CO Code § 15-1.5-110 (2021)
2021 Colorado Code|Title 15 - Probate, Trusts, and Fiduciaries|Article 1.5 - Colorado Uniform Custodial Trust Act|§ 15-1.5-110. Determination of Incapacity - Effect

  The custodial trustee shall administer the custodial trust as for an incapacitated beneficiary if:   The custodial trust was created under section 15-1.5-105;    The transferor has so directed in the instrument creating the custodial trust; or    The custodial trustee has determined that the beneficiary is incapacitated.       A custodial trustee may determine that the beneficiary is incapacitated in reliance upon:   Previous direction or authority given by the beneficiary while not incapacitated, including direction or authority pursuant to a durable power of attorney;    The certificate of the beneficiary's physician; or    Other persuasive evidence.       If a custodial trustee for an incapacitated beneficiary reasonably concludes that the beneficiary's incapacity has ceased, or that circumstances concerning the beneficiary's ability to manage property and business affairs have changed since the creation of a custodial trust directing administration as for an incapacitated beneficiary, the custodial trustee may administer the trust as for a beneficiary who is not incapacitated.    On petition of the beneficiary, the custodial trustee, or other person interested in the custodial trust property or the welfare of the beneficiary, the court shall determine whether the beneficiary is incapacitated.    Absent determination of incapacity of the beneficiary under subsection (2) or (4) of this section, a custodial trustee who has reason to believe that the beneficiary is incapacitated shall administer the custodial trust in accordance with the provisions of this article applicable to an incapacitated beneficiary.    Incapacity of a beneficiary does not terminate:   The custodial trust;    Any designation of a successor custodial trustee;    Rights or powers of the custodial trustee; or    Any immunities of third persons acting on instructions of the custodial trustee.        History. Source: L. 99: Entire article added, p. 1216, § 1, effective August 4.    OFFICIAL COMMENT   This is one of the more important sections of the Act under which the custodial trustee may determine that the beneficiary is incapacitated so the trust will change from one subject to the control of the beneficiary to a discretionary trust for the beneficiary. Subsection (2) allows the custodial trustee to determine that the beneficiary is incapacitated provided the determination is based upon the certificate of the beneficiary's physician, the prior direction or authority of the beneficiary, or other reasonable evidence. That authority could be evidenced, for example, by a durable power of attorney executed by the beneficiary prior to becoming incapacitated even though that power of attorney is not otherwise effective to control management or termination of the custodial trust. Such a durable power of attorney could be given to a child, spouse, friend, or other trusted individual. In addition, specific authority is provided in subsection (4) for the beneficiary, the custodial trustee, or other interested person to seek a declaration from the court as to the capacity of the beneficiary for the purposes of this Act. This is important to the custodial trustee, as his duties and responsibilities change on the event of the beneficiary's incapacity.   This section is not a proceeding for the appointment of a conservator, and it is not contemplated that such a declaration would lead to court appointment of a conservator or guardian unless other factors would warrant such appointment. The existence of a comprehensive and well-managed custodial trust would be one factor that would tend to avoid the necessity for the appointment of a conservator or guardian of the estate.   This section also does not provide a proceeding to attack the legal competence of a transferor in setting up a trust under section 15-1.5-102 . Rather, section 15-1.5-110 relates to a management matter in a validly established custodial trust.   Subsection (6) provides that the incapacity of the beneficiary does not terminate the custodial trust. If the beneficiary becomes incapacitated, the authority of the custodial trustee continues and the custodial trustee must follow the statutory provisions of the Act relating to managing custodial trusts for incapacitated individuals.