2021 Colorado Code
Title 15 - Probate, Trusts, and Fiduciaries
Article 1.5 - Colorado Uniform Custodial Trust Act
§ 15-1.5-117. Distribution on Termination

1. Upon termination of a custodial trust, the custodial trustee shall transfer the unexpended custodial trust property:
   1. To the beneficiary, if not incapacitated or deceased;
   2. To the conservator or other recipient designated by the court for an incapacitated beneficiary; or
   3. Upon the beneficiary's death, in the following order:
      1. As last directed in a writing signed by the deceased beneficiary while not incapacitated and received by the custodial trustee during the life of the deceased beneficiary;
      2. To the survivor of multiple beneficiaries if survivorship is provided for pursuant to section 15-1.5-106;
      3. As designated in the instrument creating the custodial trust; or
      4. To the estate of the deceased beneficiary.

2. If, when the custodial trust would otherwise terminate, the distributee is incapacitated, the custodial trust continues for the use and benefit of the distributee as beneficiary until the incapacity is removed or the custodial trust is otherwise terminated.
3. Death of a beneficiary does not terminate the power of the custodial trustee to discharge obligations of the custodial trustee or beneficiary incurred before the termination of the custodial trust.

History. Source: L. 99: Entire article added, p. 1221, § effective August 4.

This section controls distribution of the custodial trust property when the custodial trust is terminated under section (5) . It is designed to provide for efficient and certain distribution without judicial proceedings. Subsection (1)(c) is an important provision for avoiding complications on distribution and provides that distribution may be controlled first, by the direction of the deceased beneficiary or second, by the custodial trust instrument (see sections 15-1.5-102 , 15-1.5-106 , and 15-1.5-118 ) and, only if no effective prior designation for the payment or distribution of the property on the death of the beneficiary has been made, shall it pass through the beneficiary's estate.

The direction to the custodial trustee by the beneficiary, who is not incapacitated, for distribution on termination of the custodial trust may be in any written form clearly identifying the distributee. For example, the following direction would be adequate under the statute:

I, ____ (name of beneficiary) hereby direct ____ (name of trustee) as custodial trustee, to transfer and pay the unexpended balance of the custodial trust property of which I am beneficiary to ____ as distributee on the termination of the trust at my death. In the event of the prior death of ____ above named as distributee, I designate ____ as distributee of the custodial trust property.

Signed (signature) _____ Beneficiary

Date _______

Receipt Acknowledged (signature) __________

Custodial Trustee

Date _________