 through 15-1.2-416.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 823, § 1, effective January 1, 2022.

15-1.2-405. Rental property.

1. To the extent a fiduciary does not account for the management of rental property as a business under section 15-1.2-403, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:
   1. Must be added to principal and held subject to the terms of the lease, except as otherwise provided by law other than this article 1.2; and
   2. Is not allocated to income or available for distribution to a beneficiary until the fiduciary's contractual obligations have been satisfied with respect to that amount.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 824, § 1, effective January 1, 2022.

15-1.2-406. Receipt on obligation to be paid in money.

1. This section does not apply to an obligation to which section 15-1.2-409, 15-1.2-410, 15-1.2-411, 15-1.2-412, 15-1.2-414, 15-1.2-415, or 15-1.2-416 applies.
2. A fiduciary shall allocate to income, without provision for amortization of premium, an amount received as interest on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal.
3. A fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary. A fiduciary shall allocate to income the increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable, at maturity or another future time, in an amount that exceeds the amount in consideration of which it was issued.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 824, § 1, effective January 1, 2022.

15-1.2-407. Insurance policy or contract.

1. This section does not apply to a contract to which section 15-1.2-409 applies.
2. Except as otherwise provided in subsection (3) of this section, a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset. The fiduciary shall allocate dividends on an insurance policy to income to the extent premiums on the policy are paid from income and to principal to the extent premiums on the policy are paid from principal.
3. A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of:
   1. Occupancy or other use by a current income beneficiary;
   2. Income; or
   3. Subject to section 15-1.2-403, profits from a business.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 825, § 1, effective January 1, 2022.

15-1.2-408. Insubstantial allocation not required.

1. If a fiduciary determines that an allocation between income and principal required by section 15-1.2-409, 15-1.2-410, 15-1.2-411, 15-1.2-412, or 15-1.2-415 is insubstantial, the fiduciary may allocate the entire amount to principal, unless section 15-1.2-203 (5) applies to the allocation.
2. A fiduciary may presume an allocation is insubstantial under subsection (1) of this section if:
   1. The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than ten percent; and
   2. The asset producing the receipt to be allocated has a fair market value less than ten percent of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
3. The power to make a determination under subsection (1) of this section may be:
   1. Exercised by a co-fiduciary in the manner described in section 15-1.2-203 (6); or
   2. Released or delegated for a reason described in section 15-1.2-203 (7) and in the manner described in section 15-1.2-203 (8).

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 825, § 1, effective January 1, 2022.

15-1.2-409. Deferred compensation, annuity, or similar payment - definitions.

1. In this section:
   1. "Internal income of a separate fund" means the amount determined under subsection (2) of this section.
   2. "Marital trust" means a trust:
      1. Of which the settlor's surviving spouse is the only current income beneficiary and is entitled to a distribution of all the current net income of the trust; and
      2. That qualifies for a marital deduction with respect to the settlor's estate under section 2056 of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2056, as amended, because:
         1. An election to qualify for a marital deduction under section 2056 (b)(7) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2056 (b)(7), as amended, has been made; or
         2. The trust qualifies for a marital deduction under section 2056 (b)(5) of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 2056 (b)(5), as amended.
   3. "Payment" means an amount a fiduciary may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payor in exchange for future amounts the fiduciary may receive. The term includes an amount received in money or property from the payor's general assets or from a separate fund created by the payor.
   4. "Separate fund" includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus, or stock-ownership plan.
2. For each accounting period, the following rules apply to a separate fund:
   1. The fiduciary shall determine the internal income of the separate fund as if the separate fund were a trust subject to this article 1.2;
   2. If the fiduciary cannot determine the internal income of the separate fund under subsection (2)(a) of this section, the internal income of the separate fund is deemed to equal four percent of the value of the separate fund, according to the most recent statement of value preceding the beginning of the accounting period; and
   3. If the fiduciary cannot determine the value of the separate fund under subsection (2)(b) of this section, the value of the separate fund is deemed to equal the present value of the expected future payments, as determined under section 7520 of the "Internal Revenue Code of 1986", 26 U.S.C. sec. 7520, as amended, for the month preceding the beginning of the accounting period for which the computation is made.
3. A fiduciary shall allocate a payment received from a separate fund during an accounting period to income, to the extent of the internal income of the separate fund during the period, and the balance to principal.
4. The fiduciary of a marital trust shall:
   1. Withdraw from a separate fund the amount the current income beneficiary of the trust requests the fiduciary to withdraw, not greater than the amount by which the internal income of the separate fund during the accounting period exceeds the amount the fiduciary otherwise receives from the separate fund during the period;
   2. Transfer from principal to income the amount the current income beneficiary requests the fiduciary to transfer, not greater than the amount by which the internal income of the separate fund during the period exceeds the amount the fiduciary receives from the separate fund during the period after the application of subsection (4)(a) of this section; and
   3. Distribute to the current income beneficiary as income:
      1. The amount of the internal income of the separate fund received or withdrawn during the period; and
      2. The amount transferred from principal to income under subsection (4)(b) of this section.
5. For a trust, other than a marital trust, of which one or more current income beneficiaries are entitled to a distribution of all the current net income, the fiduciary shall transfer from principal to income the amount by which the internal income of a separate fund during the accounting period exceeds the amount the fiduciary receives from the separate fund during the period.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 826, § 1, effective January 1, 2022.

15-1.2-410. Liquidating asset - definition.

1. In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a limited time. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.
2. This section does not apply to a receipt subject to section 15-1.2-401, 15-1.2-409, 15-1.2-411, 15-1.2-412, 15-1.2-414, 15-1.2-415, 15-1.2-416, or 15-1.2-503.
3. A fiduciary shall allocate:
   1. To income:
      1. A receipt produced by a liquidating asset, to the extent the receipt does not exceed four percent of the value of the asset; or
      2. If the fiduciary cannot determine the value of the asset, ten percent of the receipt; and
   2. To principal, the balance of the receipt.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 827, § 1, effective January 1, 2022.

15-1.2-411. Minerals, water, and other natural resources.

1. To the extent a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under section 15-1.2-403, the fiduciary shall allocate the receipt:
   1. To income, to the extent received:
      1. As delay rental or annual rent on a lease;
      2. As a factor for interest or the equivalent of interest under an agreement creating a production payment; or
      3. On account of an interest in renewable water;
   2. To principal, if received from a production payment, to the extent subsection (1)(a)(II) of this section does not apply; or
   3. Between income and principal equitably, to the extent received:
      1. On account of an interest in non-renewable water;
      2. As a royalty, shut-in-well payment, take-or-pay payment, or bonus; or
      3. From a working interest or any other interest not provided for in subsection (1)(a), (1)(b), (1)(c)(I), or (1)(c)(II) of this section.
2. This section applies to an interest owned or held by a fiduciary whether or not a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.
3. An allocation of a receipt under subsection (1)(c) of this section is presumed to be equitable if the amount allocated to principal is equal to the amount allowed by sections 611 through 614 of the "Internal Revenue Code of 1986", 26 U.S.C. secs. 611 through 614, as amended, as a deduction for depletion of the interest.
4. If a fiduciary owns or holds an interest in minerals, water, or other natural resources before the effective date of this article 1.2, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before the effective date of this article 1.2. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after the effective date of this article 1.2, the fiduciary shall allocate receipts from the interest as provided in this section.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 828, § 1, effective January 1, 2022.

15-1.2-412. Timber.

1. To the extent a fiduciary does not account for receipts from the sale of timber and related products as a business under section 15-1.2-403, the fiduciary shall allocate the net receipts:
   1. To income, to the extent the amount of timber cut from the land does not exceed the rate of growth of the timber;
   2. To principal, to the extent the amount of timber cut from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
   3. Between income and principal if the net receipts are from the lease of land used for growing and cutting timber or from a contract to cut timber from land, by determining the amount of timber cut from the land under the lease or contract and applying the rules in subsections (1)(a) and (1)(b) of this section; or
   4. To principal, to the extent advance payments, bonuses, and other payments are not allocated under subsection (1)(a), (1)(b), or (1)(c) of this section.
2. In determining net receipts to be allocated under subsection (1) of this section, a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
3. This section applies to land owned or held by a fiduciary whether or not a settlor was cutting timber from the land before the fiduciary owned or held the property.
4. If a fiduciary owns or holds an interest in land used for growing and cutting timber before the effective date of this article 1.2, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the fiduciary before the effective date of this article 1.2. If the fiduciary acquires an interest in land used for growing and cutting timber on or after the effective date of this article 1.2, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 829, § 1, effective January 1, 2022.

15-1.2-413. Marital deduction property not productive of income.

1. If a trust received property for which a gift or estate tax marital deduction was allowed and the settlor's spouse holds a mandatory income interest in the trust, the spouse may require the trustee, to the extent the trust assets otherwise do not provide the spouse with sufficient income from or use of the trust assets to qualify for the deduction, to:
   1. Make property productive of income;
   2. Convert property to property productive of income within a reasonable time; or
   3. Exercise the power to adjust under section 15-1.2-203.
2. The trustee may decide which action or combination of actions in subsection (1) of this section to take.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 829, § 1, effective January 1, 2022.

15-1.2-414. Derivative or option - definition.

1. In this section, "derivative" means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event. The term includes stocks, fixed income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit-default events.
2. To the extent a fiduciary does not account for a transaction in derivatives as a business under section 15-1.2-403, the fiduciary shall allocate ten percent of receipts from the transaction and ten percent of disbursements made in connection with the transaction to income and the balance to principal.
3. Subsection (4) of this section applies if:
   1. A fiduciary:
      1. Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted;
      2. Grants an option that permits another person to sell property to the trust; or
      3. Acquires an option to buy property for the trust or an option to sell an asset owned by the trust; and
   2. The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.
4. If this subsection (4) applies, the fiduciary shall allocate ten percent to income and the balance to principal of the following amounts:
   1. An amount received for granting the option;
   2. An amount paid to acquire the option; and
   3. Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 830, § 1, effective January 1, 2022.

15-1.2-415. Asset-backed security.

1. Except as otherwise provided in subsection (2) of this section, a fiduciary shall allocate to income a receipt from or related to an asset-backed security, to the extent the payor identifies the payment as being from interest or other current return, and to principal the balance of the receipt.
2. If a fiduciary receives one or more payments in exchange for part or all of the fiduciary's interest in an asset-backed security, including a liquidation or redemption of the fiduciary's interest in the security, the fiduciary shall allocate to income ten percent of receipts from the transaction and ten percent of disbursements made in connection with the transaction, and to principal the balance of the receipts and disbursements.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 831, § 1, effective January 1, 2022.

15-1.2-416. Other financial instrument or arrangement.

A fiduciary shall allocate receipts from or related to a financial instrument or arrangement not otherwise addressed by this article 1.2. The allocation must be consistent with sections 15-1.2-414 and 15-1.2-415.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 831, § 1, effective January 1, 2022.

15-1.2-501. Disbursement from income.

1. Subject to section 15-1.2-504, and except as otherwise provided in section 15-1.2-601 (3)(b) or (3)(c), a fiduciary shall disburse from income:
   1. One-half of:
      1. The regular compensation of the fiduciary and any person providing investment advisory, custodial, or other services to the fiduciary, to the extent income is sufficient; and
      2. An expense for an accounting, judicial or nonjudicial proceeding, or other matter that involves both income and successive interests, to the extent income is sufficient;
   2. The balance of the disbursements described in subsection (1)(a) of this section, to the extent a fiduciary that is an independent person determines that making those disbursements from income would be in the interests of the beneficiaries;
   3. Another ordinary expense incurred in connection with administration, management, or preservation of property and distribution of income, including interest, an ordinary repair, regularly recurring tax assessed against principal, and an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily an income interest, to the extent income is sufficient; and
   4. A premium on insurance covering loss of a principal asset or income from or use of the asset.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 831, § 1, effective January 1, 2022.

15-1.2-502. Disbursement from principal.

1. Subject to section 15-1.2-505, and except as otherwise provided in section 15-1.2-601 (3)(b), a fiduciary shall disburse from principal:
   1. The balance of the disbursements described in section 15-1.2-501 (1)(a) and (1)(c), after application of section 15-1.2-501 (1)(b);
   2. The fiduciary's compensation calculated on principal as a fee for acceptance, distribution, or termination;
   3. A payment of an expense to prepare for or execute a sale or other disposition of property;
   4. A payment on the principal of a trust debt;
   5. A payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property;
   6. A payment of a premium for insurance, including title insurance, not described in section 15-1.2-501 (1)(d), of which the fiduciary is the owner and beneficiary;
   7. A payment of an estate or inheritance tax or other tax imposed because of the death of a decedent, including penalties, apportioned to the trust; and
   8. A payment:
      1. Related to environmental matters, including:
         1. Reclamation;
         2. Assessing environmental conditions;
         3. Remedying and removing environmental contamination;
         4. Monitoring remedial activities and the release of substances;
         5. Preventing future releases of substances;
         6. Collecting amounts from persons liable or potentially liable for the costs of activities described in subsections (1)(h)(I)(A) through (1)(h)(I)(E) of this section;
         7. Penalties imposed under environmental laws or regulations;
         8. Other actions to comply with environmental laws or regulations;
         9. Statutory or common law claims by third parties; and
         10. Defending claims based on environmental matters; and
      2. For a premium for insurance for matters described in subsection (1)(h)(I) of this section.
2. If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 832, § 1, effective January 1, 2022.

15-1.2-503. Transfer from income to principal for depreciation - definition.

1. In this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.
2. A fiduciary may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:
   1. Of the part of real property used or available for use by a beneficiary as a residence;
   2. Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary; or
   3. Under this section, to the extent the fiduciary accounts:
      1. Under section 15-1.2-410 for the asset; or
      2. Under section 15-1.2-403 for the business or other activity in which the asset is used.
3. An amount transferred to principal under this section need not be separately held.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 833, § 1, effective January 1, 2022.

15-1.2-504. Reimbursement of income from principal.

1. If a fiduciary makes or expects to make an income disbursement described in subsection (2) of this section, the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.
2. To the extent the fiduciary has not been and does not expect to be reimbursed by a third party, income disbursements to which subsection (1) of this section applies include:
   1. An amount chargeable to principal but paid from income because principal is illiquid;
   2. A disbursement made to prepare property for sale, including improvements and commissions; and
   3. A disbursement described in section 15-1.2-502 (1).
3. If an asset whose ownership gives rise to an income disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection (1) of this section.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 833, § 1, effective January 1, 2022.

15-1.2-505. Reimbursement of principal from income.

1. If a fiduciary makes or expects to make a principal disbursement described in subsection (2) of this section, the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.
2. To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection (1) of this section applies include:
   1. An amount chargeable to income but paid from principal because income is not sufficient;
   2. The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;
   3. A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;
   4. A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment; and
   5. A disbursement described in section 15-1.2-502 (1).
3. If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection (1) of this section.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 834, § 1, effective January 1, 2022.

15-1.2-506. Income taxes.

1. A tax required to be paid by a fiduciary which is based on receipts allocated to income must be paid from income.
2. A tax required to be paid by a fiduciary which is based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
3. Subject to subsection (4) of this section and sections 15-1.2-504, 15-1.2-505, and 15-1.2-507, a tax required to be paid by a fiduciary on a share of an entity's taxable income in an accounting period must be paid from:
   1. Income and principal proportionately to the allocation between income and principal of receipts from the entity in the period; and
   2. Principal to the extent the tax exceeds the receipts from the entity in the period.
4. After applying subsections (1) through (3) of this section, a fiduciary shall adjust income or principal receipts, to the extent the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 834, § 1, effective January 1, 2022.

15-1.2-507. Adjustment between income and principal because of taxes.

1. A fiduciary may make an adjustment between income and principal to offset the shifting of economic interests or tax benefits between current income beneficiaries and successor beneficiaries which arises from:
   1. An election or decision the fiduciary makes regarding a tax matter, other than a decision to claim an income tax deduction to which subsection (2) of this section applies;
   2. An income tax or other tax imposed on the fiduciary or a beneficiary as a result of a transaction involving the fiduciary or a distribution by the fiduciary; or
   3. Ownership by the fiduciary of an interest in an entity a part of whose taxable income, whether or not distributed, is includable in the taxable income of the fiduciary or a beneficiary.
2. If the amount of an estate tax marital or charitable deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes and, as a result, estate taxes paid from principal are increased and income taxes paid by the fiduciary or a beneficiary are decreased, the fiduciary shall charge each beneficiary that benefits from the decrease in income tax to reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax, to the extent the principal used to pay the increase would have qualified for a marital or charitable deduction but for the payment. The share of the reimbursement for each fiduciary or beneficiary whose income taxes are reduced must be the same as its share of the total decrease in income tax.
3. A fiduciary that charges a beneficiary under subsection (2) of this section may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of methods.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 835, § 1, effective January 1, 2022.

15-1.2-601. Determination and distribution of net income.

1. This section applies when:
   1. The death of an individual results in the creation of an estate or trust; or
   2. An income interest in a trust terminates, whether the trust continues or is distributed.
2. A fiduciary of an estate or trust with an income interest that terminates shall determine, under subsection (7) of this section and parts 4, 5, and 7 of this article 1.2, the amount of net income and net principal receipts received from property specifically given to a beneficiary. The fiduciary shall distribute the net income and net principal receipts to the beneficiary that is to receive the specific property.
3. A fiduciary shall determine the income and net income of an estate or income interest in a trust which terminates, other than the amount of net income determined under subsection (2) of this section, under parts 4, 5, and 7 of this article 1.2 and by:
   1. Including in net income all income from property used or sold to discharge liabilities;
   2. Paying from income or principal, in the fiduciary's discretion, fees of attorneys, accountants, and fiduciaries, court costs and other expenses of administration, and interest on estate and inheritance taxes and other taxes imposed because of the decedent's death, but the fiduciary may pay the expenses from income of property passing to a trust for which the fiduciary claims a federal estate tax marital or charitable deduction only to the extent:
      1. The payment of the expenses from income will not cause the reduction or loss of the deduction; or
      2. The fiduciary makes an adjustment under section 15-1.2-507 (2); and
   3. Paying from principal other disbursements made or incurred in connection with the settlement of the estate or the winding up of an income interest that terminates, including:
      1. To the extent authorized by the decedent's will, the terms of the trust, or applicable law, debts, funeral expenses, disposition of remains, family allowances, estate and inheritance taxes, and other taxes imposed because of the decedent's death; and
      2. Related penalties that are apportioned, by the decedent's will, the terms of the trust, or applicable law, to the estate or income interest that terminates.
4. If a decedent's will, the terms of a trust, or applicable law provides for the payment of interest or the equivalent of interest to a beneficiary that receives a pecuniary amount outright, the fiduciary shall make the payment from net income determined under subsection (3) of this section or from principal to the extent net income is insufficient.
5. Reserved.
6. A fiduciary shall distribute net income remaining after payments required by subsection (4) of this section in the manner described in section 15-1.2-602 to all other beneficiaries, including a beneficiary that receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.
7. A fiduciary may not reduce principal or income receipts from property described in subsection (2) of this section because of a payment described in section 15-1.2-501 or 15-1.2-502, to the extent the decedent's will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property must be determined by including the amount the fiduciary receives or pays regarding the property, whether the amount accrued or became due before, on, or after the date of the decedent's death or an income interest's terminating event, and making a reasonable provision for an amount the estate or income interest may become obligated to pay after the property is distributed.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 836, § 1, effective January 1, 2022.

15-1.2-602. Distribution to successor beneficiary.

1. Except to the extent part 3 of this article 1.2 applies for a beneficiary that is a trust, each beneficiary described in section 15-1.2-601 (6) is entitled to receive a share of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to which this section applies, each beneficiary, including a beneficiary that does not receive part of the distribution, is entitled, as of each distribution date, to a share of the net income the fiduciary received after the decedent's death, an income interest's other terminating event, or the preceding distribution by the fiduciary.
2. In determining a beneficiary's share of net income under subsection (1) of this section, the following rules apply:
   1. The beneficiary is entitled to receive a share of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date;
   2. The beneficiary's fractional interest under subsection (2)(a) of this section must be calculated:
      1. On the aggregate value of the assets as of the distribution date without reducing the value by any unpaid principal obligation; and
      2. Without regard to:
         1. Property specifically given to a beneficiary under the decedent's will or the terms of the trust; and
         2. Property required to pay pecuniary amounts not in trust; and
   3. The distribution date under subsection (2)(a) of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which the assets are distributed.
3. To the extent a fiduciary does not distribute under this section all the collected but undistributed net income to each beneficiary as of a distribution date, the fiduciary shall maintain records showing the interest of each beneficiary in the net income.
4. If this section applies to income from an asset, a fiduciary may apply the rules in this section to net gain or loss realized from the disposition of the asset after the decedent's death, an income interest's terminating event, or the preceding distribution by the fiduciary.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 837, § 1, effective January 1, 2022.

15-1.2-701. When right to income begins and ends.

1. An income beneficiary is entitled to net income in accordance with the terms of the trust from the date an income interest begins. The income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to:
   1. The trust for the current income beneficiary; or
   2. A successive interest for a successor beneficiary.
2. An asset becomes subject to a trust under subsection (1)(a) of this section:
   1. For an asset that is transferred to the trust during the settlor's life, on the date the asset is transferred;
   2. For an asset that becomes subject to the trust because of a decedent's death, on the date of the decedent's death, even if there is an intervening period of administration of the decedent's estate; or
   3. For an asset that is transferred to a fiduciary by a third party because of a decedent's death, on the date of the decedent's death.
3. An asset becomes subject to a successive interest under subsection (1)(b) of this section on the day after the preceding income interest ends, as determined under subsection (4) of this section, even if there is an intervening period of administration to wind up the preceding income interest.
4. An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to which a fiduciary may or must distribute income.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 838, § 1, effective January 1, 2022.

15-1.2-702. Apportionment of receipts and disbursements when decedent dies or income interest begins.

1. A fiduciary shall allocate an income receipt or disbursement, other than a receipt to which section 15-1.2-601 (2) applies, to principal if its due date occurs before the date on which:
   1. For an estate, the decedent died; or
   2. For a trust or successive interest, an income interest begins.
2. If the due date of a periodic income receipt or disbursement occurs on or after the date on which a decedent died or an income interest begins, a fiduciary shall allocate the receipt or disbursement to income.
3. If an income receipt or disbursement is not periodic or has no due date, a fiduciary shall treat the receipt or disbursement under this section as accruing from day to day. The fiduciary shall allocate to principal the portion of the receipt or disbursement accruing before the date on which a decedent died or an income interest begins, and to income the balance.
4. A receipt or disbursement is periodic under subsections (2) and (3) of this section if:
   1. The receipt or disbursement must be paid at regular intervals under an obligation to make payments; or
   2. The payor customarily makes payments at regular intervals.
5. An item of income or obligation is due under this section on the date the payor is required to make a payment. If a payment date is not stated, there is no due date.
6. Distributions to shareholders or other owners from an entity to which section 15-1.2-401 applies are due:
   1. On the date fixed by or on behalf of the entity for determining the persons entitled to receive the distribution;
   2. If no date is fixed, on the date of the decision by or on behalf of the entity to make the distribution; or
   3. If no date is fixed and the fiduciary does not know the date of the decision by or on behalf of the entity to make the distribution, on the date the fiduciary learns of the decision.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 839, § 1, effective January 1, 2022.

15-1.2-703. Apportionment when income interest ends - definition.

1. In this section, "undistributed income" means net income received on or before the date on which an income interest ends. The term does not include an item of income or expense which is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
2. Except as otherwise provided in subsection (3) of this section, when a mandatory income interest of a beneficiary ends, the fiduciary shall pay the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust to the beneficiary or, if the beneficiary does not survive the date the interest ends, to the beneficiary's estate.
3. If a beneficiary has an unqualified power to withdraw more than five percent of the value of a trust immediately before an income interest ends:
   1. The fiduciary shall allocate to principal the undistributed income from the portion of the trust which may be withdrawn; and
   2. Subsection (2) of this section applies only to the balance of the undistributed income.
4. When a fiduciary's obligation to pay a fixed annuity or a fixed fraction of the value of assets ends, the fiduciary shall prorate the final payment as required to preserve an income tax, gift tax, estate tax, or other tax benefit.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 840, § 1, effective January 1, 2022.

15-1.2-801. Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 840, § 1, effective January 1, 2022.

15-1.2-802. Relation to electronic signatures in global and national commerce act.

This article 1.2 modifies, limits, or supersedes the federal "Electronic Signatures in Global and National Commerce Act", 15 U.S.C. sec. 7001 et seq., but does not modify, limit, or supersede section 101 (c) of that act, 15 U.S.C. sec. 7001 (c), or authorize electronic delivery of any of the notices described in section 103 (b) of that act, 15 U.S.C. sec. 7003 (b).

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 840, § 1, effective January 1, 2022.

15-1.2-803. Application to trust or estate.

1. Except as provided in the terms of the trust and subsection (2) of this section, this article 1.2 shall take effect on January 1, 2022.
2. 1. This article 1.2 shall not apply to a trust established under a will or trust agreement existing and irrevocable on July 1, 2001, if a trustee of the trust has elected to apply the "Uniform Principal and Income Act" of this state that was in effect on June 30, 2001.
   2. This article 1.2 shall not apply to a trust existing on July 1, 2001, in which no trustee had the authority to act under section 15-1-404 of the "Uniform Principal and Income Act", subparts 1 to 6 of part 4 of article 1 of this title 15, as it existed on or after July 1, 2001, unless a trustee of the trust elected to apply the "Uniform Principal and Income Act" as it existed on or after July 1, 2001.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 840, § 1, effective January 1, 2022.

15-1.2-804. Severability.

If any provision of this article 1.2 or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this article 1.2 which can be given effect without the invalid provision or application, and to this end the provisions of this article 1.2 are severable.

Source: L. 2021: Entire article added, (SB 21-171), ch. 143, p. 841, § 1, effective January 1, 2022.

15-1.5-101. Definitions.

As used in this article 1.5:

1. "Adult" means an individual who is at least eighteen years of age.
2. "Beneficiary" means an individual for whom property has been transferred to or held under a declaration of trust by a custodial trustee for the individual's use and benefit under this article.
3. "Conservator" means a person appointed or qualified by a court to manage the estate of an individual or a person legally authorized to perform substantially the same functions.
4. "Court" means the district courts of this state, except in the city and county of Denver, where it means the probate court.
5. "Custodial trust property" means an interest in property transferred to or held under a declaration of trust by a custodial trustee under this article and the income from and proceeds of that interest.
6. "Custodial trustee" means a person designated as trustee of a custodial trust under this article or a substitute or successor to the person designated.
7. "Guardian" means a person appointed or qualified by a court as a guardian of an individual, including a limited guardian, but not a person who is only a guardian ad litem.
8. "Incapacitated" means lacking the ability to manage property and business affairs effectively by reason of a behavioral or mental health disorder, an intellectual and developmental disability, a physical illness or disability, a substance use disorder, confinement, detention by a foreign power, disappearance, minority, or other disabling cause.
9. "Legal representative" means a personal representative or conservator.
10. "Member of the beneficiary's family" means a beneficiary's spouse, descendant, stepchild, parent, stepparent, grandparent, brother, sister, uncle, or aunt, whether related by whole or half blood or by adoption.
11. "Person" means an individual, corporation, business trust, estate, trust, partnership, joint venture, association, or any other legal or commercial entity.
12. "Personal representative" means an executor, administrator, or special administrator of a decedent's estate, a person legally authorized to perform substantially the same functions, or a successor to any of them.
13. "State" means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.
14. "Transferor" means a person who creates a custodial trust by transfer or declaration.
15. "Trust company" means a financial institution, corporation, or other legal entity authorized to exercise general trust powers.

Source: L. 99: Entire article added, p. 1211, § 1, effective August 4. L. 2017: IP and (8) amended, (HB 17-1046), ch. 50, p. 157, § 7, effective March 16; (8) amended, (SB 17-242), ch. 263, p. 1295, § 115, effective May 25.

Cross references: For the legislative declaration in SB 17-242, see section 1 of chapter 263, Session Laws of Colorado 2017.

15-1.5-102. Custodial trust - general.

1. A person may create a custodial trust of property by a written transfer of the property to another person, evidenced by registration or by other instrument of transfer, executed in any lawful manner, naming as beneficiary an individual who may be the transferor, in which the transferee is designated, in substance, as custodial trustee under the "Colorado Uniform Custodial Trust Act".
2. A person may create a custodial trust of property by a written declaration, evidenced by registration of the property or by other instrument of declaration executed in any lawful manner, describing the property and naming as beneficiary an individual other than the declarant, in which the declarant as titleholder is designated, in substance, as custodial trustee under the "Colorado Uniform Custodial Trust Act". A registration or other declaration of trust for the sole benefit of the declarant is not a custodial trust under the "Colorado Uniform Custodial Trust Act".
3. Title to custodial trust property is in the custodial trustee and the beneficial interest is in the beneficiary.
4. Except as provided in subsection (5) of this section, a transferor may not terminate a custodial trust.
5. The beneficiary, if not incapacitated, or the conservator of an incapacitated beneficiary, may terminate a custodial trust by delivering to the custodial trustee a writing signed by the beneficiary or conservator declaring the termination. If not previously terminated, the custodial trust terminates on the death of the beneficiary.
6. Any person may augment existing custodial trust property by the addition of other property pursuant to this article.
7. The transferor may designate, or authorize the designation of, a successor custodial trustee in the trust instrument.
8. This article does not displace or restrict other means of creating trusts. A trust whose terms do not conform to this article may be enforceable according to its terms under other law.

Source: L. 99: Entire article added, p. 1212, § 1, effective August 4.

15-1.5-103. Custodial trustee for future payment or transfer.

1. A person having the right to designate the recipient of property payable or transferable upon a future event may create a custodial trust upon the occurrence of the future event by designating in writing the recipient, followed in substance by "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"".
2. Persons may be designated as substitute or successor custodial trustees to whom the property must be paid or transferred in the order named if the first designated custodial trustee is unable or unwilling to serve.
3. A designation under this section may be made in a will, a trust, a deed, a multiple-party account, an insurance policy, an instrument exercising a power of appointment, or a writing designating a beneficiary of contractual rights. Otherwise, to be effective, the designation must be registered with or delivered to the fiduciary, payor, issuer, or obligor of the future right.

Source: L. 99: Entire article added, p. 1213, § 1, effective August 4.

15-1.5-104. Form and effect of receipt and acceptance by custodial trustee - jurisdiction.

1. Obligations of a custodial trustee, including the obligation to follow upon directions of the beneficiary, arise under this article upon the custodial trustee's acceptance, express or implied, of the custodial trust property.
2. The custodial trustee's acceptance may be evidenced by a writing stating in substance:

   I, ____________ (name of custodial trustee) acknowledge receipt of the custodial trust property described below or in the attached instrument and accept the custodial trust as custodial trustee for ____________ (name of beneficiary) under the "Colorado Uniform Custodial Trust Act". I undertake to administer and distribute the custodial trust property pursuant to the "Colorado Uniform Custodial Trust Act". My obligations as custodial trustee are subject to the directions of the beneficiary unless the beneficiary is designated as, is, or becomes incapacitated. The custodial trust property consists of ____________.

   Dated: _______________

   _____________________

   (Signature of Custodial Trustee)

3. Upon accepting custodial trust property, a person designated as custodial trustee under this article is subject to personal jurisdiction of the court with respect to any matter relating to the custodial trust.

CUSTODIAL TRUSTEE'S RECEIPT AND ACCEPTANCE

Source: L. 99: Entire article added, p. 1214, § 1, effective August 4.

15-1.5-105. Transfer to custodial trustee by fiduciary or obligor - facility of payment.

1. Unless otherwise directed by an instrument designating a custodial trustee pursuant to section 15-1.5-103, a person, including a fiduciary other than a custodial trustee, who holds property of or owes a debt to an incapacitated individual not having a conservator may make a transfer to an adult member of the beneficiary's family or to a trust company as custodial trustee for the use and benefit of the incapacitated individual. If the value of the property or the debt exceeds thirty thousand dollars, the transfer is not effective unless authorized by the court.
2. A written acknowledgment of delivery, signed by a custodial trustee, is a sufficient receipt and discharge for property transferred to the custodial trustee pursuant to this section.

Source: L. 99: Entire article added, p. 1214, § 1, effective August 4.

15-1.5-106. Multiple beneficiaries - separate custodial trusts - survivorship.

1. Beneficial interests in a custodial trust created for multiple beneficiaries are deemed to be separate custodial trusts of equal undivided interests for each beneficiary. Except in a transfer or declaration for use and benefit of husband and wife, for whom survivorship is presumed, a right of survivorship does not exist unless the instrument creating the custodial trust specifically provides for survivorship.
2. Custodial trust property held under this article by the same custodial trustee for the use and benefit of the same beneficiary may be administered as a single custodial trust.
3. A custodial trustee of custodial trust property held for more than one beneficiary shall separately account to each beneficiary pursuant to sections 15-1.5-107 and 15-1.5-115 for the administration of the custodial trust.

Source: L. 99: Entire article added, p. 1214, § 1, effective August 4.

15-1.5-107. General duties of custodial trustee.

1. If appropriate, a custodial trustee shall register or record the instrument vesting title to custodial trust property.
2. If the beneficiary is not incapacitated, a custodial trustee shall follow the directions of the beneficiary in the management, control, investment, or retention of the custodial trust property. In the absence of effective contrary direction by the beneficiary while not incapacitated, or if the beneficiary is incapacitated, the custodial trustee shall observe the standard of care that would be observed by a prudent person dealing with property of another and shall comply with the provisions of the "Colorado Uniform Prudent Investor Act". However, a custodial trustee, in the custodial trustee's discretion, may retain any custodial trust property received from the transferor.
3. Subject to subsection (2) of this section, a custodial trustee shall take control of and collect, hold, manage, invest, and reinvest custodial trust property.
4. A custodial trustee at all times shall keep custodial trust property of which the custodial trustee has control, separate from all other property in a manner sufficient to identify it clearly as custodial trust property of the beneficiary. Custodial trust property, the title to which is subject to recordation, is so identified if an appropriate instrument so identifying the property is recorded, and custodial trust property subject to registration is so identified if it is registered, or held in an account in the name of the custodial trustee, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"".
5. A custodial trustee shall keep records of all transactions with respect to custodial trust property, including information necessary for the preparation of tax returns, and shall make the records and information available at reasonable times to the beneficiary or legal representative of the beneficiary.
6. The exercise of a durable power of attorney for an incapacitated beneficiary is not effective to terminate or direct the administration or distribution of a custodial trust.

Source: L. 99: Entire article added, p. 1215, § 1, effective August 4.

Editor's note: Colorado modified the model act by directing that the custodial trustee shall also comply with the provisions of the "Colorado Uniform Prudent Investor Act".

15-1.5-108. General powers of custodial trustee.

1. A custodial trustee, acting in a fiduciary capacity, has all the rights and powers over custodial trust property which an unmarried adult owner has over individually owned property, but a custodial trustee may exercise those rights and powers in a fiduciary capacity only.
2. This section does not relieve a custodial trustee from liability for a violation of section 15-1.5-107.

Source: L. 99: Entire article added, p. 1216, § 1, effective August 4.

15-1.5-109. Use of custodial trust property.

1. A custodial trustee shall pay to the beneficiary or expend for the beneficiary's use and benefit so much or all of the custodial trust property as the beneficiary while not incapacitated may direct from time to time.
2. If the beneficiary is incapacitated, the custodial trustee shall expend so much or all of the custodial trust property as the custodial trustee considers advisable for the use and benefit of the beneficiary and individuals who were supported by the beneficiary when the beneficiary became incapacitated or who are legally entitled to support by the beneficiary. Expenditures may be made in the manner, when, and to the extent that the custodial trustee determines suitable and proper, without court order and without regard to other support, income, or property of the beneficiary.
3. A custodial trustee may establish checking, savings, or other similar accounts of reasonable amounts under which either the custodial trustee or the beneficiary may withdraw funds from, or draw checks against, the accounts. Funds withdrawn from, or checks written against, the account by the beneficiary are distributions of custodial trust property by the custodial trustee to the beneficiary.

