reglab/statecodes huggingface dataset:
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 3 - UNITRUST (§§ 15-1.2-301 — 15-1.2-309) › Section 15-1.2-304 - Notice

(1)
A notice required by section
15-1.2-303 (2)(b)
must be sent in a manner authorized under section
15-5-109
to:
(a)
The qualified beneficiaries determined under section
15-5-103 (16)
, other than the attorney general; and
(b)
Each person acting as trust director of the trust under the "Colorado Uniform Directed Trust Act", part 8 of article
16
of this title 15; and
(c)
Each person that is granted a power by the terms of the trust to appoint or remove a trustee or person described in subsection (1)(b) of this section, to the extent that power is exercisable when the person is not then serving as a trustee or person described in subsection (1)(b) of this section.
(2)
The representation provisions of sections
15-5-301
through
15-5-305
apply to notice under this section.
(3)
A person may consent in a record at any time to action proposed under section
15-1.2-303 (2)(b)
. A notice required by section
15-1.2-303 (2)(b)
need not be sent to a person that consents under this subsection (3).
(4)
A notice required by section
15-1.2-303 (2)(b)
must include:
(a)
The action proposed under section
15-1.2-303 (2)(b)
;
(b)
For a conversion of an income trust to a unitrust, a copy of the unitrust policy adopted under section
15-1.2-303 (1)(a)
;
(c)
For a change in the percentage or method used to calculate the unitrust amount, a copy of the unitrust policy or amendment or replacement of the unitrust policy adopted under section
15-1.2-303 (1)(b)
;
(d)
A statement that the person to which the notice is sent may object to the proposed action by stating in a record the basis for the objection and sending or delivering the record to the fiduciary;
(e)
The date by which an objection under subsection (4)(d) of this section must be received by the fiduciary, which must be at least thirty days after the date the notice is sent;
(f)
The date on which the action is proposed to be taken and the date on which the action is proposed to take effect;
(g)
The name and contact information of the fiduciary; and
(h)
The name and contact information of a person that may be contacted for additional information.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 3 - UNITRUST (§§ 15-1.2-301 — 15-1.2-309) › Section 15-1.2-305 - Unitrust policy

(1)
In administering a unitrust under this part 3, a fiduciary shall follow a unitrust policy adopted under section
15-1.2-303 (1)(a) or (1)(b)
or amended or replaced under section
15-1.2-303 (1)(b)
.
(2)
A unitrust policy must provide:
(a)
The unitrust rate or the method for determining the unitrust rate under section
15-1.2-306
;
(b)
The method for determining the applicable value under section
15-1.2-306
; and
(c)
The rules described in sections
15-1.2-306
through
15-1.2-309
which apply in the administration of the unitrust, whether the rules are:
(I)
Mandatory, as provided in sections
15-1.2-307 (1)
and
15-1.2-416
; or
(II)
Optional, as provided in sections
15-1.2-306
,
15-1.2-307 (2)
,
15-1.2-308 (2)
, and
15-1.2-309 (1)
, to the extent the fiduciary elects to adopt those rules.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 3 - UNITRUST (§§ 15-1.2-301 — 15-1.2-309) › Section 15-1.2-306 - Unitrust rate

(1)
Except as otherwise provided in section
15-1.2-309 (2)(a)
, a unitrust rate may be:
(a)
A fixed unitrust rate; or
(b)
A unitrust rate that is determined for each period using:
(I)
A market index or other published data; or
(II)
A mathematical blend of market indices or other published data over a stated number of preceding periods.
(2)
Except as otherwise provided in section
15-1.2-309 (2)(a)
, a unitrust policy may provide:
(a)
A limit on how high the unitrust rate determined under subsection (1)(b) of this section may rise;
(b)
A limit on how low the unitrust rate determined under subsection (1)(b) of this section may fall;
(c)
A limit on how much the unitrust rate determined under subsection (1)(b) of this section may increase over the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods;
(d)
A limit on how much the unitrust rate determined under subsection (1)(b) of this section may decrease below the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods; or
(e)
A mathematical blend of any of the unitrust rates determined under subsection (1)(b) of this section and subsections (2)(a) through (2)(d) of this section.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 3 - UNITRUST (§§ 15-1.2-301 — 15-1.2-309) › Section 15-1.2-307 - Applicable value

