(1) If, upon petition, the court finds that the settlor and all beneficiaries consent to the modification or termination of a noncharitable irrevocable trust, the court shall approve the modification or termination even if the modification or termination is inconsistent with a material purpose of the trust. A settlor's consent to a trust's modification or termination may be given by an agent under a power of attorney only to the extent expressly authorized by the power of attorney or the terms of the trust, by the settlor's conservator with the approval of the court supervising the conservatorship if an agent is not so authorized, or by the settlor's guardian with the approval of the court supervising the guardianship if an agent is not so authorized and a conservator has not been appointed.
(2) Other than a trust established by court order under Title XIX of the federal "Social Security Act", 42 U.S.C. sec. 1396p (d)(4), a noncharitable irrevocable trust may:
(a) Be terminated upon consent of all of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust; or
(b) Be modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.
(3) A spendthrift provision in the terms of a trust is not presumed to constitute a material purpose of the trust.
(4) Upon termination of a trust pursuant to subsection (1) or (2) of this section, the trustee shall distribute the trust property as agreed by the beneficiaries.
(5) If not all of the beneficiaries consent to a proposed modification or termination of a trust pursuant to subsection (1) or (2) of this section, the modification or termination may be approved by the court if the court is satisfied that:
(a) If all of the beneficiaries had consented, the trust could have been modified or terminated pursuant to this section; and
(b) The interests of a beneficiary who does not consent will be adequately protected.
Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1163, § 1, effective January 1, 2019.
ANNOTATION
Law reviews. For article, "Pulling the Plug on Perpetual Trusts: Legal and Tax Considerations for Early Termination of an Irrevocable Trust in Colorado", see 55 Colo. Law. 40 (Jan.-Feb. 2026).
Subsection (2) does not apply to a disability trust. Termination of a trust established by court order under 42 U.S.C. § 1396p(d)(4) does not require the consent of all of the beneficiaries under subsection (2). Matter of Mendy Brockman Disability Trust, 2022 COA 75, 519 P.3d 373.
Because subsection (2) does not apply to disability trusts, state regulation mandating when disability trusts terminate was not inconsistent with this subsection. Matter of Mendy Brockman Disability Trust, 2022 COA 75, 519 P.3d 373.
Subsection (5) does not apply to a trust that terminates by its terms, as permitted by § 15-5-410 (1)(a). Court not required to make factual determination that interests of beneficiary would be adequately protected upon termination of disability trust where trust terminated by its terms. Matter of Mendy Brockman Disability Trust, 2022 COA 75, 519 P.3d 373.