Source: L. 99: Entire article added, p. 1216, § 1, effective August 4.

15-1.5-110. Determination of incapacity - effect.

1. The custodial trustee shall administer the custodial trust as for an incapacitated beneficiary if:
   1. The custodial trust was created under section 15-1.5-105;
   2. The transferor has so directed in the instrument creating the custodial trust; or
   3. The custodial trustee has determined that the beneficiary is incapacitated.
2. A custodial trustee may determine that the beneficiary is incapacitated in reliance upon:
   1. Previous direction or authority given by the beneficiary while not incapacitated, including direction or authority pursuant to a durable power of attorney;
   2. The certificate of the beneficiary's physician; or
   3. Other persuasive evidence.
3. If a custodial trustee for an incapacitated beneficiary reasonably concludes that the beneficiary's incapacity has ceased, or that circumstances concerning the beneficiary's ability to manage property and business affairs have changed since the creation of a custodial trust directing administration as for an incapacitated beneficiary, the custodial trustee may administer the trust as for a beneficiary who is not incapacitated.
4. On petition of the beneficiary, the custodial trustee, or other person interested in the custodial trust property or the welfare of the beneficiary, the court shall determine whether the beneficiary is incapacitated.
5. Absent determination of incapacity of the beneficiary under subsection (2) or (4) of this section, a custodial trustee who has reason to believe that the beneficiary is incapacitated shall administer the custodial trust in accordance with the provisions of this article applicable to an incapacitated beneficiary.
6. Incapacity of a beneficiary does not terminate:
   1. The custodial trust;
   2. Any designation of a successor custodial trustee;
   3. Rights or powers of the custodial trustee; or
   4. Any immunities of third persons acting on instructions of the custodial trustee.

Source: L. 99: Entire article added, p. 1216, § 1, effective August 4.

15-1.5-111. Exemption of third persons from liability.

1. A third person in good faith and without a court order may act on instructions of, or otherwise deal with, a person purporting to make a transfer as, or purporting to act in the capacity of, a custodial trustee. In the absence of knowledge to the contrary, the third person is not responsible for determining:
   1. The validity of the purported custodial trustee's designation;
   2. The propriety of, or the authority under this article for, any action of the purported custodial trustee;
   3. The validity or propriety of an instrument executed or instruction given pursuant to this article either by the person purporting to make a transfer or declaration or by the purported custodial trustee; or
   4. The propriety of the application of property vested in the purported custodial trustee.

Source: L. 99: Entire article added, p. 1217, § 1, effective August 4.

15-1.5-112. Liability to third persons.

1. A claim based on a contract entered into by a custodial trustee acting in a fiduciary capacity, an obligation arising from the ownership or control of custodial trust property, or a tort committed in the course of administering the custodial trust may be asserted by a third person against the custodial trust property by proceeding against the custodial trustee in a fiduciary capacity, whether or not the custodial trustee or the beneficiary is personally liable.
2. A custodial trustee is not personally liable to a third person:
   1. On a contract properly entered into in a fiduciary capacity unless the custodial trustee fails to reveal that capacity or to identify the custodial trust in the contract; or
   2. For an obligation arising from control of custodial trust property or for a tort committed in the course of the administration of the custodial trust unless the custodial trustee is personally at fault.
3. A beneficiary is not personally liable to a third person for an obligation arising from beneficial ownership of custodial trust property or for a tort committed in the course of administration of the custodial trust unless the beneficiary is personally in possession of the custodial trust property giving rise to the liability or is personally at fault.
4. Subsections (2) and (3) of this section do not preclude actions or proceedings to establish liability of the custodial trustee or beneficiary to the extent the person sued is protected as the insured by liability insurance.

Source: L. 99: Entire article added, p. 1218, § 1 effective August 4.

15-1.5-113. Declination, resignation, incapacity, death, or removal of custodial trustee - designation of successor custodial trustee.

1. Before accepting the custodial trust property, a person designated as custodial trustee may decline to serve by notifying the person who made the designation, the transferor, or the transferor's legal representative. If an event giving rise to a transfer has not occurred, the substitute custodial trustee designated under section 15-1.5-103 becomes the custodial trustee, or, if a substitute custodial trustee has not been designated, the person who made the designation may designate a substitute custodial trustee pursuant to section 15-1.5-103. In other cases, the transferor or the transferor's legal representative may designate a substitute custodial trustee.
2. A custodial trustee who has accepted the custodial trust property may resign by:
   1. Delivering written notice to a successor custodial trustee, if any, the beneficiary, and, if the beneficiary is incapacitated, to the beneficiary's conservator, if any; and
   2. Transferring or registering, or recording an appropriate instrument relating to, the custodial trust property, in the name of, and delivering the records to, the successor custodial trustee identified under subsection (3) of this section.
3. If a custodial trustee or successor custodial trustee is ineligible, resigns, dies, or becomes incapacitated, the successor designated under section 15-1.5-102 (7) or section 15-1.5-103 becomes custodial trustee. If there is no effective provision for a successor, the beneficiary, if not incapacitated, may designate a successor custodial trustee. If the beneficiary is incapacitated, or fails to act within ninety days after the ineligibility, resignation, death, or incapacity of the custodial trustee, the beneficiary's conservator becomes successor custodial trustee. If the beneficiary does not have a conservator or the conservator fails to act, the resigning custodial trustee may designate a successor custodial trustee.
4. If a successor custodial trustee is not designated pursuant to subsection (3) of this section, the transferor, the legal representative of the transferor or of the custodial trustee, an adult member of the beneficiary's family, the guardian of the beneficiary, a person interested in the custodial trust property, or a person interested in the welfare of the beneficiary may petition the court to designate a successor custodial trustee.
5. A custodial trustee who declines to serve or resigns, or the legal representative of a deceased or incapacitated custodial trustee, as soon as practicable, shall put the custodial trust property and records in the possession and control of the successor custodial trustee. The successor custodial trustee may enforce the obligation to deliver custodial trust property and records and becomes responsible for each item as received.
6. A beneficiary, the beneficiary's conservator, an adult member of the beneficiary's family, a guardian of the beneficiary, a person interested in the custodial trust property, or a person interested in the welfare of the beneficiary may petition the court to remove the custodial trustee for cause and designate a successor custodial trustee, to require the custodial trustee to furnish a bond or other security for the faithful performance of fiduciary duties, or for other appropriate relief.

Source: L. 99: Entire article added, p. 1218, § 1, effective August 4.

15-1.5-114. Expenses, compensation, and bond of custodial trustee.

1. Except as otherwise provided in the instrument creating the custodial trust, in an agreement with the beneficiary, or by court order, a custodial trustee:
   1. Is entitled to reimbursement from custodial trust property for reasonable expenses incurred in the performance of fiduciary services;
   2. Has a noncumulative election, to be made no later than six months after the end of each calendar year, to charge a reasonable compensation for fiduciary services performed during that year; and
   3. Need not furnish a bond or other security for the faithful performance of fiduciary duties.

Source: L. 99: Entire article added, p. 1219, § 1, effective August 4.

15-1.5-115. Reporting and accounting by custodial trustee - determination of liability of custodial trustee.

1. 1. Upon the acceptance of custodial trust property, the custodial trustee shall provide a written statement describing the custodial trust property and shall thereafter provide a written statement of the administration of the custodial trust property:
      1. Once each year;
      2. Upon request at reasonable times by the beneficiary or the beneficiary's legal representative;
      3. Upon resignation or removal of the custodial trustee; and
      4. Upon termination of the custodial trust.
   2. The statements must be provided to the beneficiary or to the beneficiary's legal representative, if any. Upon termination of the beneficiary's interest, the custodial trustee shall furnish a current statement to the person to whom the custodial trust property is to be delivered.
2. A beneficiary, the beneficiary's legal representative, an adult member of the beneficiary's family, a person interested in the custodial trust property, or a person interested in the welfare of the beneficiary may petition the court for an accounting by the custodial trustee or the custodial trustee's legal representative.
3. A successor custodial trustee may petition the court for an accounting by a predecessor custodial trustee.
4. In an action or proceeding under this article or in any other proceeding, the court may require or permit the custodial trustee or the custodial trustee's legal representative to account. The custodial trustee or the custodial trustee's legal representative may petition the court for approval of final accounts.
5. If a custodial trustee is removed, the court shall require an accounting and order delivery of the custodial trust property and records to the successor custodial trustee and the execution of all instruments required for transfer of the custodial trust property.
6. On petition of the custodial trustee or any person who could petition for an accounting, the court, after notice to interested persons, may issue instructions to the custodial trustee or review the propriety of the acts of a custodial trustee or the reasonableness of compensation determined by the custodial trustee for the services of the custodial trustee or others.

Source: L. 99: Entire article added, p. 1220, § 1, effective August 4.

15-1.5-116. Limitations of action against custodial trustee.

1. Except as provided in subsection (3) of this section, unless previously barred by adjudication, consent, or limitation, a claim for relief against a custodial trustee for accounting or breach of duty is barred as to a beneficiary, a person to whom custodial trust property is to be paid or delivered, or the legal representative of an incapacitated or deceased beneficiary or payee:
   1. Who has received a final account or statement fully disclosing the matter unless an action or proceeding to assert the claim is commenced within two years after receipt of the final account or statement; or
   2. Who has not received a final account or statement fully disclosing the matter unless an action or proceeding to assert the claim is commenced within three years after the termination of the custodial trust.
2. Except as provided in subsection (3) of this section, a claim for relief to recover from a custodial trustee for fraud, misrepresentation, or concealment related to the final settlement of the custodial trust or concealment of the existence of the custodial trust is barred unless an action or proceeding to assert the claim is commenced within five years after the termination of the custodial trust.
3. A claim for relief is not barred by this section if the claimant:
   1. Is a minor, until the earlier of two years after the claimant becomes an adult or dies;
   2. Is an incapacitated adult, until the earliest of two years after the appointment of a conservator, the removal of the incapacity, or the death of the claimant; or
   3. Was an adult, now deceased, who was not incapacitated, until two years after the claimant's death.

Source: L. 99: Entire article added, p. 1221, § 1, effective August 4.

15-1.5-117. Distribution on termination.

1. Upon termination of a custodial trust, the custodial trustee shall transfer the unexpended custodial trust property:
   1. To the beneficiary, if not incapacitated or deceased;
   2. To the conservator or other recipient designated by the court for an incapacitated beneficiary; or
   3. Upon the beneficiary's death, in the following order:
      1. As last directed in a writing signed by the deceased beneficiary while not incapacitated and received by the custodial trustee during the life of the deceased beneficiary;
      2. To the survivor of multiple beneficiaries if survivorship is provided for pursuant to section 15-1.5-106;
      3. As designated in the instrument creating the custodial trust; or
      4. To the estate of the deceased beneficiary.
2. If, when the custodial trust would otherwise terminate, the distributee is incapacitated, the custodial trust continues for the use and benefit of the distributee as beneficiary until the incapacity is removed or the custodial trust is otherwise terminated.
3. Death of a beneficiary does not terminate the power of the custodial trustee to discharge obligations of the custodial trustee or beneficiary incurred before the termination of the custodial trust.

Source: L. 99: Entire article added, p. 1221, § effective August 4.

15-1.5-118. Methods and forms for creating custodial trusts.

1. If a transaction, including a declaration with respect to or a transfer of specific property, otherwise satisfies applicable law, the criteria of section 15-1.5-102 are satisfied by:
   1. The execution and either delivery to the custodial trustee or recording of an instrument in substantially the following form:

      I, ____________ (name of transferor or name and representative capacity if a fiduciary), transfer to ____________ (name of trustee other than transferor), as custodial trustee for ____________ (name of beneficiary) as beneficiary and as distributee on termination of the trust in absence of direction by the beneficiary under the "Colorado Uniform Custodial Trust Act", the following: (insert a description of the custodial trust property legally sufficient to identify and transfer each item of property).

      Dated: ________________ ______________________

      (Signature); or

   2. The execution and the recording or giving notice of its execution to the beneficiary of an instrument in substantially the following form:

      I, ____________ (name of owner of property), declare that henceforth I hold as custodial trustee for ____________ (name of beneficiary other than transferor) as beneficiary and as distributee on termination of the trust in absence of direction by the beneficiary under the "Colorado Uniform Custodial Trust Act", the following: (insert a description of the custodial trust property legally sufficient to identify and transfer each item of property).

      Dated: ________________ ______________________

      (Signature).

2. Customary methods of transferring or evidencing ownership of property may be used to create a custodial trust, including any of the following:
   1. Registration of a security in the name of a trust company, an adult other than the transferor, or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   2. Delivery of a certificated security, or a document necessary for the transfer of an uncertificated security, together with any necessary endorsement, to an adult other than the transferor or to a trust company as custodial trustee, accompanied by an instrument in substantially the form prescribed in paragraph (a) of subsection (1) of this section;
   3. Payment of money or transfer of a security held in the name of a broker or a financial institution or its nominee to a broker or financial institution for credit to an account in the name of a trust company, an adult other than the transferor, or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   4. Registration of ownership of a life or endowment insurance policy or annuity contract with the issuer in the name of a trust company, an adult other than the transferor, or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   5. Delivery of a written assignment to an adult other than the transferor or to a trust company whose name in the assignment is designated in substance by the words: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   6. Irrevocable exercise of a power of appointment, pursuant to its terms, in favor of a trust company, an adult other than the donee of the power, or the donee who holds the power if the beneficiary is other than the donee, whose name in the appointment is designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   7. Delivery of a written notification or assignment of a right to future payment under a contract to an obligor which transfers the right under the contract to a trust company, an adult other than the transferor, or the transferor if the beneficiary is other than the transferor, whose name in the notification or assignment is designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   8. Execution, delivery, and recordation of a conveyance of an interest in real property in the name of a trust company, an adult other than the transferor, or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"";
   9. Issuance of a certificate of title by an agency of a state or of the United States which evidences title to tangible personal property:
      1. Issued in the name of a trust company, an adult other than the transferor, or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act""; or
      2. Delivered to a trust company or an adult other than the transferor or endorsed by the transferor to that person, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act""; or
   10. Execution and delivery of an instrument of gift to a trust company or an adult other than the transferor, designated in substance: "as custodial trustee for (name of beneficiary) under the "Colorado Uniform Custodial Trust Act"".

TRANSFER UNDER THE "COLORADO UNIFORM CUSTODIAL TRUST ACT"

DECLARATION OF TRUST UNDER THE "COLORADO UNIFORM CUSTODIAL TRUST ACT"

Source: L. 99: Entire article added, p. 1222, § 1, effective August 4.

15-1.5-119. Applicable law.

1. This article applies to a transfer or declaration creating a custodial trust that refers to this article if, at the time of the transfer or declaration, the transferor, beneficiary, or custodial trustee is a resident of or has its principal place of business in this state or custodial trust property is located in this state. The custodial trust remains subject to this article despite a later change in residence or principal place of business of the transferor, beneficiary, or custodial trustee, or removal of the custodial trust property from this state.
2. A transfer made pursuant to an act of another state substantially similar to this article is governed by the law of that state and may be enforced in this state.

Source: L. 99: Entire article added, p. 1224, § 1, effective August 4.

15-1.5-120. Uniformity of application and construction.

This article shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this article among states enacting it.

Source: L. 99: Entire article added, p. 1225, § 1, effective August 4.

15-1.5-121. Short title.

This article may be cited as the "Colorado Uniform Custodial Trust Act".

Source: L. 99: Entire article added, p. 1225, § 1, effective August 4.

15-1.5-122. Severability.

If any provision of this article or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this article which can be given effect without the invalid provision or application, and to this end the provisions of this article are severable.

Source: L. 99: Entire article added, p. 1225, § 1, effective August 4.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 775, § 1, effective July 1, 2015.

ARTICLE 2 POWERS OF APPOINTMENT

15-2.5-101. Short title.

This article may be cited as the "Colorado Uniform Powers of Appointment Act".

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 772, § 1, effective July 1, 2015.

15-2.5-102. Definitions.

In this article:

1. "Appointee" means a person to whom a powerholder makes an appointment of appointive property.
2. "Appointive property" means property or property interest subject to a power of appointment.
3. "Blanket-exercise clause" means a clause in an instrument, which clause exercises a power of appointment and is not a specific-exercise clause. The term includes a clause that:
   1. Expressly uses the words "any power" in exercising any power of appointment the powerholder has;
   2. Expressly uses the words "any property" in appointing any property over which the powerholder has a power of appointment; or
   3. Disposes of all property subject to disposition by the powerholder.
4. "Donor" means a person who creates a power of appointment.
5. "Exclusionary power of appointment" means a power of appointment exercisable in favor of any one or more of the permissible appointees to the exclusion of the other permissible appointees.
6. "General power of appointment" means a power of appointment exercisable in favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the powerholder's estate.
7. "Gift-in-default clause" means a clause identifying a taker in default of appointment.
8. "Impermissible appointee" means a person who is not a permissible appointee.
9. "Instrument" means a record.
10. "Nongeneral power of appointment" means a power of appointment that is not a general power of appointment.
11. "Permissible appointee" means a person in whose favor a powerholder may exercise a power of appointment.
12. "Person" means an individual; estate; trust; business or nonprofit entity; public corporation; government or governmental subdivision, agency, or instrumentality; or other legal entity.
13. "Powerholder" means a person in whom a donor creates a power of appointment.
14. "Power of appointment" means a power that enables a powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over the appointive property. The term does not include a power of attorney.
15. "Presently exercisable power of appointment" means a power of appointment exercisable by the powerholder at the relevant time. The term:
    1. Includes a power of appointment not exercisable until the occurrence of a specified event, the satisfaction of an ascertainable standard, or the passage of a specified time only after:
       1. The occurrence of the specified event;
       2. The satisfaction of the ascertainable standard; or
       3. The passage of the specified time; and
    2. Does not include a power exercisable only at the powerholder's death.
16. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
17. "Specific-exercise clause" means a clause in an instrument, which clause specifically refers to and exercises a particular power of appointment.
18. "Taker in default of appointment" means a person who takes all or part of the appointive property to the extent the powerholder does not effectively exercise the power of appointment.
19. "Terms of the instrument" means the manifestation of the intent of the maker of the instrument regarding the instrument's provisions as expressed in the instrument or as may be established by other evidence that would be admissible in a legal proceeding.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 772, § 1, effective July 1, 2015.

15-2.5-103. Governing law.

1. Unless the terms of the instrument creating a power of appointment manifest a contrary intent:
   1. The creation, revocation, or amendment of the power is governed by the law of the donor's domicile at the relevant time; and
   2. The exercise, release, or disclaimer of the power, or the revocation or amendment of the exercise, release, or disclaimer of the power, is governed by the law of the powerholder's domicile at the relevant time.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 774, § 1, effective July 1, 2015.

15-2.5-104. Supplementation by common law and principles of equity.

Unless displaced by the particular provisions of this article, the principles of law and equity supplement its provisions.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 774, § 1, effective July 1, 2015.

15-2.5-201. Creation of power of appointment.

1. A power of appointment is created only if:
   1. The instrument creating the power:
      1. Is valid under applicable law; and
      2. Except as otherwise provided in subsection (2) of this section, transfers the appointive property; and
   2. The terms of the instrument creating the power manifest the donor's intent to create in a powerholder a power of appointment over the appointive property exercisable in favor of a permissible appointee.
2. Subparagraph (II) of paragraph (a) of subsection (1) of this section does not apply to the creation of a power of appointment by the exercise of a power of appointment.
3. A power of appointment may not be created in a deceased individual.
4. Subject to an applicable rule against perpetuities, a power of appointment may be created in an unborn or unascertained powerholder.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 774, § 1, effective July 1, 2015. L. 2015: (1)(a)(II) amended, (SB 15-264), ch. 259, p. 951, § 37, effective August 5.

15-2.5-202. Nontransferability.

A powerholder may not transfer a power of appointment. If a powerholder dies without exercising or releasing a power, the power lapses.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 775, § 1, effective July 1, 2015.

15-2.5-203. Presumption of unlimited authority.

1. Subject to section 15-2.5-205, and unless the terms of the instrument creating a power of appointment manifest a contrary intent, the power is:
   1. Presently exercisable;
   2. Exclusionary; and
   3. Except as otherwise provided in section 15-2.5-204, general.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 775, § 1, effective July 1, 2015.

15-2.5-204. Exception to presumption of unlimited authority.

1. Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the power is nongeneral if:
   1. The power is exercisable only at the powerholder's death; and
   2. The permissible appointees of the power are a defined and limited class that does not include the powerholder's estate, the powerholder's creditors, or the creditors of the powerholder's estate.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 775, § 1, effective July 1, 2015.

15-2.5-205. Rules of classification - definitions.

1. In this section, "adverse party" means a person with a substantial beneficial interest in property, which interest would be affected adversely by a powerholder's exercise or nonexercise of a power of appointment in favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the powerholder's estate.
2. If a powerholder may exercise a power of appointment only with the consent or joinder of an adverse party, the power is nongeneral.
3. If the permissible appointees of a power of appointment are not defined and limited, the power is exclusionary.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 775, § 1, effective July 1, 2015.

15-2.5-206. Power of the donor to revoke or amend.

1. A donor may revoke or amend a power of appointment only to the extent that:
   1. The instrument creating the power is revocable by the donor; or
   2. The donor reserves a power of revocation or amendment in the instrument creating the power of appointment.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 776, § 1, effective July 1, 2015.

15-2.5-301. Requisites for exercise of power of appointment.

1. A power of appointment may be exercised only:
   1. If the instrument exercising the power is valid under applicable law;
   2. If the terms of the instrument exercising the power:
      1. Manifest the powerholder's intent to exercise the power; and
      2. Subject to section 15-2.5-304, satisfy the requirements of exercise, if any, imposed by the donor; and
   3. To the extent the appointment is a permissible exercise of the power.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 776, § 1, effective July 1, 2015.

15-2.5-302. Intent to exercise - determining intent from residuary clause.

1. In this section:
   1. "Residuary clause" does not include a residuary clause containing a blanket-exercise clause or a specific-exercise clause.
   2. "Will" includes a codicil and a testamentary instrument that revises another will.
2. A residuary clause in a powerholder's will, or a comparable clause in the powerholder's revocable trust, manifests the powerholder's intent to exercise a power of appointment only if:
   1. The terms of the instrument containing the residuary clause do not manifest a contrary intent;
   2. The power is a general power exercisable in favor of the powerholder's estate;
   3. There is no gift-in-default clause or the clause is ineffective; and
   4. The powerholder did not release the power.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 776, § 1, effective July 1, 2015.

15-2.5-303. Intent to exercise - after-acquired power.

1. Unless the terms of the instrument exercising a power of appointment manifest a contrary intent:
   1. Except as otherwise provided in paragraph (b) of this subsection (1), a blanket-exercise clause extends to a power acquired by the powerholder after executing the instrument containing the clause; and
   2. If the powerholder is also the donor of the power, the clause does not extend to the power unless there is no gift-in-default clause or the gift-in-default clause is ineffective.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 776, § 1, effective July 1, 2015.

15-2.5-304. Substantial compliance with donor-imposed formal requirement.

1. A powerholder's substantial compliance with a formal requirement of appointment imposed by the donor, including a requirement that the instrument exercising the power of appointment make reference or specific reference to the power, is sufficient if:
   1. The powerholder knows of and intends to exercise the power; and
   2. The powerholder's manner of attempted exercise of the power does not impair a material purpose of the donor in imposing the requirement.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 777, § 1, effective July 1, 2015.

15-2.5-305. Permissible appointment.

1. A powerholder of a general power of appointment that permits appointment to the powerholder or the powerholder's estate may make any appointment, including an appointment in trust or creating a new power of appointment, that the powerholder could make in disposing of the powerholder's own property.
2. A powerholder of a general power of appointment that permits appointment only to the creditors of the powerholder or of the powerholder's estate may appoint only to those creditors.
3. Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the powerholder of a nongeneral power may:
   1. Make an appointment in any form, including an appointment in trust, in favor of a permissible appointee;
   2. Create a general or nongeneral power in a permissible appointee; or
   3. Create a nongeneral power in an impermissible appointee to appoint to one or more of the permissible appointees of the original nongeneral power.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 777, § 1, effective July 1, 2015.

15-2.5-306. Appointment to deceased appointee or permissible appointee's descendant.

1. An appointment to a deceased appointee is ineffective.
2. Unless the terms of the instrument creating a power of appointment manifest a contrary intent, a powerholder of a nongeneral power may exercise the power in favor of, or create a new power of appointment in, a descendant of a deceased permissible appointee, which deceased appointee is a descendant of one or more of the grandparents of the donor, regardless of whether the descendant is described by the donor as a permissible appointee.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 777, § 1, effective July 1, 2015.

15-2.5-307. Impermissible appointment.

1. Except as otherwise provided in section 15-2.5-306, an exercise of a power of appointment in favor of an impermissible appointee is ineffective.
2. An exercise of a power of appointment in favor of a permissible appointee is ineffective to the extent the appointment is a fraud on the power.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 778, § 1, effective July 1, 2015.

15-2.5-308. Selective allocation doctrine.

If a powerholder exercises a power of appointment in a disposition that also disposes of property the powerholder owns, the owned property and the appointive property must be allocated in the permissible manner that best carries out the powerholder's intent.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 778, § 1, effective July 1, 2015.

15-2.5-309. Capture doctrine - disposition of ineffectively appointed property under general power.

1. To the extent a powerholder of a general power of appointment, other than a power to withdraw property from, revoke, or amend a trust, makes an ineffective appointment:
   1. The gift-in-default clause controls the disposition of the ineffectively appointed property; or
   2. If there is no gift-in-default clause, or to the extent the clause is ineffective, the ineffectively appointed property:
      1. Passes to:
         1. The powerholder if the powerholder is a permissible appointee and living; or
         2. If the powerholder is an impermissible appointee or deceased, the powerholder's estate if the estate is a permissible appointee; or
      2. If there is no taker under subparagraph (I) of this paragraph (b), passes under a reversionary interest to the donor or to the donor's transferee or successor in interest.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 778, § 1, effective July 1, 2015.

15-2.5-310. Disposition of unappointed property under released or unexercised general power.

1. To the extent a powerholder releases or fails to exercise a general power of appointment other than a power to withdraw property from, revoke, or amend a trust:
   1. The gift-in-default clause controls the disposition of the unappointed property; or
   2. If there is no gift-in-default clause or to the extent the clause is ineffective:
      1. Except as otherwise provided in subparagraph (II) of this paragraph (b), the unappointed property passes to:
         1. The powerholder if the powerholder is a permissible appointee and living; or
         2. If the powerholder is an impermissible appointee or deceased, the powerholder's estate if the estate is a permissible appointee; or
      2. To the extent the powerholder released the power, or if there is no taker under subparagraph (I) of this paragraph (b), the unappointed property passes under a reversionary interest to the donor or to the donor's transferee or successor in interest.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 778, § 1, effective July 1, 2015.

15-2.5-311. Disposition of unappointed property under released or unexercised nongeneral power.

1. To the extent a powerholder releases, ineffectively exercises, or fails to exercise a nongeneral power of appointment:
   1. The gift-in-default clause controls the disposition of the unappointed property; or
   2. If there is no gift-in-default clause, or to the extent the clause is ineffective, the unappointed property:
      1. Passes to the permissible appointees if:
         1. The permissible appointees are defined and limited; and
         2. The terms of the instrument creating the power do not manifest a contrary intent; or
      2. If there is no taker under subparagraph (I) of this paragraph (b), passes under a reversionary interest to the donor or the donor's transferee or successor in interest.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 779, § 1, effective July 1, 2015.

15-2.5-312. Disposition of unappointed property if partial appointment to taker in default.

Unless the terms of the instrument creating or exercising a power of appointment manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in default of appointment, the taker in default of appointment may share fully in unappointed property.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 779, § 1, effective July 1, 2015.

15-2.5-313. Appointment to taker in default.

If a powerholder makes an appointment to a taker in default of appointment and the appointee would have taken the property under a gift-in-default clause had the property not been appointed, the power of appointment is deemed not to have been exercised and the appointee takes the property under the clause.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 779, § 1, effective July 1, 2015.

15-2.5-314. Powerholder's authority to revoke or amend exercise.

1. A powerholder may revoke or amend an exercise of a power of appointment only to the extent that:
   1. The powerholder reserves a power of revocation or amendment in the instrument exercising the power of appointment and, if the power is nongeneral, the terms of the instrument creating the power of appointment do not prohibit the reservation; or
   2. The terms of the instrument creating the power of appointment provide that the exercise is revocable or amendable.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 779, § 1, effective July 1, 2015.

15-2.5-401. Disclaimer.

1. Subject to the "Uniform Disclaimer of Property Interests Act", part 12 of article 11 of this title:
   1. A powerholder may disclaim all or part of a power of appointment; and
   2. A permissible appointee, appointee, or taker in default of appointment may disclaim all or part of an interest in appointive property.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 780, § 1, effective July 1, 2015.

15-2.5-402. Authority to release.

A powerholder may release a power of appointment, in whole or in part, except to the extent the terms of the instrument creating the power prevent the release.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 780, § 1, effective July 1, 2015.

15-2.5-403. Method of release.

1. A powerholder of a releasable power of appointment may release the power in whole or in part:
   1. By substantial compliance with a method provided in the terms of the instrument creating the power; or
   2. If the terms of the instrument creating the power do not provide a method, or the method provided in the terms of the instrument is not expressly made exclusive, by:
      1. Delivering a writing declaring the extent to which the power is released to a person who could be adversely affected by an exercise of the power;
      2. Joining with some or all of the takers in default in making an otherwise-effective transfer of an interest in the property that is subject to the power, in which case the power is released to the extent that a subsequent exercise of the power would defeat the interest transferred;
      3. Contracting with a person who could be adversely affected by an exercise of the power not to exercise the power, in which case the power is released to the extent that a subsequent exercise of the power would violate the terms of the contract; or
      4. Communicating in any other appropriate manner an intent to release the power, in which case the power is released to the extent that a subsequent exercise of the power would be contrary to manifested intent.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 780, § 1, effective July 1, 2015.

15-2.5-404. Revocation or amendment of release.

1. A powerholder may revoke or amend a release of a power of appointment only to the extent that:
   1. The instrument of release is revocable by the powerholder; or
   2. The powerholder reserves a power of revocation or amendment in the instrument of release.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 781, § 1, effective July 1, 2015.

15-2.5-405. Power to contract - presently exercisable power of appointment.

1. A powerholder of a presently exercisable power of appointment may contract:
   1. Not to exercise the power if the contract, when made, does not confer a benefit on a person other than a taker in default or a permissible appointee; or
   2. To exercise the power if the contract, when made, does not confer a benefit on an impermissible appointee.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 781, § 1, effective July 1, 2015.

15-2.5-406. Power to contract - power of appointment not presently exercisable.

1. A powerholder of a power of appointment that is not presently exercisable may contract to exercise or not to exercise the power only if the powerholder:
   1. Is also the donor of the power; and
   2. Has reserved the power in the instrument creating the power.

Source: L. 2014: Entire article added, (HB 14-1353), ch. 209, p. 781, § 1, effective July 1, 2015.

PART 6 MISCELLANEOUS PROVISIONS

ARTICLE 5 COLORADO UNIFORM TRUST CODE

Law reviews: For article, "The C olorado Uniform Trust C ode", see 48 Colo. Law. 37 (Mar. 2019).

Section

PART 1 GENERAL PROVISIONS AND DEFINITIONS

PART 2 JUDICIAL PROCEEDINGS

PART 3 REPRESENTATION

PART 4 CREATION, VALIDITY, MODIFICATION, AND TERMINATION OF TRUST

PART 5 CREDITOR'S CLAIMS - SPENDTHRIFT AND DISCRETIONARY TRUSTS

PART 6 REVOCABLE TRUSTS

PART 7 OFFICE OF TRUSTEE

PART 8 DUTIES AND POWERS OF TRUSTEE

PART 9 (Reserved)

PART 10 LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING WITH TRUSTEES

PART 11 (Reserved)

PART 12 (Reserved)

PART 13 LIFE INSURANCE POLICY OWNED BY A TRUSTEE

PART 14 MISCELLANEOUS PROVISIONS

15-5-101. Short title.

This article 5 is known and may be cited as the "Colorado Uniform Trust Code" and is referred to in this article 5 as "this code" or "code".

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1144, § 1, effective January 1, 2019.

15-5-102. Scope.

This code applies to express trusts, charitable or noncharitable, and trusts created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust. This code does not apply to a business trust, a security arrangement, a trust created by a deposit arrangement in a financial institution, or any arrangement under which a person is a nominee or escrowee for another.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1144, § 1, effective January 1, 2019.

15-5-103. Definitions.

As used in this article 5, unless the context otherwise requires:

1. "Action", with respect to an act of a trustee, includes a failure to act.
2. "Alternative dispute resolution" means a method of nonjudicial dispute resolution as set forth in the trust instrument, which may include but is not limited to a method prescribed pursuant to the uniform arbitration act, part 2 of article 22 of title 13.
3. "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of section 2041 (b)(1)(A) or 2514 (c)(1) of the federal "Internal Revenue Code of 1986", as amended.
4. 1. "Beneficiary" means a person who:
      1. Has a present or future beneficial interest in a trust, vested or contingent; or
      2. In a capacity other than that of trustee, holds a power of appointment over trust property.
   2. "Beneficiary" does not include an appointee under a power of appointment unless and until the power is exercised and the trustee has knowledge of the exercise and the identity of the appointee.
5. "Business trust" has the same meaning as set forth in section 15-10-201 (6.5).
6. "Charitable trust" means a trust, or a portion of a trust, created for a charitable purpose described in section 15-5-405 (1).
7. "Conservator" means a person appointed by a court to administer the estate of a minor or adult individual.
8. "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment.
9. "Guardian" means a person appointed by a court to make decisions regarding the support, care, education, health, and welfare of a minor or adult individual. The term does not include a guardian ad litem.
10. "Interested person" means a qualified beneficiary or other person having a property right in or claim against a trust estate, which right or claim may reasonably and materially be affected by a judicial proceeding pursuant to this code. The term also includes fiduciaries and other persons having authority to act under the terms of the trust.
11. "Interests of the beneficiaries" means the beneficial interests provided in the terms of the trust.
12. "Jurisdiction", with respect to a geographical area, includes a state or country.
13. "Person" means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.
14. "Power of withdrawal" means a presently exercisable general power of appointment other than a power:
    1. Exercisable by a trustee and limited by an ascertainable standard; or
    2. Exercisable by another person only upon consent of the trustee or a person holding an adverse interest.
15. "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.
16. "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's qualification is determined:
    1. Is a distributee or permissible distributee of trust income or principal;
    2. Would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in subsection (16)(a) of this section terminated on that date without causing the trust to terminate; or
    3. Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
17. "Revocable", as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest.
18. "Settlor" means a person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or has a power of withdrawal over that portion.
19. "Spendthrift provision" means a term of a trust that restrains both voluntary and involuntary transfer of a beneficiary's interest.
20. "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.
21. "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions, as expressed in the trust instrument, or as may be established by other evidence in a judicial proceeding, or in a nonjudicial settlement agreement pursuant to section 15-5-111 or by alternative dispute resolution pursuant to section 15-5-113.
22. "Trust instrument" means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto.
23. "Trustee" includes an original, an additional, and a successor trustee or a cotrustee.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1144, § 1, effective January 1, 2019.

15-5-104. Knowledge.

