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Kentucky Living Trust Forms – Irrevocable & Revocable

The Kentucky living trust forms are used when an individual known as a “Grantor” wishes to determine how they will distribute their assets and property when they die. Both Irrevocable and Revocable trusts serve this purpose, however, each trust operates differently and the type that you eventually choose will affect how the trust can be managed. A Revocable Trust offers flexibility regarding possible amendments or modifications made by the Grantor while an Irrevocable Trust cannot be altered by the Grantor whatsoever. With both trust types, the Trustee will be required to manage the trust and ensure that the Grantor’s assets are distributed to the Beneficiaries when the Grantor dies. All assets being held in the trust are not be subject to the probate process and can be given to the Beneficiaries directly after the Grantor dies.

Definition§ 386B.1-010(20)

LawsChapter 386B (Uniform Trust Code)

Will (Last Will and Testament) – To be used to define all provisions not mentioned in a trust. This form will be presented during the probate process after the Grantor’s death to distribute the property named in it to the Heirs.

Types

Irrevocable Living Trust – After the Grantor has created an Irrevocable Trust, he or she will not be able to make changes or terminate its existence (unless under special circumstances). An Irrevocable trust offers the Grantor protection from creditors and enables them to avoid estate tax.

Revocable Living Trust – This trust type does not offer the Grantor tax advantages, though it can be modified or terminated by the Grantor during their lifetime. It is also possible for the Grantor of a Revocable Trust to act as Trustee and retain control over their assets.

Individual Roles

A Living Trust has four (4) main roles:

Grantor (or “Settlor”) – Creator of the trust; the grantor transfers ownership of their property to the trust.

Trustee – The Trustee is required to ensure that the trust is maintained during the Grantor’s lifetime. When the Grantor dies, the Trustee must communicate with the Beneficiaries and distribute to them their entitled assets. Note that the Grantor of a Revocable Trust may be Trustee.

Successor Trustee – Person responsible for managing the trust in the event that the initial Trustee becomes incapacitated, dies, or is otherwise unfit to manage the trust.

Beneficiaries – Person(s) who will benefit from the assets placed in the trust.

How to Make a Living Trust in Kentucky

In order to create a trust under § 386B.4-020, the Grantor must be capable of making such a decision (meaning not incapacitated or suffering from a mental condition impairing their judgment). In addition, the same individual cannot be the single Trustee and the Beneficiary. The form is not required to be signed in the presence of witnesses or a Notary Public; however, it is highly recommended that it be signed with a third-party present for legal purposes.

All property that is named in the document must transfer ownership, including the following items:

Motor Vehicles – Forward the Title of any automobile, motorcycle, boat, etc. that is registered with the County Clerk’s Office. For further security, complete a Kentucky Bill of Sale to provide proof of the transfer.

Real Estate – The property ownership must be changed to reflect the name of the trust. This can be done by filing a Deed in the County Clerk’s Office where the real estate is located.

Websites – The WHOIS / ICANN information must be changed where it is registered. This can be done by contacting your registrar (entity managing the domain) and modifying the ownership information.

Do I Need a Living Trust?

If an individual is seeking to bypass probate while giving certain possessions to specific persons, there is no alternative to this beyond creating a living trust. However, in the Commonwealth of Kentucky, if an individual has less than $15,000 in net worth, the Heirs may file a Small Estate Affidavit which allows the descendants to bypass the probate process altogether with the filing of the form. If a Small Estate Affidavit is filed, the individual’s assets will be distributed evenly among the Heirs. Therefore, if an individual has more than $15,000 in net assets and wants to transfer property to specific persons while avoiding the probate process, there is no other possibility than creating a trust.

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