Colorado Code
Part 9 - Colorado Uniform Trust Decanting Act
§ 15-16-906. Reasonable Reliance

A trustee or other person that reasonably relies on the validity of a distribution of part or all of the property of a trust to another trust, or a modification of a trust, under this part 9, law of this state other than this part 9, or the law of another jurisdiction is not liable to any person for any action or failure to act as a result of the reliance.
Source: L. 2016: Entire part added, (SB 16-085), ch. 228, p. 874, § 1, effective August 10.
COMMENT
A trustee should be able to administer a trust with some dispatch and without concern that reliance on a prior decanting is misplaced. This section allows a trustee, other fiduciary or other person to reasonably rely on the validity of a prior decanting, whether that decanting was performed under the act or under other law of the state or another jurisdiction. Thus this section relieves a trustee or other fiduciary from any duty it might otherwise have to determine definitively the validity of a prior decanting.
The person's reliance on the validity of a prior decanting must be reasonable. Thus a fiduciary must still review the facts of the prior decanting, whether it appears to be in compliance with the statute or other law under which the decanting was performed, and whether the law under which the decanting was performed appears to be applicable to the trust. If the second trust contains provisions that clearly are prohibited by the applicable decanting law, or fails to contain provisions that are clearly required by the applicable decanting law, reliance would not be reasonable.
When trusts have changed jurisdictions, it may be difficult to determine what law governs the administration of the trust. When trusts have multiple trustees, or a trustee conducts different trust functions in different places, it may be difficult to determine where the trust is administered. Thus it may be difficult in some cases to confirm with certainty which state decanting law applied to a prior attempted decanting. In some instances more than one state's decanting law may appear to apply, creating further uncertainty if the prior attempted decanting did not comply with all of the potentially applicable statutes. Section 15-16-906 protects a trustee or other person who makes a reasonable determination about which state decanting law applied to a prior decanting.
Ordinarily, a trustee or other person relying on a prior decanting need not independently verify compliance with every procedural rule of the decanting law. For example, ordinarily, the person relying on the prior decanting need not verify that every person required by the statute to receive notice in fact received notice. If such person knew, however, that the decanting law required notice and that no notice was given, reliance would not be reasonable.
This section does not validate any or all attempted decantings. Even if a trustee or other person may reasonably rely on a prior decanting, an interested person may still have the ability to challenge the decanting as invalid.
There may be times when the trustee or other person has sufficient questions about a prior attempted decanting that additional action is required to determine whether the prior attempted decanting was valid, in whole or in part, and to clarify the operating terms of the trust. In some cases the authorized fiduciary might use a new, properly implemented decanting to clarify the terms of the trust prospectively. In other cases a nonjudicial settlement agreement between the trustee and interested parties might be used to conform the effective terms of the trust. In some cases the trustee or other person might petition the court to determine the effective terms of the trust.

Structure Colorado Code