Chapter 20 - § 20.7 • CARE — PRUDENCE

• Jurisdiction: Colorado

§ 20.7 • CARE — PRUDENCE

It is the duty of the representative to exercise such care and skill as a reasonably prudent person should exercise, not with respect to his or her own property, but rather with respect to the property of another, not only with regard to investments but with regard to all other matters in connection with the administration of the estate.¹⁴ This duty of care is also imposed on other fiduciaries, including trustees, conservators, and custodians under the Uniform Transfers to Minors Act. The leading case is Buder v. Sartore, 774 P.2d 1383 (Colo. 1989), aff'g Sartore v. Buder, 759 P.2d 785 (Colo. App. 1988). See also In re Marriage of Ludwig, 122 P.3d 1056 (Colo. App. 2005). The representative will give consideration to such small items as discontinuing utilities as soon as possible and will terminate newspaper, magazine, and financial service subscriptions and seek such refunds as may be available. He or she should terminate the obligation to pay rent as soon as possible after the premises are no longer needed for the purposes of the estate. In Holmes v. Young, 885 P.2d 305 (Colo. App. 1994), the court recognized but did not apply the tort of aiding and abetting a breach of fiduciary duty, per Restatement (Second) of the Law of Torts § 874. See also Anstine v. Alexander, 128 P.3d 249 (Colo. App. 2005), rev'd, 152 P.3d 497 (Colo. 2007), which applied the tort cause of action.

The representative will consider the status of any property outside the jurisdiction and try to reduce it to possession without ancillary proceedings, but if that is not possible, he or she will commence such proceedings or arrange for interested persons to commence the proceedings. He or she will take on necessary steps to produce the largest possible net estate for distribution.¹⁵

Regarding investments, Colorado has adopted the Uniform Prudent Investor Act, C.R.S. §§ 15-1.1-101, et seq. It is more relevant to long-term investment management under trusts, conservatorships, and custodian accounts than to short-term estate administration. Buder was decided under a version of the Uniform Prudent Investor Act.

Van Gundy v. Van Gundy, 292 P.3d 1201 (Colo. App. 2012), dealt with the question of the extent to which statutory standard of care and prudence in investing, particularly with regard to diversification, may be varied by the terms of the governing instrument. See § 20.24.

See § 23.4 for a discussion of the role of the personal representative (personal...