1. Subject to subsection (2) of this section, a person has knowledge of a fact if the person:
   1. Has actual knowledge of it;
   2. Has received a notice or notification of it; or
   3. From all the facts and circumstances known to the person at the time in question, and acting in a reasonably prudent manner given the person's experience and expertise, has reason to know it.
2. An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act for the trust, or would have been brought to the employee's attention if the organization had exercised reasonable diligence. An organization exercises reasonable diligence if it maintains routines for communicating significant information to the employee having responsibility to act for the trust and there is reasonable compliance with the routines. Reasonable diligence does not require an employee of the organization to communicate information unless the communication is part of the individual's regular duties or the individual knows that a matter involving the trust would be materially affected by the information.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1147, § 1, effective January 1, 2019.

15-5-105. Default and mandatory rules.

1. Except as otherwise provided in the terms of the trust, this code governs the duties, rights, and powers of a trustee; relations among trustees; the rights, powers, and interests of a beneficiary; the relationship between the trustees and the beneficiaries; the purpose of the trust; and other matters with respect to the trust or the property subject to the trust.
2. Subject to sections 15-16-809, 15-16-810, and 15-16-811, the terms of a trust prevail over any provision of this code except:
   1. The minimum requirements for creating the trust;
   2. The duty of a trustee to act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries;
   3. The requirement that a trust and its terms be for the benefit of its beneficiaries and that the trust have a purpose that is lawful, not contrary to public policy, and possible to achieve;
   4. The power of the court to modify or terminate a trust pursuant to sections 15-5-410 to 15-5-416;
   5. The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in part 5 of this article 5;
   6. The power of the court pursuant to section 15-5-702 to require, dispense with, modify, or terminate a bond;
   7. The power of the court pursuant to section 15-5-708 (2) to adjust a trustee's compensation specified in the terms of the trust that is unreasonably low or high;
   8. The duty pursuant to section 15-5-813 (2)(b) and (2)(c) to provide notice of the existence of an irrevocable trust, of the identity of the trustee, and of the right to request trustee's reports to current distributees or permissible distributees of such trust at any age, or to other qualified beneficiaries of such trust who have attained twenty-five years of age;
   9. The duty pursuant to section 15-5-813 (1) to respond to the request of a qualified beneficiary of an irrevocable trust for trustee's reports and other information reasonably related to the administration of a trust;
   10. The effect of an exculpatory term pursuant to section 15-5-1008;
   11. The rights pursuant to sections 15-5-1010 to 15-5-1013 of a person other than a trustee or beneficiary;
   12. The periods of limitation for commencing a judicial proceeding;
   13. Consistent with the terms of the trust and the provisions of this code, the power of the court to take such action and exercise such jurisdiction not inconsistent with a settlor's intent as may be necessary in the interests of justice; and
   14. The subject matter jurisdiction of the court and venue for commencing a proceeding as provided in sections 15-5-203 and 15-5-204, unless the trust instrument requires alternative dispute resolution.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1147, § 1, effective January 1, 2019. L. 2019: IP(2) amended, (SB 19-105), ch. 51, p. 173, § 2, effective August 2. L. 2021: (2)(e) added, (SB 21-162), ch. 170, p. 944, § 2, effective September 7.

15-5-106. Common law of trusts - principles of equity - other statutes.

Unless displaced by the particular provisions of this code, the common law of trusts and principles of law and equity, and other statutes of this state, supplement its provisions.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1148, § 1, effective January 1, 2019.

15-5-107. Governing law.

1. The meaning and effect of the terms of a trust are determined by:
   1. The law of the jurisdiction designated in the terms of the trust unless the designation of that jurisdiction's law is contrary to a strong public policy of the jurisdiction having the most significant relationship to the matter at issue; or
   2. In the absence of a controlling designation in the terms of the trust, the law of the jurisdiction having the most significant relationship to the matter at issue.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1148, § 1, effective January 1, 2019.

15-5-108. Principal place of administration.

1. Without precluding other means for establishing a sufficient connection with the designated jurisdiction, terms of a trust designating the principal place of administration are valid and controlling if:
   1. A trustee's principal place of business is located in or a trustee is a resident of the designated jurisdiction; or
   2. All or part of the administration occurs in the designated jurisdiction.
2. In the case of cotrustees, the principal place of administration, if not otherwise designated in the trust instrument, is the usual place of business of the corporate trustee if there is but one corporate cotrustee, or the usual place of business or residence of the individual trustee who is a professional fiduciary if there is but one such person and no corporate cotrustee, and otherwise the usual place of business or residence of any of the cotrustees as agreed upon by them.
3. A trustee is under a continuing duty to administer the trust at a place appropriate to its purposes, its administration, and the interests of the beneficiaries.
4. Without precluding the right of the court to order, approve, or disapprove a transfer, the trustee, in furtherance of the duty prescribed by subsection (3) of this section, may transfer the trust's principal place of administration to another state or to a jurisdiction outside the United States.
5. The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's principal place of administration not less than sixty days before initiating the transfer. The notice of a proposed transfer must include:
   1. The name of the jurisdiction to which the principal place of administration is to be transferred;
   2. The address, e-mail address, and telephone number at the new location at which the trustee can be contacted;
   3. An explanation of the reasons for the proposed transfer;
   4. The date on which the proposed transfer is anticipated to occur; and
   5. The date, not less than sixty days after the giving of the notice, by which the qualified beneficiary must notify the trustee of an objection to the proposed transfer.
6. If a qualified beneficiary notifies the trustee of an objection to a proposed transfer of the trust's principal place of administration, the authority of a trustee pursuant to this section to transfer a trust's principal place of administration is suspended, pending resolution of the objection.
7. In connection with a transfer of the trust's principal place of administration, the trustee may transfer some or all of the trust property to a successor trustee designated in the terms of the trust or appointed pursuant to section 15-5-704.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1149, § 1, effective January 1, 2019. L. 2022: (4) amended, (SB 22-212), ch. 421, p. 2968, § 25, effective August 10.

15-5-109. Methods and waiver of notice in matters other than judicial proceedings.

1. Notice to a person pursuant to this code or the sending of a document to a person pursuant to this code must be accomplished in a manner reasonably suitable under the circumstances and likely to result in receipt of the notice or document. Permissible methods of notice or for sending a document include first-class mail, personal delivery, delivery to the person's last-known place of residence or place of business, or a properly directed electronic message.
2. A trustee need not provide a notice or document otherwise required pursuant to this code to a person whose identity or location is unknown to and not reasonably ascertainable by the trustee. The trustee shall maintain documentation of the trustee's reasonable efforts to ascertain the identity or location of such a person.
3. Notice pursuant to this code or the sending of a document pursuant to this code may be waived by the person who is to be notified or sent the document.
4. Notice of a judicial proceeding must be given as provided in the Colorado rules of probate procedure, the "Colorado Probate Code", and, if applicable, the Colorado rules of civil procedure.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1150, § 1, effective January 1, 2019.

15-5-110. Others treated as qualified beneficiaries.

1. Whenever notice to qualified beneficiaries of a trust is required pursuant to this code, the trustee shall also give notice to any other beneficiary who has sent the trustee a request for notice.
2. A charitable organization expressly designated to receive distributions under the terms of a charitable trust has the rights of a qualified beneficiary pursuant to this code if the charitable organization, on the date the charitable organization's qualification is being determined:
   1. Is a distributee or permissible distributee of trust income or principal;
   2. Would be a distributee or permissible distributee of trust income or principal upon the termination of the interests of other distributees or permissible distributees then receiving or eligible to receive distributions; or
   3. Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
3. A person appointed to enforce a trust created for the care of an animal or another noncharitable purpose as provided in section 15-5-408 or 15-5-409 has the rights of a qualified beneficiary pursuant to this code.
4. The attorney general has the rights of a qualified beneficiary with respect to a charitable trust having its principal place of administration in this state.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1150, § 1, effective January 1, 2019.

15-5-111. Nonjudicial settlement agreements.

1. Except as otherwise provided in subsection (3) of this section, any person may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust, regardless of whether the settlement agreement is supported by consideration.
2. The required parties to a nonjudicial settlement agreement are those persons whose interests in the trust would be materially affected by its provisions were the settlement agreement to be approved by the court at the time it was entered into by the parties.
3. A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the court pursuant to this code or other applicable law.
4. Matters that may be resolved by a nonjudicial settlement agreement include but are not limited to:
   1. The interpretation or construction of the terms of the trust;
   2. The approval of a trustee's report or accounting;
   3. Direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power;
   4. The resignation or appointment of a trustee and the determination of a trustee's compensation;
   5. Transfer of a trust's principal place of administration; and
   6. Liability of a trustee for an action relating to the trust.
5. Any person whose interest in the trust may be affected by a nonjudicial settlement agreement may request the court to approve or disapprove the nonjudicial settlement agreement, to determine whether the representation as provided in part 3 of this code was adequate, and to determine whether the agreement contains terms and conditions the court could have properly approved.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1151, § 1, effective January 1, 2019.

15-5-112. Rules of construction.

Unless the terms of the trust instrument contain contrary rules of construction, the rules of construction that apply in this state to the interpretations of and disposition of property by a will or other governing instrument, as that term is defined in the "Colorado Probate Code", articles 10 to 17 of this title 15, also apply as appropriate to the interpretation of the terms of a trust and the disposition of the trust property.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1152, § 1, effective January 1, 2019.

15-5-113. Alternate dispute resolution.

1. A settlor may designate in the trust instrument a method of nonjudicial alternate dispute resolution that is valid, enforceable, and irrevocable, except on a ground that exists at law or in equity for the invalidation of a trust. Such methods of nonjudicial dispute resolution may include rules of notice and procedure. The settlor may bind beneficiaries and assigns to the methods of dispute resolution.
2. A method of nonjudicial dispute resolution provided by the settlor in the trust instrument does not preclude the court's authority to enter an order of alternate dispute resolution, which does not eliminate or negate the method of nonjudicial dispute resolution provided by the settlor except on a ground that exists at law or in equity for the invalidation of a trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1152, § 1, effective January 1, 2019.

15-5-114. Insurable interest of trustee - definition.

1. In this section, "settlor" means a person who executes a trust instrument. The term includes a person for which a fiduciary or agent is acting.
2. A trustee of a trust has an insurable interest in the life of an individual insured under a life insurance policy that is owned by the trustee of the trust acting in a fiduciary capacity or that designates the trust itself as the owner if, on the date the policy issued:
   1. The insured is:
      1. A settlor of the trust; or
      2. An individual in whom a settlor of the trust has, or would have had if living at the time the policy was issued, an insurable interest; and
   2. The life insurance proceeds are primarily for the benefit of one or more trust beneficiaries that have:
      1. An insurable interest in the life of the insured; or
      2. A substantial interest engendered by love and affection in the continuation of the life of the insured and, if not already included pursuant to subsection (2)(b)(I) of this section, who are:
         1. Related within the fifth degree or closer, as measured by the civil law system of determining degrees of relation, either by blood or law, to the insured;
         2. Stepchildren of the insured or their descendants; or
         3. Individuals who are designated as beneficiaries of insurance policies for life insurance coverage on the life of the insured under a designated beneficiary agreement executed pursuant to article 22 of this title 15.
3. This section does not limit or abridge any insurable interest or right to insure under the common law or any other statute.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1152, § 1, effective January 1, 2019.

15-5-201. Role of court in administration of trust.

1. The court may intervene in the administration of a trust to the extent its jurisdiction is invoked by an interested person or as provided by law.
2. A trust is not subject to continuing judicial supervision unless ordered by the court.
3. A judicial proceeding involving a trust may relate to any matter involving the trust's administration. Such matters may include, but are not limited to, proceedings involving:
   1. The appointment or removal of a trustee or trust director;
   2. Review of a trustee's fees or trust director's fees and review and settling of interim or final accountings;
   3. Requests for instruction;
   4. Declarations of rights;
   5. Determinations as to the creation, existence, and validity of all or part of a trust;
   6. The ascertainment of beneficiaries, and determinations of any other questions arising in the administration of distribution of any trust, including questions of construction in trust instruments, and the existence or nonexistence of any immunity, power, privilege, duty, or right;
   7. The registration or release of registration of a trust;
   8. A direction to compel or refrain from performing a particular act;
   9. The amendment, modification, revocation, or termination of a trust;
   10. The combination or division of trusts; or
   11. Equitable doctrines of cy pres, equitable deviation, and other principles of equity pertaining to charitable and other trusts.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1153, § 1, effective January 1, 2019. L. 2019: (3)(a) and (3)(b) amended, (SB 19-105), ch. 51, p. 173, § 3, effective August 2.

15-5-202. Jurisdiction over trustee and beneficiary.

1. By accepting the trusteeship of a trust having its principal place of administration in this state or by moving the principal place of administration to this state, the trustee submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
2. With respect to their interests in the trust, the beneficiaries of a trust that has its principal place of administration in this state or that is properly registered in this state are subject to the jurisdiction of the courts of this state regarding any matter involving the trust. By accepting a distribution from such a trust, the recipient submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
3. This section does not preclude other methods of obtaining jurisdiction over a trustee, beneficiary, or other person receiving property from the trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1154, § 1, effective January 1, 2019.

15-5-203. Subject matter jurisdiction.

1. The district court or, in the city and county of Denver, the probate court, has exclusive jurisdiction of proceedings in this state brought by a trustee, trust director, or beneficiary concerning the administration of a trust.
2. The district court or, in the city and county of Denver, the probate court, has concurrent jurisdiction with other district courts of this state of other proceedings involving trusts and third parties, such as proceedings by or against creditors or debtors of trusts.
3. This section does not preclude judicial or nonjudicial alternative dispute resolution.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1154, § 1, effective January 1, 2019. L. 2019: (1) amended, (SB 19-105), ch. 51, p. 174, § 4, effective August 2.

15-5-204. Venue.

1. A judicial proceeding concerning the internal affairs of trusts and involving trustees, beneficiaries, or persons with authority to act under the trust instrument must be commenced in the following order of priority:
   1. The county of venue specified by the terms of the trust if that county has a substantial relationship to the present administration of the trust;
   2. The county in which the trust is registered;
   3. Either:
      1. The county in which the trust's principal place of administration is or is to be located; or
      2. If the trust is created by a will, the county in which the decedent's estate is being administered.
2. If a trust has no trustee, a judicial proceeding for the appointment of a trustee must be commenced in the following order of priority:
   1. The county required pursuant to subsection (1) of this section;
   2. Any of the following:
      1. A county in which a beneficiary resides;
      2. A county in which the trust property, or some portion of the trust property, is located; or
      3. A county in which a trust director resides or has a principal place of business.
3. A judicial proceeding other than one described in subsection (1) or (2) of this section must be commenced in accordance with the rules of venue applicable to civil actions.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1154, § 1, effective January 1, 2019. L. 2019: (2)(b) amended, (SB 19-105), ch. 51, p. 174, § 5, effective August 2.

15-5-205. Registration of trusts.

1. The trustee of a trust having its principal place of administration in this state may, after its acceptance of the trust, register the trust in the court of this state at the principal place of administration unless registration would be inconsistent with the retained jurisdiction of a foreign court from which the trustee cannot obtain release.
2. Registration of a fully and concurrently revocable inter vivos trust shall not be made until such a time as the settlor's power to revoke such a trust has terminated.
3. A trust that divides the corpus into multiple trusts or a will that creates multiple trusts needs only one registration rather than a registration of each separate trust.
4. This section and sections 15-5-206 to 15-5-209 do not apply to any trust created pursuant to section 15-14-412.5 or 15-14-412.6.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1155, § 1, effective January 1, 2019.

15-5-206. Registration procedures and content of statement.

1. Registration may be accomplished by filing a trust registration statement with the court as described in section 15-5-205 indicating the name and address of the trustee in which the trustee acknowledges the trusteeship. The statement must indicate whether the trust has been registered elsewhere, if known.
2. The statement must identify the trust as follows:
   1. In the case of a testamentary trust, by the name of the testator and the date and place of domiciliary probate;
   2. In the case of a written inter vivos trust, by the name of each settlor and the original trustee and the date of the trust instrument; or
   3. In the case of an oral trust, by information identifying the settlor or other source of funds or assets and describing the time and manner of the trust's creation and the terms of the trust, including the subject matter, beneficiaries, and time of performance.
3. Within sixty days after filing the trust registration statement, the trustee shall notify in writing all cotrustees, qualified beneficiaries, and other fiduciaries and persons having authority to act under the terms of the trust. For purposes of privacy, the names of qualified beneficiaries may be redacted from the copy of the statement filed with the court or provided to other qualified beneficiaries.
4. The trust registration statement must contain language indicating that, because a court will not routinely review or adjudicate matters unless it is specifically requested to do so by a beneficiary, creditor, or other interested person, all interested persons, including beneficiaries and creditors, have the responsibility to protect their own rights and interests in the trust estate.
5. If a trust has been registered in a foreign court, registration in this state is ineffective to the extent it is inconsistent with the foreign registration until the earlier registration is released, or an instrument executed by the trustee and all qualified beneficiaries is filed with the registration in this state.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1155, § 1, effective January 1, 2019.

15-5-207. Effect of failure to register.

A trustee who does not register a trust in a proper place, for purposes of any proceedings initiated by a beneficiary of the trust prior to registration, is subject to the personal jurisdiction of any court in which the trust could have been registered and otherwise as provided by section 15-5-205. In addition, any trustee who, within thirty days after receipt of a written demand by a settlor or qualified beneficiary of the trust, fails to register a trust may be subject to removal or to surcharge as the court may direct.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1156, § 1, effective January 1, 2019.

15-5-208. Registration - qualification of a foreign trustee.

A foreign corporate trustee is required to qualify as a foreign corporation doing business in this state if it maintains the principal place of administration of any trust within this state. A foreign cotrustee is not required to qualify in this state solely because its cotrustee maintains the principal place of administration in this state. Unless otherwise doing business in this state, local qualification by a foreign trustee, corporate or individual, is not required in order for the trustee to receive distribution from a local estate or to hold, invest in, manage, or acquire property located in this state, or maintain litigation. Nothing in this section affects a determination of what other acts require qualification as doing business in this state.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1156, § 1, effective January 1, 2019.

15-5-209. Release of trust registration statement.

1. If a trust's principal place of administration changes after the trust has been registered in this state, the trustee may withdraw that registration by:
   1. Filing a notice of release of trust registration statement in the same court in which the last registration statement was filed; and
   2. Serving the notice of release upon all persons described in section 15-5-206 (3).
2. The trust registration is deemed released thirty-five days after the filing of the notice of release with the court unless an objection to the release is filed with that court and the objector files a notice to set a hearing on the objection within said period and serves the objection and the notice to set on those persons described in section 15-5-206 (3).

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1157, § 1, effective January 1, 2019.

15-5-210. Judicially approved settlements.

1. A settlement of any controversy as to the administration of a trust; the construction, validity, or effect of any trust; or the rights or interests of the beneficiaries or persons having claims against a trust, if approved in a formal proceeding in the court for that purpose, is binding on all parties thereto, including an unborn individual, an unascertained individual, or a person who could not be located. An approved settlement does not impair the rights of creditors or taxing authorities who are not parties to it.
2. Notice of a judicially approved settlement must be given to every interested person or to one who can bind an interested person as provided in this code.
3. The procedure for securing court approval of a settlement is as follows:
   1. The terms of the settlement must be set forth in an agreement in writing, which must be executed by all competent persons and parents of any minor child having a beneficial interest or having claims that will or may be affected by the settlement. Execution is not required by any person whose identity or whereabouts are unknown and cannot be reasonably ascertained.
   2. Any interested person, including a trustee, then may submit the settlement to the court for its approval and for execution by the trustee, the trustee of every affected testamentary trust, other fiduciaries, and representatives.
   3. After notice to all interested persons or their representatives, the court, if it finds that the contest or controversy is in good faith and that the effect of the settlement upon the interests of the persons represented by the fiduciaries or representatives is just and reasonable, shall make an order approving the settlement and directing all fiduciaries under its supervision to execute the agreement. A minor child represented only by his or her parents may be bound only if there is no conflict of interest between the parent and the child. Upon the making of the order and the execution of the settlement, all further disposition of trust property affected by the settlement must be in accordance with the terms of the settlement.
4. Notice to a person who may be represented and bound pursuant to this code of an agreement to be approved by the court must be given:
   1. Directly to the person or to one who may bind the person if the person may be represented and bound pursuant to section 15-5-302 or 15-5-303; or
   2. In the case of a person who may be represented and bound pursuant to section 15-5-304 and who is unborn or whose identity or location is unknown and not reasonably ascertainable, to all persons whose interests in the judicial proceedings are substantially identical and whose identities and locations are known; or, in the case of other persons who may be represented and bound pursuant to section 15-5-304, directly to the person.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1157, § 1, effective January 1, 2019.

15-5-301. Representation - basic effect.

1. Notice to a person who may represent and bind another person pursuant to this part 3 has the same effect as if notice were given directly to the other person.
2. The consent of a person who may represent and bind another person pursuant to this part 3 is binding on the person represented unless the person represented objects to the representation before the consent would otherwise have become effective.
3. A person who pursuant to this part 3 may represent a settlor who lacks capacity may receive notice and give a binding consent on the settlor's behalf.
4. A settlor may not represent and bind a beneficiary pursuant to this part 3 with respect to the termination or modification of a trust pursuant to section 15-5-411 (1).

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1158, § 1, effective January 1, 2019.

15-5-301.5. Scope of representative's authority and duty of certain representatives - definitions.

1. As used in this section, unless the context otherwise requires, "representative" means a representative acting pursuant to section 15-5-302, 15-5-303, 15-5-304, or 15-5-305.
2. A representative may receive notice, give consent, and otherwise represent, bind, and act on behalf of the individual represented with respect to any matter arising pursuant to this article 5, regardless of whether a judicial proceeding concerning the trust is pending.
3. In making decisions, a representative may consider general benefits accruing to the living members of the represented individual's family.
4. A representative acting pursuant to section 15-5-303 (1)(f) or section 15-5-305 shall act in good faith on behalf of the person represented. As used in this subsection (4), with respect to representatives acting pursuant to sections 15-5-303 (1)(f) and 15-5-305 only, "good faith" means honesty in fact.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1158, § 1, effective January 1, 2019.

15-5-302. Representation by a holder of general testamentary power of appointment.

To the extent that there is no conflict of interest between the holder of a general testamentary power of appointment and the persons represented with respect to the particular question or dispute, the holder may represent and bind persons whose interests, as permissible appointees, takers in default, or otherwise, are subject to the power. For persons bound by orders binding holders of a presently exercisable general power of appointment, see section 15-10-403 (3)(a).

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1159, § 1, effective January 1, 2019.

15-5-303. Representation by fiduciaries and parents.

1. To the extent there is no conflict of interest between the representative and the person represented or among those being represented with respect to a particular question or dispute:
   1. A conservator may represent and bind the protected person whose estate the conservator controls;
   2. A guardian may represent and bind the ward if a conservator of the ward's estate has not been appointed;
   3. An agent having authority to act with respect to the particular question or dispute may represent and bind the principal;
   4. A trustee may represent and bind the beneficiaries of the trust;
   5. A personal representative of a decedent's estate may represent and bind persons interested in the estate; and
   6. A parent may represent and bind, or appoint another person to represent and bind, the parent's minor or unborn child if a conservator or guardian for the child has not been appointed, provided that a person appointed by a settlor to represent the settlor's minor or unborn child may not be related or subordinate to the settlor within the meaning of section 672 (c) of the federal "Internal Revenue Code of 1986", as amended.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1159, § 1, effective January 1, 2019.

15-5-304. Representation by person having substantially identical interest.

Unless otherwise represented, a minor, an incapacitated person, or an unborn individual, or a person whose identity or location is unknown and not reasonably ascertainable, may be represented by and bound by another having a substantially identical interest with respect to the particular question or dispute, but only to the extent there is no conflict of interest between the representative and the person represented.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1159, § 1, effective January 1, 2019.

15-5-305. Appointment of representative.

If the court determines that an interest is not represented pursuant to this part 3, or that the otherwise available representation might be inadequate, the court may appoint a representative to receive notice, give consent, and otherwise represent, bind, and act on behalf of a minor, an incapacitated person, a protected person, or an unborn individual, or a person whose identity or location is unknown. A representative may be appointed to represent several persons or interests.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1160, § 1, effective January 1, 2019.

15-5-401. Methods of creating trust.

1. A trust may be created by:
   1. Transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect upon the settlor's death;
   2. Declaration by the owner of property that the owner holds identifiable property as trustee;
   3. Exercise of a power of appointment in favor of a trustee; or
   4. A statute, judgment, or decree authorizing the creation of a trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1160, § 1, effective January 1, 2019.

15-5-402. Requirements for creation.

1. A trust is created only if:
   1. Either:
      1. The settlor has capacity to create a trust and indicates an intention to create a trust; or
      2. A statute, judgment, or decree authorizes creation of a trust;
   2. The trust has a definite beneficiary or is:
      1. A charitable trust;
      2. A trust for the care of an animal, as provided in section 15-5-408; or
      3. A trust for a noncharitable purpose, as provided in section 15-5-409;
   3. The trustee has duties to perform; and
   4. The same person is not the sole trustee and sole beneficiary.
2. A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.
3. A power in a trustee to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1160, § 1, effective January 1, 2019.

15-5-403. Trusts created in other jurisdictions.

1. A trust not created by a will is validly created if its creation complies with the law of the jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which, at the time of creation:
   1. The settlor was domiciled, had a place of abode, or was a national;
   2. A trustee was domiciled or had a place of business; or
   3. Any trust property was located.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1161, § 1, effective January 1, 2019.

15-5-404. Trust purposes.

A trust may be created only to the extent its purposes are lawful, not contrary to public policy, and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1161, § 1, effective January 1, 2019.

15-5-405. Charitable purposes - enforcement.

1. A charitable trust may be created for the relief of poverty; the advancement of education or religion; the promotion of health, governmental, or municipal purposes; or other purposes the achievement of which is beneficial to the community.
2. If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, the trustee, if authorized by the terms of the trust, or, if not, the court, may select one or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's intention to the extent that such intention can be ascertained.
3. The settlor of a charitable trust, among others, may maintain a proceeding to enforce the trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1161, § 1, effective January 1, 2019.

15-5-406. Creation of trust induced by fraud, duress, or undue influence.

A trust is void to the extent its creation was induced by fraud, duress, or undue influence.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1161, § 1, effective January 1, 2019.

15-5-407. Evidence of oral trust.

Except as required by a statute other than this article 5, a trust need not be evidenced by a trust instrument, but the creation of an oral trust and its terms may be established only by clear and convincing evidence.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1161, § 1, effective January 1, 2019.

15-5-408. Trust for care of an animal.

Subject to this section and section 15-5-409.5, a trust for the care of designated domestic or pet animals and the animals' offspring in gestation is valid. For purposes of this section, the determination of the "animals' offspring in gestation" is made at the time the designated domestic or pet animals become present beneficiaries of the trust. Unless the trust instrument provides for an earlier termination, the trust terminates when no living animal is covered by the trust. A trust instrument must be liberally construed to bring the trust within this section, to presume against the merely precatory or honorary nature of its disposition, and to carry out the general intent of the settlor. Extrinsic evidence is admissible in determining the settlor's intent. Any trust pursuant to this section is an exception to any statutory or common law rule against perpetuities.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1161, § 1, effective January 1, 2019.

15-5-409. Noncharitable trust without ascertainable beneficiary.

Subject to section 15-5-409.5 and except as provided pursuant to sections 38-30-110 to 38-30-112, if a trust is for a specific, lawful, noncharitable purpose or for lawful, noncharitable purposes to be selected by the trustee, and there is no definite or definitely ascertainable beneficiary designated, the trust may be performed by the trustee for twenty-one years but no longer, regardless of whether the terms of trust contemplate a longer duration.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1162, § 1, effective January 1, 2019.

15-5-409.5. Additional provisions applicable to noncharitable trusts without ascertainable beneficiary and trusts for care of animal.

1. In addition to the provisions of sections 15-5-408 and 15-5-409, a trust covered by either of those sections is subject to the following provisions:
   1. Except as expressly provided otherwise in the trust instrument, no portion of the principal or income may be converted to the use of the trustee, other than reasonable trustee fees and expenses of administration, or to any use other than for the trust's purposes or for the benefit of a covered animal or animals;
   2. Upon termination, the trustee shall transfer the unexpended trust property in the following order:
      1. As directed in the trust instrument;
      2. If the trust was created in a nonresiduary clause in the settlor's will or in a codicil to the settlor's will, under the residuary clause in the settlor's will; and
      3. If no taker is produced by the application of subsections (1)(b)(I) and (1)(b)(II) of this section, to the settlor's heirs pursuant to part 5 of article 11 of this title 15;
   3. (Reserved)
   4. The intended use of the principal or income can be enforced by an individual designated for that purpose in the trust instrument, by the person having custody of an animal for which care is provided by the trust instrument, by a remainder beneficiary, or, if none, by an individual appointed by a court upon application to it by an individual;
   5. All trusts created pursuant to this section may be registered, and all trustees are subject to the laws of this state applying to trusts and trustees; and
   6. (Reserved)
   7. 1. If no trustee is designated or no designated trustee is willing or able to serve, a court shall name a trustee. A court may order the transfer of the property to another trustee if required to ensure that the intended use is carried out and if:
         1. No successor trustee is designated in the trust instrument; or
         2. No designated successor trustee agrees to serve or is able to serve.
      2. A court may also make such other orders and determinations as shall be advisable to carry out the intent of the settlor and the purposes of sections 15-5-408 and 15-5-409.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1162, § 1, effective January 1, 2019.

15-5-410. Modification or termination of trust - proceedings for approval or disapproval.

1. In addition to the methods of termination prescribed by sections 15-5-411 to 15-5-414, a trust terminates to the extent that:
   1. The trust is revoked or expires pursuant to its terms;
   2. No purpose of the trust remains to be achieved; or
   3. The purposes of the trust have become unlawful, contrary to public policy, or impossible to achieve.
2. A proceeding to approve or disapprove a proposed modification or termination pursuant to sections 15-5-411 to 15-5-416, or trust combination or division pursuant to section 15-5-417, may be commenced by a trustee or a beneficiary.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1163, § 1, effective January 1, 2019.

15-5-411. Modification or termination of noncharitable irrevocable trust by consent.

1. If, upon petition, the court finds that the settlor and all beneficiaries consent to the modification or termination of a noncharitable irrevocable trust, the court shall approve the modification or termination even if the modification or termination is inconsistent with a material purpose of the trust. A settlor's consent to a trust's modification or termination may be given by an agent under a power of attorney only to the extent expressly authorized by the power of attorney or the terms of the trust, by the settlor's conservator with the approval of the court supervising the conservatorship if an agent is not so authorized, or by the settlor's guardian with the approval of the court supervising the guardianship if an agent is not so authorized and a conservator has not been appointed.
2. Other than a trust established by court order under Title XIX of the federal "Social Security Act", 42 U.S.C. sec. 1396p (d)(4), a noncharitable irrevocable trust may:
   1. Be terminated upon consent of all of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust; or
   2. Be modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.
3. A spendthrift provision in the terms of a trust is not presumed to constitute a material purpose of the trust.
4. Upon termination of a trust pursuant to subsection (1) or (2) of this section, the trustee shall distribute the trust property as agreed by the beneficiaries.
5. If not all of the beneficiaries consent to a proposed modification or termination of a trust pursuant to subsection (1) or (2) of this section, the modification or termination may be approved by the court if the court is satisfied that:
   1. If all of the beneficiaries had consented, the trust could have been modified or terminated pursuant to this section; and
   2. The interests of a beneficiary who does not consent will be adequately protected.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1163, § 1, effective January 1, 2019.

15-5-412. Modification or termination because of unanticipated circumstances or inability to administer trust effectively.

1. The court may modify the administrative or dispositive terms of a trust or terminate the trust if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust. To the extent practicable, the modification must be made in accordance with the settlor's probable intention.
2. The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or impair the trust's administration.
3. Upon termination of a trust pursuant to this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1164, § 1, effective January 1, 2019.

15-5-413. Cy pres.

1. Except as otherwise provided in subsection (2) of this section, if a particular charitable purpose becomes unlawful, impracticable, impossible to achieve, or wasteful:
   1. The trust does not fail, in whole or in part;
   2. The trust property does not revert to the settlor or the settlor's successors in interest; and
   3. The court may apply cy pres to modify or terminate the trust by directing that the trust property be applied or distributed, in whole or in part, in a manner consistent with the settlor's charitable purposes.
2. A provision in the terms of a charitable trust that would result in distribution of the trust property to a noncharitable beneficiary prevails over the power of the court pursuant to subsection (1) of this section to apply cy pres to modify or terminate the trust only if, when the provision takes effect:
   1. The trust property is to revert to the settlor and the settlor is still living; or
   2. Fewer than twenty-one years have elapsed since the date of the trust's creation.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1164, § 1, effective January 1, 2019.

15-5-414. Modification or termination of uneconomic trust.

1. After notice to the qualified beneficiaries, the trustee of a trust property having a total value less than one hundred thousand dollars may terminate the trust if the trustee concludes that the value of the trust property is insufficient to justify the cost of administration.
2. The court may modify or terminate a trust or remove the trustee and appoint a different trustee if it determines that the value of the trust property is insufficient to justify the cost of administration.
3. Upon termination of a trust pursuant to this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.
4. This section does not apply to an easement for conservation or preservation.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1165, § 1, effective January 1, 2019.

15-5-415. Reformation to correct mistakes.

The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor's intention if it is proved by clear and convincing evidence that the settlor's intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1165, § 1, effective January 1, 2019.

15-5-416. Modification to achieve settlor's tax objectives.

To achieve the settlor's tax objectives, the court may modify the terms of a trust in a manner that is not contrary to the settlor's probable intention. The court may provide that the modification has retroactive effect.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1165, § 1, effective January 1, 2019.

15-5-417. Combination and division of trusts.

After notice to the qualified beneficiaries and trust directors, a trustee may combine two or more trusts into a single trust or divide a trust into two or more separate trusts, if the result does not impair the rights of any beneficiary or adversely affect achievement of the purposes of the trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1165, § 1, effective January 1, 2019. L. 2019: Entire section amended, (SB 19-105), ch. 51, p. 174, § 6, effective August 2.

15-5-501. Rights of beneficiary's creditor or assignee.

Except as provided in section 15-5-504, to the extent a beneficiary's interest is not subject to a spendthrift provision, the court may authorize a creditor or assignee of the beneficiary to attach present or future distributions to or for the benefit of the beneficiary. The court may limit the award to such relief as is appropriate under the circumstances. Nothing in this part 5 modifies other Colorado law governing limitations on the amounts that may be applied to the satisfaction of a creditor's claim, or the procedures by which a creditor may attempt to satisfy a claim.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 939, § 1, effective September 7.

15-5-502. Spendthrift provision.

1. A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary's interest.
2. A term of a trust providing that the interest of a beneficiary is held subject to a "spendthrift trust", or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary's interest.
3. A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and, except as otherwise provided in this part 5, a creditor or assignee of the beneficiary may not reach the interest or a distribution by the trustee before its receipt by the beneficiary.
4. A trustee of a trust that is subject to a spendthrift provision may make a distribution that is required or authorized by the terms of the trust by applying the distribution for the beneficiary's benefit. A creditor or assignee of the beneficiary may not reach a distribution that is applied for the beneficiary's benefit, and no trustee is liable to any creditor of a beneficiary for making such a distribution.
5. Real property or tangible personal property that is owned by the trust but that is made available for a beneficiary's use or occupancy in accordance with the trustee's authority under the terms of the trust is not considered to have been distributed by the trustee or received by the beneficiary for purposes of allowing a creditor or assignee of the beneficiary to reach the property.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 939, § 1, effective September 7.

15-5-503. Exceptions to spendthrift provision - definitions.

