§ 15-5-504 — Discretionary trusts - effect of standard - definitions

Colorado § 15-5-504

• Jurisdiction: Colorado
• Title 15: Probate,
• Art.: Colorado Uniform Trust Code

Text

(1) In this
section:

(a) Child includes any person or entity who can enforce a child support
order in this or another state.

(b) 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:

(a) The discretion is expressed in the form of a standard of distribution; or

(b) 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:

(a) A distribution may be ordered by the court to satisfy a child support order
to which the beneficiary is an obligor; and

(b) 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.

Legislative History

Source: L. 2021: Entire part added, (SB 21-162), ch. 170, p. 941, � 1, effective September 7. L. 2023: (3)(a) amended, (HB 23-1301), ch. 303, p. 1819, � 17, effective August 7.