§ 15-1.2-502 — Disbursement from principal

Colorado § 15-1.2-502

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

Text

(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:

(a) 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);

(b) The fiduciary's compensation calculated on principal as a fee for
acceptance, distribution, or termination;

(c) A payment of an expense to prepare for or execute a sale or other
disposition of property;

(d) A payment on the principal of a trust debt;

(e) 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;

(f) 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;

(g) 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

(h) A payment:

(I) Related to environmental matters, including:

(A) Reclamation;

(B) Assessing environmental conditions;

(C) Remedying and removing environmental contamination;

(D) Monitoring remedial activities and the release of substances;

(E) Preventing future releases of substances;

(F) 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;

(G) Penalties imposed under environmental laws or regulations;

(H) Other actions to comply with environmental laws or regulations;

(I) Statutory or common law claims by third parties; and

(J) Defending claims based on environmental matters; and

(II) 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.

Legislative History

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