Navigating Colorado's Trust Registration Statutes

• Publication year: 2002
• Pages: 55
• Citation: Vol. 31 No. 2 Pg. 55

31 Colo.Law. 55 Colorado Lawyer 2002.

2002, March, Pg. 55. Navigating Colorado's Trust Registration Statutes

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55

Vol. 31, No. 2, Pg. 55

The Colorado Lawyer
March 2002
Vol. 31, No. 3 [Page 55]

Specialty Law Columns
Estate and Trust Forum
Navigating Colorado's Trust Registration Statutes
by Peter W. Bullard

This column is sponsored by the CBA Trust and Estate Law Section. The column focuses on trusts and estate law topics including estate and trust planning and administration, elder law, probate litigation, guardianships and conservatorships and tax planning

This month's article was written by Peter W. Bullard, Fort Collins, a principal of Bullard & Larsen, L.L.P. - (970) 223-5900.

This article discusses Colorado's trust registration statutes, provides advice to assist in the registration process, and points out some of the benefits of trust registration for

litigators.

Colorado lawyers who practice in the trust and estate areas invariably encounter the pitfalls and opportunities inherent in Colorado's statutory requirements regarding registration of trusts. Colorado's trust registration scheme is not designed to make a public record of the contents of trust instruments.1 Instead, its purpose is "to provide those having an interest thereunder with an opportunity to become aware of the existence of the trust, and to provide a means of knowing the venue for proceedings involving thetrust."2 This article summarizes the background and content of the statutes governing trust registration, provides some advice to assist those making their way through this process, and points out some of the benefits of trust registration in the context of trust litigation.

Legislative Background

In 1974, Colorado enacted laws relating to estate planning and trusts as part of the Uniform Probate Code ("UPC"). Colorado's version of the UPC ("CUPC")3 contains specific trust registration provisions ("Trust Registration Statutes").4 The Trust Registration Statutes govern all aspects of trust registration in Colorado. The five sections of the Trust Registration Statutes are referred to in this article by section number, such as "§ 101."

The Colorado legislature has made some minor changes to the Trust Registration Statutes over the years, so the language of the CUPC provisions are somewhat different from those of the UPC. However, both versions contain this essential concept: Trustees have a duty to register trusts - whether inter vivos or testamentary, written or oral.5 In Colorado, registration involves providing minimal paperwork regarding a trust to the appropriate Colorado court.

Although approximately twenty states have adopted the UPC in some form,6 fewer have adopted the trust registrations provisions in the UPC, Part I, Article VII.7 Colorado is one of only approximately fifteen states with statutory requirements for registration of trusts.8

Colorado Registration
Requirements

Section 101, Duty to Register Trusts, contains the trust registration requirement and rules regarding the place of registration. Generally, a trustee of a trust that has its principal place of administration in Colorado must register the trust in the court with jurisdiction at that principal place of administration.9 The trust must be registered within thirty days of acceptance of trusteeship.10

Place of Registration

When registration is required for trust instruments, the following guidelines should help determine in what location the registration should take place:11

1. If the trust instrument designates the principal place of administration, it must be registered in the respective courthouse.12

2. If the trust instrument does not specify a principal place of administration, registration should take place in the same location (court) as the trustee's usual place of business - that is, where records relating to the trust are kept.

3. If the trustee has no place of business, the trust should be registered in the same location (court) as the trustee's place of residence.

4. If there is more than one corporate or professional co-trustee,13 they are permitted to reach an agreement to determine the place of administration (and hence, location of trust registration).

5. If none of these scenarios applies, the statute allows the trust to be registered in the same location (court) as the residence or usual place of business of one of the trustees.14 For example, suppose a trust instrument is silent about the principal place of administration. If there are at least two corporate trustees (which should not occur often) or there is no corporate trustee but more than one individual trustee (a common occurrence), the trustees could agree to register the trust in the court having probate jurisdiction at the residence or usual place of business of one of the trustees.

Trusts Exempt from
Registration in Colorado

An exception to the general rule carved out by the initial sentence of § 101(1) makes the registration requirement subject to the provisions of CRS § 15-10-108, which deals with acts by holders of a general power of appointment. The statute states that such a holder is "deemed to act" for the beneficiaries of the trust if their "interests...are subject to that power."15 This may allow a holder to avoid registration, on behalf of such beneficiaries, by consenting to or approving the failure to register a trust.16 Other exceptions are discussed below.

Section 101(2) pertains to trusts with no or minimal assets (an initial value of $500 or less). Such trusts do not have to be registered until they are funded. Therefore, this statute section exempts from registration requirements all unfunded or minimally funded irrevocable inter vivos trusts.

Section 101(3) exempts from the registration...