(1)
A unitrust policy must provide the method for determining the fair market value of an asset for the purpose of determining the unitrust amount, including:
(a)
The frequency of valuing the asset, which need not require a valuation in every period; and
(b)
The date for valuing the asset in each period in which the asset is valued.
(2)
Except as otherwise provided in section
15-1.2-309 (2)(b)
, a unitrust policy may provide methods for determining the amount of the net fair market value of the trust to take into account in determining the applicable value, including:
(a)
Obtaining an appraisal of an asset for which fair market value is not readily available;
(b)
Exclusion of specific assets or groups or types of assets;
(c)
Other exceptions or modifications of the treatment of specific assets or groups or types of assets;
(d)
Identification and treatment of cash or property held for distribution;
(e)
Use of:
(I)
An average of fair market values over a stated number of preceding periods; or
(II)
Another mathematical blend of fair market values over a stated number of preceding periods;
(f)
A limit on how much the applicable value of all assets, groups of assets, or individual assets may increase over:
(I)
The corresponding applicable value for the preceding period; or
(II)
A mathematical blend of applicable values over a stated number of preceding periods;
(g)
A limit on how much the applicable value of all assets, groups of assets, or individual assets may decrease below:
(I)
The corresponding applicable value for the preceding period; or
(II)
A mathematical blend of applicable values over a stated number of preceding periods;
(h)
The treatment of accrued income and other features of an asset which affect value; and
(i)
Determining the liabilities of the trust, including treatment of liabilities to conform with the treatment of assets under subsections (2)(a) through (2)(h) of this section.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 3 - UNITRUST (§§ 15-1.2-301 — 15-1.2-309) › Section 15-1.2-308 - Period

(1)
A unitrust policy must provide the period used under sections
15-1.2-306
and
15-1.2-307
. Except as otherwise provided in section
15-1.2-309 (2)(c)
, the period may be:
(a)
A calendar year;
(b)
A twelve-month period other than a calendar year;
(c)
A calendar quarter;
(d)
A three-month period other than a calendar quarter; or
(e)
Another period.
(2)
Except as otherwise provided in section
15-1.2-309 (2)
, a unitrust policy may provide standards for:
(a)
Using fewer preceding periods under section
15-1.2-306 (1)(b)(II), (2)(c), or (2)(d)
if:
(I)
The trust was not in existence in a preceding period; or
(II)
Market indices or other published data are not available for a preceding period;
(b)
Using fewer preceding periods under section
15-1.2-307 (2)(e)(I), (2)(e)(II), (2)(f)(II), or (2)(g)(II)
if:
(I)
The trust was not in existence in a preceding period; or
(II)
Fair market values are not available for a preceding period; and
(c)
Prorating the unitrust amount on a daily basis for a part of a period in which the trust or the administration of the trust as a unitrust or the interest of any beneficiary commences or terminates.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 3 - UNITRUST (§§ 15-1.2-301 — 15-1.2-309) › Section 15-1.2-309 - Special tax benefits - rules