1. In this section:
   1. "Child" includes any person or entity who can enforce a child support order in this or another state.
   2. "Child support order" means any administrative or court order requiring the payment of child support, child support arrears, child support debt, retroactive support, or medical support. If a child support order is combined with an order for spousal maintenance or support, the term "child support order" shall not include any portion of the order for spousal maintenance or support.
2. A spendthrift provision is unenforceable against:
   1. A child who is an obligee pursuant to a child support order for which the beneficiary is the obligor; and
   2. A judgment creditor who has provided essential services for the protection of a beneficiary's interest in the trust.

   (2.5) Subsection (2) of this section does not apply to a special needs trust, supplemental needs trust, or similar trust established for a person if its application could invalidate such a trust's exemption from consideration as a countable resource for medicaid or supplemental security income purposes or if its application has the effect or potential effect of rendering the person ineligible for any program of public benefit, including, but not limited to, medicaid and supplemental security income.

3. The only remedy of a claimant against whom a spendthrift provision cannot be enforced is to obtain from a court an order attaching present or future distributions to or for the benefit of the beneficiary. The court may limit the award to such relief as is appropriate under the circumstances.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 940, § 1, effective September 7.

15-5-504. Discretionary trusts - effect of standard - definitions.

1. In this section:
   1. "Child" includes any person or entity who can enforce a child support order in this or another state.
   2. "Child support order" means any administrative or court order requiring the payment of child support, child support arrears, child support debt, retroactive support, or medical support. If a child support order is combined with an order for spousal maintenance or support, the term "child support order" shall not include any portion of the order for spousal maintenance or support.
2. Except as otherwise provided in subsection (3) of this section, whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee's discretion, even if:
   1. The discretion is expressed in the form of a standard of distribution; or
   2. The trustee has abused the discretion.
3. To the extent a trustee has not complied with a standard of distribution or has abused a discretion:
   1. A distribution may be ordered by the court to satisfy a child support order to which the beneficiary is an obligee; and
   2. The court shall direct the trustee to pay to the child such amount as is equitable under the circumstances but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.

   (3.5) Subsection (3) of this section does not apply to a special needs trust, supplemental needs trust, or similar trust established for a person if its application could invalidate such a trust's exemption from consideration as a countable resource for medicaid or supplemental security income purposes or if its application has the effect or potential effect of rendering such person ineligible for any program of public benefit, including, but not limited to, medicaid and supplemental security income.

4. This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution.
5. If the trustee's or cotrustee's discretion to make distributions for the trustee's or cotrustee's own benefit is limited by an ascertainable standard, a creditor may not reach or compel distribution of the beneficial interest except to the extent the interest would be subject to the creditor's claim were the beneficiary not acting as trustee or cotrustee.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 941, § 1, effective September 7.

15-5-505. Creditor's claim against a settlor.

1. Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:
   1. During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors.
   2. With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.
   3. After the death of a settlor, the property of a trust that was revocable at the settlor's death is subject to claims and allowances as provided in section 15-15-103.
   1. (1.5) (a) For the purposes of subsection (1)(b) of this section, none of the following shall be considered an amount that can be distributed to or for the benefit of the settlor:
      1. Trust property that could be, but has not yet been, distributed to or for the benefit of the settlor only as a result of the exercise of a power of appointment held in a nonfiduciary capacity by any person other than the settlor;
      2. Trust property that could be, but has not yet been, distributed to or for the benefit of the settlor of a trust pursuant to the power of the trustee to make distributions or pursuant to the power of another in a fiduciary capacity to direct distributions, if and to the extent that the distributions could be made from trust property the value of which was included in the gross estate of the settlor's spouse for federal estate tax purposes under section 2041 or section 2044 of the "Internal Revenue Code of 1986", as amended, or that was treated as a transfer by the settlor's spouse under section 2514 or section 2519 of the "Internal Revenue Code of 1986", as amended; and
      3. Trust property that, pursuant to the exercise of a discretionary power by a person other than the settlor, could be paid to a taxing authority or to reimburse the settlor for any income tax on trust income or principal that is payable by the settlor under the law imposing the tax.
   2. Subsection (1)(b) of this section does not apply to an irrevocable special needs trust established for a disabled person as described in 42 U.S.C. sec. 1396p (d)(4) or similar federal law governing the transfer to such a trust.
2. (Reserved)

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 942, § 1, effective September 7.

15-5-506. Overdue distribution - definition.

1. In this section, "mandatory distribution" means a distribution of income or principal which the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. The term does not include a distribution subject to the exercise of the trustee's discretion, even if the discretion is expressed in the form of a standard of distribution, or the terms of the trust authorizing a distribution couple language of discretion with language of direction.
2. Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 943, § 1, effective September 7.

15-5-507. Personal obligations of trustee.

Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 943, § 1, effective September 7.

15-5-508. Application of part.

1. This part 5 applies to all trusts created before, on, or after July 1, 2022.
2. This part 5 applies to all judicial proceedings concerning trusts commenced on or after July 1, 2022.
3. This part 5 applies to judicial proceedings concerning trusts commenced before July 1, 2022, unless the court finds that application of a particular provision of this part 5 would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of this part 5 does not apply and the superseded law applies.
4. Any rule of construction or presumption provided in this part 5 applies to trust instruments executed before July 1, 2022, unless there is a clear indication of a contrary intent in the terms of the trust.
5. An act done before July 1, 2022, is not affected by this part 5.
6. If a right affected by this part 5 is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run pursuant to any other statute before July 1, 2022, then the period prescribed by that statute continues to apply to the right.

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 943, § 1, effective September 7.

15-5-601. (Reserved)

15-5-602. Revocation or amendment of revocable trust.

1. Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection (1) does not apply to a trust created under an instrument executed before August 7, 2013.
2. Unless the terms of a trust expressly provide otherwise, if a revocable trust is created or funded by more than one settlor:
   1. To the extent the trust consists of community property, the trust may be revoked by either spouse acting alone, with regard to the portion of the trust property attributable to that settlor's contribution, but may be amended only by joint action of both spouses;
   2. To the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor's contribution; and
   3. Upon the revocation or amendment of the trust by fewer than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.
3. The settlor may revoke or amend a revocable trust:
   1. By substantial compliance with a method provided in the terms of the trust; or
   2. If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by any other method manifesting clear and convincing evidence of the settlor's intent, which may include a later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust. A provision in a trust specifying a method to revoke or amend the trust does not make the specified method exclusive unless the specified method is referred to as the "sole", "exclusive", or "only" method of revoking or amending the trust or the provision includes similar language manifesting the settlor's intent that the trust may not be revoked or amended by any other method.
4. Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.
5. A settlor's powers with respect to revocation, amendment, or distribution of trust property may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the trust or the power.
6. Unless the terms of a trust expressly provide otherwise, or the power to do so has been expressly granted to another person, a conservator of the settlor or, if no conservator has been appointed, a guardian of the settlor, may exercise the settlor's powers with respect to revocation, amendment, or distribution of trust property, but only with the approval of the court supervising the conservatorship or guardianship.
7. A trustee who does not know that a trust has been revoked or amended is not liable to the settlor or the settlor's successors in interest for distributions made and other actions taken on the assumption that the trust has not been amended or revoked.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1166, § 1, effective January 1, 2019.

15-5-603. Settlor's powers.

1. To the extent a trust is revocable by a settlor, a trustee may follow a direction of the settlor that is contrary to the terms of the trust. To the extent a trust is revocable by a settlor in conjunction with a person other than a trustee or person holding an adverse interest, the trustee may follow a direction from the settlor and the other person holding the power to revoke, even if the direction is contrary to the terms of the trust.
2. To the extent a trust is revocable, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.
3. During the period the power may be exercised, the holder of a power of withdrawal has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1167, § 1, effective January 1, 2019. L. 2019: Entire section amended, (SB 19-105), ch. 51, p. 174, § 7, effective August 2.

15-5-604. Limitation on action contesting validity of revocable trust.

1. 1. A person must commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor's death within the earlier of:
      1. Three years after the settlor's death; or
      2. One hundred twenty days after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust's existence, of the trustee's name and address, and of the time allowed for commencing a proceeding. A trustee is not liable to any person for giving or failing to give notice under this section.
   2. The applicable time limit described in subsection (1)(a) of this section is an absolute bar that may not be waived or tolled.
2. Upon the death of the settlor of a trust that was revocable at the settlor's death, the trustee may proceed to distribute the trust property in accordance with the terms of the trust. The trustee is not subject to liability for doing so unless:
   1. The trustee knows of a pending judicial proceeding contesting the validity of the trust; or
   2. A potential contestant has notified the trustee of a possible judicial proceeding to contest the trust and a judicial proceeding is commenced within sixty days after the contestant sent the notification.
3. Unless a distribution or payment no longer can be questioned because of adjudication, estoppel, or limitation, a beneficiary of a trust that is determined to have been invalid, or a distributee of property improperly distributed or paid, or a claimant who is improperly paid, is liable for the return of the property improperly received and its income, if any, since the distribution, if he or she has the property. If he or she does not have the property, then he or she is liable for the return of the value as of the date of his or her disposition of the property improperly received, and its income and gain, if any received by him or her.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1167, § 1, effective January 1, 2019.

15-5-701. Accepting or declining trusteeship.

1. Except as otherwise provided in subsection (3) of this section, a person designated as trustee accepts the trusteeship:
   1. By substantially complying with a method of acceptance provided in the terms of the trust; or
   2. If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as a trustee, or otherwise indicating acceptance of the trusteeship. A provision in a trust specifying a method to accept or decline trusteeship does not make the specified method exclusive unless the specified method is referred to as the "sole", "exclusive", or "only" method of accepting or declining trusteeship or the provision includes similar language manifesting that the settlor's intent was that the trusteeship may not be accepted or declined by any other method.
2. A person designated as trustee who has not yet accepted the trusteeship may reject the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is deemed to have rejected the trusteeship.
3. A person designated as a trustee, without accepting the trusteeship, may:
   1. Act to preserve the trust property if, within a reasonable time after acting, the person sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to any acting trustee and a qualified beneficiary; and
   2. Inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1168, § 1, effective January 1, 2019.

15-5-702. Trustee's bond.

1. A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.
2. The court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The court may modify or terminate a bond at any time.
3. Unless otherwise directed by the court or the terms of the trust, the cost of a bond is charged to the trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1168, § 1, effective January 1, 2019.

15-5-703. Cotrustees.

1. Cotrustees who are unable to reach a unanimous decision may act by majority decision.
2. If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.
3. Subject to section 15-16-812, a cotrustee shall participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification, or other temporary incapacity or the cotrustee has properly delegated the performance of the function to another trustee.
4. If a cotrustee is unavailable to perform duties because of absence, illness, disqualification, or other temporary incapacity, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.
5. A trustee may not delegate to a costrustee the performance of a function the settlor reasonably expected the trustees to perform jointly. Unless a delegation was irrevocable, a trustee may revoke a delegation previously made.
6. Except as otherwise provided in subsection (7) of this section, a trustee who does not join in an action of another trustee is not liable for the action.
7. Subject to section 15-16-812, each trustee shall exercise reasonable care to:
   1. Prevent a cotrustee from committing a serious breach of trust; and
   2. Pursue a remedy, at trust expense, for a cotrustee's serious breach of trust.
8. A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified any cotrustee of the dissent at or before the time of the action is not liable for the action unless the action is a serious breach of trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1169, § 1, effective January 1, 2019. L. 2019: (3) and IP(7) amended, (SB 19-105), ch. 51, p. 175, § 8, effective August 2.

15-5-704. Vacancy in trusteeship - appointment of successor.

1. A vacancy in a trusteeship occurs if:
   1. A person designated as trustee rejects the trusteeship;
   2. A person designated as trustee cannot be identified or does not exist;
   3. A trustee resigns;
   4. A trustee is disqualified or removed;
   5. A trustee dies; or
   6. A guardian or conservator is appointed for an individual serving as trustee.
2. If one or more cotrustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.
3. A vacancy in a trusteeship of a noncharitable trust that is required to be filled must be filled in the following order of priority:
   1. By a person designated in the terms of the trust to act as successor trustee;
   2. By a person appointed by unanimous agreement of the qualified beneficiaries; or
   3. By a person appointed by the court.
4. A vacancy in a trusteeship of a charitable trust that is required to be filled must be filled in the following order of priority:
   1. By a person designated in the terms of the trust to act as successor trustee;
   2. By a person selected by the charitable organizations expressly designated to receive distributions under the terms of the trust if the attorney general is provided written notice of the selection and fails to object or concurs in the selection within thirty days of such notice; or
   3. By a person appointed by the court.
5. Regardless of whether a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1169, § 1, effective January 1, 2019.

15-5-705. Resignation of trustee.

1. A trustee may resign:
   1. Upon at least thirty days' notice to the qualified beneficiaries; the settlor, if living; and all cotrustees; or
   2. With the approval of the court.
2. In approving a resignation pursuant to this section, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.
3. Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1170, § 1, effective January 1, 2019.

15-5-706. Removal of trustee.

1. The settlor, a cotrustee, or a beneficiary may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.
2. The court may remove a trustee if:
   1. The trustee has committed a serious breach of trust;
   2. Lack of cooperation among cotrustees substantially impairs the administration of the trust;
   3. Because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or
   4. 1. There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries;
      2. The court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust; and
      3. A suitable cotrustee or successor trustee is available.
3. Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order such appropriate relief pursuant to section 15-5-1001 (2) as may be necessary to protect the trust property or the interests of the beneficiaries.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1171, § 1, effective January 1, 2019.

15-5-707. Delivery of property by former trustee.

1. Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.
2. A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1171, § 1, effective January 1, 2019.

15-5-708. Compensation of trustee.

1. If the terms of the trust do not specify the trustee's compensation, a trustee's compensation is determined in accordance with part 6 of article 10 of this title 15.
2. If the terms of a trust specify the trustee's compensation, the trustee is entitled to be compensated as specified, but the court may allow more or less compensation if the compensation specified by the terms of the trust would be unreasonably low or high as determined in accordance with the factors set forth in part 6 of article 10 of this title 15 and taking into consideration whether the duties of the trustee are substantially different from those contemplated when the trust was created.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1171, § 1, effective January 1, 2019.

15-5-709. Reimbursement of expenses.

1. A trustee is entitled to be reimbursed out of the trust property, with interest as appropriate, for:
   1. Expenses that were properly incurred in the administration of the trust; and
   2. To the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.
2. A reasonable advance by the trustee of money for the protection of the trust gives rise to a lien against trust property to secure reimbursement with reasonable interest.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1172, § 1, effective January 1, 2019.

15-5-801. Duty to administer trust.

Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with this article 5.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1172, § 1, effective January 1, 2019.

15-5-802. Duty of loyalty.

1. A trustee shall administer the trust solely in the interests of the beneficiaries.
2. Subject to the rights of persons dealing with or assisting the trustee as provided in section 15-5-1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or that is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless:
   1. The transaction was authorized by the terms of the trust;
   2. The transaction was approved by the court;
   3. The beneficiary did not commence a judicial proceeding within the time allowed by section 15-5-1005;
   4. The beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with section 15-5-1009; or
   5. The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.
3. A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:
   1. The trustee's spouse;
   2. The trustee's descendants, siblings, parents, or their spouses;
   3. An agent or attorney of the trustee; or
   4. A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment.
4. A transaction between a trustee and a beneficiary that does not concern trust property but that occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary and from which the trustee obtains an advantage is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.
5. A transaction not concerning trust property, and in which the trustee engages in the trustee's individual capacity, involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.
6. An investment by a trustee in securities of an investment company or investment trust to which the trustee or its affiliate provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the "Colorado Uniform Prudent Investor Act", article 1.1 of this title 15. In addition to its compensation for acting as trustee, the trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust. If the trustee receives compensation from the investment company or investment trust for providing investment advisory or investment management services, the trustee must at least annually notify the persons entitled pursuant to section 15-5-813 to receive a copy of the trustee's annual report of the rate and method by which that compensation was determined.
7. In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.
8. This section does not preclude the following transactions, if fair to the beneficiaries:
   1. An agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee;
   2. Payment of reasonable compensation to the trustee;
   3. A transaction between a trust and another trust, decedent's estate, guardianship, or conservatorship of which the trustee is a fiduciary or in which a beneficiary has an interest;
   4. A deposit of trust money in a regulated financial service institution operated by the trustee; or
   5. An advance by the trustee of money for the protection of the trust.
9. The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this section if entered into by the trustee.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1172, § 1, effective January 1, 2019.

15-5-803. Impartiality.

If a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, taking into account any differing interests of the beneficiaries.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1174, § 1, effective January 1, 2019.

15-5-804. Prudent administration.

A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1174, § 1, effective January 1, 2019.

15-5-805. Costs of administration.

In administering a trust, the trustee may incur only costs that are appropriate and reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1174, § 1, effective January 1, 2019.

15-5-806. Trustee's skills.

A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1174, § 1, effective January 1, 2019.

15-5-807. Delegation by trustee.

1. A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
   1. Selecting an agent;
   2. Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
   3. Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
2. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
3. A trustee who complies with subsection (1) of this section is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
4. By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1174, § 1, effective January 1, 2019.

15-5-808. Powers to direct.

(Reserved)

15-5-809. Control and protection of trust property.

A trustee shall take reasonable steps to take control of and protect the trust property.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1175, § 1, effective January 1, 2019.

15-5-810. Record keeping and identification of trust property.

1. A trustee shall keep adequate records of the administration of the trust.
2. A trustee shall keep trust property separate from the trustee's own property.
3. 1. Except as otherwise provided in subsection (4) of this section, a trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.
   2. Nothing in subsection (3)(a) of this section may be construed as preventing a trustee from holding a property in the name of a nominee or other form, without disclosure of the trust, as authorized in section 15-5-816 (1)(g)(II) and in section 15-1-804 (2)(o), provided the trustee maintains adequate records of all trust property so held.
   3. This subsection (3) does not apply to tangible personal property other than motor vehicles, airplanes, and other property the title of which is registered with a governmental authority.
4. If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of two or more separate trusts.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1175, § 1, effective January 1, 2019.

15-5-811. Enforcement and defense of claims.

A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust of which the trustee has knowledge.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1175, § 1, effective January 1, 2019.

15-5-812. Collecting trust property.

A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee and to redress a breach of trust known to the trustee to have been committed by a former trustee.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1176, § 1, effective January 1, 2019.

15-5-813. Duty to inform and report.

1. A trustee shall keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary's request for information related to the administration of the trust.
2. A trustee:
   1. Upon request of a qualified beneficiary, shall promptly furnish to the qualified beneficiary a copy of the portions of the trust instrument that describe or affect the beneficiary's interest;
   2. Within sixty days after accepting a trusteeship, shall notify the qualified beneficiaries of the acceptance and of the trustee's name, address, and telephone number;
   3. Within sixty days after the date the trustee acquires knowledge of the creation of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified beneficiaries of the trust's existence, of the identity of the settlor or settlors, of the right to request portions of the trust instrument that describe or affect the beneficiary's interest, and of the right to a trustee's report as provided in subsection (3) of this section; and
   4. Shall notify the qualified beneficiaries in advance of any change in the method or rate of the trustee's compensation.
3. 1. At least annually and at the termination of the trust, a trustee shall send to the distributees or permissible distributees of trust income or principal, and to other qualified beneficiaries who request it:
      1. A report of the trust property, liabilities, receipts, and disbursements, including the source and amount of the trustee's compensation; and
      2. A listing of the trust assets and, if feasible, their respective market values.
   2. Upon a vacancy in a trusteeship, unless a cotrustee remains in office, the former trustee shall send a report to the qualified beneficiaries. A personal representative, conservator, or guardian may send the qualified beneficiaries a report on behalf of a deceased or incapacitated trustee.
4. A qualified beneficiary may waive the right to a trustee's report or other information required to be furnished pursuant to this section. A qualified beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.
5. Subsections (2)(b) and (2)(c) of this section do not apply to a trustee who accepts a trusteeship before January 1, 2019, to an irrevocable trust created before January 1, 2019, or to a revocable trust that becomes irrevocable before January 1, 2019.
6. Nothing in this section may be construed to impose on the trustee a duty to inform or report to any person other than a qualified beneficiary or as directed by the court.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1176, § 1, effective January 1, 2019.

15-5-814. Discretionary powers - tax savings.

1. 1. Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as "absolute", "sole", or "uncontrolled", the trustee shall exercise a discretionary power in good faith. The parameters for that exercise are established by the terms and purposes of the trust, the interests of the beneficiaries, and relevant fiduciary duties. A trustee does not abuse its discretion if the trustee, following the terms and purposes of the trust and considering the interests of its beneficiaries, exercises its judgment honestly and with a proper motive.
   2. Where a trust gives a trustee unlimited discretion, including the use of such terms as "absolute", "sole", or "uncontrolled", a court may not determine that a trustee abused its discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.
2. Subject to subsection (4) of this section, and unless the terms of the trust expressly indicate that a rule in this subsection (2) does not apply:
   1. A person other than a settlor who is a beneficiary and trustee of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee's personal benefit may exercise the power only in accordance with an ascertainable standard; and
   2. A trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.
3. A power whose exercise is limited or prohibited by subsection (2) of this section may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.
4. Subsection (2) of this section does not apply to:
   1. A power held by the settlor's spouse who is the trustee of a trust for which a marital deduction, as defined in section 2056 (b)(5) or 2523 (e) of the federal "Internal Revenue Code of 1986", as amended, was previously allowed;
   2. Any trust during any period that the trust may be revoked or amended by its settlor; or
   3. A trust, if contributions to the trust qualify for the annual exclusion under section 2503 (c) of the federal "Internal Revenue Code of 1986", as amended.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1177, § 1, effective January 1, 2019.

15-5-815. General powers of trustee.

1. A trustee, without authorization by the court, may exercise:
   1. Powers conferred by the terms of the trust; and
   2. Except as limited by the terms of the trust:
      1. All powers over the trust property that an unmarried competent owner has over individually owned property;
      2. Any other powers appropriate to achieve the proper investment, management, and distribution of the trust property; and
      3. Any other powers conferred by this code and the "Colorado Fiduciaries' Powers Act", part 8 of article 1 of this title 15.
2. The exercise of a power is subject to the fiduciary duties prescribed by this code.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1178, § 1, effective January 1, 2019.

15-5-816. Specific powers of trustee.

1. Without limiting the authority conferred by section 15-5-815, and in addition to the powers conferred pursuant to the "Colorado Fiduciaries' Powers Act", part 8 of article 1 of this title 15, a trustee may:
   1. Collect trust property and accept or reject additions to the trust property from a settlor or any other person;
   2. Acquire or sell property, for cash or on credit, at public or private sale;
   3. Exchange, partition, or otherwise change the character of trust property;
   4. Deposit trust money in an account in a regulated financial service institution;
   5. Borrow money, with or without security, and mortgage or pledge trust property for a period within or extending beyond the duration of the trust;
   6. With respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or property owners, including merging, dissolving, or otherwise changing the form of business organization or contributing additional capital;
   7. With respect to stocks or other securities, exercise the rights of an absolute power, including the right to:
      1. Vote or give proxies to vote, with or without power of substitution, or enter into or continue a voting trust agreement;
      2. Hold a security in the name of a nominee or in other form without disclosure of the trust so that title may pass by delivery;
      3. Pay calls, assessments, and other sums chargeable or accruing against the securities, and sell or exercise stock subscription or conversion rights; and
      4. Deposit the securities with a depositary or other regulated financial service institution;
   8. With respect to an interest in real property, construct, or make ordinary or extraordinary repairs to, alterations to, or improvements in, buildings or other structures; demolish improvements; raze existing or erect new party walls or buildings; subdivide or develop land; dedicate land to public use or grant public or private easements; and make or vacate plats and adjust boundaries;
   9. Enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust;
   10. Grant an option involving a sale, lease, or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired;
   11. Insure the property of the trust against damage or loss and insure the trustee, the trustee's agents, and beneficiaries against liability arising from the administration of the trust;
   12. Abandon or decline to administer property of no value or insufficient value to justify its collection or continued administration;
   13. With respect to possible liability for violation of environmental law:
       1. Inspect or investigate property the trustee holds or has been asked to hold, or property owned or operated by an organization in which the trustee holds or has been asked to hold an interest, for the purpose of determining the application of environmental law with respect to the property;
       2. Take action to prevent, abate, or otherwise remedy any actual or potential violation of any environmental law affecting property held directly or indirectly by the trustee, whether taken before or after the assertion of a claim or the initiation of government enforcement;
       3. Decline to accept property into trust or disclaim any power with respect to property that is or may be burdened with liability for violation of environmental law;
       4. Compromise claims against the trust that may be asserted for an alleged violation of environmental law; and
       5. Pay the expense of any inspection, review, abatement, or remedial action to comply with environmental law;
   14. Pay or contest any claim, settle a claim by or against the trust, and release, in whole in or in part, a claim belonging to the trust;
   15. Pay taxes, assessments, compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the administration of the trust;
   16. Exercise elections with respect to federal, state, and local taxes;
   17. Select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;
   18. (Reserved)
   19. (Reserved)
   20. Appoint a trustee to act in another jurisdiction with respect to trust property located in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the appointing trustee, require that the appointed trustee furnish security, and remove any trustee so appointed;
   21. Pay an amount distributable to a beneficiary by paying it directly to the beneficiary or applying it for the beneficiary's benefit and, in the case of a beneficiary who is under a legal disability or who the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or applying it for the beneficiary's benefit or by:
       1. Paying it to the beneficiary's conservator or, if the beneficiary does not have a conservator, the beneficiary's guardian;
       2. Paying it to the beneficiary's custodian pursuant to the "Colorado Uniform Transfers to Minors Act", article 50 of title 11, or custodial trustee pursuant to the "Colorado Uniform Custodial Trust Act", article 1.5 of this title 15, and for that purpose, creating a custodianship of custodial trust;
       3. If the trustee does not know of a conservator, guardian, custodian, or custodial trustee, paying it to an adult relative or other person having legal or physical care or custody of the beneficiary, to be expended on the beneficiary's behalf; or
       4. Managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution;
   22. On distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the trust property for those purposes, and adjust for resulting differences in valuation;
   23. Resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternate dispute resolution;
   24. Prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee's duties;
   25. Sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the trustee's powers; and
   26. On termination of the trust, exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1178, § 1, effective January 1, 2019. L. 2021: IP(1)(u) amended, (SB 21-162), ch. 170, p. 944, § 3, effective September 7.

15-5-817. Distribution on termination.

1. Upon termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within thirty days after the proposal was sent, but only if the proposal informed the beneficiary of the right to object and of the time allowed for objection.
2. Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payments of debts, expenses, and taxes.
3. A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent:
   1. It was induced by improper conduct of the trustee; or
   2. The beneficiary, at the time of the release, did not know of the beneficiary's rights or of the material facts relating to the breach.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1181, § 1, effective January 1, 2019.

15-5-818. Reimbursement for taxes - definitions.

1. As used in this section:
   1. "Independent trustee" means a trustee who is not related or subordinate to the settlor within the meaning of section 672 (c) of the federal "Internal Revenue Code of 1986", as amended.
   2. "Settlor" means the grantor or another person treated as the owner of any portion of a trust under section 671 of the federal "Internal Revenue Code of 1986", as amended.
2. Unless otherwise provided in the governing instrument, an independent trustee of a trust may, from time to time, in the trustee's discretion, distribute to the settlor an amount equal to any income taxes on any portion of the trust's taxable income for which the settlor is liable.
3. A trustee shall not exercise or participate in the exercise of discretion pursuant to this section that would cause the inclusion of the trust assets in the settlor's gross taxable estate for federal estate tax purposes at the time of exercise or in a manner inconsistent with the qualification of all or any portion of the trust for the federal gift or estate tax marital deduction, to the extent the trust is intended to qualify for such deduction.
4. The provisions of this section do not apply to:
   1. Any trust by which a future estate is indefeasibly vested in the United States or a political subdivision thereof for exclusively public purposes;
   2. A corporation organized exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation;
   3. A trustee, or a fraternal society, order, or association operating under the lodge system, provided the principal or income of such trust is to be used by such trustee or by such fraternal society, order, or association exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, and no substantial part of the activities of such trustee or of such fraternal society, order, or association is carrying on propaganda or otherwise attempting to influence legislation; or
   4. Any veterans' organization incorporated by an act of congress, or any department or local chapters or posts of such an organization, no part of the net earnings of which inures to the benefit of any private shareholder or individual.
5. A creditor of the settlor of an irrevocable trust is not entitled to attach or otherwise reach any trust property due to the power granted to a trustee or other third party by the terms of the trust, court order, agreement of the beneficiaries, or any other provision of law, including subsection (2) of this section, to reimburse the settlor of the trust an amount for which the settlor is liable for income tax on the taxable income of the trust.
6. The provisions of this section apply to all trusts unless an independent trustee of a trust elects otherwise in writing.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1182, § 1, effective January 1, 2019.

PART 10 LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING WITH TRUSTEES

PART 12 (Reserved)

15-5-1301. Life insurance policy owned by a trustee - definition.

1. Notwithstanding any other provision of law and the provisions of the "Colorado Uniform Prudent Investor Act", article 1.1 of this title 15, a trustee may not acquire or hold as a trust asset a life insurance policy on the life of a person unless the trustee has an insurable interest, as described in section 15-5-114, in the person. A trustee who acquires as a trust asset a life insurance policy on the life of a person in whom the trustee has an insurable interest may continue to hold the life insurance policy without liability for loss arising from the trustee's failure to:
   1. Determine whether the policy is or remains a proper investment;
   2. Investigate the financial strength of the life insurance company;
   3. Exercise or not exercise any option, right, or privilege available under the policy, including financing the payment of premiums, unless there is sufficient cash or there are other readily marketable trust assets from which to pay premiums, regardless of whether the exercise or nonexercise of these powers results in the lapse or termination of the policy;
   4. Inquire about or investigate the health or financial condition of any insured under the policy; or
   5. Retain the policy without regard to any lack of diversification of trust assets resulting from ownership of such policy and without regard to the terms and conditions of the policy.
2. 1. This section does not relieve a trustee of liability with respect to any life insurance policy purchased from an affiliated company, or with respect to which the trustee or any affiliated company of the trustee receives any commission, unless either:
      1. The trustee has given written notice of such intended purchase to all qualified beneficiaries of the trust as defined in section 15-5-103 (16), or to their legal representatives, and either receives written consent to such purchase from qualified beneficiaries or does not receive from a qualified beneficiary a response to written notice by the trustee within thirty days after the mailing of such notice to the qualified beneficiary or legal representative at his or her last known address; or
      2. The trust agreement contains a provision that permits purchases of life insurance from an affiliate.
   2. For purposes of this section, an "affiliated company" has the same meaning as set forth in 15 U.S.C. sec. 80a-2 (a)(2).
3. This section applies to a trust established before, on, or after August 7, 2013, and to a life insurance policy acquired, retained, or owned by a trustee before, on, or after August 7, 2013.
4. Notwithstanding the provisions of this section, this section does not apply to any trust that expressly provides that this section does not apply to such trust, or to any trust that otherwise provides for a different standard of fiduciary care or obligation greater than that provided in this section; except that a trust may not permit a trustee to acquire or hold as a trust asset a life insurance policy on the life of a person in whom the trustee does not hold an insurable interest.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1189, § 1, effective January 1, 2019. L. 2021: (2)(a)(I) amended, (SB 21-171), ch. 143, p. 841, § 4, effective January 1, 2022.

15-5-1401. Uniformity of application and construction.

In applying and construing the language of this article 5 that is consistent with uniform law, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1191, § 1, effective January 1, 2019.

15-5-1402. Electronic records and signatures.

The provisions of this article 5 governing the legal effect, validity, or enforceability of electronic records or electronic signatures, and of contracts formed or performed with the use of such records or signatures, conform to the requirements of section 102 of the federal "Electronic Signatures in Global and National Commerce Act", 15 U.S.C. sec. 7002, and supersede, modify, and limit the requirements of the federal "Electronic Signatures in Global and National Commerce Act", 15 U.S.C. sec. 7001 et seq.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1191, § 1, effective January 1, 2019.

15-5-1403. Severability clause.

If any provision of this article 5 or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions of applications of this article 5 that can be given effect without the invalid provision or application, and to this end the provisions of this article 5 are severable.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1191, § 1, effective January 1, 2019.

15-5-1404. Application to existing relationships.

1. Except as otherwise provided in this article 5, including section 15-5-508, on January 1, 2019:
   1. This article 5 applies to all trusts created before, on, or after January 1, 2019;
   2. This article 5 applies to all judicial proceedings concerning trusts commenced on or after January 1, 2019;
   3. This article 5 applies to judicial proceedings concerning trusts commenced before January 1, 2019, unless the court finds that application of a particular provision of this article 5 would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of this article 5 does not apply and the superseded law applies;
   4. Any rule of construction or presumption provided in this article 5 applies to trust instruments executed before January 1, 2019, unless there is a clear indication of a contrary intent in the terms of the trust; and
   5. An act done before January 1, 2019, is not affected by this article 5.
2. If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run pursuant to any other statute before January 1, 2019, then the period prescribed by that statute as it existed prior to January 1, 2019, continues to apply to the right, even if the statute has been repealed or suspended.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1191, § 1, effective January 1, 2019. L. 2021: IP(1) amended, (SB 21-162), ch. 170, p. 944, § 4, effective September 7.

15-10-101. Short title.

Articles 10 to 17 of this title shall be known and may be cited as the "Colorado Probate Code" and is referred to in said articles as "this code" or "code".

Source: L. 73: R&RE, p. 1538, § 1. C.R.S. 1963: § 153-1-101.

15-10-102. Purposes - rule of construction.

1. This code shall be liberally construed and applied to promote its underlying purposes and policies.
2. The underlying purposes and policies of this code are:
   1. To simplify and clarify the law concerning the affairs of decedents, missing persons, protected persons, minors, and incapacitated persons;
   2. To discover and make effective the intent of a decedent in distribution of his property;
   3. To promote a speedy and efficient system for settling the estate of the decedent and making distribution to his successors;
   4. To facilitate use and enforcement of certain trusts;
   5. To promote a speedy and efficient system for managing and protecting the estates of protected persons so that assets may be preserved for application to the needs of protected persons and their dependents;
   6. To provide a system of general and limited guardianships for minors and incapacitated persons and to coordinate guardianships and protective proceedings concerned with management and protection of the estates of incapacitated persons;
   7. To make uniform the law among the various jurisdictions.
3. Under this code, the rights of partners in a civil union created pursuant to the "Colorado Civil Union Act", article 15 of title 14, C.R.S., are the same rights as those extended to spouses who are married pursuant to the provisions of the "Uniform Marriage Act", part 1 of article 2 of title 14, C.R.S.

Source: L. 73: R&RE, p. 1538, § 1. C.R.S. 1963: § 153-1-102. L. 88: (2)(d.1) and (2)(d.2) added, p. 649, § 1, effective July 1. L. 2013: (3) added, (SB 13-011), ch. 49, p. 164, § 17, effective May 1.

15-10-103. Supplementary general principles of law applicable.

Unless displaced by the particular provisions of this code, the principles of law and equity supplement its provisions.

Source: L. 73: R&RE, p. 1539, § 1. C.R.S. 1963: § 153-1-103.

15-10-104. Severability.

If any provision of this code or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of the code which can be given effect without the invalid provision or application, and to this end the provisions of this code are declared to be severable.

Source: L. 73: R&RE, p. 1539, § 1. C.R.S. 1963: § 153-1-104.

15-10-105. Construction against implied repeal.

This code is a general act intended as a unified coverage of its subject matter, and no part of it shall be deemed impliedly repealed by subsequent legislation if it can reasonably be avoided.

Source: L. 73: R&RE, p. 1539, § 1. C.R.S. 1963: § 153-1-105.

