C.R.S.
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.
Source:
Section 15-1.2-502 — Disbursement from principal, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-15.pdf
(accessed Oct. 20, 2023).