(1)
A unitrust policy may:
(a)
Provide methods and standards for:
(I)
Determining the timing of distributions;
(II)
Making distributions in cash or in kind or partly in cash and partly in kind; or
(III)
Correcting an underpayment or overpayment to a beneficiary based on the unitrust amount if there is an error in calculating the unitrust amount;
(b)
Specify sources and the order of sources, including categories of income for federal income tax purposes, from which distributions of a unitrust amount are paid; or
(c)
Provide other standards and rules the fiduciary determines serve the interests of the beneficiaries.
(2)
If a trust qualifies for a special tax benefit or a fiduciary is not an independent person:
(a)
The unitrust rate established under section
15-1.2-306
may not be less than three percent or more than five percent;
(b)
The only provisions of section
15-1.2-307
which apply are section
15-1.2-307 (1), (2)(a), (2)(d), (2)(e)(I), and (2)(i)
;
(c)
The only period that may be used under section
15-1.2-308
is a calendar year under section
15-1.2-308 (1)(a)
; and
(d)
The only other provisions of section
15-1.2-308
which apply are section
15-1.2-308 (2)(b)(I) and (2)(c)
.
(3)
Unless otherwise provided by the terms of unitrust policy or the terms of the trust, the distribution amount each year shall be deemed to be paid from the following sources for that year in the following order:
(a)
Net income determined as if the trust was not a unitrust;
(b)
Other ordinary income as determined for federal income tax purposes;
(c)
Net realized short-term capital gains as determined for federal income tax purposes;
(d)
Net realized long-term capital gains as determined for federal income tax purposes;
(e)
Trust principal comprising assets for which there is a readily available market value; and
(f)
Other trust principal.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-402 - Distribution from trust or estate

A fiduciary shall allocate to income an amount received as a distribution of income, including a unitrust distribution under part 3 of this article 1.2, from a trust or estate in which the fiduciary has an interest, other than an interest the fiduciary purchased in a trust that is an investment entity, and shall allocate to principal an amount received as a distribution of principal from the trust or estate. If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, section
15-1.2-401
,
15-1.2-415
, or
15-1.2-416
apply to a receipt from the trust.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-403 - Business of other activity conducted by fiduciary

(1)
This section applies to a business or other activity conducted by a fiduciary if the fiduciary determines that it is in the interests of the beneficiaries to account separately for the business or other activity instead of:
(a)
Accounting for the business or other activity as part of the fiduciary's general accounting records; or
(b)
Conducting the business or other activity through an entity described in section
15-1.2-401 (1)(b)(I)
.
(2)
A fiduciary may account separately under this section for the transactions of a business or other activity, whether or not assets of the business or other activity are segregated from other assets held by the fiduciary.
(3)
A fiduciary that accounts separately under this section for a business or other activity:
(a)
May determine:
(I)
The extent to which the net cash receipts of the business or other activity must be retained for:
(A)
Working capital;
(B)
The acquisition or replacement of fixed assets; and
(C)
Other reasonably foreseeable needs of the business or other activity; and
(II)
The extent to which the remaining net cash receipts are accounted for as principal or income in the fiduciary's general accounting records for the trust;
(b)
May make a determination under subsection (3)(a) of this section separately and differently from the fiduciary's decisions concerning distributions of income or principal; and
(c)
Shall account for the net amount received from the sale of an asset of the business or other activity, other than a sale in the ordinary course of the business or other activity, as principal in the fiduciary's general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.
(4)
Activities for which a fiduciary may account separately under this section include:
(a)
Retail, manufacturing, service, and other traditional business activities;
(b)
Farming;
(c)
Raising and selling livestock and other animals;
(d)
Managing rental properties;
(e)
Extracting minerals, water, and other natural resources;
(f)
Growing and cutting timber;
(g)
An activity to which section
15-1.2-414
,
15-1.2-415
, or
15-1.2-416
applies; and
(h)
Any other business conducted by the fiduciary.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-404 - Principal receipts

(1)
A fiduciary shall allocate to principal:
(a)
To the extent not allocated to income under this article 1.2, an asset received from:
(I)
An individual during the individual's lifetime;
(II)
An estate;
(III)
A trust on termination of an income interest; or
(IV)
A payor under a contract naming the fiduciary as beneficiary;
(b)
Except as otherwise provided in this part 4, money or other property received from the sale, exchange, liquidation, or change in form of a principal asset;
(c)
An amount recovered from a third party to reimburse the fiduciary because of a disbursement described in section
15-1.2-502 (1)
or for another reason to the extent not based on loss of income;
(d)
Proceeds of property taken by eminent domain; except that proceeds awarded for loss of income in an accounting period are income if a current income beneficiary had a mandatory income interest during the period;
(e)
Net income received in an accounting period during which there is no beneficiary to which a fiduciary may or must distribute income; and
(f)
Other receipts as provided in sections
15-1.2-408
through
15-1.2-416
.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-405 - Rental property

