§ 15-1.2-201 — Fiduciary duties - general principles

Colorado § 15-1.2-201

• Jurisdiction: Colorado
• Title 15: Probate,
• Art.: Uniform Fiduciary Income and Principal Act

Text

(1) In making an allocation
or determination or exercising discretion under this article 1.2, a fiduciary shall:

(a) Act in good faith, based on what is fair and reasonable to all beneficiaries;

(b) 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;

(c) 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

(d) 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:

(a) 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

(b) 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:

(a) The terms of the trust;

(b) The nature, distribution standards, and expected duration of the trust;

(c) The effect of the allocation rules, including specific adjustments between
income and principal, under parts 4 through 7 of this article 1.2;

(d) The desirability of liquidity and regularity of income;

(e) The desirability of the preservation and appreciation of principal;

(f) The extent to which an asset is used or may be used by a beneficiary;

(g) The increase or decrease in the value of principal assets, reasonably
determined by the fiduciary;

(h) 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;

(i) The extent to which the fiduciary has accumulated income or invaded
principal in preceding accounting periods;

(j) The effect of current and reasonably expected economic conditions; and

(k) The reasonably expected tax consequences of the exercise of the power.

Legislative History

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