15-10-106. Effect of fraud and evasion.

Whenever fraud has been perpetrated in connection with any proceeding or in any statement filed under this code or if fraud is used to avoid or circumvent the provisions or purposes of this code, any person injured thereby may obtain appropriate relief against the perpetrator of the fraud or restitution from any person (other than a bona fide purchaser) benefitting from the fraud, whether innocent or not. Any proceeding must be commenced within five years after the discovery of the fraud. This section has no bearing on remedies relating to fraud practiced on a decedent during his lifetime which affects the succession of his estate.

Source: L. 73: R&RE, p. 1539, § 1. C.R.S. 1963: § 153-1-106.

15-10-106.5. Petition to determine cause and date of death resulting from disaster - body unidentifiable or missing.

1. If the occurrence of a disaster has been declared by proclamation of the governor under section 24-33.5-704, C.R.S., and it appears that a person has died as a direct result, but the remains have not been located or are unidentifiable, the coroner, sheriff, or district attorney for the county in which any part of such disaster occurred, the spouse, next of kin, or public administrator for such county, or, thirty days after the disaster was declared, any other person, may apply to the coroner of such county asking that the coroner determine the cause, manner, and date of death of the alleged decedent.
2. 1. Such application shall contain the facts and circumstances concerning the disaster, the reasons for the belief that the alleged decedent perished, a statement that the alleged decedent's remains have not been located or are unidentifiable, and the names and addresses of all persons known or believed to be heirs at law of the alleged decedent.
   2. The application shall contain an affidavit in which the applicant states the following information to the extent of the applicant's personal knowledge, information, and belief:
      1. The full name of the alleged decedent;
      2. The alleged decedent's residential address, including city, county, and zip code;
      3. The alleged decedent's date and place of birth;
      4. The alleged decedent's sex, race, ethnicity, and social security number;
      5. The full names of the alleged decedent's parents and the mother's maiden name;
      6. The applicant's name, address, telephone number, and relationship to the alleged decedent;
      7. The identification number of any missing person report filed concerning the alleged decedent;
      8. The date and time of the applicant's last contact with the alleged decedent and a description of that contact;
      9. The basis for the belief that the alleged decedent was physically present at the time and place of an occurrence declared under section 24-33.5-704, C.R.S.;
      10. A description of the efforts undertaken by the applicant, and efforts the applicant knows others to have undertaken, to locate or identify the alleged decedent;
      11. Whether the alleged decedent served in the armed forces of the United States and, if so, the branch and dates of service;
      12. If the alleged decedent was employed, the name of the alleged decedent's employer and the employer's address and telephone number; and
      13. The alleged decedent's marital status, the name of spouse, and wife's maiden name, if applicable.
   3. The applicant shall pay an application fee of twenty-five dollars when filing the application.
   4. The coroner shall assign an application number to the application.
3. If the coroner finds sufficient evidence that a disaster occurred and that the alleged decedent named in the application may be presumed to have died, then the coroner shall issue a certificate of death under this section.
4. A certified copy of an order issued pursuant to subsection (7) of this section shall be sufficient when presented to the coroner or other person acting in place of the coroner for the issuance of a certificate of death under this section.
5. An application for the finding of death under this section shall not be filed later than five years following the initial proclamation of the disaster.
6. This section shall apply only under the circumstances specified in subsection (1) of this section. In all other cases and if the coroner finds the evidence insufficient to support the issuance of a death certification, the provisions of section 15-10-107 with respect to determination of death and status apply.
7. If the coroner denies or fails to act within thirty days on an application that complies with subsection (2) of this section, the applicant may file a petition, in the district court for the county in which any part of the disaster occurred or in the Denver probate court if any part of the disaster occurred in the city and county of Denver, for an expedited determination of death in accordance with this section. If the court determines the alleged decedent died, a certified copy of the court's order shall constitute sufficient evidence for the coroner under subsection (4) of this section.

Source: L. 77: Entire section added, p. 838, § 1, effective July 1. L. 83: (1) amended, p. 964, § 1, effective July 1, 1984. L. 92: (1) amended, p. 1042, § 6, effective March 12. L. 2004: Entire section amended, p. 624, § 1, effective August 4. L. 2013: (1) and (2)(b)(IX) amended, (HB 13-1300), ch. 316, p. 1675, § 36, effective August 7.

15-10-107. Evidence of death or status.

1. In addition to the rules of evidence in courts of general jurisdiction, the following rules relating to a court determination of death and status apply:
   1. Death occurs when an individual is determined dead under section 12-240-140.
   2. An authenticated copy of a death certificate purporting to be issued by an official or agency of the place where the death purportedly occurred is prima facie evidence of the fact, place, date, and time of death and the identity of the decedent.
   3. An authenticated copy of any record or report of a governmental agency, domestic or foreign, that an individual is missing, detained, dead, or alive is prima facie evidence of the status and of the dates, circumstances, and places disclosed by the record or report.
   4. In the absence of prima facie evidence of death under paragraph (b) or (c) of this subsection (1), the fact of death shall be established by clear and convincing evidence, including circumstantial evidence.
   5. An individual whose death is not established under paragraphs (a) to (d) of this subsection (1) or under section 15-10-106.5 who is absent for a continuous period of five years, during which he or she has not been heard from, and whose absence is not satisfactorily explained after diligent search or inquiry, is presumed to be dead. His or her death is presumed to have occurred at the end of the period unless there is sufficient evidence, including, without limitation, a determination under section 15-10-106.5 that death occurred earlier.
   6. In the absence of evidence disputing the time of death stated on a document described in paragraph (b) or (c) of this subsection (1), a document described in paragraph (b) or (c) of this subsection (1) that states a time of death one hundred twenty hours or more after the time of death of another individual, however the time of death of the other individual is determined, establishes by clear and convincing evidence that the individual survived the other individual by one hundred twenty hours.
2. In the event that the fact of death of an absentee is entered in any action brought before a finding of death is entered in a formal testacy proceeding under this code, the finding relating to death of the absentee in such action shall not be determinative of any finding to be made in any proceeding under this code.

Source: L. 73: R&RE, p. 1539, § 1. C.R.S. 1963: § 153-1-107. L. 94: Entire section R&RE, p. 969, § 1, effective July 1, 1995. L. 2004: IP(1) and (1)(e) amended, p. 626, § 2, effective August 4. L. 2019: (1)(a) amended, (HB 19-1172), ch. 136, p. 1670, § 79, effective October 1.

15-10-108. Acts by holder of general power.

For the purpose of granting consent or approval with regard to the acts or accounts of a personal representative or trustee, including relief from liability or penalty for failure to post bond, to register a trust, or to perform other duties, and for purposes of consenting to modification or termination of a trust or to deviation from its terms, the sole holder or all coholders of a presently exercisable general power of appointment, including one in the form of a power of amendment or revocation, are deemed to act for beneficiaries to the extent that their interests (as objects, takers in default, or otherwise) are subject to the power.

Source: L. 73: R&RE, p. 1540, § 1. C.R.S. 1963: § 153-1-108.

15-10-109. Remarriage of absentee's spouse.

1. At any time after a finding of death of an absentee in a formal testacy proceeding under this code, the spouse of an absentee may remarry, and:
   1. Such subsequent marriage shall not constitute the offense of bigamy or any other criminal offense under the laws of this state, even though the absentee shall later be determined to be alive; and
   2. Upon such subsequent marriage, the marriage between the absentee and his said spouse shall be deemed to have been dissolved as of the date of the absentee's death as determined in accordance with section 15-10-107.

Source: L. 73: R&RE, p. 1540, § 1. C.R.S. 1963: § 153-1-109.

15-10-110. Insurance and other contracts - surrender value - effect of contract provisions - suit on claim of death.

1. A finding of death in a formal testacy proceeding under this code shall be fully effective as to rights under insurance, annuity, and endowment contracts dependent upon the life of an absentee, and the receipts of beneficiaries for payments made under any such contracts shall be a release to the contract issuer of all claims under such contracts.
2. If, in any proceeding under this code, the absentee is not found to be deceased and any policy of insurance or any annuity or endowment contract owned by the absentee provides for a surrender value, the conservator, acting for the insured, with court approval and a finding of necessity, may demand the payment of surrender value to the estate of the absentee. The receipt of the conservator for such payment shall be a release to the contract issuer of all claims under the contract.
3. Notwithstanding the provisions in any annuity or endowment contract or policy of life or accident insurance or in the charter or bylaws of any mutual or fraternal insurance association hereafter executed or adopted, the provisions of this section shall govern the effect to be given to evidence of absence or of death.
4. When any annuity or endowment contract, any policy of life or accident insurance, or the charter or bylaws of any mutual or fraternal insurance association hereafter executed or adopted contains a provision requiring a beneficiary to bring suit upon a claim of death within a stated period after the death of the insured and the fact of the absence of the insured is relied upon by the beneficiary as evidence of the death, the action may be begun, notwithstanding such provision in the contract, policy, charter, or bylaws, at any time within the statutory period of limitation for actions on contracts in writing dating from the date of death of the absentee, as determined in a formal testacy proceeding under this code.

Source: L. 73: R&RE, p. 1540, § 1. C.R.S. 1963: § 153-1-110.

15-10-111. Entry into safe deposit box of decedent - definitions.

1. 1. Whenever a decedent at the time of his or her death was a sole or joint lessee of a safe deposit box, the custodian shall, prior to notice that a personal representative or special administrator has been appointed, allow access to the box by:
      1. If the decedent was the sole lessee of the box, a person claiming to be a successor of the decedent, or acting on behalf of a successor of the decedent, upon presentation of an affidavit made pursuant to section 15-12-1201 for the purpose of delivering the contents of the box in accordance with said section; or
      2. If the decedent was the sole lessee or a joint lessee of the box, a person who is reasonably believed to be an heir at law or devisee of the decedent, a person nominated as a personal representative pursuant to the provisions of section 15-12-203 (1)(a), or the agent or attorney of any such person for the purpose of determining whether the box contains an instrument that appears to be a will of the decedent, deed to a burial plot, or burial instructions.
   2. 1. If a person described in subparagraph (I) or (II) of paragraph (a) of this subsection (1) desires access to a safe deposit box but does not possess a key to the box, the custodian shall drill the safe deposit box at the person's expense.
      2. In the case of a person described in subparagraph (I) of paragraph (a) of this subsection (1), the custodian shall deliver the contents of the box, other than a purported will, deed to a burial plot, and burial instructions, to the person in accordance with section 15-12-1201. In order to protect a custodian in carrying out his or her duty under the foregoing sentence to examine such contents solely for the purpose of identifying and withholding specified documents and making delivery of such contents other than the specified documents to such person, a custodian is not deemed to have acquired knowledge, either actual or constructive, pertaining to the value of any of the contents of the box delivered to the person as a consequence of the examination and delivery.
      3. In the case of a person described in subparagraph (II) of paragraph (a) of this subsection (1), the custodian shall retain, in a secure location at the person's expense, the contents of the box other than a purported will, deed to a burial plot, and burial instructions.
      4. A custodian shall deliver a purported will as described in subsection (2) of this section.
      5. If the safe deposit box contains a deed to a burial plot or burial instructions that are not a part of a purported will, the person or persons authorized to have access to the safe deposit box under the provisions of subsection (1) of this section may remove these instruments, and the custodian shall not prevent the removal.
      6. Expenses incurred by a custodian pursuant to this section shall be considered an estate administration expense.
   3. A representative of the custodian shall be present during the entry of a safe deposit box pursuant to this section.

   (1.3) Nothing in this section affects the rights and responsibilities of a public administrator, as described in sections 15-12-620 and 15-12-621.

   (1.5) As used in this section, unless the context otherwise requires:

   1. "Custodian" means a bank, savings and loan association, credit union, or other institution acting as a lessor of a safe deposit box, as defined in section 11-46-101, C.R.S., or section 11-101-401, C.R.S.
   2. "Representative of a custodian" means an authorized officer or employee of a custodian.
2. 1. If an instrument purporting to be a will is found in a safe deposit box as the result of an entry pursuant to subsection (1) of this section, the purported will shall be removed by the representative of the custodian.
   2. At the request of the person or persons authorized to have access to the safe deposit box under the provisions of subsection (1) of this section, the representative of the custodian shall copy each purported will of the decedent, at the expense of the requesting person, and shall deliver the copy of each purported will to the person, or if directed by the person, to the person's agent or attorney. In copying any purported will, the representative of the custodian shall not remove any staples or other fastening devices or disassemble the purported will in any way.
   3. The custodian shall mail the purported will by registered or certified mail or deliver the purported will in person to the clerk of the district or probate court of the county in which the decedent was a resident. If the custodian is unable to determine the county of residence of the decedent, the custodian shall mail the purported will by registered or certified mail or deliver the purported will in person to the office of the clerk of the proper court of the county in which the safe deposit box is located.
   4. Repealed.
3. After the appointment of a personal representative or special administrator for the decedent, the personal representative or special administrator shall be permitted to enter the safe deposit box upon the same terms and conditions as the decedent was permitted to enter during his or her lifetime.
4. Nothing in this section affects the right of surviving joint lessees to enter a safe deposit box after the death of a decedent.
5. A custodian shall not be liable to a person for an action taken pursuant to this section or for a failure to act in accordance with the requirements of this section unless the action or failure to act is shown to have resulted from the custodian's bad faith, gross negligence, or intentional misconduct.

Source: L. 73: R&RE, p. 1540, § 1. C.R.S. 1963: § 153-1-111. L. 75: (1) amended, p. 588, § 8, effective July 1. L. 77: (1) amended, p. 840, § 1, effective July 1. L. 80: Entire section R&RE, p. 522, § 1, effective July 1. L. 2007: Entire section amended, p. 124, § 1, effective July 1. L. 2009: (1)(b) and (2)(b) amended, (HB 09-1241), ch. 169, p. 760, § 15, effective April 22. L. 2014: (1)(a)(I) amended, (HB 14-1322), ch. 296, p. 1220, § 1, effective August 6. L. 2015: (1)(a), (1)(b), and (4) amended and (2)(d) repealed, (HB 15-1064), ch. 32, p. 76, § 1, effective August 5.

Editor's note: The provisions of subsection (1) as amended by House Bill 07-1003, including subsection (1)(e) renumbered to subsection (1.3), and the paragraphs in subsection (2) as amended by House Bill 07-1003 have been renumbered on revision to conform to standard C.R.S. format.

15-10-112. Cost of living adjustment of certain dollar amounts.

1. As used in this section, unless the context otherwise requires:
   1. "CPI" means the consumer price index (annual average) for all urban consumers (CPI-U): United States city average -- all items, reported by the bureau of labor statistics, United States department of labor or its successor agency or, if the index is discontinued, an equivalent index reported by a federal authority. If no such index is reported, the term means the substitute index chosen by the department of revenue; and
   2. "Reference base index" means the CPI for the calendar year 2010.
2. The dollar amounts stated in sections 15-11-102, 15-11-202 (2), 15-11-403, and 15-11-405 apply to the estate of a decedent who died during or after 2010, but for the estate of a decedent who died after 2011, these dollar amounts must be increased or decreased if the CPI for the calendar year immediately preceding the year of death exceeds or is less than the reference base index. The amount of any increase or decrease is computed by multiplying each dollar amount by the percentage by which the CPI for the calendar year immediately preceding the year of death exceeds or is less than the reference base index. If the amount of the increase or decrease produced by the computation is not a multiple of one thousand dollars, then the amount of the increase or decrease is rounded down if it is an increase, or rounded up if it is a decrease, to the next multiple of one thousand dollars, but for the purpose of section 15-11-405, the periodic installment amount is the lump-sum amount divided by twelve. If the CPI for 2010 is changed by the bureau of labor statistics, the reference base index must be revised using the rebasing factor reported by the bureau of labor statistics, or other comparable data if a rebasing factor is not reported.
3. Before February 1, 2012, and before February 1 of each succeeding year, the department of revenue shall publish a cumulative list, beginning with the dollar amounts effective for the estate of a decedent who died in 2012 of each dollar amount as increased or decreased under this section.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1670, § 1, effective July 1, 2010. L. 2010: (1)(b), (2), and (3) amended, (SB 10-199), ch. 374, p. 1747, § 2, effective July 1. L. 2014: (2) amended, (HB 14-1322), ch. 296, p. 1240, § 12, effective August 6.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

COMMENT

Automatic Adjustments for Inflation. Added in 2008, Section 1-109 operates in conjunction with the inflation adjustments of the dollar amounts listed in subsection (b) also adopted in 2008. Section 1-109 was added to make it unnecessary in the future for the ULC or individual enacting states to continue to amend the UPC periodically to adjust the dollar amounts for inflation. This section provides for an automatic adjustment of each of the above dollar amounts annually.

In each January, the Bureau of Labor Statistics of the U.S. Department of Labor reports the CPI (annual average) for the preceding calendar year. The information can be obtained by telephone (202/691-5200) or on the Bureau's website (http://www.bls.gov/cpi).

Subsection (c) tasks an appropriate state agency, such as the Department of Revenue, to issue an official cumulative list of the adjusted amounts beginning in January of the year after the effective date of the act. This subsection is bracketed because some enacting states might not have a state agency that could appropriately be assigned the task of issuing updated amounts. Such an enacting state might consider tasking the state supreme court to issue a court rule each year making the appropriate adjustment.

15-10-201. General definitions.

Subject to additional definitions contained in this article 10 and the subsequent articles that are applicable to specific articles, parts, or sections, and unless the context otherwise requires, in this code:

1. "Agent" means an attorney in fact under a durable or nondurable power of attorney, an individual authorized to make decisions concerning another's health care, and an individual authorized to make decisions for another under the "Colorado Patient Autonomy Act".
2. "Application" means a written request to the registrar for an order of informal probate or appointment under part 3 of article 12 of this title.
3. "Augmented estate" means the estate described in sections 15-11-203, 15-11-204, 15-11-205, 15-11-206, 15-11-207, and 15-11-208.
4. "Authenticated" means certified, when used in reference to copies of official documents, and only certification by the official having custody is required.
5. "Beneficiary", as it relates to a trust beneficiary, includes a person who has any present or future interest, vested or contingent, and also includes the owner of an interest by assignment or other transfer; as it relates to a charitable trust, includes any person entitled to enforce the trust; as it relates to a "beneficiary of a beneficiary designation", includes a beneficiary of an insurance or annuity policy, of an account with payment on death (POD) designation, of a security registered in beneficiary form (TOD), or of a pension, profit sharing, retirement, or similar benefit plan, or other nonprobate transfer at death; and, as it relates to a "beneficiary designated in a governing instrument", includes a grantee of a deed, a devisee, a trust beneficiary, a beneficiary of a beneficiary designation, a donee, appointee, or taker in default of a power of appointment, and a person in whose favor a power of attorney or a power held in any individual, fiduciary, or representative capacity is exercised.
6. "Beneficiary designation" means a governing instrument naming a beneficiary of an insurance or annuity policy, of an account with POD designation, of a security registered in the beneficiary form (TOD), or of a pension, profit sharing, retirement, or similar benefit plan, or other nonprobate transfer at death.

   (6.5) "Business trust" includes, but is not limited to, Massachusetts business trusts created for business or investment purposes; Delaware statutory trusts; Illinois land trusts; mutual fund trusts; common trust funds; voting trusts; liquidation trusts; real estate investment trusts; environmental remediation trusts; trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, compensation, annuities, profits, pensions, or employee benefits of any kind; and other trusts with purposes that are the same or similar to any of the trusts enumerated in this subsection (6.5), regardless of whether such other trusts are created under statutory or common law, and regardless of whether the beneficial interests in such other trusts are evidenced by certificates.

7. "Child" includes an individual entitled to take as a child under this code by intestate succession from the parent whose relationship is involved and excludes a person who is only a stepchild, a foster child, a grandchild, or any more remote descendant.
8. "Claims", in respect to the estates of decedents and protected persons, includes liabilities of the decedent or protected person whether arising in contract, in tort, or otherwise, and liabilities of the estate which arise at or after the death of the decedent or after the appointment of a conservator, including funeral expenses and expenses of administration. The term does not include estate or inheritance taxes, or taxes due the state of Colorado, or demands or disputes regarding title of a decedent or protected person to specific assets alleged to be included in the estate.
9. "Conservator" means a person who is appointed by a court to manage the estate of a protected person.
10. "Court" means the court or division thereof having jurisdiction in matters relating to the affairs of decedents and protected persons. This court is the district court, except in the city and county of Denver where it is the probate court.
11. "Descendant" means all of the individual's lineal descendants of all generations, with the relationship of parent and child at each generation being determined by the definitions of child and parent contained in this code.
12. "Devise", when used as a noun, means a testamentary disposition of real or personal property and, when used as a verb, means to dispose of real or personal property by will.
13. "Devisee" means a person designated in a will to receive a devise. For the purposes of article 12 of this title, in the case of a devise to an existing trust or trustee, or to a trustee in trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees.
14. "Disability" means cause for a protective order as described in section 15-14-401.
15. "Distributee" means any person who has received property of a decedent from his or her personal representative other than as a creditor or purchaser. A testamentary trustee is a distributee only to the extent of distributed assets or increment thereto remaining in his or her hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. For the purposes of this provision, "testamentary trustee" includes a trustee to whom assets are transferred by will, to the extent of the devised assets.
16. "Divorce" includes a dissolution of marriage, and "annulment" includes a declaration of invalidity, as such terms are used in the "Uniform Dissolution of Marriage Act", article 10 of title 14, C.R.S.

    (16.5) "Domiciliary foreign personal representative" means a personal representative appointed by another jurisdiction in which the decedent was domiciled at the time of the decedent's death.

    (16.7) "Donee", as used in the context of powers of appointment, has the same meaning as "powerholder" as set forth in section 15-2.5-102 (13).

17. "Estate" means the property of the decedent, trust, or other person whose affairs are subject to this code as originally constituted and as it exists from time to time during administration.
18. "Exempt property" means that property of a decedent's estate which is described in section 15-11-403.
19. "Fiduciary" includes a personal representative, guardian, conservator, and trustee.
20. "Foreign personal representative" means a personal representative appointed by another jurisdiction.
21. "Formal proceedings" means proceedings conducted before a judge with notice to interested persons.
22. "Governing instrument" means a deed, will, trust, insurance or annuity policy, multiple-party account, security registered in beneficiary form (TOD), pension, profit sharing, retirement or similar benefit plan, instrument creating or exercising a power of appointment or power of attorney, or a donative, appointive, or nominative instrument of any other type.
23. "Guardian" means a person who has qualified as a guardian of a minor or incapacitated person pursuant to testamentary or court appointment, but excludes one who is merely a guardian ad litem.
24. "Heirs", except as controlled by section 15-11-711, means persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent.
25. "Incapacitated person" means an individual described in section 15-14-102 (5).
26. "Informal proceedings" means those conducted without notice to interested persons by an officer of the court acting as a registrar for probate of a will, appointment of a personal representative, or determination of a guardian under sections 15-14-202 and 15-14-301.
27. "Interested person" includes heirs, devisees, children, spouses, creditors, beneficiaries, trust directors, and any others having a property right in or claim against a trust estate or the estate of a decedent, ward, or protected person, which may be affected by the proceeding. It also includes persons having priority for an appointment as a personal representative and other fiduciaries representing the interested person. The meaning as it relates to particular persons may vary from time to time and is determined according to the particular purposes of, and matter involved in, any proceeding.
28. "Issue" of a person means descendant as defined in subsection (11) of this section.
29. "Joint tenants with right of survivorship" and "community property with the right of survivorship" for the purposes of this code only includes co-owners of property held under circumstances that entitle one or more to the whole of the property on the death of the other or others, but excludes forms of co-ownership registration in which the underlying ownership of each party is in proportion to that party's contribution.
30. "Lease" includes an oil, gas, or other mineral lease.
31. "Letters" includes letters testamentary, letters of guardianship, letters of administration, and letters of conservatorship.
32. "Minor" means a person who is under eighteen years of age.
33. "Mortgage" means any conveyance, agreement, or arrangement in which the property is used as security.
34. "Nonresident decedent" means a decedent who was domiciled in another jurisdiction at the time of his or her death.
35. "Organization" means a corporation, business trust, estate, trust, partnership, joint venture, limited liability company, association, government or governmental subdivision or agency, or any other legal or commercial entity.
36. "Parent" includes any person entitled to take, or who would be entitled to take if the child died without a will, as a parent under this code by intestate succession from the child whose relationship is in question and excludes any person who is only a stepparent, foster parent, or grandparent.
37. "Payer" means a trustee, insurer, business entity, employer, government, governmental agency or subdivision, or any other person authorized or obligated by law or a governing instrument to make payments.
38. "Person" means an individual or an organization.
39. "Personal representative" includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status. "General personal representative" excludes special administrator.
40. "Petition" means a written request to the court for an order after notice.
41. "Proceeding" includes action at law and suit in equity.
42. "Property" means both real and personal property or any interest therein and anything that may be the subject of ownership.
43. "Protected person" has the same meaning as set forth in section 15-14-102 (11).
44. "Protective proceeding" has the same meaning as used in section 15-14-401.

    (44.5) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

45. "Registrar" refers to the official of the court designated to perform the functions of registrar as provided in section 15-10-307.
46. "Security" includes any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease; collateral trust certificate; transferable share; voting trust certificate; or, in general, any interest or instrument commonly known as security; any certificate of interest or participation; any temporary or interim certificate, receipt, or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of the items enumerated in this subsection (46).
47. "Settlement", in reference to a decedent's estate, means the full process of administration, distribution, and closing.

    (47.5) "Sign" means, with present intent to authenticate or adopt a record other than a will:

    1. To execute or adopt a tangible symbol; or
    2. To attach to or logically associate with the record an electronic symbol, sound, or process.
48. "Special administrator" means a personal representative as described by sections 15-12-614 to 15-12-618.
49. "State" means any state of the United States, the District of Columbia, the commonwealth of Puerto Rico, and any territory or insular possession subject to the jurisdiction of the United States.
50. "Successor personal representative" means a personal representative, other than a special administrator, who is appointed to succeed a previously appointed personal representative.
51. "Successors" means persons other than creditors, who are entitled to property of a decedent under his or her will or this code.
52. "Supervised administration" means the proceedings described in part 5 of article 12 of this title.
53. "Survive" means that an individual has neither predeceased an event, including the death of another individual, nor is deemed to have predeceased an event under section 15-11-104, 15-11-702, or 15-11-712. The term includes its derivatives, such as "survives", "survived", "survivor", and "surviving".
54. "Testacy proceeding" means a proceeding to establish a will or determine intestacy.
55. "Testator" includes an individual of either sex.
56. 1. Except as provided in paragraph (b) of this subsection (56):
       1. "Trust" includes an express trust, private or charitable, with additions thereto, wherever and however created and any amendments to such trusts.
       2. "Trust" also includes a trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust.
    2. 1. "Trust" excludes constructive trusts unless a court, in determining such a trust, provides that the trust is to be administered as an express trust.
       2. "Trust" also excludes resulting trusts; conservatorships; personal representatives; accounts as defined in section 15-15-201 (1); custodial arrangements pursuant to the "Colorado Uniform Transfers to Minors Act", article 50 of title 11, C.R.S.; security arrangements; business trusts, as defined in subsection (6.5) of this section; and any arrangement under which a person is nominee or escrowee for another.
57. "Trustee" includes an original, additional, or successor trustee, whether or not appointed or confirmed by court.
58. "Ward" means an individual described in section 15-14-102 (15).
59. "Will" includes any codicil and any testamentary instrument that merely appoints an executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits the right of an individual or class to succeed to property of the decedent passing by intestate succession. "Will" does not include a designated beneficiary agreement that is executed pursuant to article 22 of this title.

Source: L. 73: R&RE, p. 1541, § 1. C.R.S. 1963: § 153-1-201. L. 74: (27) amended, p. 422, § 74, effective April 11. L. 75: (1) amended, p. 589, § 9, effective July 1. L. 84: (48) amended, p. 394, § 6, effective July 1. L. 90: (48) amended, p. 921, § 5, effective July 1. L. 94: Entire section R&RE, p. 970, § 2, effective July 1, 1995. L. 95: (11) amended, p. 362, § 16, effective July 1. L. 2000: (25), (26), (43), (44), and (58) amended, p. 1833, § 8, effective January 1, 2001. L. 2006: (16.5) added, p. 391, § 24, effective July 1. L. 2009: (44.5) and (47.5) added, (HB 09-1287), ch. 310, p. 1671, § 2, effective July 1, 2010. L. 2010: (59) amended, (SB 10-199), ch. 374, p. 1748, § 3, effective July 1. L. 2013: IP and (56) amended and (6.5) added, (SB 13-077), ch. 190, p. 778, § 13, effective August 7. L. 2014: (3) amended, (HB 14-1322), ch. 296, p. 1240, § 14, effective August 6; (16.7) added, (HB 14-1353), ch. 209, p. 782, § 4, effective July 1, 2015. L. 2019: IP and (27) amended, (SB 19-105), ch. 51, p. 175, § 9, effective August 2.

Editor's note: This section was repealed and reenacted in 1994, resulting in the relocation of provisions. For a detailed comparison of this section for 1994, see the comparative tables located in the back of the index.

Cross references: For age of competence, see § 13-22-101; for the "Colorado Uniform Transfers to Minors Act", see article 50 of title 11. For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

15-10-301. Territorial application.

1. Except as otherwise provided in this code, this code applies to:
   1. The affairs and estates of decedents, missing persons, and persons to be protected, domiciled in this state;
   2. The property of nonresidents located in this state or property coming into the control of a fiduciary who is subject to the laws of this state;
   3. Incapacitated persons and minors in this state;
   4. Survivorship and related accounts in this state;
   5. Trusts subject to administration in this state, to the extent such application is not inconsistent with the "Colorado Uniform Trust Code", article 5 of this title 15; and
   6. Declaration instruments created pursuant to article 19 of this title.

Source: L. 73: R&RE, p. 1545, § 1. C.R.S. 1963: § 153-1-301. L. 2003: (1)(f) added, p. 1355, § 2, effective August 6. L. 2018: (1)(e) amended, (SB 18-180), ch. 169, p. 1193, § 8, effective January 1, 2019.

15-10-302. Subject matter jurisdiction.

1. The court has jurisdiction over all subject matter vested by article VI of the state constitution and by articles 1 to 10 of title 13, C.R.S.
2. The court has full power to make orders, judgments, and decrees and take all other action necessary and proper to administer justice in the matters which come before it.

Source: L. 73: R&RE, p. 1545, § 1. C.R.S. 1963: § 153-1-302.

15-10-303. Venue - multiple proceedings - transfer.

1. Where a proceeding under this code could be maintained in more than one place in this state, the court in which the proceeding is first commenced has the exclusive right to proceed.
2. If proceedings concerning the same estate, protected person, ward, or trust are commenced in more than one court of this state, the court in which the proceeding was first commenced shall continue to hear the matter, and the other courts shall hold the matter in abeyance until the question of venue is decided, and if the ruling court determines that venue is properly in another court, it shall transfer the proceeding to the other court.
3. If a court finds that in the interest of justice a proceeding or a file should be located in another court of this state, the court making the finding may transfer the proceeding or file to the other court.

Source: L. 73: R&RE, p. 1545, § 1. C.R.S. 1963: § 153-1-303.

15-10-304. Practice in court.

Unless specifically provided to the contrary in this code or unless inconsistent with its provisions, the Colorado rules of civil procedure including the rules concerning vacation of orders and appellate review govern formal proceedings under this code.

Source: L. 73: R&RE, p. 1546, § 1. C.R.S. 1963: § 153-1-304.

15-10-305. Records and certified copies.

1. The clerk of each court shall keep for each decedent, ward, protected person, or trust under the court's jurisdiction a record of any document which may be filed with the court under this code, including petitions and applications, demands for notices or bonds, trust registrations, and of any orders or responses relating thereto by the registrar or court, and establish and maintain a system for indexing, filing, or recording which is sufficient to enable users of the records to obtain adequate information. Upon payment of the fees required by law the clerk must issue certified copies of any probated wills, letters issued to personal representatives, or any other record or paper filed or recorded. Certificates relating to probated wills must indicate whether the decedent was domiciled in this state and whether the probate was formal or informal. Certificates relating to letters must show the date of appointment.
2. All instruments purporting to be the original wills, upon presentation for probate thereof, shall be recorded by the clerk of the court, in a well-bound book, to be provided by him for that purpose, or photographed, microphotographed, or reproduced on film as a permanent record, and shall remain and be preserved in the office of the clerk of the court. Upon admission of such will to probate, such record shall be sufficient, without again recording the same in the records of the clerk of the court.

Source: L. 73: R&RE, p. 1546, § 1. C.R.S. 1963: § 153-1-305.

Cross references: For the recording of wills and decrees affecting land, see § 38-30-153.

15-10-306. Jury trial.

1. If duly demanded, a party is entitled to trial by jury in a formal testacy proceeding and any proceeding in which any controverted question of fact arises as to which any party has a constitutional right to trial by jury.
2. If there is no right to trial by jury under subsection (1) of this section or the right is waived, the court in its discretion may call a jury to decide any issue of fact, in which case the verdict is advisory only.

Source: L. 73: R&RE, p. 1546, § 1. C.R.S. 1963: § 153-1-306.

15-10-307. Registrar - powers.

The acts and orders which this code specifies as performable by the registrar may be performed either by a judge of the court or by a person, including the clerk, designated by the court by a written order filed and recorded in the office of the clerk of the court.

Source: L. 73: R&RE, p. 1546, § 1. C.R.S. 1963: § 153-1-307.

15-10-308. Appeals.

Appellate review, including the right to appellate review, interlocutory appeal, provisions as to time, manner, notice, appeal bond, stays, scope of review, record on appeal, briefs, arguments, and power of the appellate court, is governed by the Colorado appellate rules.

Source: L. 73: R&RE, p. 1546, § 1. C.R.S. 1963: § 153-1-308.

15-10-309. (Reserved)

15-10-310. Oath or affirmation on filed document.

1. Except as otherwise specifically provided in this code or by rule, every document filed with the court under this code, including applications, petitions, and demands for notice, shall be deemed to include an oath, affirmation, or statement to the effect that its representations are true as far as the person executing or filing it knows or is informed, and penalties for perjury may follow deliberate falsification therein.
2. The court shall have jurisdiction over any person, resident or nonresident, who files any document with the court under this code and over any person, resident or nonresident, who executes any such document and who knows or has reason to know that the document will be filed with the court under this code in any proceeding for relief from fraud relating to such a document that may be initiated against such person. Service of process shall be as provided in the Colorado rules of civil procedure.

Source: L. 73: R&RE, p. 1546, § 1. C.R.S. 1963: § 153-1-310. L. 77: Entire section amended, p. 831, § 6, effective July 10.

Cross references: For service of process, see Rule 4, C.R.C.P.

15-10-401. Notice - method and time of giving.

1. If notice of a hearing on any petition is required, and except for specific notice requirements as otherwise provided, the petitioner shall cause notice of the time and place of hearing on any petition to be given to any interested person or to the interested person's attorney of record or the interested person's designee. Notice shall be given:
   1. By mailing a copy thereof at least fourteen days before the time set for the hearing by certified, registered, or ordinary first-class mail addressed to the person being notified at the post-office address given in any demand for notice, or at the person's office or place of residence, if known; or
   2. By delivering a copy thereof to the person being notified personally at least fourteen days before the time set for the hearing; or
   3. If the address or identity of any person is not known and cannot be ascertained with reasonable diligence, by publishing once a week for three consecutive weeks, a copy thereof in a newspaper having general circulation published in the county where the hearing is to be held, the last publication of which is to be at least fourteen days before the time set for the hearing. In case there is no newspaper of general circulation published in the county of appointment, said publication shall be made in such a newspaper in an adjoining county. A motion for court permission to publish the notice of any hearing shall not be required unless otherwise directed by the court.
2. The court for good cause shown may provide for a different method or time of giving notice for any hearing.
3. Proof of the giving of notice shall be made on or before the hearing and filed in the proceeding. If notice is given by publication, at the time the party who issued the notice by publication files proof of publication, that party shall also file an affidavit verified by the oath of such party or by someone on his or her behalf stating the facts that warranted the use of publication for service of the notice of the hearing and stating the efforts, if any, that have been made to obtain personal service or service by mail. The affidavit shall also state the address, or last known address, of each person served by publication or shall state that the person's address or identity is unknown and cannot be ascertained with reasonable diligence.
4. "Publication once a week for three consecutive weeks" means publication once during each week of three consecutive calendar weeks with at least twelve days elapsing between the first and last publications.