(1)
To the extent a fiduciary does not account for the management of rental property as a business under section
15-1.2-403
, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:
(a)
Must be added to principal and held subject to the terms of the lease, except as otherwise provided by law other than this article 1.2; and
(b)
Is not allocated to income or available for distribution to a beneficiary until the fiduciary's contractual obligations have been satisfied with respect to that amount.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-406 - Receipt on obligation to be paid in money

(1)
This section does not apply to an obligation to which section
15-1.2-409
,
15-1.2-410
,
15-1.2-411
,
15-1.2-412
,
15-1.2-414
,
15-1.2-415
, or
15-1.2-416
applies.
(2)
A fiduciary shall allocate to income, without provision for amortization of premium, an amount received as interest on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal.
(3)
A fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary. A fiduciary shall allocate to income the increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable, at maturity or another future time, in an amount that exceeds the amount in consideration of which it was issued.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-407 - Insurance policy or contract

(1)
This section does not apply to a contract to which section
15-1.2-409
applies.
(2)
Except as otherwise provided in subsection (3) of this section, a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset. The fiduciary shall allocate dividends on an insurance policy to income to the extent premiums on the policy are paid from income and to principal to the extent premiums on the policy are paid from principal.
(3)
A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of:
(a)
Occupancy or other use by a current income beneficiary;
(b)
Income; or
(c)
Subject to section
15-1.2-403
, profits from a business.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-408 - Insubstantial allocation not required

(1)
If a fiduciary determines that an allocation between income and principal required by section
15-1.2-409
,
15-1.2-410
,
15-1.2-411
,
15-1.2-412
, or
15-1.2-415
is insubstantial, the fiduciary may allocate the entire amount to principal, unless section
15-1.2-203 (5)
applies to the allocation.
(2)
A fiduciary may presume an allocation is insubstantial under subsection (1) of this section if:
(a)
The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than ten percent; and
(b)
The asset producing the receipt to be allocated has a fair market value less than ten percent of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
(3)
The power to make a determination under subsection (1) of this section may be:
(a)
Exercised by a co-fiduciary in the manner described in section
15-1.2-203 (6)
; or
(b)
Released or delegated for a reason described in section
15-1.2-203 (7)
and in the manner described in section
15-1.2-203 (8)
.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-410 - Liquidating asset - definition

(1)
In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a limited time. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.
(2)
This section does not apply to a receipt subject to section
15-1.2-401
,
15-1.2-409
,
15-1.2-411
,
15-1.2-412
,
15-1.2-414
,
15-1.2-415
,
15-1.2-416
, or
15-1.2-503
.
(3)
A fiduciary shall allocate:
(a)
To income:
(I)
A receipt produced by a liquidating asset, to the extent the receipt does not exceed four percent of the value of the asset; or
(II)
If the fiduciary cannot determine the value of the asset, ten percent of the receipt; and
(b)
To principal, the balance of the receipt.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-411 - Minerals, water, and other natural resources

(1)
To the extent a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under section
15-1.2-403
, the fiduciary shall allocate the receipt:
(a)
To income, to the extent received:
(I)
As delay rental or annual rent on a lease;
(II)
As a factor for interest or the equivalent of interest under an agreement creating a production payment; or
(III)
On account of an interest in renewable water;
(b)
To principal, if received from a production payment, to the extent subsection (1)(a)(II) of this section does not apply; or
(c)
Between income and principal equitably, to the extent received:
(I)
On account of an interest in non-renewable water;
(II)
As a royalty, shut-in-well payment, take-or-pay payment, or bonus; or
(III)
From a working interest or any other interest not provided for in subsection (1)(a), (1)(b), (1)(c)(I), or (1)(c)(II) of this section.
(2)
This section applies to an interest owned or held by a fiduciary whether or not a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.
(3)
An allocation of a receipt under subsection (1)(c) of this section is presumed to be equitable if the amount allocated to principal is equal to the amount allowed by sections 611 through 614 of the "Internal Revenue Code of 1986",
26 U.S.C. secs. 611
through
614
, as amended, as a deduction for depletion of the interest.
(4)
If a fiduciary owns or holds an interest in minerals, water, or other natural resources before January 1, 2022, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before January 1, 2022. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after January 1, 2022, the fiduciary shall allocate receipts from the interest as provided in this section.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-412 - Timber

