§ 15-1.2-703 — Apportionment when income interest ends - definition

Colorado § 15-1.2-703

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

Text

(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:

(a) The fiduciary shall allocate to principal the undistributed income from the
portion of the trust which may be withdrawn; and

(b) 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.

Legislative History

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