Title XXXIII, Administration of Trusts and Estates of Persons Under Disability

insubstantial. If a trustee determines that an allocation between principal and income required by KRS 386.480, 386.482, 386.484, or 386.486 is unsubstantial, the trustee may allocate the entire amount to principal. An allocation is presumed to be insubstantial if: (1) The amount…

Exceptions -- Allocations of payments made from a separate fund. (1) As used in this section: (a) "Payment" means a payment that a trustee may receive over a fixed number of years or during the life of one (1) or more individuals because of services rendered or property transferr…

(1) In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during…

(1) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows: (a) If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be alloc…

(1) To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts: (a) To income to the extent that the amount of timber removed from the land does not exceed the rate of growt…

(1) If a marital deduction is allowed for all or part of a trust, the spouse may require the trustee to make the trust income productive. (2) In cases not governed by subsection (1) of this section, proceeds from the sale or other disposition of an asset are principal without reg…

A trustee shall make the following disbursements from income to the extent that they are not disbursements to which KRS 386.456(2)(b) or (2)(c) applies: (1) One-half (1/2) of the regular compensation of the trustee and of any person providing investment advisory or custodial serv…

(1) A trustee shall make the following disbursements from principal: (a) That portion of the regular compensation of the trustee and any person providing investment advisory or custodial services to the trustee not paid from income under KRS 386.490(1); (b) The remaining one-half…

(1) In this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a useful life of more than one (1) year. (2) A trustee may transfer to principal a reasonable amount of the net cash receipts from a…

(1) If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one (1) or more accounting periods to reimburse principal or to provide a reserve for future principal disburse…

(1) A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income. (2) A tax required to be paid by a trustee based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing auth…

(1) A fiduciary may, with District Court approval, make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from: (a) Elections and decisions, other than those d…

The provisions of KRS 386.450 to 386.504 shall apply to all trusts administered under Kentucky law, except as otherwise specifically provided in the instrument creating the trust, regardless of when created.

KRS 386.450 to 386.504 may be cited as the "Kentucky Principal and Income Act."

As used in KRS 386.510 to 386.590, the following terms shall be construed to have the meaning set forth by this section, unless a contrary meaning clearly appears from the context: (1) The term "trust institution" means any of the following corporations having trust powers and au…

Four (4) or more trust institutions may cause a fiduciary investment company or companies to be organized and incorporated, but no trust institution or foreign trust institution may own an interest in more than seven (7) fiduciary investment companies. A fiduciary investment comp…

Any such fiduciary investment company shall be incorporated under and subject to the provisions of the Kentucky Business Corporation Act. The incorporators shall be persons who are officers or directors of the trust institution or institutions causing such fiduciary investment co…

Trust institutions and foreign trust institutions, as defined by KRS 386.510, acting in a fiduciary capacity and for fiduciary purposes, may, if exercising due care as a prudent investor, and with the consent of any co-fiduciary, invest and reinvest funds held in such fiduciary c…

Every fiduciary investment company in which a trust institution or foreign trust institution is authorized by KRS 386.510 to 386.590 to own and hold corporate stock or shares, in order to qualify for such investments, shall have such corporate powers as may be granted by the Kent…

regulations of comptroller of currency. (1) A fiduciary investment company may acquire, purchase or redeem its own stock and shall, by means of contract or by its bylaws, bind itself to acquire, purchase or redeem its own stock, but it shall not vote shares of its own stock there…

The commissioner of financial institutions shall have authority to adopt and issue reasonable and uniform rules and regulations to govern the conduct and management of all fiduciary investment companies having investment advisers other than national banks. The commissioner of fin…

Except as may be specifically authorized by rule or regulation of the appropriate supervisory agency, no trust institution or foreign trust institution holding stock in a fiduciary investment company may advertise or publicize its participation in such fiduciary investment compan…

No person shall serve or act as investment adviser of a fiduciary investment company except pursuant to a written contract, which contract has been approved by the vote of a majority of the outstanding voting securities of such fiduciary investment company and: (1) Precisely desc…

KRS 386.510 to 386.590 may be cited as the "Fiduciary Investment Company Act."