(1)
To the extent a fiduciary does not account for receipts from the sale of timber and related products as a business under section
15-1.2-403
, the fiduciary shall allocate the net receipts:
(a)
To income, to the extent the amount of timber cut from the land does not exceed the rate of growth of the timber;
(b)
To principal, to the extent the amount of timber cut from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(c)
Between income and principal if the net receipts are from the lease of land used for growing and cutting timber or from a contract to cut timber from land, by determining the amount of timber cut from the land under the lease or contract and applying the rules in subsections (1)(a) and (1)(b) of this section; or
(d)
To principal, to the extent advance payments, bonuses, and other payments are not allocated under subsection (1)(a), (1)(b), or (1)(c) of this section.
(2)
In determining net receipts to be allocated under subsection (1) of this section, a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
(3)
This section applies to land owned or held by a fiduciary whether or not a settlor was cutting timber from the land before the fiduciary owned or held the property.
(4)
If a fiduciary owns or holds an interest in land used for growing and cutting timber before the effective date of this article 1.2, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the fiduciary before the effective date of this article 1.2. If the fiduciary acquires an interest in land used for growing and cutting timber on or after the effective date of this article 1.2, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-413 - Marital deduction property not productive of income

(1)
If a trust received property for which a gift or estate tax marital deduction was allowed and the settlor's spouse holds a mandatory income interest in the trust, the spouse may require the trustee, to the extent the trust assets otherwise do not provide the spouse with sufficient income from or use of the trust assets to qualify for the deduction, to:
(a)
Make property productive of income;
(b)
Convert property to property productive of income within a reasonable time; or
(c)
Exercise the power to adjust under section
15-1.2-203
.
(2)
The trustee may decide which action or combination of actions in subsection (1) of this section to take.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-414 - Derivative or option - definition

(1)
In this section, "derivative" means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event. The term includes stocks, fixed income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit-default events.
(2)
To the extent a fiduciary does not account for a transaction in derivatives as a business under section
15-1.2-403
, the fiduciary shall allocate ten percent of receipts from the transaction and ten percent of disbursements made in connection with the transaction to income and the balance to principal.
(3)
Subsection (4) of this section applies if:
(a)
A fiduciary:
(I)
Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted;
(II)
Grants an option that permits another person to sell property to the trust; or
(III)
Acquires an option to buy property for the trust or an option to sell an asset owned by the trust; and
(b)
The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.
(4)
If this subsection (4) applies, the fiduciary shall allocate ten percent to income and the balance to principal of the following amounts:
(a)
An amount received for granting the option;
(b)
An amount paid to acquire the option; and
(c)
Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-415 - Asset-backed security

(1)
Except as otherwise provided in subsection (2) of this section, a fiduciary shall allocate to income a receipt from or related to an asset-backed security, to the extent the payor identifies the payment as being from interest or other current return, and to principal the balance of the receipt.
(2)
If a fiduciary receives one or more payments in exchange for part or all of the fiduciary's interest in an asset-backed security, including a liquidation or redemption of the fiduciary's interest in the security, the fiduciary shall allocate to income ten percent of receipts from the transaction and ten percent of disbursements made in connection with the transaction, and to principal the balance of the receipts and disbursements.
Added by 2021 Ch. 143,§1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 4 - ALLOCATION OF RECEIPTS (§§ 15-1.2-401 — 15-1.2-416) › Section 15-1.2-416 - Other financial instrument or arrangement

