Trustees in Colorado have various responsibilities, some of which are defined by state laws and others of which may be determined by trust documents. Misunderstanding these obligations cannot only lead to personal liability, but it may also result in costly, long-term impacts.
To avoid such impacts and facilitate the proper administration of trusts in Colorado, below is an overview of the primary fiduciary responsibilities trustees in Colorado have (according to state law). If you currently need specific information or advice regarding your fiduciary duties, however, don’t hesitate to contact a Denver fiduciary lawyer at the Shaw Law Firm, LLC.
Primary Fiduciary Duties for Colorado Trustees
- The duty to promote the interests of the trust and its beneficiaries – This essentially means that Colorado trustees have to act ethically and prudently when administering the trust, investing the trust’s assets and/or dealing with beneficiaries. It also means that trustees are generally required to put the interests of the trust and its beneficiaries above their personal interests and that trustees are required to act unbiasedly (not favoring any party affiliated with the trust over any other affiliated party).
- The duty to accurately account for the trust’s holdings – This accounting requirement involves both maintaining precise records regarding a trust’s holdings, earnings and payments, as well as reporting on the trust’s transactions (according to the trust’s terms and/or when beneficiaries may request such reports or updates).
- The duty to separately maintain the trust’s holdings – In other words, this Colorado trustee duty prohibits comingling personal assets with the assets held by the trust.
- The duty to pay taxes on behalf of the trust – Annually, Colorado trustees must satisfy any and all state and federal tax obligations associated with the trust.
- The duty to comply with the terms of the trust – Specifically, this involves distributing the assets of the trust according to its terms and carrying out any other specific duties defined in the trust documents.
Colorado Fiduciary Duties: More Important Information
- Breaching fiduciary duties – Colorado trustees (and other fiduciaries) who fail to live up to their legal obligations can held personally liable for the mistakes they make and the losses they cause. In fact, beneficiaries (and others) may pursue breach of fiduciary duty claims if or when they believe a Colorado trustee has shirked his ethical and/or administrative duties.
- Help carrying out fiduciary duties –Colorado trustees are generally permitted to retain the help of experienced professionals – like attorneys, accountants, etc. – to assist them in administering trusts. In fact, given that trusts will usually cover the costs of retaining professionals to assist in the administration of the trust (as well as the fact that fiduciaries shoulder personal responsibility when they assume the role of trustee in Colorado), hiring a lawyer to help minimize fiduciary risks can be integral to successfully administering a trust in Colorado.
Contact a Denver Fiduciary Lawyer at the Shaw Law Firm, LLC
For experienced assistance managing and limiting fiduciary risks in Colorado, it’s time to contact a trusted Denver fiduciary lawyer at the Shaw Law Firm, LLC. For more than 25 years, our attorneys have been providing comprehensive, high quality legal services for retirement plan design, ERISA matters, tax compliance issues and other matters.
You can call our firm at (720) 924-1040 or email us via the contact form at the top of this page to schedule a free initial consultation with one of our lawyers and find out more about how we can serve you.
From offices based in Denver, we provide exceptional legal services to individuals and businesses throughout Denver County and the state of Colorado.