As used in KRS 386.601 to 386.619, unless the context otherwise requires: (1) "Claim" means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or un…

A qualified affidavit shall state that: (1) The transferor has full right, title, and authority to transfer the assets to the trust; (2) The transfer of the assets to the trust will not render the transferor insolvent; (3) The transferor does not intend to defraud a creditor by t…

(1) Notwithstanding any law to the contrary, including KRS 386B.5-020(7)(a), no action of any kind, including but not limited to an action to enforce a judgment entered by a court or other body having adjudicative authority, shall be brought at law or in equity for an attachment …

A transferor shall only have the powers and rights conferred by the qualified trust. The powers and rights conferred by the qualified trust upon the transferor are personal powers and rights that may not be exercised by a creditor or any other person, except as expressly permitte…

(1) A qualified disposition to a qualified trust shall be avoided only to the extent necessary to satisfy the transferor's debt to the creditor at whose instance the disposition was avoided, together with costs, including attorneys' fees, that the court may allow. (2) In the even…

A spendthrift provision as described in KRS 386.601(11)(c) shall be deemed to be a restriction on the transfer of the transferor's beneficial interest in the trust that is enforceable under applicable nonbankruptcy law within the meaning of 11 U.S.C. sec. 541(c)(2) or any success…

(1) For purposes of KRS 386.601 to 386.619, none of the following shall be considered a qualified trustee: (a) The transferor or any other natural person who is a nonresident of this Commonwealth; or (b) An entity: 1. That is not authorized by the law of this Commonwealth to act …

A person may serve as an investment advisor notwithstanding that the person is the transferor of the qualified disposition.

In the event that a qualified trustee of a qualified trust ceases to meet the requirements of KRS 386.601(12)(a), and there remains no trustee that meets the requirements, the qualified trustee shall be deemed to have resigned as of the time of that cessation, and thereupon, the …

A qualified trust shall not be deemed revocable on account of its inclusion of one (1) or more of the following: (1) A transferor's power to veto a distribution from the trust; (2) A power of appointment, other than a power to appoint to the transferor, the transferor's creditors…

KRS 386.601 to 386.619 shall apply to qualified dispositions to qualified trusts and dispositions by transferors who are trustees made on or after July 15, 2026.

As used in KRS 386.620 to 386.624: (1) "Community property" means property owned by a community property trust during the marriage of the settlor spouses; (2) "Community property trust" means an express trust that complies with the requirements of KRS 386.622; (3) "Decree" means …

community property trust -- Requirements for -- Provisions of written agreement -- Amendment or revocation of trust -- Consideration not required - - Classification and distribution of property. (1) Any arrangement between spouses involving community property shall be considered …

trust -- Distribution of assets upon death of spouse or dissolution of marriage. (1) An obligation incurred by only one (1) spouse before or during marriage may be satisfied from that spouse's one-half (1/2) share of a community property trust. (2) An obligation incurred by both …

conflict of interest. If the duty of the trustee and his interest as trustee of another trust conflict in the exercise of a trust power, the power may be exercised only by court authorization upon petition of the trustee.

As used in KRS 387.010 to 387.280, unless the context requires otherwise: (1) "Minor" means any person who has not reached the age of eighteen (18). (2) "Interested person or entity" means an adult relative or friend of the minor, an official or representative of a public or priv…

conservators -- Venue of proceedings. (1) District Courts shall have exclusive jurisdiction for the appointment and removal of guardians, limited guardians, and conservators for minors, and for the management and settlement of their accounts. (2) If the minor is a resident of the…

conservator. (1) Any interested person or entity may petition the District Court for the appointment of a guardian or limited guardian for an unmarried minor. (2) Any interested person or entity may petition the District Court for appointment of a conservator for a minor who owns…

In appointing a guardian, limited guardian, or conservator, the District Court shall appoint any person or entity whose appointment would be in the best interest of the minor, taking into consideration the ability of the person or entity to manage and preserve the minor's estate,…

The last surviving parent of a minor may by will nominate a guardian, or alternatively a limited guardian, or conservator, or both, for the minor. One (1) person or entity may be nominated to manage the minor's financial resources and another to have care, custody, and control of…

If the minor is fourteen (14) years of age or older, the minor may, in the presence of the District Court, or by a writing signed in the presence of the judge, after privy examination, nominate his own guardian, limited guardian, or conservator, or if the minor be absent from the…

(1) A guardian of a ward shall have the powers and responsibilities of a parent regarding the ward's support, care, and education, but a guardian shall not be personally liable for the ward's expenses and shall not be liable to third persons by reason of the relationship for acts…

(1) Except as provided in subsections (2) and (3) of this section, no guardian or conservator shall act until the guardian or conservator has been appointed by the proper District Court, and given bond to the Commonwealth of Kentucky with good surety, either corporate or personal…

(1) Anyone damaged by the act or omission of the ward's guardian or conservator may sue upon the bond of the guardian or conservator for damages, including reasonable attorney's fees and costs incurred in collecting damages. With the assent of the District Court, anyone may sue o…

(1) The District Court shall remove a guardian, limited guardian, or conservator if: (a) The guardian, limited guardian, or conservator becomes insane, moves out of the Commonwealth, becomes incapable of discharging the duties of the appointment, or fails for any reason to discha…

(1) A guardian or conservator shall, within sixty (60) days after appointment, file with the District Court a true and correct inventory of the ward's real and personal property and other financial resources, signed by the guardian or conservator and verified by the affidavit of …