Trust Decanting Requirements in Colorado
At a glance
| Governing law and available decanting route | C.R.S. §§ 15-16-901 to -930, Colorado Uniform Trust Decanting Act; § 15-16-931 reserved. Decanting power distributes first-trust property to ≥1 second trusts or modifies first-trust terms; modified first trust is a second trust (§§ 15-16-901 to -902) |
|---|---|
| First-trust scope, state connection, retroactivity, and opt-out | Express trust irrevocable or revocable only with trustee/adverse-interest holder consent; solely charitable trust excluded. Applies to trusts created before/on/after Aug. 10, 2016 with Colorado principal administration or specified Colorado governing-law connection. Express restriction/prohibition controls; other statutory/common-law/instrument routes preserved. Statute does not alter divorce property characterization or court remedies (§§ 15-16-903, -905, -915) |
| Authorized fiduciary and required distribution power | Nonsettlor trustee/other fiduciary with discretion to distribute/direct part/all principal to ≥1 current beneficiaries; court-appointed special fiduciary; or special-needs fiduciary. Disability hierarchy reaches principal discretion, then income discretion, then mandatory income/principal (§§ 15-16-902(3), -909, -913) |
| Expanded, limited, mandatory, and ascertainable-standard branches | Expanded = discretion not limited by ascertainable/reasonably definite standard; may decant covered principal with vested/beneficiary limits. Limited = discretion limited by either standard; aggregate second-trust interests must be substantially similar. Mandatory authority appears only in disability branch (§§ 15-16-902(2),(11),(21), -911 to -913) |
| Beneficiary, vested-interest, and power-of-appointment changes | Expanded route generally bars new current/remainder/successor beneficiaries and reduction/elimination of vested interests; may retain/omit/create/modify appointment powers and use broader/different appointee class. Limited route preserves substantially similar interests. Disability route may alter the disabled beneficiary's interest while protecting others in aggregate (§§ 15-16-911 to -913) |
| Second-trust terms, duration, governing law, and administration | Distribution to ≥1 second trusts or first-trust modification; expanded/ limited second trusts may use any jurisdiction, subject to charitable rule. Duration may differ, but attributable property keeps first-trust maximum- perpetuity, accumulation, and alienation-suspension rules. Complete exercise presumptively carries later property; partial leaves it unless otherwise provided (§§ 15-16-902(10),(23), -911 to -912, -914(5), -920, -926) |
| Tax, charitable, special-needs, compensation, and other guardrails | Detailed marital/charitable deduction, gift-exclusion, S-corporation, GST, qualified-benefits, grantor-status, and other tax-benefit limits. Charitable interests protected and may trigger Attorney General rights/notice. Special- needs/animal routes included. Compensation increase, liability relief/ aggregate reduction, and remover-power changes restricted (§§ 15-16-913 to -919, -923) |
| Notice, recipients, consent, waiver, objection, and representation | Record notice no later than 63 days before exercise; statutory period ends 62 days after notice day. Recipients: living/existing settlors, first-trust qualified beneficiaries, present appointment-power holders, fiduciary removers, both trusts' fiduciaries, and Attorney General when applicable; minor-without-representative and unknown/unlocatable exceptions. Give manner/ effective date plus first/all second instruments; all recipients may waive in signed record. Detailed no-conflict representation; settlor cannot represent beneficiary (§§ 15-16-907 to -908) |
| Exercise instrument, court review, effectiveness, and remedies | Signed record identifies first/all second trusts and distributed/remaining property, directly or by notice reference. Consent/court approval ordinarily unnecessary; listed applicants may seek instructions, special fiduciary, approval, ineffectiveness ruling, corrective directions, or relief. Reasonable-care notice saving, noncompliant-term cure/correction, reliance protection, later-property defaults, and inherited obligations apply; no part-specific limitations period (§§ 15-16-906 to -910, -922, -926 to -927) |
Requirements one by one
Covered trust and fiduciary
Colorado Revised Statutes § 15-16-903 covers an express trust that is irrevocable or revocable only with consent of the trustee or an adverse-interest holder and excludes a solely charitable trust. Section 15-16-905 reaches trusts created before, on, or after August 10, 2016 when Colorado is the principal place of administration or has one of the specified governing-law connections.
Under § 15-16-902, the authorized fiduciary is a nonsettlor trustee or other fiduciary with discretion over some or all principal for current beneficiaries, a court-appointed special fiduciary, or a special-needs fiduciary.
Expanded, limited, and disability routes
Colorado Revised Statutes § 15-16-911 permits expanded-discretion decanting of covered principal, generally without adding current, presumptive-remainder, or successor beneficiaries or reducing a vested interest. It permits specified appointment-power changes, including a broader or different appointee class.
Limited discretion under § 15-16-912 is constrained by an ascertainable or reasonably definite standard. The second trusts in aggregate must preserve substantially similar beneficial interests.
Section 15-16-913's disability route can reach a nonsettlor fiduciary with principal discretion, then income discretion, and finally mandatory income or principal authority. A qualifying special-needs fiduciary uses the expanded route when the second trust benefits the beneficiary with a disability and the exercise furthers the first trust's purposes.
Notice, representation, and the record
Colorado Revised Statutes § 15-16-907 requires notice in a record no later than 63 days before exercise; the defined period ends 62 days after the notice day. Recipients are the listed settlors, first-trust qualified beneficiaries, present appointment-power holders, fiduciary removers, other fiduciaries of both trusts, and Attorney General when the determinable-charitable-interest rule applies. The notice states the manner and effective date and includes the first and all second trust instruments. All recipients may waive the period in a signed record.
Colorado Revised Statutes § 15-16-908 supplies detailed representation rules and bars settlor representation of a beneficiary. Section 15-16-910 separately requires the authorized fiduciary's signed exercise record to identify both trusts and the property distributed to each second trust or left in the first.
Court review and saving rules
Consent and court approval are ordinarily unnecessary. Colorado Revised Statutes § 15-16-909 lets listed applicants seek instructions, a special fiduciary, approval, an ineffectiveness ruling, corrective directions, or other relief.
Reasonable care to comply prevents a missed notice from automatically making the exercise ineffective. Section 15-16-922 separately saves an otherwise valid exercise when part of the second-trust instrument does not comply, voiding the forbidden term or supplying the required term to the necessary extent and requiring corrective fiduciary action.
What trips people up
The notice timing uses two related figures: notice must be given no later than 63 days before exercise, while the statutory notice period ends 62 days after the notice day. Neither figure should be rounded into a 60-day rule.
An express decanting or further-trust restriction controls and carries forward. A general no-amendment, no-revocation, spendthrift, or transfer-restraint clause does not.
Common questions
Can a second trust use another state's law?
Usually yes under the expanded and limited routes. A determinable charitable interest under § 15-16-914 can require Colorado administration unless the Attorney General does not object, consents in a signed record, or a court approves.
Can a second trust last longer?
Its stated duration may differ, but § 15-16-920 keeps the first trust's maximum- perpetuity, accumulation, and alienation-suspension rules on attributable property.
What happens to property discovered later?
Under § 15-16-926, a complete decanting presumptively carries later property to the second trust; a partial decanting presumptively leaves it in the first trust, unless the exercise or second-trust terms provide otherwise.
Statutes and sources
- C.R.S. §§ 15-16-901 to -930 — current Colorado Uniform Trust Decanting Act; § 15-16-931 is reserved. Official 2026 Title 15 text (accessed September 12, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
What does Colorado law mean for your facts?
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