Source: L. 73: R&RE, p. 1547, § 1. C.R.S. 1963: § 153-1-401. L. 75: (4) amended, p. 589, § 10, effective July 1. L. 77: (1)(a) amended, p. 831, § 7, effective July 1. L. 2002: Entire section amended, p. 651, § 4, effective July 1. L. 2012: (1) amended, (SB 12-175), ch. 208, p. 836, § 40, effective July 1.

15-10-402. Notice - waiver.

A person, including a guardian ad litem, conservator, or other fiduciary, may waive notice by a writing signed by him or his attorney and filed in the proceeding.

Source: L. 73: R&RE, p. 1547, § 1. C.R.S. 1963: § 153-1-402.

15-10-403. Pleadings - when parties bound by others - notice.

1. In formal proceedings involving trusts or estates of decedents, minors, protected persons, or incapacitated persons, and in judicially supervised settlements, the provisions of this section are applicable.
2. Interests to be affected shall be described in pleadings which give reasonable information to owners by name or class, by reference to the instrument creating the interests, or in other appropriate manner.
3. Persons are bound by orders binding others in the following cases:
   1. Orders binding the sole holder or all coholders of a power of revocation or a presently exercisable general power of appointment, including one in the form of a power of amendment, bind other persons to the extent their interests (as objects, takers in default, or otherwise) are subject to the power.
   2. To the extent there is no conflict of interest between them or among persons represented, orders binding a conservator bind the person whose estate he controls; orders binding a guardian bind the ward if no conservator of his estate has been appointed; orders binding a trustee bind beneficiaries of the trust in proceedings to probate a will establishing or adding to a trust, to review the acts or accounts of a prior fiduciary and in proceedings involving creditors or other third parties; and orders binding a personal representative bind persons interested in the undistributed assets of a decedent's estate in actions or proceedings by or against the estate.
   3. If there is no conflict of interest and no conservator or guardian has been appointed, a parent may represent his minor child, and where there is such representation orders binding the parent bind the minor child.
   4. An unborn, unascertained, minor, or incapacitated person who is not otherwise represented is bound by an order to the extent his or her interest is adequately represented by another party having a substantially identical interest in the proceeding.
4. Notice is required as follows:
   1. Notice as prescribed by section 15-10-401 shall be given to each interested person or to one who can bind an interested person as described in subsection (3) of this section. Notice may be given both to a person and to another who may bind him.
   2. Notice is given to unborn, unascertained, minor, or incapacitated persons who are not represented under subsection (3) of this section by giving notice to all known persons whose interests in the proceedings are substantially identical to those of the unborn, unascertained, minor, or incapacitated persons.
5. At any point in a proceeding, a court may appoint a guardian ad litem to represent the interest of a minor, an incapacitated, protected, unborn, or unascertained person, or a person whose identity or address is unknown, if the court determines that a need for such representation appears. If not precluded by conflict of interests, a guardian ad litem may be appointed to represent several persons or interests. The court shall set out its reasons for appointing a guardian ad litem as a part of the record of the proceeding.

Source: L. 73: R&RE, p. 1547, § 1. C.R.S. 1963: § 153-1-403. L. 2000: (3)(d) and (4)(b) amended, p. 1172, § 2, effective May 26. L. 2009: (5) amended, (HB 09-1241), ch. 169, p. 761, § 16, effective April 22.

15-10-501. Court powers - definitions - application.

1. Court powers. A court, incident to a court proceeding, possesses and may employ all of the powers and authority expressed in the provisions of this part 5 to maintain the degree of supervision necessary to ensure the timely and proper administration of estates by fiduciaries over whom the court has obtained jurisdiction. Nothing in this part 5 shall be interpreted to limit a court's powers under Colorado law. The powers of a court as described in this part 5 do not confer jurisdiction over the fiduciaries of nonsupervised trusts, private trusts, agencies created by powers of attorney, and custodial accounts created under the "Colorado Uniform Transfers to Minors Act", article 50 of title 11, C.R.S., except as provided in paragraph (c) of subsection (2) of this section.
2. Definitions. As used in this part 5, unless the context otherwise requires:
   1. "Court" means a district court of Colorado and the probate court of the city and county of Denver.
   2. "Estate" means the estate of a decedent; a guardianship; a protective proceeding; a trust, including an implied trust; an agency created by a power of attorney; or a custodial account created under the "Colorado Uniform Transfers to Minors Act", article 50 of title 11, C.R.S.
   3. "Jurisdiction" means, and is restricted to, the personal jurisdiction obtained by a court over a fiduciary as a result of the filing of a proceeding concerning the estate. The filing of a trust registration statement, by itself, shall not constitute a proceeding for the purposes of this part 5.
3. Application. The provisions of this part 5 apply to any fiduciary over whom a court has obtained jurisdiction, including but not limited to a personal representative, special administrator, guardian, conservator, special conservator, trustee, trust director, agent under a power of attorney, and custodian, including a custodian of assets or accounts created under the "Colorado Uniform Transfers to Minors Act", article 50 of title 11.

Source: L. 2008: Entire part added, p. 477, § 1, effective July 1. L. 2019: (3) amended, (SB 19-105), ch. 51, p. 175, § 10, effective August 2.

15-10-502. Initial investigation.

1. If, during the administration of an estate, a court desires to be informed about the current status of the administration, then the court, on its own motion or the request of an interested person, and without the need to state any reason for its actions, may:
   1. Send a letter to the fiduciary of the estate directing the fiduciary to file with the court one or more of the following documents on or before a date to be determined by the court:
      1. A status report;
      2. An inventory of the current assets of the estate;
      3. An up-to-date interim accounting; or
      4. A financial report concerning the estate;
   2. Order the fiduciary to file or appear before the court to submit one or more of the documents described in paragraph (a) of this subsection (1) on or before a date to be determined by the court.
2. When a court has directed a fiduciary to file or appear before the court to submit one or more of the documents described in paragraph (a) of this subsection (1), the fiduciary may request that the documents be placed under security pursuant to rule 20 of the Colorado rules of probate procedure.

Source: L. 2008: Entire part added, p. 478, § 1, effective July 1.

15-10-503. Power of a court to address the conduct of a fiduciary - emergencies - nonemergencies.

1. Emergency situations - court action without the requirement of prior notice or hearing. If it appears to a court that an emergency exists because a fiduciary's actions or omissions pose an imminent risk of substantial harm to a ward's or protected person's health, safety, or welfare or to the financial interests of an estate, the court may, on its own motion or upon the request of an interested person, without a hearing and without following any of the procedures authorized by section 15-10-502, order the immediate restraint, restriction, or suspension of the powers of the fiduciary; direct the fiduciary to appear before the court; or take such further action as the court deems appropriate to protect the ward or protected person or the assets of the estate. If a court restrains, restricts, or suspends the powers of a fiduciary, the court shall set a hearing and direct that notice be given pursuant to section 15-10-505. The clerk of the court shall immediately note the restraint, restriction, or suspension on the fiduciary's letters, if any. Any action for the removal, surcharge, or sanction of a fiduciary shall be governed by this section. The court shall rule on its motion or the interested person's request within fourteen days after the motion or request is made.
2. Nonemergency situations - court action after notice and hearing. Upon petition by a person who appears to have an interest in an estate, or upon the court's own motion, and after a hearing for which notice to the fiduciary has been provided pursuant to section 15-10-505, a court may order any one or more of the following:
   1. Supervised administration of a decedent's estate, as described in part 5 of article 12 of this title. The degree and extent of the supervision shall be endorsed upon the fiduciary's letters, if any.
   2. A temporary restraint on the fiduciary's performance of specified acts of administration, disbursement, or distribution; a temporary restraint on the fiduciary's exercise of any powers or discharge of any duties of the office of the fiduciary; or any other order to secure proper performance of the fiduciary's duty if it appears to the court that, in the absence of such an order, the fiduciary may take some action that would unreasonably jeopardize the interest of the petitioner or of some other interested person. The court may make persons with whom the fiduciary may transact business parties to any order issued pursuant to this paragraph (b). The restraint shall be endorsed upon the fiduciary's letters, if any.
   3. Additional restrictions on the powers of the fiduciary. The restrictions shall be endorsed upon the fiduciary's letters, if any.
   4. The suspension of the fiduciary if the court determines that the fiduciary has violated his, her, or its fiduciary duties. If a court orders the suspension of a fiduciary pursuant to this paragraph (d), the court shall direct that the suspension be endorsed upon the fiduciary's letters, if any.
   5. The appointment of a temporary or permanent successor fiduciary;
   6. A review of the fiduciary's conduct. If a court orders a review of the fiduciary's conduct, the court shall specify the scope and duration of the review in the court's order.
   7. A surcharge or sanction of the fiduciary pursuant to section 15-10-504;
   8. The removal of the fiduciary; or
   9. Such further relief as the court deems appropriate to protect the ward or protected person or the assets of the estate.
3. Removal of a fiduciary - procedures. A court may remove a fiduciary for cause at any time, and the following provisions apply:
   1. If a court orders the removal of a fiduciary, the court shall direct by order the disposition of the assets remaining in the name of, or under the control of, the fiduciary being removed.
   2. If a court orders the removal of a fiduciary, the court shall direct that the fiduciary's letters, if any, be revoked and that such revocation be endorsed upon the fiduciary's letters, if any.
   3. Cause for removal of a fiduciary exists when:
      1. Removal would be in the best interests of the estate;
      2. It is shown that the fiduciary or the person seeking the fiduciary's appointment intentionally misrepresented material facts in the proceedings leading to the fiduciary's appointment; or
      3. The fiduciary has disregarded an order of the court, has become incapable of discharging the duties of the office, or has mismanaged the estate or failed to perform any duty pertaining to the office.
4. Petition for removal - temporary restraints on fiduciary powers. After a fiduciary receives notice of the filing of a petition for his, her, or its removal, the fiduciary shall not act except to account, to correct maladministration, or to preserve the estate.

Source: L. 2008: Entire part added, p. 478, § 1, effective July 1. L. 2016: (1), (2)(e), (2)(f), (2)(g), and (2)(h) amended and (3) and (4) added, (SB 16-131), ch. 286, p. 1163, § 1, effective August 10. L. 2020: (1) amended, (SB 20-129), ch. 270, p. 1318, § 5, effective September 1.

15-10-504. Surcharge - contempt - sanctions against fiduciaries.

1. Notice. Except as provided in subsection (3) of this section, notice to a fiduciary concerning any matters governed by the provisions of this section shall be provided pursuant to section 15-10-505.
2. Surcharge.
   1. If a court, after a hearing, determines that a breach of fiduciary duty has occurred or an exercise of power by a fiduciary has been improper, after applying the standards of care applicable to each fiduciary in a proceeding, the court may surcharge the fiduciary for any damage or loss to the estate, beneficiaries, or interested persons. Such damages may include compensatory damages, interest, and attorney fees and costs. When allocating any such damages among fiduciaries, the court shall consider the standards of care applicable to the fiduciaries in the proceeding.
   2. In awarding attorney fees and costs pursuant to this section, a court may consider the provisions of part 6 of this article 10 and shall consider the standards of care applicable to the fiduciaries in the proceeding.
3. Contempt proceedings against fiduciary. Nothing in this part 5 shall be interpreted to limit or restrict a court's authority to proceed against a fiduciary for direct contempt as provided in rule 107 of the Colorado rules of civil procedure. In addition, if a fiduciary fails to comply with an order of a court issued pursuant to this part 5, the court may proceed against the fiduciary for indirect contempt as provided in rule 107 of the Colorado rules of civil procedure. A court may initiate indirect contempt proceedings on its own motion or upon the filing of a motion supported by affidavit as described in rule 107 of the Colorado rules of civil procedure.
4. Sanctions. If a court determines that a breach of fiduciary duty has occurred or an exercise of power by a fiduciary has been improper, the court, after a hearing, may order such other sanctions as the court deems appropriate, but the court shall take into account the standards of care applicable to each fiduciary in the proceeding.
5. Remedies. If remedies are sought against a directed trustee for complying with the direction of a trust director under the "Colorado Uniform Directed Trust Act", part 8 of article 16 of this title 15, or comparable arrangement created under the terms of a trust, the court shall take into account the standards of care applicable to each fiduciary in the proceeding when apportioning damages, fees, costs, or fault among the fiduciaries.

Source: L. 2008: Entire part added, p. 480, § 1, effective July 1. L. 2011: (2)(b) amended, (SB 11-083), ch. 101, p. 302, § 2, effective August 10. L. 2019: (2) and (4) amended and (5) added, (SB 19-105), ch. 51, p. 175, § 11, effective August 2.

15-10-505. Notice to fiduciary - current address on file.

1. In all actions undertaken pursuant to this part 5, the following provisions shall govern notice to fiduciaries:
   1. In emergency situations. If it appears to a court that an emergency exists because there is an imminent risk of substantial harm to a ward's or protected person's health, safety, or welfare or to the financial interests of an estate, the court may take appropriate action and issue an order with or without prior notice to a fiduciary as the court determines appropriate based upon the nature of the emergency. If a fiduciary of an estate is not present when an emergency order is entered concerning the administration of the estate, the court shall attempt to notify the fiduciary of the court's action and mail a copy of the court's order to the fiduciary at the fiduciary's last address of record on file with the court. Notice of the court's order shall also be served, pursuant to section 15-10-401, upon all interested persons or as the court directs. Notice of all hearings set under section 15-10-503 (1) shall be given pursuant to section 15-10-401.
   2. In nonemergency situations. In nonemergency situations, notice to a fiduciary shall be governed by section 15-10-401.
   3. Contempt. For a hearing to determine possible contempt of a fiduciary, the court shall provide notice to the fiduciary as required by rule 107 of the Colorado rules of civil procedure.
2. Fiduciary's responsibility to keep current address in court file. Every fiduciary appointed by a court is required to keep his, her, or its current address and telephone number on file with the court. The fiduciary shall promptly notify the court of any change in the fiduciary's address or telephone number.

Source: L. 2008: Entire part added, p. 481, § 1, effective July 1.

15-10-601. Definitions.

As used in this part 6, unless the context otherwise requires:

1. "Estate" means the property of the decedent, trust, or other person whose affairs are subject to this code or any code included as part of this title 15 as the estate is originally constituted and as the estate exists from time to time during administration. "Estate" includes custodial property as described in the "Colorado Uniform Transfers to Minors Act", article 50 of title 11; custodial trust property as described in the "Colorado Uniform Custodial Trust Act", article 1.5 of this title 15; and the property of a principal that is subject to a power of attorney.
2. "Fiduciary" means:
   1. A personal representative, guardian, conservator, trust director, or trustee;
   2. A custodian as described in the "Colorado Uniform Transfers to Minors Act", article 50 of title 11, C.R.S.;
   3. A custodial trustee as described in the "Colorado Uniform Custodial Trust Act", article 1.5 of this title;
   4. An agent as defined in sections 15-10-201 (1), 15-14-602 (3), and 15-14-702 (1); and
   5. A public administrator as described in section 15-12-619.
3. 1. "Governing instrument" means a will or a trust or a donative, appointive, or nominative instrument of any other type, including but not limited to:
      1. An instrument that creates a custodial transfer as described in the "Colorado Uniform Transfers to Minors Act", article 50 of title 11, C.R.S.;
      2. A custodial trust as described in the "Colorado Uniform Custodial Trust Act", article 1.5 of this title;
      3. A medical durable power of attorney as described in section 15-14-506;
      4. An agency instrument as defined in section 15-14-602 (2);
      5. A power of attorney as defined in section 15-14-702 (7);
      6. A court order appointing a guardian as described in parts 2 and 3 of article 14 of this title; and
      7. A court order appointing a conservator as described in part 4 of article 14 of this title.
   2. "Governing instrument" does not include a deed; an insurance or annuity policy; a multiple-party account; a security registered in beneficiary form; a pension; a profit-sharing, retirement, or similar benefit plan; or an individual retirement account.

Source: L. 2011: Entire part added, (SB 11-083), ch. 101, p. 295, § 1, effective August 10. L. 2018: (1) amended, (SB 18-180), ch. 169, p. 1193, § 9, effective January 1, 2019. L. 2019: (2)(a) amended, (SB 19-105), ch. 51, p. 176, § 12, effective August 2.

15-10-602. Recovery of reasonable compensation and costs.

1. A fiduciary and his or her lawyer are entitled to reasonable compensation for services rendered on behalf of an estate.
2. A lawyer hired by a respondent, ward, or protected person is entitled to reasonable compensation and costs incurred for the legal representation the lawyer provides for the respondent, ward, or protected person.
3. A third party who performs services at the request of a court is entitled to reasonable compensation.
4. A person's entitlement to compensation or costs shall not limit or remove a court's inherent authority, discretion, and responsibility to determine the reasonableness of compensation and costs when appropriate.
5. Except as limited or otherwise restricted by a court order, compensation and costs that may be recovered pursuant to this section may be paid directly or reimbursed without a court order. After a fiduciary receives notice of proceedings for his, her, or its removal, the fiduciary shall not pay compensation or attorney fees and costs from the estate without an order of the court. A court shall order a person who receives excessive compensation or payment for inappropriate costs to make appropriate refunds.
6. Except as provided in sections 15-10-605 (2), (3), and (4); 15-14-318 (4); and 15-14-431 (5), if any fiduciary or person with priority for appointment as personal representative, conservator, guardian, agent, custodian, or trustee defends or prosecutes a proceeding in good faith, whether successful or not, the fiduciary or person is entitled to receive from the estate reimbursement for reasonable costs and disbursements, including but not limited to reasonable attorney fees.
7. 1. Except as otherwise provided in part 5 of this article or in this part 6, a nonfiduciary or his or her lawyer is not entitled to receive compensation from an estate.
   2. If a lawyer or another person not appointed by the court provides services that result in an order beneficial to the estate, respondent, ward, or protected person, the lawyer or other person not appointed by the court may receive costs and reasonable compensation from the estate as provided below:
      1. The lawyer or other person shall file a request for compensation for services or costs alleged to have resulted in the order within thirty-five days after the entry of the order or within a greater or lesser time as the court may direct. Any objection thereto must be filed within twenty-one days after the filing of the request for compensation or costs. Any reply to the objection must be filed within seven days after the filing of the objection.
      2. After a request for compensation or costs or an objection to such a request, if any, has been filed, the court shall determine, without a hearing, the benefit, if any, that the estate received from the services provided.
      3. If the court determines that a compensable benefit resulted from the services, then the person requesting compensation or costs shall submit to the court only those fees or costs purportedly incurred in providing the beneficial services. If no objection to those fees and costs is filed, the court shall determine the amount of compensation or costs to be awarded for the benefit, without a hearing.
      4. An interested person disputing the reasonableness of the amount of compensation or costs requested for the beneficial services may file an objection. If an objection is filed, the proceedings to resolve the dispute shall be governed by section 15-10-604.
   3. In determining a reasonable amount of compensation or costs, the court may take into account, in addition to the factors set forth in section 15-10-603 (3):
      1. The value of a benefit to the estate, respondent, ward, or protected person;
      2. The number of parties involved in addressing the issue;
      3. The efforts made by the lawyer or person not appointed by the court to reduce and minimize issues; and
      4. Any actions by the lawyer or person not appointed by the court that unnecessarily expanded issues or delayed or hindered the efficient administration of the estate.
   4. For the purposes of this subsection (7), services rendered by a lawyer or a person not appointed by a court that confer a benefit to an estate, respondent, ward, or protected person are those significant, demonstrable, and generally noncumulative services that assist the court in resolving material issues in the administration of an estate. By way of example and not limitation, such benefits may result in significantly increasing or preventing a significant decrease in the size of the estate, preventing or exposing maladministration or a material breach of fiduciary duty, or clarifying and upholding a decedent's, settlor's, principal's, respondent's, ward's, or protected person's intent with respect to a material issue in dispute.
8. A fiduciary who is a member of a law firm may use the services of the law firm and charge for the reasonable value of the services of the members and staff of the firm that assist the fiduciary in performing his or her duties.
9. Every application or petition for appointment of a fiduciary filed under this code, including without limitation those required under sections 15-12-301, 15-12-402, 15-12-614, 15-12-621, 15-12-622, 15-14-202, 15-14-204, 15-14-304, and 15-14-403, shall include a statement by the applicant or petitioner disclosing the basis upon which any compensation is to be charged to the estate by the fiduciary and his or her or its counsel or shall state that the basis has not yet been determined. The disclosure statement shall specifically describe, as is applicable, the hourly rates to be charged, any amounts to be charged pursuant to a published fee schedule, including the rates and basis for charging fees for any extraordinary services, and any other bases upon which a fee charged to the estate will be calculated. This disclosure obligation shall be continuing in nature so as to require supplemental disclosures if material changes to the basis for charging fees take place.

Source: L. 2011: Entire part added, (SB 11-083), ch. 101, p. 296, § 1, effective August 10. L. 2012: (7)(b)(I) amended, (SB 12-175), ch. 208, p. 837, § 41, effective July 1. L. 2016: (5), (6), and (7)(b)(I) amended, (SB 16-131), ch. 286, p. 1166, § 5, effective August 10.

15-10-603. Factors in determining the reasonableness of compensation and costs.

1. A court may review and determine:
   1. The reasonableness of the compensation of any fiduciary, lawyer, or other person who:
      1. Is employed on behalf of an estate, fiduciary, respondent, ward, or protected person;
      2. Is appointed by the court; or
      3. Provides beneficial services to an estate, respondent, ward, or protected person; and
   2. The appropriateness of any cost sought to be paid by or recovered from an estate.
2. In considering the reasonableness of the compensation, there shall be no presumption that any method of charging a fee for services rendered to an estate, fiduciary, principal, respondent, ward, or protected person is per se unreasonable. Regardless of the method used for charging a fee, in determining appropriate compensation, the court shall apply the standard of reasonableness in light of all relevant facts and circumstances.
3. The court shall consider all of the factors described in this subsection (3) in determining the reasonableness of any compensation or cost. The court may determine the weight to be given to each factor and to any other factor the court considers relevant in reaching its decision:
   1. The time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the service properly;
   2. The likelihood, if apparent to the fiduciary, that the acceptance of the particular employment will preclude the person employed from other employment;
   3. 1. The compensation customarily charged in the community for similar services with due consideration and allowance for the complexity or uniqueness of any administrative or litigated issues, the need for and local availability of specialized knowledge or expertise, and the need for and advisability of retaining outside fiduciaries or lawyers to avoid potential conflicts of interest;
      2. As used in this subsection (3), unless the context otherwise requires, "community" means the general geographical area in which the estate is being administered or in which the respondent, ward, or protected person resides.
   4. The nature and size of the estate, the liquidity or illiquidity of the estate, and the results and benefits obtained during the administration of the estate;
   5. Whether and to what extent any litigation has taken place and the results of such litigation;
   6. The life expectancy and needs of the respondent, ward, protected person, devisee, beneficiary, or principal;
   7. The time limitations imposed on or by the fiduciary or by the circumstances of the administration of the estate;
   8. The adequacy of any detailed billing statements upon which the compensation is based;
   9. Whether the fiduciary has charged variable rates that reflect comparable payment standards in the community for like services;
   10. The expertise, special skills, reputation, and ability of the person performing the services and, in the case of a fiduciary, whether and to what extent the fiduciary has had any prior experience in administering estates similar to those for which compensation is sought;
   11. The terms of a governing instrument;
   12. The various courses of action available to a fiduciary or an individual seeking compensation for a particular service or alleged benefit and whether the course of action taken was reasonable and appropriate under the circumstances existing at the time the service was performed; and
   13. The various courses of action available to a fiduciary or an individual seeking compensation for a particular service or alleged benefit and the cost-effectiveness of the action taken under the circumstances existing at the time the service was performed.
4. If a governing instrument provides that a fiduciary is entitled to receive compensation in accordance with a published fee schedule in effect at the time the services are performed, fees charged in accordance with the published fee schedule shall be presumed to be reasonable. The absence of such a provision in a governing instrument shall not preclude the fiduciary from receiving compensation in accordance with a published fee schedule in effect at the time the services are performed.
5. Nothing in this section shall be interpreted to prohibit members or employees of a professional fiduciary's organization or law firm, including partners, associates, paralegals, law clerks, trust officers, caregivers, and social workers, from collaborating on the same service so long as the collaboration is reasonable and the total compensation charged for the service in the aggregate is reasonable under the circumstances.

Source: L. 2011: Entire part added, (SB 11-083), ch. 101, p. 298, § 1, effective August 10. L. 2013: (3)(j) amended, (SB 13-077), ch. 190, p. 767, § 2, effective August 7.

15-10-604. Fee disputes - process and procedure.

1. A dispute over the reasonableness of a request for compensation or costs authorized by this part 6 shall be resolved in accordance with the factors set forth in section 15-10-603 (3) and the process and procedure set forth in this section.
2. For purposes of this section, a fee dispute shall be deemed to have arisen when an objection to compensation or costs has been filed in a proceeding.
3. After the objection to compensation or costs has been filed, the person requesting compensation or costs shall have thirty-five days, or a greater or lesser time as the court may direct, to make available to the objector for inspection and copying all documentation that the person deems necessary to establish the reasonableness of the compensation and costs in consideration of the factors set forth in section 15-10-603 (3) and to certify to the court that such documentation was made available to the objector on a certain date. The objector shall then have fourteen days, or a greater or lesser time as the court may direct, to file specific written objections to such compensation and costs based on the factors set forth in section 15-10-603 (3). The fourteen days shall commence on the date that the person makes the documentation available to the objector or upon the filing of the person's certification, whichever is later. The court may permit further discovery on the compensation and cost issues raised by the pleadings only upon good cause shown.
4. Subject to the court's inherent authority to order alternative dispute resolution methods, the court shall determine, after notice and hearing, the amount of compensation and costs it considers to be reasonable and shall issue its findings of fact and conclusions of law referencing the factors set forth in section 15-10-603 (3) and any other factors it deems relevant to its decision.

Source: L. 2011: Entire part added, (SB 11-083), ch. 101, p. 300, § 1, effective August 10. L. 2012: (3) amended, (SB 12-175), ch. 208, p. 837, § 42, effective July 1.

15-10-605. Compensation and costs - assessment - limitations.

1. If the court determines that any proceedings pursuant to this code or any pleadings filed in such proceedings were brought, defended, or filed in bad faith, the court may assess the fees and the costs, including reasonable attorney fees, incurred by the fiduciary and other affected parties in responding to the proceedings or pleadings, against an estate, party, person, or entity that brought or defended the proceedings or filed the pleadings in bad faith. Nothing in this section is intended to limit any other remedy, sanction, or surcharge provided by law.
2. If any person entitled to compensation under this part 6 is required to defend the reasonableness of compensation or costs in a proceeding, the court may review the fees and costs incurred by the person in defending the compensation or costs, and the fees incurred in challenging the compensation and costs, and may assess the reasonable fees and costs incurred in the proceeding as the court deems equitable. The court may allocate fees or costs assessed pursuant to this subsection (2) in favor of or against the estate or any party, person, or entity involved in the proceeding as justice and equity may require.
3. A person who is unsuccessful in defending the reasonableness of compensation or costs at a hearing shall not be entitled to recover the fees or costs of that defense as the court deems equitable.
4. A fiduciary who is unsuccessful in defending the fiduciary's conduct in a proceeding pursuant to this code alleging breach of fiduciary duty shall not recover the fees or costs of that defense as the court deems equitable.

Source: L. 2011: Entire part added, (SB 11-083), ch. 101, p. 301, § 1, effective August 10.

15-10-606. Applicability.

1. This part 6 applies to:
   1. An estate existing before, on, or after August 10, 2011; and
   2. Proceedings to determine the reasonableness of compensation and costs commenced on or after August 10, 2011.
2. This part 6 does not apply to proceedings to determine the reasonableness of compensation and costs commenced before August 10, 2011, unless the court determines that the application of this part 6 would not prejudice the rights of any party to the proceeding and the court directs otherwise.

Source: L. 2011: Entire part added, (SB 11-083), ch. 101, p. 302, § 1, effective August 10.

15-11-101. Intestate estate.

1. Any part of a decedent's estate not effectively disposed of by will or otherwise passes by intestate succession to the decedent's heirs as prescribed in this code, except as modified by the decedent's will.
2. A decedent by will may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession. If that individual or a member of that class survives the decedent, the share of the decedent's intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class had disclaimed the intestate share.

Source: L. 94: Entire part R&RE, p. 976, § 3, effective July 1, 1995. L. 2022: (2) amended, (SB 22-092), ch. 60, p. 271, § 1, effective August 10.

Editor's note: This section is similar to former § 15-11-101 as it existed prior to 1995.

15-11-102. Share of spouse.

The various possible circumstances describing the decedent, his or her surviving spouse, and their surviving descendants, if any, are set forth in this section to be utilized in determining the intestate share of the decedent's surviving spouse. If more than one circumstance is applicable, the circumstance that produces the largest share for the surviving spouse shall be applied. The intestate share of a decedent's surviving spouse is:

1. The entire intestate estate if:
   1. No descendant or parent of the decedent survives the decedent; or
   2. All of the decedent's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent;
2. The first three hundred thousand dollars, plus three-fourths of any balance of the intestate estate, if no descendant of the decedent survives the decedent, but a parent of the decedent survives the decedent;
3. The first two hundred twenty-five thousand dollars, plus one-half of any balance of the intestate estate, if all of the decedent's surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent;
4. The first one hundred fifty thousand dollars, plus one-half of any balance of the intestate estate, if one or more of the decedent's surviving descendants are not descendants of the surviving spouse.
5. (Deleted by amendment, L. 2009, (HB 09-1287), ch. 310, p. 1671, § 3, effective July 1, 2010.)
6. The dollar amounts stated in this section shall be increased or decreased based on the cost of living adjustment as calculated and specified in section 15-10-112.

Source: L. 94: Entire part R&RE, p. 976, § 3, effective July 1, 1995. L. 95: Entire section amended, p. 352, § 1, effective July 1. L. 2009: Entire section amended, (HB 09-1287), ch. 310, p. 1671, § 3, effective July 1, 2010.

Editor's note: This section is similar to former § 15-11-102 as it existed prior to 1995.

Cross references: For the descent and distribution of property of aliens, see § 15-11-111. For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

COMMENT

Purpose and Scope of 1990 Revisions. This section was revised in 1990 to give the surviving spouse a larger share than the pre-1990 UPC. If the decedent leaves no surviving descendants and no surviving parent or if the decedent does leave surviving descendants but neither the decedent nor the surviving spouse has other descendants, the surviving spouse is entitled to all of the decedent's intestate estate.

If the decedent leaves no surviving descendants but does leave a surviving parent, the decedent's surviving spouse receives the first $300,000 plus three-fourths of the balance of the intestate estate.

If the decedent leaves surviving descendants and if the surviving spouse (but not the decedent) has other descendants, and thus the decedent's descendants are unlikely to be the exclusive beneficiaries of the surviving spouse's estate, the surviving spouse receives the first $225,000 plus one-half of the balance of the intestate estate. The purpose is to assure the decedent's own descendants of a share in the decedent's intestate estate when the estate exceeds $225,000.

If the decedent has other descendants, the surviving spouse receives $150,000 plus one-half of the balance. In this type of case, the decedent's descendants who are not descendants of the surviving spouse are not natural objects of the bounty of the surviving spouse.

Note that in all the cases where the surviving spouse receives a lump sum plus a fraction of the balance, the lump sums must be understood to be in addition to the probate exemptions and allowances to which the surviving spouse is entitled under Part 4. These can add up to a minimum of $64,500.

Under the pre-1990 Code, the decedent's surviving spouse received the entire intestate estate only if there were neither surviving descendants nor parents. If there were surviving descendants, the descendants to one-half of the balance of the estate in excess of $50,000 (for example, $25,000 in a $100,000 estate). If there were no surviving descendants, but there was a surviving parent or parents, the parent or parents took that one-half of the balance in excess of $50,000.

2008 Cost-of-Living Adjustments. As revised in 1990, the dollar amount in paragraph (2) was $200,000, in paragraph (3) was $150,000, and in paragraph (4) was $100,000. To adjust for inflation, these amounts were increased in 2008 to $300,000, $225,000, and $150,000 respectively. The dollar amounts in these paragraphs are subject to annual cost-of-living adjustments under Section 1-109.

References. The theory of this section is discussed in Waggoner, "The Multiple-Marriage Society and Spousal Rights Under the Revised Uniform Probate Code", 76 Iowa L. Rev. 223, 229-35 (1991).

Empirical studies support the increase in the surviving spouse's intestate share, reflected in the revisions of this section. The studies have shown that testators in smaller estates (which intestate estates overwhelmingly tend to be) tend to devise their entire estates to their surviving spouses, even when the couple has children. See C. Shammas, M. Salmon & M. Bahlin, Inheritance in America from Colonial Times to the Present 184-85 (1987); M. Sussman, J. Cates & D. Smith, The Family and Inheritance (1970); Browder, "Recent Patterns of Testate Succession in the United States and England", 67 Mich. L. Rev. 1303, 1307-08 (1969); Dunham, "The Method, Process and Frequency of Wealth Transmission at Death", 30 U. Chi. L. Rev. 241, 252 (1963); Gibson, "Inheritance of Community Property in Texas -- A Need for Reform", 47 Texas L. Rev. 359, 364-66 (1969); Price, "The Transmission of Wealth at Death in a Community Property Jurisdiction", 50 Wash. L. Rev. 277, 283, 311-17 (1975). See also Fellows, Simon & Rau, "Public Attitudes About Property Distribution at Death and Intestate Succession Laws in the United States", 1978 Am. B. F. Research J. 319, 355-68; Note, "A Comparison of Iowans' Dispositive Preferences with Selected Provisions of the Iowa and Uniform Probate Codes", 63 Iowa L. Rev. 1041, 1091-92 (1978).

Cross Reference. See Section 2-802 for the definition of spouse, which controls for purposes of intestate succession.

Historical Note. This Comment was revised in 2008.

15-11-102.5. Share of designated beneficiary.

1. If the decedent is survived by a person with the right to inherit real or personal property from the decedent in a designated beneficiary agreement executed pursuant to article 22 of this title, the intestate share of the decedent's designated beneficiary is:
   1. The entire estate if no descendent of the decedent survives the decedent; or
   2. One half of the intestate estate if one or more descendants of the decedent survive the decedent.

Source: L. 2010: Entire section added, (SB 10-199), ch. 374, p. 1748, § 4, effective July 1.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

15-11-103. Share of heirs other than surviving spouse and designated beneficiary - definitions.

