Updated April 23, 2024
A Kentucky living trust is a document used by an individual, known as a “grantor,” to determine how their assets will be distributed when they die. A living or revocable trust allows the grantor to modify or revoke the trust during the lifetime. The grantor may also act as the person responsible for managing the trust, known as the “trustee.”
Requirements (5)
- Competent: The grantor must have the capacity to create a trust.
- Intent: The grantor must indicate the intention to create a trust.
- Definite Beneficiary: The trust must have a definite beneficiary, unless it is a charitable trust or one established for the care of an animal.
- Trustee’s Duties: There must be duties for the trustee to perform.
- Sole Trustee Cannot be the Sole Beneficiary: The same person cannot be both the sole trustee and the sole beneficiary of the trust.[1]
Registration
The trustee must register a living trust by filing a statement with the District Court in the jurisdiction where the trust is administered.[2] The statement must identify the trustee and grantor and state whether the trust has been registered elsewhere.[3]
Laws
Amending/Revoking – Unless the terms of a trust specifically state that it is irrevocable, the grantor may amend or revoke the trust.[4]
Bond Requirement – Unless a court finds that a bond is necessary to protect the interests of the beneficiaries, or the terms of the trust expressly require that a bond be put forward, the trustee is not required to give a bond.[5]
Certification of Trust – The trustee may furnish a certification of trust in lieu of a copy of the trust instrument. This certification must include the identities of the grantor and trustee, the date the trust instrument was signed, and whether the trust is revocable.[6]
Co-Trustees – If co-trustees cannot reach a unanimous decision, then they may act by majority decision.[7]
Contesting a Trust – A person may commence a proceeding to contest the validity of a trust within 90 days of receiving notice of the trust’s existence from the trustee or within two years of the grantor’s death, whichever is earlier.[8]
Costs Related to the Trust – The trustee may only incur reasonable administration costs in relation to the trust property and its intended purposes.[9]
Jurisdiction – A trust created in another jurisdiction is valid in Kentucky so long as its creation complied with the laws of the jurisdiction in which the trust instrument was executed.[10]
Oral Trusts – A valid oral trust may only be established by “clear and convincing evidence.”[11]
Pet Trusts – A trust may be established to provide for the care of one or more animals that are alive during the grantor’s lifetime. The trust terminates upon the death of the last surviving animal.[12]
Signing Requirements – There is no statewide statute in Kentucky that requires a living trust to be signed in order to be valid.
Spendthrift Provision – Specific language is not required to establish a spendthrift trust. A manifest intent in the trust instrument to restrain the voluntary and involuntary alienation of a beneficiary’s interest is sufficient to create a valid spendthrift provision.[13]
Trustee’s Compensation – If the trustee’s compensation is not specified by the terms of the trust, they are otherwise entitled to reasonable compensation.[14]
Trustee’s Duties – The trustee has a duty to prudently administer the trust in good faith, in the interest of the beneficiaries, and in accordance with its intended purpose.[15]
Trustee’s Powers – Along with those powers conferred by the terms of the trust, the trustee has the power to collect, acquire, sell, or otherwise alter the nature of trust property.[16]