Source: L. 2000: Entire part R&RE, p. 1142, § 1, effective July 1, 2001.
Prior Acts. Section 11 of the 1962 Uniform Act allocates receipts from "property subject to depletion" to income in an amount "not in excess of 5%" of the asset's inventory value. The 1931 Uniform Act has a similar 5% rule that applies when the trustee is under a duty to change the form of the investment. The 5% rule imposes on a trust the obligation to pay a fixed annuity to the income beneficiary until the asset is exhausted. Under both the 1931 and 1962 Uniform Acts the balance of each year's receipts is added to principal. A fixed payment can produce unfair results. The remainder beneficiary receives all of the receipts from unexpected growth in the asset, e.g., if royalties on a patent or copyright increase significantly. Conversely, if the receipts diminish more rapidly than expected, most of the amount received by the trust will be allocated to income and little to principal. Moreover, if the annual payments remain the same for the life of the asset, the amount allocated to principal will usually be less than the original inventory value. For these reasons, Section 15-1-420 abandons the annuity approach under the 5% rule.
Lottery payments. The reference in subsection (1) to rights to receive payments under an arrangement that does not provide for the payment of interest includes state lottery prizes and similar fixed amounts payable over time that are not deferred compensation arrangements covered by Section 15-1-419.
Structure Colorado Code
Title 15 - Probate, Trusts, and Fiduciaries
Part 4 - Uniform Principal and Income Act
§ 15-1-403. Fiduciary Duties - General Principles
§ 15-1-404. Trustee's Power to Adjust
§ 15-1-404.5. Conversion - Unitrusts - Administration
§ 15-1-406. Determination and Distribution of Net Income
§ 15-1-407. Distribution to Residuary and Remainder Beneficiaries
§ 15-1-408. When Right to Income Begins and Ends
§ 15-1-409. Apportionment of Receipts and Disbursements When Decedent Dies or Income Interest Begins
§ 15-1-410. Apportionment When Income Interest Ends
§ 15-1-411. Character of Receipts
§ 15-1-412. Distribution From Trust or Estate
§ 15-1-413. Business and Other Activities Conducted by Trustee
§ 15-1-414. Principal Receipts
§ 15-1-416. Obligation to Pay Money
§ 15-1-417. Insurance Policies and Similar Contracts
§ 15-1-418. Insubstantial Allocations Not Required
§ 15-1-419. Deferred Compensation, Annuities, and Similar Payments
§ 15-1-421. Minerals, Water, and Other Natural Resources
§ 15-1-421.5. Disposition of Natural Resources
§ 15-1-423. Property Not Productive of Income
§ 15-1-424. Derivatives and Options
§ 15-1-425. Asset-Backed Securities
§ 15-1-426. Disbursements From Income
§ 15-1-427. Disbursements From Principal
§ 15-1-428. Transfers From Income to Principal for Depreciation
§ 15-1-429. Transfers From Income to Reimburse Principal
§ 15-1-431. Adjustments Between Principal and Income Because of Taxes
§ 15-1-432. Uniformity of Application - Construction
§ 15-1-434. Effective Date - Application to Existing Trusts and Estates - Election
§ 15-1-435. Application of Certain Provisions - Notice of Election
§ 15-1-436. Transitional Matters
§ 15-1-452. Source and Prior Enactment - Uniform Application
§ 15-1-453. Definitions - Construction of Terms
§ 15-1-455. Application of This Subpart 7 - Powers of Settlor
§ 15-1-456. Income and Principal - Disposition
§ 15-1-457. Apportionment of Income
§ 15-1-458. Corporate Dividends and Share Rights
§ 15-1-459. Premium and Discount Bonds
§ 15-1-460. Principal Used in Business
§ 15-1-461. Principal Comprising Animals
§ 15-1-462. Principal Subject to Depletion
§ 15-1-463. Unproductive Estate
§ 15-1-464. Disposition of Natural Resources
§ 15-1-464.5. Disposition of Natural Resources - Special Applicability
§ 15-1-465. Expenses - Trust Estates
§ 15-1-466. Expenses - Nontrust Estates