C.R.S.
Section 15-5-504
Discretionary trusts
- effect of standard
- definitions
(1)
In this section:(a)
“Child” includes any person or entity who can enforce a child support order in this or another state.(b)
“Child support order” means any administrative or court order requiring the payment of child support, child support arrears, child support debt, retroactive support, or medical support. If a child support order is combined with an order for spousal maintenance or support, the term “child support order” shall not include any portion of the order for spousal maintenance or support.(2)
Except as otherwise provided in subsection (3) of this section, whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee’s discretion, even if:(a)
The discretion is expressed in the form of a standard of distribution; or(b)
The trustee has abused the discretion.(3)
To the extent a trustee has not complied with a standard of distribution or has abused a discretion:(a)
A distribution may be ordered by the court to satisfy a child support order to which the beneficiary is an obligor; and(b)
The court shall direct the trustee to pay to the child such amount as is equitable under the circumstances but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.(3.5)
Subsection (3) of this section does not apply to a special needs trust, supplemental needs trust, or similar trust established for a person if its application could invalidate such a trust’s exemption from consideration as a countable resource for medicaid or supplemental security income purposes or if its application has the effect or potential effect of rendering such person ineligible for any program of public benefit, including, but not limited to, medicaid and supplemental security income.(4)
This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution.(5)
If the trustee’s or cotrustee’s discretion to make distributions for the trustee’s or cotrustee’s own benefit is limited by an ascertainable standard, a creditor may not reach or compel distribution of the beneficial interest except to the extent the interest would be subject to the creditor’s claim were the beneficiary not acting as trustee or cotrustee.
Source:
Section 15-5-504 — Discretionary trusts - effect of standard - definitions, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-15.pdf (accessed Oct. 20, 2023).
Up to date