1. Definitions. In this section:
   1. "Deceased parent", "deceased grandparent", or "deceased spouse" means a parent, grandparent, or spouse who either predeceased the decedent or is deemed under this article 11 to have predeceased the decedent.
   2. "Surviving spouse", "surviving descendant", "surviving parent", or "surviving grandparent" means a spouse, descendant, parent, or grandparent who neither predeceased the decedent nor is deemed under this article 11 to have predeceased the decedent.
2. Heirs other than surviving spouse and designated beneficiary. Any part of the intestate estate not passing to the decedent's surviving spouse under section 15-11-102, or to the decedent's surviving designated beneficiary under section 15-11-102.5, or the entire estate if there is no surviving spouse and no surviving designated beneficiary with the right to inherit real or personal property from the decedent through intestate succession, passes to the decedent's descendants, parents, or other heirs as provided in subsections (3) to (9) of this section.
3. Surviving descendants. If a decedent is survived by one or more descendants, any part of the intestate estate not passing to the surviving spouse or surviving designated beneficiary passes per capita at each generation to the decedent's surviving descendants.
4. Surviving parent. If a decedent is not survived by a descendant but is survived by one or more parents, any part of the intestate estate not passing to the surviving spouse or surviving designated beneficiary is distributed as follows:
   1. The intestate estate or part is divided into as many equal shares as there are:
      1. Surviving parents; and
      2. Deceased parents with one or more surviving descendants, if any, as determined under subsection (5) of this section.
   2. One share passes to each surviving parent.
   3. The balance of the intestate estate or part, if any, passes per capita at each generation to the surviving descendants of the decedent's deceased parents, as determined under subsection (5) of this section.
5. When parent survives - computation of shares of surviving descendants of deceased parent. The following rules apply under subsection (4) of this section to determine whether a deceased parent of the decedent is treated as having a surviving descendant:
   1. If all the surviving descendants of one or more deceased parents also are descendants of one or more surviving parents and none of those surviving parents has any other surviving descendant, those descendants are deemed to have predeceased the decedent.
   2. If two or more deceased parents have the same surviving descendants and none of those deceased parents has any other surviving descendant, those deceased parents are deemed to be one deceased parent with surviving descendants.
6. Surviving descendant of deceased parent. If a decedent is not survived by a descendant or parent but is survived by one or more descendants of a parent, the intestate estate passes per capita at each generation to the surviving descendants of the decedent's deceased parents.
7. Surviving grandparent. If a decedent is not survived by a descendant, parent, or descendant of a parent but is survived by one or more grandparents, the intestate estate is distributed as follows:
   1. The intestate estate is divided into as many equal shares as there are:
      1. Surviving grandparents; and
      2. Deceased grandparents with one or more surviving descendants, if any, as determined under subsection (8) of this section.
   2. One share passes to each surviving grandparent.
   3. The balance of the intestate estate, if any, passes per capita at each generation to the surviving descendants of the decedent's deceased grandparents, as determined under subsection (8) of this section.
8. When grandparent survives - computation of shares of surviving descendants of deceased grandparent. The following rules apply under subsection (7) of this section to determine whether a deceased grandparent of the decedent is treated as having a surviving descendant:
   1. If all the surviving descendants of one or more deceased grandparents also are descendants of one or more surviving grandparents and none of those surviving grandparents has any other surviving descendant, those descendants are deemed to have predeceased the decedent.
   2. If two or more deceased grandparents have the same surviving descendants and none of those deceased grandparents has any other surviving descendant, those deceased grandparents are deemed to be one deceased grandparent with surviving descendants.
9. Surviving descendant of deceased grandparent. If a decedent is not survived by a descendant, parent, descendant of a parent, or grandparent but is survived by one or more descendants of a grandparent, the intestate estate passes per capita at each generation to the surviving descendants of the decedent's deceased grandparents.

Source: L. 94: Entire part R&RE, p. 977, § 3, effective July 1, 1995. L. 95: Entire section amended, p. 353, § 2, effective July 1. L. 2009: Entire section amended, (HB 09-1260), ch. 107, p. 443, § 7, effective July 1; entire section amended, (HB 09-1287), ch. 310, p. 1672, § 4, effective July 1, 2010. L. 2010: IP, (1), and (7) amended, (SB 10-199), ch. 374, p. 1748, § 5, effective July 1. L. 2022: Entire section R&RE (SB 22-092), ch. 60, p. 271, § 2, effective August 10.

Editor's note: (1) This section is similar to former § 15-11-103 as it existed prior to 1995.

(2) Amendments to this section by House Bill 09-1260 and House Bill 09-1287 were harmonized, effective July 1, 2010; except that the second sentence of subsection (7) and the provisions of subsection (8), as amended by House Bill 09-1260, were superseded by House Bill 09-1287, effective July 1, 2010.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

COMMENT

This section provides for inheritance by descendants of the decedent, parents and their descendants, and grandparents and collateral relatives descended from grandparents; in line with modern policy, it eliminates more remote relatives tracing through great-grandparents.

1990 Revisions. The 1990 revisions were stylistic and clarifying, not substantive. The pre-1990 version of this section contained the phrase "if they are all of the same degree of kinship to the decedent they take equally (etc.)." That language was removed. It was unnecessary and confusing because the system of representation in Section 2-106 gives equal shares if the decedent's descendants are all of the same degree of kinship to the decedent.

The word "descendants" replaced the word "issue" in this section and throughout the 1990 revisions of Article II. The term issue is a term of art having a biological connotation. Now that inheritance rights, in certain cases, are extended to adopted children, the term descendants is a more appropriate term.

2008 Revisions. In addition to making a few stylistic changes, which were not intended to change meaning, the 2008 revisions divided this section into two subsections. New subsection (b) grants inheritance rights to descendants of the intestate's deceased spouse(s) who are not also descendants of the intestate. The term deceased spouse refers to an individual to whom the intestate was married at the individual's death.

Historical Note. This Comment was revised in 2008.

15-11-104. Requirement of survival by one hundred twenty hours - individual gestation.

1. For purposes of intestate succession and exempt property, and except as otherwise provided in paragraph (b) of this subsection (1), the following rules apply:
   1. An individual born before a decedent's death who fails to survive the decedent by one hundred twenty hours is deemed to have predeceased the decedent. If it is not established by clear and convincing evidence that an individual born before the decedent's death survived the decedent by one hundred twenty hours, it is deemed that the individual failed to survive for the required period.
   2. An individual in gestation at a decedent's death is deemed to be living at the decedent's death if the individual lives one hundred twenty hours after birth. If it is not established by clear and convincing evidence that an individual in gestation at the decedent's death lived one hundred twenty hours after birth, it is deemed that the individual failed to survive for the required period.
2. This section is not to be applied if its application would result in a taking of intestate estate by the state under section 15-11-105.

Source: L. 94: Entire part R&RE, p. 978, § 3, effective July 1, 1995. L. 2009: Entire section amended, (HB 09-1287), ch. 310, p. 1673, § 5, effective July 1, 2010.

Editor's note: This section is similar to former § 15-11-104 as it existed prior to 1995.

Cross references: For requirement that a devisee survive a testator by one hundred twenty hours, see § 15-11-702. For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

COMMENT

This section avoids multiple administrations and in some instances prevents the property from passing to persons not desired by the decedent. See Halbach & Waggoner, The UPC's New Survivorship and Antilapse Provisions, 55 Alb. L. Rev. 1091, 1094-1099 (1992). The 120-hour period will not delay the administration of a decedent's estate because Sections 3-302 and 3-307 prevent informal issuance of letters for a period of five days from death. Subsection (b) prevents the survivorship requirement from defeating inheritance by the last eligible relative of the intestate who survives for any period.

In the case of a surviving spouse who survives the 120-hour period, the 120-hour requirement of survivorship does not disqualify the spouse's intestate share for the federal estate-tax marital deduction. See Int.Rev.Code § 2056(b)(3).

2008 Revisions. In 2008, this section was reorganized, revised, and combined with former Section 2-108. What was contained in former Section 2-104 now appears as subsections (a)(1) and (b). What was contained in former Section 2-108 now appears as subsection (a)(2). Subsections (a)(1) and (a)(2) now distinguish between an individual who was born before the decedent's death and an individual who was in gestation at the decedent's death. With respect to an individual who was born before the decedent's death, it must be established by clear and convincing evidence that the individual survived the decedent by 120 hours. For a comparable provision applicable to wills and other governing instruments, see Section 2-702. With respect to an individual who was in gestation at the decedent's death, it must be established by clear and convincing evidence that the individual lived for 120 hours after birth.

Historical Note. This Comment was revised in 2008.

15-11-105. No taker.

If there is no taker under the provisions of this article, the intestate estate passes to the state of Colorado, subject to the provisions of section 15-12-914.

Source: L. 94: Entire part R&RE, p. 978, § 3, effective July 1, 1995.

Editor's note: This section is similar to former § 15-11-105 as it existed prior to 1995.

15-11-106. Per capita at each generation.

1. Definitions. In this section:
   1. "Deceased descendant", "deceased parent", "deceased grandparent", or "deceased spouse" means a descendant, parent, grandparent, or spouse who either predeceased the decedent or is deemed under this subpart 1 to have predeceased the decedent.
   2. "Surviving descendant" means a descendant who neither predeceased the decedent nor is deemed under this subpart 1 to have predeceased the decedent.
2. Decedent's descendants. If, under section 15-11-103 (3), all or part of a decedent's intestate estate passes "per capita at each generation" to the decedent's surviving descendants, the estate or part is divided into as many equal shares as there are (i) surviving descendants in the generation nearest to the decedent which contains one or more surviving descendants and (ii) deceased descendants in the same generation who left surviving descendants, if any. Each surviving descendant in the nearest generation is allocated one share. The remaining shares, if any, are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent.
3. Descendants of parent when parent survives. If a decedent is survived by one or more parents and, under section 15-11-103 (4) and (5), the balance of the decedent's intestate estate or part passes per capita at each generation to the surviving descendants of one or more of the decedent's deceased parents, the balance passes to those descendants as if they were the decedent's surviving descendants under subsection (2) of this section.
4. Descendants of parent when no parent survives. If a decedent is not survived by a parent and, under section 15-11-103 (6), the decedent's intestate estate passes per capita at each generation to the surviving descendants of one or more of the decedent's deceased parents, the intestate estate passes to those descendants as if they were the decedent's surviving descendants under subsection (2) of this section.
5. Descendants of grandparent when grandparent survives. If a decedent is survived by one or more grandparents and, under section 15-11-103 (7) and (8), the balance of the decedent's intestate estate passes per capita at each generation to the surviving descendants of one or more of the decedent's deceased grandparents, the balance passes to those descendants as if they were the decedent's surviving descendants under subsection (2) of this section.
6. Descendants of grandparent when no grandparent survives. If a decedent is not survived by a grandparent and, under section 15-11-103 (9), the decedent's intestate estate passes per capita at each generation to the surviving descendants of one or more of the decedent's deceased grandparents, the intestate estate passes to those descendants as if they were the decedent's surviving descendants under subsection (2) of this section.

Source: L. 94: Entire part R&RE, p. 978, § 3, effective July 1, 1995. L. 95: (2) and (3) amended, p. 354, § 3, effective July 1. L. 2009: (2) and (3) amended, (HB 09-1260), ch. 107, p. 444, § 8, effective July 1. L. 2022: Entire section amended, (SB 22-092), ch. 60, p. 273, § 3, effective August 10.

Editor's note: This section is similar to former § 15-11-106 as it existed prior to 1995.

15-11-107. Inheritance without regard to number of common ancestors in same generation.

An heir inherits without regard to how many common ancestors in the same generation the heir shares with the decedent.

Source: L. 94: Entire part R&RE, p. 979, § 3, effective July 1, 1995. L. 2022: Entire section R&RE, (SB 22-092), ch. 60, p. 275, § 4, effective August 10.

Editor's note: This section is similar to former § 15-11-107 as it existed prior to 1995.

15-11-108. After-born heirs - repeal. (Repealed)

Source: L. 94: Entire part R&RE, p. 979, § 3, effective July 1, 1995. L. 2009: (2) added by revision, (HB 09-1287), ch. 310, pp. 1674, 1688, §§ 6, 17.

Editor's note: (1) This section was similar to former § 15-11-108 as it existed prior to 1995.

(2) Subsection (2) provided for the repeal of this section, effective July 1, 2010. (See L. 2009, pp. 1674, 1688.)

15-11-109. Advancements.

1. If an individual dies intestate as to all or a portion of the estate, property the decedent gave during the decedent's lifetime to an individual who, at the decedent's death, is an heir is treated as an advancement against the heir's intestate share only if (i) the decedent declared in a contemporaneous writing or the heir acknowledged in writing that the gift is an advancement, or (ii) the decedent's contemporaneous writing or the heir's written acknowledgment otherwise indicates that the gift is to be taken into account in computing the division and distribution of the decedent's intestate estate.
2. For the purposes of subsection (1) of this section, property advanced is valued as of the time the heir came into possession or enjoyment of the property or as of the time of the decedent's death, whichever first occurs.
3. If the recipient of the property fails to survive the decedent, the property is not taken into account in computing the division and distribution of the decedent's intestate estate, unless the decedent's contemporaneous writing provides otherwise.
4. An heir who has received from the intestate estate more than his or her share shall in no case be required to refund, except as otherwise provided by section 15-11-203.

Source: L. 94: Entire part R&RE, p. 979, § 3, effective July 1, 1995. L. 2022: Entire section amended, (SB 22-092), ch. 60, p. 275, § 5, effective August 10.

Editor's note: This section is similar to former § 15-11-110 as it existed prior to 1995.

15-11-110. Debts to decedent.

A debt owed to a decedent is not charged against the intestate share of any individual except the debtor. If the debtor fails to survive the decedent, the debt is not taken into account in computing the intestate share of the debtor's descendants.

Source: L. 94: Entire part R&RE, p. 979, § 3, effective July 1, 1995.

Editor's note: This section is similar to former § 15-11-111 as it existed prior to 1995.

Cross references: For an offset against a successor's interest for a noncontingent indebtedness to an estate, see § 15-12-903.

15-11-111. Alienage.

No individual is disqualified to take as an heir, devisee, grantee, lessee, mortgagee, assignee, or other transferee because the individual or an individual through whom he or she claims is or has been an alien.

Source: L. 94: Entire part R&RE, p. 980, § 3, effective July 1, 1995.

Editor's note: This section is similar to former § 15-11-112 as it existed prior to 1995.

15-11-112. Dower and courtesy abolished.

The estates of dower and courtesy are abolished.

Source: L. 94: Entire part R&RE, p. 980, § 3, effective July 1, 1995.

Editor's note: This section is similar to former § 15-11-113 as it existed prior to 1995.

15-11-113. Individual related to decedent through more than one line of relationship.

An individual who is related to the decedent through more than one line of relationship is entitled to only a single share based upon the relationship that would entitle the individual to the largest share. The individual and the individual's descendants are deemed to have predeceased the decedent with respect to a line of relationship resulting in a smaller share.

Source: L. 94: Entire part R&RE, p. 980, § 3, effective July 1, 1995. L. 2022: Entire section amended, (SB 22-092), ch. 60, p. 275, § 6, effective August 10.

Editor's note: This section is similar to former § 15-11-114 as it existed prior to 1995.

15-11-114. Parent barred from inheriting in certain circumstances.

1. A parent is barred from inheriting from or through a child of the parent if:
   1. The parent's parental rights were terminated and the parent-child relationship was not judicially reestablished; or
   2. The child died before reaching eighteen years of age and there is clear and convincing evidence that immediately before the child's death the parental rights of the parent could have been terminated under the laws of this state other than this code on the basis of nonsupport, abandonment, abuse, neglect, or other actions or inactions of the parent toward the child.
2. For the purpose of intestate succession from or through the deceased child, a parent who is barred from inheriting under this section is deemed to have predeceased the child.

Source: L. 94: Entire part R&RE, p. 980, § 3, effective July 1, 1995. L. 2009: (2) amended, (HB 09-1260), ch. 107, p. 444, § 9, effective July 1; entire section amended, (HB 09-1287), ch. 310, p. 1674 § 7, effective July 1, 2010. L. 2022: (2) amended, (SB 22-092), ch. 60, p. 275, § 7, effective August 10.

Editor's note: This section is similar to former § 15-11-109 as it existed prior to 1995.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101. For legal effects of a final decree of adoption, see § 19-5-211. For the legal effect of a final order of relinquishment, see § 19-5-104.

COMMENT

2008 Revisions. In 2008, this section replaced former Section 2-114(c), which provided: "(c) Inheritance from or through a child by either natural parent or his [or her] kindred is precluded unless that natural parent has openly treated the child as his [or hers], and has not refused to support the child."

Subsection (a)(1) recognizes that a parent whose parental rights have been terminated is no longer legally a parent.

Subsection (a)(2) addresses a situation in which a parent's parental rights were not actually terminated. Nevertheless, a parent can still be barred from inheriting from or through a child if the child died before reaching [18] years of age and there is clear and convincing evidence that immediately before the child's death the parental rights of the parent could have been terminated under law of this state other than this [code], but only if those parental rights could have been terminated on the basis of nonsupport, abandonment, abuse, neglect, or other actions or inactions of the parent toward the child.

Statutes providing the grounds for termination of parental rights include: Ariz. Rev. Stat. Ann. § 8-533; Conn. Gen. Stat. § 45a-717; Del. Code Ann. tit. 13 § 1103; Fla. Stat. Ann. § 39.806; Iowa Code § 600A.8; Kan. Stat. Ann. § 38-2269; Mich. Comp. L. Ann. § 712A.19b; Minn. Stat. Ann. § 260C.301; Miss. Code Ann. § 93-15-103; Mo. Rev. Stat. § 211.447; Tex. Fam. Code §§ 161.001 to .007.

15-11-115. Definitions.

In this subpart 2:

1. "Adoptee" means an individual who is adopted.
2. "Assisted reproduction" means a method of causing pregnancy other than sexual intercourse.
3. "Divorce" includes an annulment, dissolution of marriage, and declaration of invalidity of a marriage.
4. "Functioned as a parent of the child" means behaving toward a child in a manner consistent with being the child's parent and performing functions that are customarily performed by a parent, including fulfilling parental responsibilities toward the child, recognizing or holding out the child as the individual's child, materially participating in the child's upbringing, and residing with the child in the same household as a regular member of that household.
5. "Genetic father" means the man whose sperm fertilized the egg of a child's genetic mother. If the father-child relationship is established under the presumption of paternity under section 19-4-105, C.R.S., the term means only the man for whom that relationship is established.
6. "Genetic mother" means the woman whose egg was fertilized by the sperm of a child's genetic father.
7. "Genetic parent" means a child's genetic father or genetic mother.
8. "Incapacity" means the inability of an individual to function as a parent of a child because of the individual's physical or mental condition.
9. "Relative" means a grandparent or a descendant of a grandparent.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1675, § 8, effective July 1, 2010.

COMMENT

Scope. This section sets forth definitions that apply for purposes of the intestacy rules contained in Subpart 2 (Parent-Child Relationship).

Definition of "Adoptee". The term "adoptee" is not limited to an individual who is adopted as a minor but includes an individual who is adopted as an adult.

Definition of "Assisted Reproduction". The definition of "assisted reproduction" is copied from the Uniform Parentage Act § 102. Current methods of assisted reproduction include intrauterine insemination (previously and sometimes currently called artificial insemination), donation of eggs, donation of embryos, in-vitro fertilization and transfer of embryos, and intracytoplasmic sperm injection.

Definition of "Functioned as a Parent of the Child". The term "functioned as a parent of the child" is derived from the Restatement (Third) of Property: Wills and Other Donative Transfers. The Reporter's Note No. 4 to § 14.5 of the Restatement lists the following parental functions:

Custodial responsibility refers to physical custodianship and supervision of a child. It usually includes, but does not necessarily require, residential or overnight responsibility.

Decisionmaking responsibility refers to authority for making significant life decisions on behalf of the child, including decisions about the child's education, spiritual guidance, and health care.

Caretaking functions are tasks that involve interaction with the child or that direct, arrange, and supervise the interaction and care provided by others. Caretaking functions include but are not limited to all of the following:

1. satisfying the nutritional needs of the child, managing the child's bedtime and wake-up routines, caring for the child when sick or injured, being attentive to the child's personal hygiene needs including washing, grooming, and dressing, playing with the child and arranging for recreation, protecting the child's physical safety, and providing transportation;
2. directing the child's various developmental needs, including the acquisition of motor and language skills, toilet training, self-confidence, and maturation;
3. providing discipline, giving instruction in manners, assigning and supervising chores, and performing other tasks that attend to the child's needs for behavioral control and self-restraint;
4. arranging for the child's education, including remedial or special services appropriate to the child's needs and interests, communicating with teachers and counselors, and supervising homework;
5. helping the child to develop and maintain appropriate interpersonal relationships with peers, siblings, and other family members;
6. arranging for health-care providers, medical follow-up, and home health care;
7. providing moral and ethical guidance;
8. arranging alternative care by a family member, babysitter, or other child-care provider or facility, including investigation of alternatives, communication with providers, and supervision of care.

Parenting functions are tasks that serve the needs of the child or the child's residential family. Parenting functions include caretaking functions, as defined [above], and all of the following additional functions:

(a) providing economic support;

(b) participating in decisionmaking regarding the child's welfare;

(c) maintaining or improving the family residence, including yard work, and house cleaning;

(d) doing and arranging for financial planning and organization, car repair and maintenance, food and clothing purchases, laundry and dry cleaning, and other tasks supporting the consumption and savings needs of the household;

(e) performing any other functions that are customarily performed by a parent or guardian and that are important to a child's welfare and development.

Ideally, a parent would perform all of the above functions throughout the child's minority. In cases falling short of the ideal, the trier of fact must balance both time and conduct. The question is, did the individual perform sufficient parenting functions over a sufficient period of time to justify concluding that the individual functioned as a parent of the child. Clearly, insubstantial conduct, such as an occasional gift or social contact, would be insufficient. Moreover, merely obeying a child support order would not, by itself, satisfy the requirement. Involuntarily providing support is inconsistent with functioning as a parent of the child.

The context in which the question arises is also relevant. If the question is whether the individual claiming to have functioned as a parent of the child inherits from the child, the court might require more substantial conduct over a more substantial period of time than if the question is whether a child inherits from an individual whom the child claims functioned as his or her parent.

Definition of "Genetic Father". The term "genetic father" means the man whose sperm fertilized the egg of a child's genetic mother. If the father-child relationship is established under the presumption of paternity recognized by the law of this state, the term means only the man for whom that relationship is established. As stated in the Legislative Note, a state that has enacted the Uniform Parentage Act (2000, as amended) should insert a reference to Section 201(b)(1), (2), or (3) of that Act.

Definition of "Relative". The term "relative" does not include any relative no matter how remote but is limited to a grandparent or a descendant of a grandparent, as determined under this subpart 2.

15-11-116. Effect of parent-child relationship.

Except as otherwise provided in section 15-11-119, if a parent-child relationship exists or is established under this subpart 2, the parent is a parent of the child and the child is a child of the parent for the purpose of intestate succession.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1676, § 8, effective July 1, 2010.

Cross references: For other provisions on establishing parent-child relationships, see the "Uniform Parentage Act", article 4 of title 19.

COMMENT

Scope. This section provides that if a parent-child relationship exists or is established under any section in subpart 2, the consequence is that the parent is a parent of the child and the child is a child of the parent for the purpose of intestate succession by, from, or through the parent and the child. The exceptions in Section 2-119(b) through (e) refer to cases in which a parent-child relationship exists but only for the purpose of the right of an adoptee or a descendant of an adoptee to inherit from or through one or both genetic parents.

15-11-117. No distinction based on marital status.

Except as otherwise provided in section 15-11-114, 15-11-119, 15-11-120, or 15-11-121, a parent-child relationship exists between a child and the child's genetic parents, regardless of the parents' marital status.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1676, § 8, effective July 1, 2010.

Cross references: For another provision on marital status, see § 19-4-103.

COMMENT

Scope. This section, adopted in 2008, provides the general rule that a parent-child relationship exists between a child and the child's genetic parents, regardless of the parents' marital status. Exceptions to this general rule are contained in Sections 2-114 (Parent Barred from Inheriting in Certain Circumstances), 2-119 (Adoptee and Adoptee's Genetic Parents), 2-120 (Child Conceived by Assisted Reproduction Other than Child Born to Gestational Carrier), and 2-121(Child Born to Gestational Carrier).

This section replaces former Section 2-114(a), which provided: "(a) Except as provided in subsections (b) and (c), for purposes of intestate succession by, through, or from a person, an individual is the child of his [or her] natural parents, regardless of their marital status. The parent and child relationship may be established under [the Uniform Parentage Act] [applicable state law] [insert appropriate statutory reference]."

Defined Terms. Genetic parent is defined in Section 2-115 as the child's genetic father or genetic mother. Genetic mother is defined as the woman whose egg was fertilized by the sperm of a child's genetic father. Genetic father is defined as the man whose sperm fertilized the egg of a child's genetic mother.

15-11-118. Adoptee and adoptee's adoptive parent or parents.

1. Parent-child relationship between adoptee and adoptive parent or parents. A parent-child relationship exists between an adoptee and the adoptee's adoptive parent or parents.
2. Individual in process of being adopted by married couple - stepchild in process of being adopted by stepparent. For purposes of subsection (1) of this section:
   1. An individual who is in the process of being adopted by a married couple when one of the spouses dies is treated as adopted by the deceased spouse if the adoption is subsequently granted to the decedent's surviving spouse; and
   2. A child of a genetic parent who is in the process of being adopted by a genetic parent's spouse when the spouse dies is treated as adopted by the deceased spouse if the genetic parent survives the deceased spouse by one hundred twenty hours.

   (2.5) Individual in process of being adopted by second parent. For purposes of subsection (1) of this section, a child who is in the process of being adopted by a second adult in a second-parent adoption when the second adult dies is treated as adopted by the second adult if the child's parent survives the second adult by one hundred twenty hours.

3. Child of assisted reproduction or gestational child in process of being adopted. If, after a parent-child relationship is established between a child of assisted reproduction and a parent under section 15-11-120 or between a gestational child and a parent under section 15-11-121, the child is in the process of being adopted by the parent's spouse or another individual when that spouse or individual dies, the child is treated as adopted by the deceased spouse or individual for the purpose of paragraph (b) of subsection (2) of this section.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1676, § 8, effective July 1, 2010. L. 2010: (2.5) added and (3) amended, (SB 10-199), ch. 374, p. 1749, § 6, effective July 1.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101. For other provisions on assisted reproduction and paternity, see § 19-4-106. For legal effects of a final decree of adoption, see § 19-5-211. For the legal effect of a final order of relinquishment, see § 19-5-104.

COMMENT

2008 Revisions. In 2008, this section and Section 2-119 replaced former Section 2-114(b), which provided: "(b) An adopted individual is the child of his [or her] adopting parent or parents and not of his [or her] natural parents, but adoption of a child by the spouse of either natural parent has no effect on (i) the relationship between the child and that natural parent or (ii) the right of the child or a descendant of the child to inherit from or through the other natural parent". The 2008 revisions divided the coverage of former Section 2-114(b) into two sections. Subsection (a) of this section covered that part of former Section 2-114(b) that provided that an adopted individual is the child of his or her adopting parent or parents. Section 2-119(a) and (b)(1) covered that part of former Section 2-114(b) that provided that an adopted individual is not the child of his natural parents, but adoption of a child by the spouse of either natural parent has no effect on the relationship between the child and that natural parent or (ii) the right of the child or a descendant of the child to inherit from or through the other natural parent.

The 2008 revisions also added subsections (b)(2) and (c), which are explained below.

Data on Adoptions. Official data on adoptions are not regularly collected. Partial data are sometimes available from the Children's Bureau of the U.S. Department of Health and Human Services, the U.S. Census Bureau, and the Evan B. Donaldson Adoption Institute.

For an historical treatment of adoption, from ancient Greece, through the Middle Ages, 19th- and 20th-century America, to open adoption and international adoption, see Debora L. Spar, The Baby Business ch. 6 (2006) and sources cited therein.

Defined Term. Adoptee is defined in Section 2-115 as an individual who is adopted. The term is not limited to an individual who is adopted as a minor but includes an individual who is adopted as an adult.

Subsection (a): Parent-Child Relationship Between Adoptee and Adoptive Parent or Parents. Subsection (a) states the general rule that adoption creates a parent-child relationship between the adoptee and the adoptee's adoptive parent or parents.

Subsection (b)(1): Individual in Process of Being Adopted by Married Couple. If the spouse who subsequently died had filed a legal proceeding to adopt the individual before the spouse died, the individual is "in the process of being adopted" by the deceased spouse when the spouse died. However, the phrase "in the process of being adopted" is not intended to be limited to that situation, but is intended to grant flexibility to find on a case by case basis that the process commenced earlier.

Subsection (b)(2): Stepchild in Process of Being Adopted by Stepparent. If the stepparent who subsequently died had filed a legal proceeding to adopt the stepchild before the stepparent died, the stepchild is "in the process of being adopted" by the deceased stepparent when the stepparent died. However, the phrase "in the process of being adopted" is not intended to be limited to that situation, but is intended to grant flexibility to find on a case by case basis that the process commenced earlier.

Subsection (c): Child of Assisted Reproduction or Gestational Child in Process of Being Adopted. Subsection (c) provides that if, after a parent-child relationship is established between a child of assisted reproduction and a parent under Section 2-120 or between a gestational child and a parent under Section 2-121, the child is in the process of being adopted by the parent's spouse when that spouse dies, the child is treated as adopted by the deceased spouse for the purpose of subsection (b)(2). An example would be a situation in which an unmarried mother or father is the parent of a child of assisted reproduction or a gestational child, and subsequently marries an individual who then begins the process of adopting the child but who dies before the adoption becomes final. In such a case, subsection (c) provides that the child is treated as adopted by the deceased spouse for the purpose of subsection (b)(2). The phrase "in the process of being adopted" carries the same meaning under subsection (c) as it does under subsection (b)(2).

15-11-119. Adoptee and adoptee's genetic parents.

1. Parent-child relationship between adoptee and genetic parents. Except as otherwise provided in this section, a parent-child relationship does not exist between an adoptee and the adoptee's genetic parents.
2. Stepchild adopted by stepparent. A parent-child relationship exists between an individual who is adopted by the spouse of either genetic parent and:
   1. The genetic parent whose spouse adopted the individual; and
   2. The other genetic parent, but only for the purpose of the right of the adoptee or a descendant of the adoptee to inherit from or through the other genetic parent.

   (2.5) Child of a second-parent adoption. A parent-child relationship exists between an individual who is adopted by a second parent and:

   1. A genetic parent who consented to a second-parent adoption; and
   2. Another genetic parent who is not a third-party donor, but only for the purpose of the right of the adoptee or a descendant of the adoptee to inherit from or through the other genetic parent.
3. Individual adopted by relative of genetic parent. A parent-child relationship exists between both genetic parents and an individual who is adopted by a relative of a genetic parent, or by the spouse or surviving spouse of a relative of a genetic parent, but only for the purpose of the right of the adoptee or a descendant of the adoptee to inherit from or through either genetic parent.
4. Individual adopted after death of both genetic parents. A parent-child relationship exists between both genetic parents and an individual who is adopted after the death of both genetic parents, but only for the purpose of the right of the adoptee or a descendant of the adoptee to inherit through either genetic parent.
5. Child of assisted reproduction or gestational child who is subsequently adopted. If, after a parent-child relationship is established between a child of assisted reproduction and a parent or parents under section 15-11-120 or between a gestational child and a parent or parents under section 15-11-121, the child is adopted by another or others, the child's parent or parents under section 15-11-120 or 15-11-121 are treated as the child's genetic parent or parents for the purpose of this section.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1676, § 8, effective July 1, 2010. L. 2010: (2.5)(a) and (2.5)(b) amended, (SB 10-199), ch. 374, p. 1749, § 7, effective July 1.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101. For other provisions on assisted reproduction and paternity, see § 19-4-106. For legal effects of a final decree of adoption, see § 19-5-211. For the legal effect of a final order of relinquishment, see § 19-5-104.

COMMENT

2008 Revisions. In 2008, this section and Section 2-118 replaced former Section 2-114(b), which provided: "(b) An adopted individual is the child of his [or her] adopting parent or parents and not of his [or her] natural parents, but adoption of a child by the spouse of either natural parent has no effect on (i) the relationship between the child and that natural parent or (ii) the right of the child or a descendant of the child to inherit from or through the other natural parent". The 2008 revisions divided the coverage of former Section 2-114(b) into two sections. Section 2-118(a) covered that part of former Section 2-114(b) that provided that an adopted individual is the child of his or her adopting parent or parents. Subsections (a) and (b) of this section covered that part of former Section 2-114(b) that provided that an adopted individual is not the child of his natural parents, but adoption of a child by the spouse of either natural parent has no effect on the relationship between the child and that natural parent or (ii) the right of the child or a descendant of the child to inherit from or through the other natural parent.

The 2008 revisions also added subsections (c), (d), and (e), which are explained below.

Defined Terms. Section 2-119 uses terms that are defined in Section 2-115.

Adoptee is defined in Section 2-115 as an individual who is adopted. The term is not limited to an individual who is adopted as a minor, but includes an individual who is adopted as an adult.

Genetic parent is defined in Section 2-115 as the child's genetic father or genetic mother. Genetic mother is defined as the woman whose egg was fertilized by the sperm of a child's genetic father. Genetic father is defined as the man whose sperm fertilized the egg of a child's genetic mother.

Relative is defined in Section 2-115 as a grandparent or a descendant of a grandparent.

Subsection (a): Parent-Child Relationship Between Adoptee and Adoptee's Genetic Parents. Subsection (a) states the general rule that a parent-child relationship does not exist between an adopted child and the child's genetic parents. This rule recognizes that an adoption severs the parent-child relationship between the adopted child and the child's genetic parents. The adoption gives the adopted child a replacement family, sometimes referred to in the case law as "a fresh start". For further elaboration of this theory, see Restatement (Third) of Property: Wills and Other Donative Transfers § 2.5(2)(A) & cmts. d & e (1999). Subsection (a) also states, however, that there are exceptions to this general rule in subsections (b) through (d).

Subsection (b): Stepchild Adopted by Stepparent. Subsection (b) continues the so-called "stepparent exception" contained in the Code since its original promulgation in 1969. When a stepparent adopts his or her stepchild, Section 2-118 provides that the adoption creates a parent-child relationship between the child and his or her adoptive stepparent. Section 2-119(b)(1) provides that a parent-child relationship continues to exist between the child and the child's genetic parent whose spouse adopted the child. Section 2-119(b)(2) provides that a parent-child relationship also continues to exist between an adopted stepchild and his or her other genetic parent (the noncustodial genetic parent) for purposes of inheritance from and through that genetic parent, but not for purposes of inheritance by the other genetic parent and his or her relatives from or through the adopted stepchild.

Example 1--Post-Widowhood Remarriage. A and B were married and had two children, X and Y. A died, and B married C. C adopted X and Y. Under subsection (b)(1), X and Y are treated as B's children and under Section 2-118(a) as C's children for all purposes of inheritance. Under subsection (b)(2), X and Y are treated as A's children for purposes of inheritance from and through A but not for purposes of inheritance from or through X or Y. Thus, if A's father, G, died intestate, survived by X and Y and by G's daughter (A's sister), S, G's heirs would be S, X, and Y. S would take half and X and Y would take one-fourth each.

Example 2--Post-Divorce Remarriage. A and B were married and had two children, X and Y. A and B got divorced, and B married C. C adopted X and Y. Under subsection (b)(1), X and Y are treated as B's children and under Section 2-118(a) as C's children for all purposes of inheritance. Under subsection (b)(2), X and Y are treated as A's children for purposes of inheritance from and through A. On the other hand, neither A nor any of A's relatives can inherit from or through X or Y.

Subsection (c): Individual Adopted by Relative of a Genetic Parent. Under subsection (c), a child who is adopted by a maternal or a paternal relative of either genetic parent, or by the spouse or surviving spouse of such a relative, remains a child of both genetic parents.

Example 3. F and M, a married couple with a four-year old child, X, were badly injured in an automobile accident. F subsequently died. M, who was in a vegetative state and on life support, was unable to care for X. Thereafter, M's sister, A, and A's husband, B, adopted X. F's father, PGF, a widower, then died intestate. Under subsection (c), X is treated as PGF's grandchild (F's child).

