Proceeding from Your Colorado Trustee Duties: 6 Facts to Know (Pt. 1), below, some more important facts about trustee duties in the state of Colorado will be discussed.

Colorado Trustee Duties: More Important Info

Fact 3 – There are a number of administrative Colorado trustee duties.

While there are various administrative Colorado trustee duties, failure to fulfill even one of them can lead to breach of fiduciary duty lawsuits.

While there are various administrative Colorado trustee duties, failure to fulfill even one of them can lead to breach of fiduciary duty lawsuits.

Administrative Colorado trustee duties refer to the management-related responsibilities that trustees will usually have to fulfill, regardless of what the trust document may specify. Typically, such administrative Colorado trustee duties include:

  • Registering trusts – Within 30 days of accepting a trustee role, you have to submit a Trust Registration Statement to the Probate Court in the county in which you will be administering the trust. Although the court will generally have minimal involvement after this registration has been completed, it may be more involved if the trust document requires this.
  • Notifying beneficiaries – Upon registering the trust, you will also have to notify all of the trust’s beneficiaries of their interest in the trust, as well as the jurisdiction in which the trust will be administered (so that beneficiaries know where to bring disputes, etc.). You must also provide copies of the trust or the pertinent information if or when beneficiaries request it.
  • Managing trust assets – When overseeing and growing the assets of a trust, you will typically be held to the standard of care stipulated in the “prudent investor rule,” which means that you are required to make investments in a manner similar to how a prudent person would invest the funds/assets in the same (or a similar) situation. In other words, you are generally required to diversify investments, not make risky investments, etc.
  • Overseeing tax and accounting obligations – In addition to having to satisfy all tax obligations for the trust, your Colorado trustee duties will also require that you keep detailed, accurate records of all accounting activities for the trust (including all income to and payouts from the trust). Additionally, all supporting documentation related to the trust’s accounting affairs must be maintained, and you must supply copies of accounting records to the beneficiaries (annually and/or when beneficiaries request this info).

Fact 4 – Trustees can be held personally liable for not fulfilling their Colorado trustee duties.

While we’ve spent some time discussing the types of Colorado trustee duties that people have in this role, it’s important to also point out that, when these duties are NOT fulfilled, trustees can face some serious repercussions. Specifically:

  • Trustees can be held personally liable for mismanaging trusts’ assets – whether or not such mismanagement is the result of a lack of knowledge or intentional negligence.
  • Trustees can be sued for breach of fiduciary duty when beneficiaries suspect that trustees have failed to live up to their Colorado trustee duties.

When breach of fiduciary lawsuits are filed against allegedly negligent trustees, these people can be ordered to pay for any losses suffered by the trust and/or beneficiaries as a result of the negligence in question and/or for any reasonable attorneys’ fees in the case (that is, if the breach of fiduciary lawsuit is resolved in favor of the plaintiff).

Look for the conclusion to this blog series for some final important facts regarding Colorado trustee duties.

Trinidad and Pueblo Estate Planning Attorneys at Gradisar, Trechter, Ripperger & Roth

If you need help administering a trust or resolving any estate planning issue, you can rely on the experienced Trinidad and Pueblo estate planning attorneys at Gradisar, Trechter, Ripperger & Roth. To find out more about our superior legal services and how we can assist you, contact us by calling (719) 556- 8844 or by emailing us using the contact form on this page.

From our offices based in Pueblo, we represent clients in Trinidad, La Jara, Lamar, Walsenburg, Alamosa and throughout the state of Colorado.

Categories: Blog, Estate Planning, Trust Administration