Delegation and agents: getting help as a Colorado trustee

What may be delegated

C.R.S. §15-5-807(1) provides that a trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee exercises reasonable care, skill and caution in selecting the agent, establishing the scope and terms of the delegation consistent with the trust's purposes and terms, and periodically reviewing the agent's actions.

What the trustee keeps

An agent performing a delegated function owes the trust a duty to exercise reasonable care to comply with the terms of the delegation (C.R.S. §15-5-807(2)). A trustee who complies with §15-5-807(1) is not liable to the beneficiaries or the trust for the agent's decisions or actions (§15-5-807(3)).

The selection and the monitoring remain the trustee's; many trustees keep the engagement letter, the instructions and their periodic reviews in the trust's file.

Paying for professional help

A trustee is reimbursed from the trust property for expenses properly incurred in the administration (C.R.S. §15-5-709). A fiduciary's lawyer is entitled to reasonable compensation for services rendered on behalf of an estate (§15-10-602), and a court may review the reasonableness of the compensation of anyone employed on behalf of an estate or fiduciary (§15-10-603).

Trust directors

Some trusts move a power away from the trustee entirely, to a trust director with a power of direction (C.R.S. §15-16-806). A directed trustee takes reasonable action to comply and is not liable for doing so except for willful misconduct (§15-16-809), and, unless the terms provide otherwise, has no duty to monitor the director (§15-16-811).

The statutes, verbatim

• Powers of trust director

  C.R.S. §15-16-806 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Duty and liability of directed trustee

  C.R.S. §15-16-809 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Reimbursement of expenses

  C.R.S. §15-5-709 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Delegation by trustee

  C.R.S. §15-5-807 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

Can a Colorado trustee hire an investment manager?

Yes. A trustee may delegate what a prudent trustee of comparable skills could properly delegate, with reasonable care in selecting, instructing and reviewing the agent (C.R.S. §15-5-807(1)).

Is a Colorado trustee liable for an agent's mistakes?

A trustee who used reasonable care in selecting, instructing and monitoring the agent is not liable for the agent's decisions or actions (C.R.S. §15-5-807(3)).

Who pays for a trustee's lawyer in Colorado?

The trust, as an expense properly incurred in the administration (C.R.S. §15-5-709); a fiduciary's lawyer is entitled to reasonable compensation (§15-10-602), which a court may review (§15-10-603).

General information about Colorado law, not legal advice.