Subsection (d): Individual Adopted After Death of Both Genetic Parents. Usually, a post-death adoption does not remove a child from contact with the genetic families. When someone with ties to the genetic family or families adopts a child after the deaths of the child's genetic parents, even if the adoptive parent is not a relative of either genetic parent or a spouse or surviving spouse of such a relative, the child continues to be in a parent-child relationship with both genetic parents. Once a child has taken root in a family, an adoption after the death of both genetic parents is likely to be by someone chosen or approved of by the genetic family, such as a person named as guardian of the child in a deceased parent's will. In such a case, the child does not become estranged from the genetic family. Such an adoption does not "remove" the child from the families of both genetic parents. Such a child continues to be a child of both genetic parents, as well as a child of the adoptive parents.

Example 4. F and M, a married couple with a four-year-old child, X, were involved in an automobile accident that killed F and M. Neither M's parents nor F's father (F's mother had died before the accident) nor any other relative was in a position to take custody of X. X was adopted by F and M's close friends, A and B, a married couple approximately of the same ages as F and M. F's father, PGF, a widower, then died intestate. Under subsection (d), X is treated as PGF's grandchild (F's child). The result would be the same if F's or M's will appointed A and B as the guardians of the person of X, and A and B subsequently successfully petitioned to adopt X.

Subsection (e): Child of Assisted Reproduction or Gestational Child Who Is Subsequently Adopted. Subsection (e) puts a child of assisted reproduction and a gestational child on the same footing as a genetic child for purposes of this section. The results in Examples 1 through 4 would have been the same had the child in question been a child of assisted reproduction or a gestational child.

15-11-120. Child conceived by assisted reproduction other than child born to gestational carrier.

1. Definitions. In this section:
   1. "Birth mother" means a woman, other than a gestational carrier under section 15-11-121, who gives birth to a child of assisted reproduction. The term is not limited to a woman who is the child's genetic mother.
   2. "Child of assisted reproduction" means a child conceived by means of assisted reproduction by a woman other than a gestational carrier under section 15-11-121.
   3. "Third-party donor" means an individual who produces eggs or sperm used for assisted reproduction, whether or not for consideration. The term does not include:
      1. A husband who provides sperm, or a wife who provides eggs, that are used for assisted reproduction by the wife;
      2. The birth mother of a child of assisted reproduction; or
      3. An individual who has been determined under subsection (5) or (6) of this section to have a parent-child relationship with a child of assisted reproduction.
2. Third-party donor. A parent-child relationship does not exist between a child of assisted reproduction and a third-party donor.
3. Parent-child relationship with birth mother. A parent-child relationship exists between a child of assisted reproduction and the child's birth mother.
4. Parent-child relationship with husband whose sperm were used during his lifetime by his wife for assisted reproduction. Except as otherwise provided in subsections (9) and (10) of this section, a parent-child relationship exists between a child of assisted reproduction and the husband of the child's birth mother if the husband provided the sperm that the birth mother used during his lifetime for assisted reproduction.
5. Birth certificate - presumptive effect. A birth certificate identifying an individual other than the birth mother as the other parent of a child of assisted reproduction presumptively establishes a parent-child relationship between the child and that individual.
6. Parent-child relationship with another. Except as otherwise provided in subsections (7), (9), and (10) of this section, and unless a parent-child relationship is established under subsection (4) or (5) of this section, a parent-child relationship exists between a child of assisted reproduction and an individual other than the birth mother who consented to assisted reproduction by the birth mother with intent to be treated as the other parent of the child. Consent to assisted reproduction by the birth mother with intent to be treated as the other parent of the child is established if the individual:
   1. Before or after the child's birth, signed a record that, considering all the facts and circumstances, evidences the individual's consent; or
   2. In the absence of a signed record under paragraph (a) of this subsection (6):
      1. Functioned as a parent of the child no later than two years after the child's birth;
      2. Intended to function as a parent of the child no later than two years after the child's birth but was prevented from carrying out that intent by death, incapacity, or other circumstances; or
      3. Intended to be treated as a parent of a posthumously conceived child, if that intent is established by clear and convincing evidence.
7. Record signed more than two years after the birth of the child - effect. For the purpose of paragraph
   1. of subsection (6) of this section, neither an individual who signed a record more than two years after the birth of the child, nor a relative of that individual who is not also a relative of the birth mother, inherits from or through the child unless the individual functioned as a parent of the child before the child reached eighteen years of age.
8. Presumption - birth mother is married or surviving spouse. For the purpose of paragraph (b) of subsection (6) of this section, the following rules apply:
   1. If the birth mother is married at the time of conception and no divorce proceeding is then pending, her spouse is presumed to satisfy the requirements of subparagraph (I) or (II) of paragraph (b) of subsection (6) of this section.
   2. If the birth mother is a surviving spouse and at her deceased spouse's death no divorce proceeding was pending, her deceased spouse is presumed to satisfy the requirements of subparagraph (II) or (III) of paragraph (b) of subsection (6) of this section.
9. Divorce before placement of eggs, sperm, or embryos. If a married couple is divorced before placement of eggs, sperm, or embryos, a child resulting from the assisted reproduction is not a child of the birth mother's former spouse, unless the former spouse consented in a record that if assisted reproduction were to occur after divorce, the child would be treated as the former spouse's child.
10. Withdrawal of consent before placement of eggs, sperm, or embryos. If, in a record, an individual withdraws consent to assisted reproduction before placement of eggs, sperm, or embryos, a child resulting from the assisted reproduction is not a child of that individual, unless the individual subsequently satisfies subsection (6) of this section.
11. When posthumously conceived child treated as in gestation. If, under this section, an individual is a parent of a child of assisted reproduction who is conceived after the individual's death, the child is treated as in gestation at the time of the individual's death for purposes of section 15-11-104 (1)(b) if the child is:
    1. In utero not later than thirty-six months after the individual's death; or
    2. Born not later than forty-five months after the individual's death.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1677, § 8, effective July 1, 2010. L. 2010: (8) amended, (SB 10-199), ch. 374, p. 1750, § 8, effective July 1.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101. For other provisions on assisted reproduction and paternity, see § 19-4-106.

COMMENT

Data on Children of Assisted Reproduction. The Center for Disease Control (CDC) of the U.S. Department of Health and Human Services collects data on children of assisted reproduction (ART). See Center for Disease Control, 2004 Assisted Reproductive Technology Success Rates (Dec. 2006) (2004 CDC Report), available at http://www.cdc.gov/ART/ART2004. The data, however, is of limited use because the definition of ART used in the CDC Report excludes intrauterine (artificial) insemination (2004 CDC Report at 3), which is probably the most common form of assisted reproductive procedures. The CDC estimates that in 2004 ART procedures (excluding intrauterine insemination) accounted for slightly more than one percent of total U.S. births. 2004 CDC Report at 13. According to the Report: "The number of infants born who were conceived using ART increased steadily between 1996 and 2004. In 2004, 49,458 infants were born, which was more than double the 20,840 born in 1996." 2004 CDC Report at 57. "The average age of women using ART services in 2004 was 36. The largest group of women using ART services were women younger than 35, representing 41% of all ART cycles carried out in 2004. Twenty-one percent of ART cycles were carried out among women aged 35-37, 19% among women aged 38-40, 9% among women aged 41-42, and 9% among women older than 42." 2004 CDC Report at 15. Updates of the 2004 CDC Report are to be posted at http://www.cdc.gov/ART/ART2004.

AMA Ethics Policy on Posthumous Conception. The ethics policies of the American Medical Association concerning artificial insemination by a known donor state that "[i]f semen is frozen and the donor dies before it is used, the frozen semen should not be used or donated for purposes other than those originally intended by the donor. If the donor left no instructions, it is reasonable to allow the remaining partner to use the semen for intrauterine insemination but not to donate it to someone else. However, the donor should be advised of such a policy at the time of donation and be given an opportunity to override it." Am. Med. Assn. Council on Ethical & Judicial Affairs, Code of Medical Ethics: Current Opinions E-2.04 (Issued June 1993; updated December 2004), available at http://www0.ama-assn.org/apps/pf_new/pf_online?f_n=browse&doc= policyfiles/HnE/E-2.0 (last visited October 16, 2008).

Subsection (a): Definitions. Subsection (a) defines the following terms:

Birth mother is defined as the woman (other than a gestational carrier under Section 2-121) who gave birth to a child of assisted reproduction.

Child of assisted reproduction is defined as a child conceived by means of assisted reproduction by a woman other than a gestational carrier under Section 2-121.

Third-party donor. The definition of third-party donor is based on the definition of "donor" in the Uniform Parentage Act § 102.

Other Defined Terms. In addition to the terms defined in subsection (a), this section uses terms that are defined in Section 2-115.

Assisted reproduction is defined in Section 2-115 as a method of causing pregnancy other than sexual intercourse.

Divorce is defined in Section 2-115 as including an annulment, dissolution, and declaration of invalidity of a marriage.

Functioned as a parent of the child is defined in Section 2-115 as behaving toward a child in a manner consistent with being the child's parent and performing functions that are customarily performed by a parent, including fulfilling parental responsibilities toward the child, recognizing or holding out the child as the individual's child, materially participating in the child's upbringing, and residing with the child in the same household as a regular member of that household. See also the Comment to Section 2-115 for additional explanation of the term.

Genetic father is defined in Section 2-115 as the man whose sperm fertilized the egg of a child's genetic mother.

Genetic mother is defined as the woman whose egg was fertilized by the sperm of the child's genetic father.

Incapacity is defined in Section 2-115 as the inability of an individual to function as a parent of a child because of the individual's physical or mental condition.

Subsection (b): Third-Party Donor. Subsection (b) is consistent with the Uniform Parentage Act § 702. Under subsection (b), a third-party donor does not have a parent-child relationship with a child of assisted reproduction, despite the donor's genetic relationship with the child.

Subsection (c): Parent-Child Relationship With Birth Mother. Subsection (c) is in accord with the Uniform Parentage Act § 201 in providing that a parent-child relationship exists between a child of assisted reproduction and the child's birth mother. The child's birth mother, defined in subsection (a) as the woman (other than a gestational carrier) who gave birth to the child, made the decision to undergo the procedure with intent to become pregnant and give birth to the child. Therefore, in order for a parent-child relationship to exist between her and the child, no proof that she consented to the procedure with intent to be treated as the parent of the child is necessary.

Subsection (d): Parent-Child Relationship with Husband Whose Sperm Were Used During His Lifetime By His Wife for Assisted Reproduction. The principal application of subsection (d) is in the case of the assisted reproduction procedure known as intrauterine insemination husband (IIH), or, in older terminology, artificial insemination husband (AIH). Subsection (d) provides that, except as otherwise provided in subsection (i), a parent-child relationship exists between a child of assisted reproduction and the husband of the child's birth mother if the husband provided the sperm that were used during his lifetime by her for assisted reproduction and the husband is the genetic father of the child. The exception contained in subsection (i) relates to the withdrawal of consent in a record before the placement of eggs, sperm, or embryos. Note that subsection (d) only applies if the husband's sperm were used during his lifetime by his wife to cause a pregnancy by assisted reproduction. Subsection (d) does not apply to posthumous conception.

Subsection (e): Birth Certificate: Presumptive Effect. A birth certificate will name the child's birth mother as mother of the child. Under subsection (c), a parent-child relationship exists between a child of assisted reproduction and the child's birth mother. Note that the term "birth mother" is a defined term in subsection (a) as not including a gestational carrier as defined in Section 2-121.

Subsection (e) applies to the individual, if any, who is identified on the birth certificate as the child's other parent. Subsection (e) grants presumptive effect to a birth certificate identifying an individual other than the birth mother as the other parent of a child of assisted reproduction. In the case of unmarried parents, federal law requires that states enact procedures under which "the name of the father shall be included on the record of birth," but only if the father and mother have signed a voluntary acknowledgment of paternity or a court of an administrative agency of competent jurisdiction has issued an adjudication of paternity. See 42 U.S.C. § 666(a)(5)(D). This federal statute is included as an appendix to the Uniform Parentage Act.

The federal statute applies only to unmarried opposite-sex parents. Section 2-120(e)'s presumption, however, could apply to a same-sex couple if state law permits a woman who is not the birth mother to be listed on the child's birth certificate as the child's other parent. Even if state law does not permit that listing, the woman who is not the birth mother could be the child's parent by adoption of the child (see Section 2-118) or under subsection (f) as a result of her consent to assisted reproduction by the birth mother "with intent to be treated as the other parent of the child," or by satisfying the "function as a parent" test in subsection (f)(2).

Section 2-120 does not apply to same-sex couples that use a gestational carrier. For same-sex couples using a gestational carrier, the parent-child relationship can be established by adoption (see Section 2-118 and Section 2-121(b)), or it can be established under subsection 2-121(d) if the couple enters into a gestational agreement with the gestational carrier under which the couple agrees to be the parents of the child born to the gestational carrier. It is irrelevant whether either intended parent is a genetic parent of the child. See Section 2-121(a)(4).

Subsection (f): Parent-Child Relationship with Another. In order for someone other than the birth mother to have a parent-child relationship with the child, there needs to be proof that the individual consented to assisted reproduction by the birth mother with intent to be treated as the other parent of the child. The other individual's genetic material might or might not have been used to create the pregnancy. Except as otherwise provided in this section, merely depositing genetic material is not, by itself, sufficient to establish a parent-child relationship with the child.

Subsection (f)(1): Signed Record Evidencing Consent, Considering All the Facts and Circumstances, to Assisted Reproduction with Intent to Be Treated as the Other Parent of the Child. Subsection (f)(1) provides that a parent-child relationship exists between a child of assisted reproduction and an individual other than the birth mother who consented to assisted reproduction by the birth mother with intent to be treated as the other parent of the child. Consent to assisted reproduction with intent to be treated as the other parent of the child is established if the individual signed a record, before or after the child's birth, that considering all the facts and circumstances evidences the individual's consent. Recognizing consent in a record not only signed before the child's birth but also at any time after the child's birth is consistent with the Uniform Parentage Act §§ 703 and 704.

As noted, the signed record need not explicitly express consent to the procedure with intent to be treated as the other parent of child, but only needs to evidence such consent considering all the facts and circumstances. An example of a signed record that would satisfy this requirement comes form In re Martin B., 841 N.Y.S.2d 207 (Sur. Ct. 2007). In that case, the New York Surrogate's Court held that a child of posthumous conception was included in a class gift in a case in which the deceased father had signed a form that stated: "In the event of my death I agree that my spouse shall have the sole right to make decisions regarding the disposition of my semen samples. I authorize repro lab to release my specimens to my legal spouse [naming her]." Another form he signed stated: "I, [naming him], hereby certify that I am married or intimately involved with [naming her] and the cryopreserved specimens stored at repro lab will be used for future inseminations of my wife/intimate partner." Although these forms do not explicitly say that the decedent consented to the procedure with intent to be treated as the other parent of the child, they do evidence such consent in light of all of the facts and circumstances and would therefore satisfy subsection (f)(1).

Subsection (f)(2): Ideally an individual other than the birth mother who consented to assisted reproduction by the birth mother with intent to be treated as the other parent of the child will have signed a record that satisfies subsection (f)(1). If not, subsection (f)(2) recognizes that actions speak as loud as words. Under subsection (f)(2), consent to assisted reproduction by the birth mother with intent to be treated as the other parent of the child is established if the individual functioned as a parent of the child no later than two years after the child's birth. Under subsection (f)(2)(B), the same result applies if the evidence establishes that the individual had that intent but death, incapacity, or other circumstances prevented the individual from carrying out that intent. Finally, under subsection (f)(2)(C), the same result applies if it can be established by clear and convincing evidence that the individual intended to be treated as a parent of a posthumously conceived child.

Subsection (g): Record Signed More than Two Years after the Birth of the Child: Effect. Subsection (g) is designed to prevent an individual who has never functioned as a parent of the child from signing a record in order to inherit from or through the child or in order to make it possible for a relative of the individual to inherit from or through the child. Thus, subsection (g) provides that, for purposes of subsection (f)(1), an individual who signed a record more than two years after the birth of the child, or a relative of that individual, does not inherit from or through the child unless the individual functioned as a parent of the child before the child reached the age of [18].

Subsection (h): Presumption: Birth Mother is Married or Surviving Spouse. Under subsection (h), if the birth mother is married and no divorce proceeding is pending, then in the absence of clear and convincing evidence to the contrary, her spouse satisfies subsection (f)(2)(A) or (B) or if the birth mother is a surviving spouse and at her deceased spouse's death no divorce proceeding was pending, then in the absence of clear and convincing evidence to the contrary, her deceased spouse satisfies subsection (f)(2)(B) or (C).

Subsection (i): Divorce Before Placement of Eggs, Sperm, or Embryos. Subsection (i) is derived from the Uniform Parentage Act § 706(b).

Subsection (j): Withdrawal of Consent Before Placement of Eggs, Sperm, or Embryos. Subsection (j) is derived from the Uniform Parentage Act § 706(a). Subsection (j) provides that if, in a record, an individual withdraws consent to assisted reproduction before placement of eggs, sperm, or embryos, a child resulting from the assisted reproduction is not a child of that individual, unless the individual subsequently satisfies the requirements of subsection (f).

Subsection (k): When Posthumously Conceived Gestational Child Treated as in Gestation. Subsection (k) provides that if, under this section, an individual is a parent of a gestational child who is conceived after the individual's death, the child is treated as in gestation at the individual's death for purposes of Section 2-104(a)(2) if the child is either (i) in utero no later than 36 months after the individual's death or (ii) born no later than 45 months after the individual's death. Note also that Section 3-703 gives the decedent's personal representative authority to take account of the possibility of posthumous conception in the timing of all or part of the distribution of the estate.

The 36-month period in subsection (k) is designed to allow a surviving spouse or partner a period of grieving, time to make up his or her mind about whether to go forward with assisted reproduction, and a reasonable allowance for unsuccessful attempts to achieve a pregnancy. The 36-month period also coincides with Section 3-1006, under which an heir is allowed to recover property improperly distributed or its value from any distributee during the later of three years after the decedent's death or one year after distribution. If the assisted-reproduction procedure is performed in a medical facility, the date when the child is in utero will ordinarily be evidenced by medical records. In some cases, however, the procedure is not performed in a medical facility, and so such evidence may be lacking. Providing an alternative of birth within 45 months is designed to provide certainty in such cases. The 45-month period is based on the 36-month period with an additional nine months tacked on to allow for a typical period of pregnancy.

15-11-121. Child born to gestational carrier.

1. In this section:
   1. "Gestational agreement" means an enforceable or unenforceable agreement for assisted reproduction in which a woman agrees to carry a child to birth for an intended parent, intended parents, or an individual described in subsection (5) of this section.
   2. "Gestational carrier" means a woman who is not an intended parent who gives birth to a child under a gestational agreement. The term is not limited to a woman who is the child's genetic mother.
   3. "Gestational child" means a child born to a gestational carrier under a gestational agreement.
   4. "Intended parent" means an individual who entered into a validated gestational agreement providing that the individual will be the parent of a child born to a gestational carrier by means of assisted reproduction. The term is not limited to an individual who has a genetic relationship with the child.
2. Court order adjudicating parentage - effect. A parent-child relationship is conclusively established by a court order designating the parent or parents of a gestational child.
3. Gestational carrier. A parent-child relationship between a gestational child and the child's gestational carrier does not exist unless the gestational carrier is:
   1. Designated as a parent of the child in a court order described in subsection (2) of this section; or
   2. The child's genetic mother and a parent-child relationship does not exist under this section with an individual other than the gestational carrier.
4. Parent-child relationship with intended parent or parents. In the absence of a court order under subsection (2) of this section, a parent-child relationship exists between a gestational child and an intended parent who:
   1. Functioned as a parent of the child no later than two years after the child's birth; or
   2. Died while the gestational carrier was pregnant if:
      1. There were two intended parents and the other intended parent functioned as a parent of the child no later than two years after the child's birth;
      2. There were two intended parents, the other intended parent also died while the gestational carrier was pregnant, and a relative of either deceased intended parent or the spouse or surviving spouse of a relative of either deceased intended parent functioned as a parent of the child no later than two years after the child's birth; or
      3. There was no other intended parent and a relative of or the spouse or surviving spouse of a relative of the deceased intended parent functioned as a parent of the child no later than two years after the child's birth.
5. Gestational agreement after death or incapacity. In the absence of a court order under subsection (2) of this section, a parent-child relationship exists between a gestational child and an individual whose sperm or eggs were used after the individual's death or incapacity to conceive a child under a gestational agreement entered into after the individual's death or incapacity if the individual intended to be treated as the parent of the child. The individual's intent may be shown by:
   1. A record signed by the individual which considering all the facts and circumstances evidences the individual's intent; or
   2. Other facts and circumstances establishing the individual's intent by clear and convincing evidence.
6. Presumption - gestational agreement after spouse's death or incapacity. Except as otherwise provided in subsection (7) of this section, and unless there is clear and convincing evidence of a contrary intent, an individual is deemed to have intended to be treated as the parent of a gestational child for purposes of paragraph (b) of subsection (5) of this section if:
   1. The individual, before death or incapacity, deposited the sperm or eggs that were used to conceive the child;
   2. When the individual deposited the sperm or eggs, the individual was married and no divorce proceeding was pending; and
   3. The individual's spouse or surviving spouse functioned as a parent of the child no later than two years after the child's birth.
7. Subsection (6) presumption inapplicable. The presumption under subsection (6) of this section does not apply if there is:
   1. A court order under subsection (2) of this section; or
   2. A signed record that satisfies paragraph (a) of subsection (5) of this section.
8. When posthumously conceived gestational child treated as in gestation. If, under this section, an individual is a parent of a gestational child who is conceived after the individual's death, the child is treated as in gestation at the time of the individual's death for purposes of section 15-11-104 (1)(b) if the child is:
   1. In utero not later than thirty-six months after the individual's death; or
   2. Born not later than forty-five months after the individual's death.
9. No effect on other laws. This section does not affect laws of this state other than this code regarding the enforceability or validity of a gestational agreement.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1679, § 8, effective July 1, 2010.

Cross references: For other provisions on assisted reproduction and paternity, see § 19-4-106.

COMMENT

Subsection (a): Definitions. Subsection (a) defines the following terms:

Gestational agreement. The definition of gestational agreement is based on the Comment to Article 8 of the Uniform Parentage Act, which states that the term "gestational carrier" "applies to both a woman who, through assisted reproduction, performs the gestational function without being genetically related to a child, and a woman who is both the gestational and genetic mother. The key is that an agreement has been made that the child is to be raised by the intended parents." The Comment also points out that "The [practice in which the woman is both the gestational and genetic mother] has elicited disfavor in the ART community, which has concluded that the gestational carrier's genetic link to the child too often creates additional emotional and psychological problems in enforcing a gestational agreement."

Gestational carrier is defined as a woman who is not an intended parent and who gives birth to a child under a gestational agreement. The term is not limited to a woman who is the child's genetic mother.

Gestational child is defined as a child born to a gestational carrier under a gestational agreement.

Intended parent is defined as an individual who entered into a gestational agreement providing that the individual will be the parent of a child born to a gestational carrier by means of assisted reproduction. The term is not limited to an individual who has a genetic relationship with the child.

Other Defined Terms. In addition to the terms defined in subsection (a), this section uses terms that are defined in Section 2-115.

Child of assisted reproduction is defined in Section 2-115 as a method of causing pregnancy other than sexual intercourse.

Divorce is defined in Section 2-115 as including an annulment, dissolution, and declaration of invalidity of a marriage.

Functioned as a parent of the child is defined in Section 2-115 as behaving toward a child in a manner consistent with being the child's parent and performing functions that are customarily performed by a parent, including fulfilling parental responsibilities toward the child, recognizing or holding out the child as the individual's child, materially participating in the child's upbringing, and residing with the child in the same household as a regular member of that household. See also the Comment to Section 2-115 for additional explanation of the term.

Genetic mother is defined as the woman whose egg was fertilized by the sperm of the child's genetic father.

Incapacity is defined in Section 2-115 as the inability of an individual to function as a parent of a child because of the individual's physical or mental condition.

Relative is defined in Section 2-115 as a grandparent or a descendant of a grandparent.

Subsection (b): Court Order Adjudicating Parentage: Effect. A court order issued under § 807 of the Uniform Parentage Act (UPA) would qualify as a court order adjudicating parentage for purposes of subsection (b). UPA § 807 provides:

UPA § 807. Parentage under Validated Gestational Agreement.

1. Upon birth of a child to a gestational carrier, the intended parents shall file notice with the court that a child has been born to the gestational carrier within 300 days after assisted reproduction. Thereupon, the court shall issue an order:
   1. confirming that the intended parents are the parents of the child;
   2. if necessary, ordering that the child be surrendered to the intended parents; and
   3. directing the [agency maintaining birth records] to issue a birth certificate naming the intended parents as parents of the child.
2. If the parentage of a child born to a gestational carrier is alleged not to be the result of assisted reproduction, the court shall order genetic testing to determine the parentage of the child.
3. If the intended parents fail to file notice required under subsection (a), the gestational carrier or the appropriate State agency may file notice with the court that a child has been born to the gestational carrier within 300 days after assisted reproduction. Upon proof of a court order issued pursuant to Section 803 validating the gestational agreement, the court shall order the intended parents are the parents of the child and are financially responsible for the child.

Subsection (c): Gestational Carrier. Under subsection (c), the only way that a parent-child relationship exists between a gestational child and the child's gestational carrier is if she is (1) designated as a parent of the child in a court order described in subsection (b) or (2) the child's genetic mother and a parent-child relationship does not exist under this section with an individual other than the gestational carrier.

Subsection (d): Parent-Child Relationship With Intended Parent or Parents. Subsection (d) only applies in the absence of a court order under subsection (b). If there is no such court order, subsection (b) provides that a parent-child relationship exists between a gestational child and an intended parent who functioned as a parent of the child no later than two years after the child's birth. A parent-child also exists between a gestational child and an intended parent if the intended parent died while the gestational carrier was pregnant, but only if (A) there were two intended parents and the other intended parent functioned as a parent of the child no later than two years after the child's birth; (B) there were two intended parents, the other intended parent also died while the gestational carrier was pregnant, and a relative of either deceased intended parent or the spouse or surviving spouse of a relative of either deceased intended parent functioned as a parent of the child no later than two years after the child's birth; or (C) there was no other intended parent and a relative of or the spouse or surviving spouse of a relative of the deceased intended parent functioned as a parent of the child no later than two years after the child's birth.

Subsection (e): Gestational Agreement After Death or Incapacity. Subsection (e) only applies in the absence of a court order under subsection (b). If there is no such court order, a parent-child relationship exists between a gestational child and an individual whose sperm or eggs were used after the individual's death or incapacity to conceive a child under a gestational agreement entered into after the individual's death or incapacity if the individual intended to be treated as the parent of the child. The individual's intent may be shown by a record signed by the individual which considering all the facts and circumstances evidences the individual's intent or by other facts and circumstances establishing the individual's intent by clear and convincing evidence.

Subsections (f) and (g): Presumption: Gestational Agreement After Spouse's Death or Incapacity. Subsection (f) and (g) are connected. Subsection (f) provides that unless there is clear and convincing evidence of a contrary intent, an individual is deemed to have intended to be treated as the parent of a gestational child for purposes of subsection (e)(2) if (1) the individual, before death or incapacity, deposited the sperm or eggs that were used to conceive the child, (2) when the individual deposited the sperm or eggs, the individual was married and no divorce proceeding was pending; and (3) the individual's spouse or surviving spouse functioned as a parent of the child no later than two years after the child's birth.

Subsection (g) provides, however, that the presumption under subsection (f) does not apply if there is a court order under subsection (b) or a signed record that satisfies subsection (e)(1).

Subsection (h): When Posthumously Conceived Gestational Child is Treated as in Gestation. Subsection (h) provides that if, under this section, an individual is a parent of a gestational child who is conceived after the individual's death, the child is treated as in gestation at the individual's death for purposes of Section 2-104(a)(2) if the child is either (i) in utero not later than 36 months after the individual's death or (ii) born not later than 45 months after the individual's death. Note also that Section 3-703 gives the decedent's personal representative authority to take account of the possibility of posthumous conception in the timing of the distribution of part or all of the estate.

The 36-month period in subsection (g) is designed to allow a surviving spouse or partner a period of grieving, time to make up his or her mind about whether to go forward with assisted reproduction, and a reasonable allowance for unsuccessful attempts to achieve a pregnancy. The three-year period also coincides with Section 3-1006, under which an heir is allowed to recover property improperly distributed or its value from any distributee during the later of three years after the decedent's death or one year after distribution. If the assisted-reproduction procedure is performed in a medical facility, the date when the child is in utero will ordinarily be evidenced by medical records. In some cases, however, the procedure is not performed in a medical facility, and so such evidence may be lacking. Providing an alternative of birth within 45 months is designed to provide certainty in such cases. The 45-month period is based on the 36-month period with an additional nine months tacked on to allow for a typical period of pregnancy.

15-11-122. Equitable adoption.

This subpart 2 does not affect the doctrine of equitable adoption.

Source: L. 2009: Entire section added, (HB 09-1287), ch. 310, p. 1682, § 8, effective July 1, 2010.

COMMENT

On the doctrine of equitable adoption, see Restatement (Third) of Property: Wills and Other Donative Transfers § 2.5, cmt. k & Reporter's Note No. 7 (1999).

15-11-201. Definitions.

1. "Bona fide purchaser" means a purchaser for value in good faith and without notice of an adverse claim. The notation of a state documentary fee on a recorded instrument pursuant to section 39-13-103, C.R.S., is prima facie evidence that the transfer described therein was made to a bona fide purchaser.
2. "Decedent's nonprobate transfers to others" means amounts that are included in the augmented estate under section 15-11-205.
3. "Fractional interest in property held in joint tenancy with the right of survivorship", whether the fractional interest is unilaterally severable or not, and if the interests are equal, means the fraction, the numerator of which is one and the denominator of which, if the decedent was a joint tenant, is one plus the number of joint tenants who survive the decedent and which, if the decedent was not a joint tenant, is the number of joint tenants. If the interests are unequal, "fractional interest in property held in joint tenancy with the right of survivorship" means the decedent's interest immediately preceding the decedent's death.
4. "Marriage", as it relates to a transfer by the decedent during marriage, means any marriage of the decedent to the decedent's surviving spouse.
5. "Nonadverse party" means a person who does not have a substantial beneficial interest in the trust or other property arrangement that would be adversely affected by the exercise or nonexercise of the power that he or she possesses respecting the trust or other property arrangement. A person having a general power of appointment over property is deemed to have a beneficial interest in the property.
6. "Power" or "power of appointment" includes a power to designate the beneficiary of a beneficiary designation, including beneficiary designations under individual retirement accounts and annuities described in section 408 of the federal "Internal Revenue Code of 1986", as amended, as well as other pension plans or arrangements not subject to part 2 (section 201 et seq.) of the federal "Employee Retirement Income Security Act of 1974", as amended (29 U.S.C. sec. 1051 et seq.).
7. "Presently exercisable general power of appointment" means a power of appointment under which, at the time in question, the decedent held a power to create a present or future interest in the decedent, the decedent's creditors, the decedent's estate, or creditors of the decedent's estate, whether or not the decedent then had the capacity to exercise the power. The term includes a power to revoke or invade the principal of a trust or other property arrangement.
8. "Property" includes values subject to a beneficiary designation.
9. "Right to income" includes a right to payments under a commercial or private annuity, an annuity trust, a unitrust, or a similar arrangement.
10. "Transfer", as it relates to a transfer by or on behalf of the decedent, includes:
    1. An exercise or release of a presently exercisable general power of appointment held by the decedent;
    2. A lapse at death of a presently exercisable general power of appointment held by the decedent; and
    3. An exercise, release, or lapse of a presently exercisable general power of appointment that the decedent reserved or of a power described in section 15-11-205 (2)(b) that the decedent conferred on a nonadverse party.
11. "Value", unless otherwise indicated, means fair market value as of the decedent's date of death.

Source: L. 2014: Entire part R&RE, (HB 14-1322), ch. 296, p. 1220, § 2, effective August 6. L. 2022: (7) and (10)(c) amended, (SB 22-092), ch. 60, p. 275, § 8, effective August 10.

Editor's note: This section is similar to former § 15-11-202 (1) as it existed prior to 2014.

Cross references: For provisions relating to the time of taking effect or the provisions for transition of this code, see § 15-17-101.

COMMENT

Pre-1990 Provision. The pre-1990 provisions granted the surviving spouse a one-third share of the augmented estate. The one-third fraction was largely a carry over from common-law dower, under which a surviving widow had a one-third interest for life in her deceased husband's land.

Purpose and Scope of Revisions. The revision of this section is the first step in the overall plan of implementing a partnership or marital-sharing theory of marriage, with a support theory back-up.

Historical Note. This Comment was revised in 2008.

15-11-202. Elective-share.

1. Elective-share amount. The surviving spouse of a decedent who dies domiciled in this state has a right of election, under the limitations and conditions stated in this part 2, to take an elective-share amount equal to fifty percent of the value of the marital-property portion of the augmented estate.
2. 1. Supplemental elective-share amount. If the sum of the amounts described in sections 15-11-207, 15-11-209 (1)(a), and that part of the elective-share amount payable from the decedent's net probate estate and nonprobate transfers to others under section 15-11-209 (3)(a) and (3)(b) is less than fifty thousand dollars, the surviving spouse is entitled to a supplemental elective-share amount equal to fifty thousand dollars, minus the sum of the amounts described in those sections. The supplemental elective-share amount is payable from the decedent's net probate estate and from recipients of the decedent's nonprobate transfers to others in the order of priority set forth in section 15-11-209 (3)(a) and (3)(b).
   2. The court shall increase or decrease the dollar amount stated in paragraph (a) of this subsection (2) based on the cost of living adjustment as calculated and specified in section 15-10-112.
3. Effect of election on statutory benefits. If the right of election is exercised by or on behalf of the surviving spouse, the exempt property and family allowance, if any, are not charged against but are in addition to the elective-share and supplemental elective-share amounts.
4. Nondomiciliary. The right, if any, of the surviving spouse of a decedent who dies domiciled outside this state to take an elective-share in property in this state is governed by the law of the decedent's domicile at death.

Source: L. 2014: Entire part R&RE, (HB 14-1322), ch. 296, p. 1222, § 2, effective August 6.

Editor's note: This section is similar to former § 15-11-201 as it existed prior to 2014.

15-11-203. Composition of the marital-property portion of the augmented estate.

1. Subject to section 15-11-208, the value of the augmented estate, to the extent provided in sections 15-11-204, 15-11-205, 15-11-206, and 15-11-207, consists of the sum of the values of all property, whether real or personal, movable or immovable, tangible or intangible, wherever situated, that constitutes:
   1. The decedent's net probate estate;
   2. The decedent's nonprobate transfers to others;
   3. The decedent's nonprobate transfers to the surviving spouse; and
   4. The surviving spouse's property and nonprobate transfers to others.
2. The value of the marital-property portion of the augmented estate consists of the sum of the values of the four components of the augmented estate as determined under subsection (1) of this section multiplied by the following percentage:

If the decedent and the spouse The percentage is: were married to each other: Less than 1 year Supplemental amount only. 1 year but less than 2 years 10% 2 years but less than 3 years 20% 3 years but less than 4 years 30% 4 years but less than 5 years 40% 5 years but less than 6 years 50% 6 years but less than 7 years 60% 7 years but less than 8 years 70% 8 years but less than 9 years 80% 9 years but less than 10 years 90% 10 years or more 100%

Source: L. 2014: Entire part R&RE, (HB 14-1322), ch. 296, p. 1223, § 2, effective August 6.

Editor's note: This section is similar to former § 15-11-201 (1) as it existed prior to 2014.