A fiduciary shall allocate receipts from or related to a financial instrument or arrangement not otherwise addressed by this article 1.2. The allocation must be consistent with sections
15-1.2-414
and
15-1.2-415
.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-501 - Disbursement from income

(1)
Subject to section
15-1.2-504
, and except as otherwise provided in section
15-1.2-601 (3)(b) or (3)(c)
, a fiduciary shall disburse from income:
(a)
One-half of:
(I)
The regular compensation of the fiduciary and any person providing investment advisory, custodial, or other services to the fiduciary, to the extent income is sufficient; and
(II)
An expense for an accounting, judicial or nonjudicial proceeding, or other matter that involves both income and successive interests, to the extent income is sufficient;
(b)
The balance of the disbursements described in subsection (1)(a) of this section, to the extent a fiduciary that is an independent person determines that making those disbursements from income would be in the interests of the beneficiaries;
(c)
Another ordinary expense incurred in connection with administration, management, or preservation of property and distribution of income, including interest, an ordinary repair, regularly recurring tax assessed against principal, and an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily an income interest, to the extent income is sufficient; and
(d)
A premium on insurance covering loss of a principal asset or income from or use of the asset.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-502 - Disbursement from principal

(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.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-503 - Transfer from income to principal for depreciation - definition

(1)
In this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.
(2)
A fiduciary may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:
(a)
Of the part of real property used or available for use by a beneficiary as a residence;
(b)
Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary; or
(c)
Under this section, to the extent the fiduciary accounts:
(I)
Under section
15-1.2-410
for the asset; or
(II)
Under section
15-1.2-403
for the business or other activity in which the asset is used.
(3)
An amount transferred to principal under this section need not be separately held.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-504 - Reimbursement of income from principal

(1)
If a fiduciary makes or expects to make an income disbursement described in subsection (2) of this section, the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.
(2)
To the extent the fiduciary has not been and does not expect to be reimbursed by a third party, income disbursements to which subsection (1) of this section applies include:
(a)
An amount chargeable to principal but paid from income because principal is illiquid;
(b)
A disbursement made to prepare property for sale, including improvements and commissions; and
(c)
A disbursement described in section
15-1.2-502 (1)
.
(3)
If an asset whose ownership gives rise to an income disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection (1) of this section.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-505 - Reimbursement of principal from income

(1)
If a fiduciary makes or expects to make a principal disbursement described in subsection (2) of this section, the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.
(2)
To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection (1) of this section applies include:
(a)
An amount chargeable to income but paid from principal because income is not sufficient;
(b)
The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;
(c)
A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;
(d)
A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment; and
(e)
A disbursement described in section
15-1.2-502 (1)
.
(3)
If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection (1) of this section.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-506 - Income taxes

(1)
A tax required to be paid by a fiduciary which is based on receipts allocated to income must be paid from income.
(2)
A tax required to be paid by a fiduciary which is based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
(3)
Subject to subsection (4) of this section and sections
15-1.2-504
,
15-1.2-505
, and
15-1.2-507
, a tax required to be paid by a fiduciary on a share of an entity's taxable income in an accounting period must be paid from:
(a)
Income and principal proportionately to the allocation between income and principal of receipts from the entity in the period; and
(b)
Principal to the extent the tax exceeds the receipts from the entity in the period.
(4)
After applying subsections (1) through (3) of this section, a fiduciary shall adjust income or principal receipts, to the extent the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 5 - ALLOCATION OF DISBURSEMENTS (§§ 15-1.2-501 — 15-1.2-507) › Section 15-1.2-507 - Adjustment between income and principal because of taxes

