HB 78 (BR 289) - T. Kerr, J. Crenshaw
AN ACT relating to trusts and estates.
Establish KRS Chapter 386B and create subchapters and sections thereof to enact the Kentucky Uniform Trust Code; provide for the creation, administration, modification, termination, and validity of trusts; address definitions, general provisions, venue, jurisdiction, and administration of trusts; establish method of sending notice and waiving notice; allow trust matter to be commenced in District or Circuit Court; provide uniformity regarding representation in transactions or proceedings related to a trust; allow a minor, incapacitated person, unborn individual, or person whose identity is unknown to be represented and legally bound by another having a substantially identical interest with respect to a particular question or dispute in a trust matter; require that most trusts to have a definite beneficiary and, alternatively, allow and legitimatize trusts for care of animals, charitable trusts, and trusts for a noncharitable purpose; allow the creation of a trust without a trust instrument; allow oral trusts; require clear and convincing evidence as the standard of proof for oral trusts; provide that courts may apply the doctrine of cy pres to a charitable trust when the charitable purpose is no longer obtainable and a comparable purpose may be selected; give express statutory direction for creditor’s claims and spendthrift and discretionary trusts; specify that a spendthrift provision in a trust restricts a beneficiary creditor from attaching the beneficiary’s interest in the trust until there is a distribution to the beneficiary; provide that a creditor shall not compel a trust to make a distribution to a beneficiary that is discretionary; forbid a beneficiary who owes child support, spousal maintenance, or a debt for services provided from relying on a trust’s spendthrift provisions to avoid attachment of that interest to the trust; recognize and define revocable trusts; require that a trust is revocable unless a trust instrument expressly provides that it is irrevocable; allow a settler, co-trustee, beneficiary or the court to request that a trustee be removed on the grounds of breach of trust; specify that a trustee is entitled to reasonable compensation and that a court may review and change a trustee’s compensation; enumerate the duties and powers of a trustee; require that an agent be held to a fiduciary standard of a trustee in accepting an appointment; set out provisions related to the liability of trustees and the rights of persons dealing with trustees; provide remedies for when there is a breach of an obligation by a trustee; provide that in certain situations a trustee is immune from personal liability when doing business with others on behalf of the trust; specify that a breach of duty to the beneficiary invokes a court’s equity powers to compel performances; require that the provisions of Chapter 386B be applied and construed so as to promote uniformity among states; conform to federal requirements related to electronic signatures and records; specify the applicability of Chapter 386B ; amend and repeal various sections of the Kentucky Revised Statutes to conform.
HB 78 - AMENDMENTS
HCS (1) - Retain original provisions; except correct citations and statutory references; delete definition of "prudent person"; include oral trusts within the scope of the bill.
HCS (2) - Retain original provisions; except delete repeal of KRS 286.3-275 from Section 118; reinsert deleted phrase “Further, a fiduciary may divide a trust or estate into one (1) or more fractional shares if the division does not change the beneficial interests” from amendment to KRS 386.454 at Section 106; delete phrase “if KRS 286.3-277 applies by law” from Section 106(a); revise all instances of “serious breach of trust” to “breach of trust” and revise all instances of “financial-service institution” to “financial institution.”
(Prefiled by the sponsor(s).)
Jan 7-introduced in House; to Judiciary (H); posting waived
Jan 8-reported favorably, 1st reading, to Consent Calendar with Committee Substitute
Jan 9-2nd reading, to Rules
Jan 15-recommitted to Judiciary (H)
Feb 26-reported favorably, to Rules with Committee Substitute (2) as a Consent Bill
Feb 27-posted for passage in the Consent Orders of the Day for Tuesday, March 4, 2014
Mar 4-Committee Substitute (1) withdrawn; 3rd reading, passed 97-0 with Committee Substitute (2)
Mar 5-received in Senate
Mar 7-to Judiciary (S)