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:
(a) For a trust:
(I) A current beneficiary, including a current income beneficiary and a
beneficiary that may receive only principal;
(II) A remainder beneficiary; and
(III) Any other successor beneficiary.
(b) For an estate, an heir, legatee, and devisee.
(c) 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:
(a) For a trust:
(I) A qualified beneficiary determined under section 15-5-103 (16) of the
Colorado Uniform Trust Code;
(II) A settlor of the trust; or
(III) An individual whose legal obligation to support a beneficiary may be
satisfied by a distribution from the trust;
(b) For an estate, a beneficiary;
(c) A spouse, parent, brother, sister, or issue of an individual described in
subsection (11)(a) or (11)(b) of this section;
(d) 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
(e) 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:
(a) 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;
(b) 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;
(c) 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;
(d) 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:
(I) 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
(II) 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
(e) 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:
(I) 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
(II) 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:
(a) Except as otherwise provided in subsection (22)(b) of this section, the
manifestation of the settlor's intent regarding a trust's provisions as:
(I) Expressed in the trust instrument; or
(II) Established by other evidence that would be admissible in a judicial
proceeding;
(b) The trust's provisions as established, determined, or amended by:
(I) A trustee or trust director in accordance with applicable law;
(II) A court order;
(III) A nonjudicial settlement agreement under section 15-5-111; or
(IV) By alternative dispute resolution under section 15-5-113; or
(c) For an estate, a will.
(d) Reserved.
(23) Trust:
(a) Includes:
(I) An express trust, private or charitable, with additions to the trust,
wherever and however created; and
(II) A trust created or determined by judgment or decree under which the
trust is to be administered in the manner of an express trust.
(b) Does not include:
(I) A constructive trust;
(II) 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
(III) 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.