(1)
A fiduciary may make an adjustment between income and principal to offset the shifting of economic interests or tax benefits between current income beneficiaries and successor beneficiaries which arises from:
(a)
An election or decision the fiduciary makes regarding a tax matter, other than a decision to claim an income tax deduction to which subsection (2) of this section applies;
(b)
An income tax or other tax imposed on the fiduciary or a beneficiary as a result of a transaction involving the fiduciary or a distribution by the fiduciary; or
(c)
Ownership by the fiduciary of an interest in an entity a part of whose taxable income, whether or not distributed, is includable in the taxable income of the fiduciary or a beneficiary.
(2)
If the amount of an estate tax marital or charitable deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes and, as a result, estate taxes paid from principal are increased and income taxes paid by the fiduciary or a beneficiary are decreased, the fiduciary shall charge each beneficiary that benefits from the decrease in income tax to reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax, to the extent the principal used to pay the increase would have qualified for a marital or charitable deduction but for the payment. The share of the reimbursement for each fiduciary or beneficiary whose income taxes are reduced must be the same as its share of the total decrease in income tax.
(3)
A fiduciary that charges a beneficiary under subsection (2) of this section may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of methods.
Added by 2021 Ch. 143,§1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 6 - DEATH OF INDIVIDUAL OR TERMINATION OF INCOME INTEREST (§§ 15-1.2-601 — 15-1.2-602) › Section 15-1.2-602 - Distribution to successor beneficiary

(1)
Except to the extent part 3 of this article 1.2 applies for a beneficiary that is a trust, each beneficiary described in section
15-1.2-601 (6)
is entitled to receive a share of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to which this section applies, each beneficiary, including a beneficiary that does not receive part of the distribution, is entitled, as of each distribution date, to a share of the net income the fiduciary received after the decedent's death, an income interest's other terminating event, or the preceding distribution by the fiduciary.
(2)
In determining a beneficiary's share of net income under subsection (1) of this section, the following rules apply:
(a)
The beneficiary is entitled to receive a share of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date;
(b)
The beneficiary's fractional interest under subsection (2)(a) of this section must be calculated:
(I)
On the aggregate value of the assets as of the distribution date without reducing the value by any unpaid principal obligation; and
(II)
Without regard to:
(A)
Property specifically given to a beneficiary under the decedent's will or the terms of the trust; and
(B)
Property required to pay pecuniary amounts not in trust; and
(c)
The distribution date under subsection (2)(a) of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which the assets are distributed.
(3)
To the extent a fiduciary does not distribute under this section all the collected but undistributed net income to each beneficiary as of a distribution date, the fiduciary shall maintain records showing the interest of each beneficiary in the net income.
(4)
If this section applies to income from an asset, a fiduciary may apply the rules in this section to net gain or loss realized from the disposition of the asset after the decedent's death, an income interest's terminating event, or the preceding distribution by the fiduciary.
Added by 2021 Ch. 143, § 1, eff. 1/1/2022.
2023 Colorado Revised Statutes › Title 15 - PROBATE, TRUSTS, AND FIDUCIARIES (§§ 15-1-101 — 15-24-403) › FIDUCIARY (§§ 15-1-101 — 15-1.5-122) › Article 1.2 - UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT (§§ 15-1.2-101 — 15-1.2-804) › Part 7 - APPORTIONMENT AT BEGINNING AND END OF INCOME INTEREST (§§ 15-1.2-701 — 15-1.2-703) › Section 15-1.2-701 - When right to income begins and ends

(1)
An income beneficiary is entitled to net income in accordance with the terms of the trust from the date an income interest begins. The income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to:
(a)
The trust for the current income beneficiary; or
(b)
A successive interest for a successor beneficiary.
(2)
An asset becomes subject to a trust under subsection (1)(a) of this section:
(a)
For an asset that is transferred to the trust during the settlor's life, on the date the asset is transferred;
(b)
For an asset that becomes subject to the trust because of a decedent's death, on the date of the decedent's death, even if there is an intervening period of administration of the decedent's estate; or
(c)
For an asset that is transferred to a fiduciary by a third party because of a decedent's death, on the date of the decedent's death.
(3)
An asset becomes subject to a successive interest under subsection (1)(b) of this section on the day after the preceding income interest ends, as determined under subsection (4) of this section, even if there is an intervening period of administration to wind up the preceding income interest.
(4)
An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to which a fiduciary may or must distribute income.
Added by 2021 Ch. 143,§1, eff. 1/1/2022.