AN ACT relating to the disposition of property.

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AN ACT relating to the disposition of property. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 391.010 is amended to read as follows: 3
When a person having right or title to any real estate or inheritance dies intestate as to 4
such estate, it shall descend in common to his or her kindred, male and female, in t he 5
following order, except as otherwise provided in this chapter: 6
(1) (a) To his or her surviving spouse as follows: 7
1. If there is no surviving descendant of the decedent, the entirety; 8
2. If the decedent is survived by one (1) or more descendants, all of 9
whom are also descendants of the surviving spouse, the entirety; 10
3. If the decedent is survived by one (1) or more descendants who are not 11
lineal descendants of the surviving spouse, one-half (1/2); or 12
4. If the decedent is survived by one (1) or more descendants, all of 13
whom are also descendants of the surviving spouse, and the surviving 14
spouse has one (1) or more descendants who are not descendants of 15
the decedent, one-half (1/2); and 16
(b) Any interest in property not passing to his or her surviving spouse under 17
this subsection, or if there is no surviving spouse, as provided in subsections 18
(2) to (6) of this section. 19
(2)[(1)] To his or her children and their descendants; if there are none, then 20
(3)[(2)] To his or her father and mother, if both are living, one (1) moiety each; but if 21
the father is dead, the mother, if living, shall take the whole estate; if the mother is 22
dead, the whole estate shall pass to the father; if there is no father or mother, then 23
(4)[(3)] To his or her brothers and sisters and their descendants; if there are none, then 24
[(4) To the husband or wife of the intestate; if there are none surviving, then] 25
(5) (a) One (1) moiety of the estate shall pass to the paternal and t he other to the 26
maternal[ kindred, in the following order: 27
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(a) The] grandfather and grandmother equally, if both are living; but if one is 1
dead, the entire moiety shall go to the survivor; if there is no grandfather or 2
grandmother, then 3
(b) To the uncles and aunts and their descendants; if there are none, then 4
(c) To the stepchildren of the decedent [great-grandfathers and great -5
grandmothers, in the same manner prescribed for grandfather and 6
grandmother by subsection (a); if there are none, then 7
(d) To the b rothers and sisters of the grandfathers and grandmothers and their 8
descendants; and so on in other cases without end, passing to the nearest lineal 9
ancestors and their descendants]. 10
(6) If there is no[ such] kindred[ to one of the parents] as is described in subsection (5) 11
of this section , the whole shall vest in the state under KRS 393.020 [to go to the 12
kindred of the other. If there is neither paternal nor maternal kindred, the whole 13
shall go to the kindred of the husband or wife, as if he or she had survi ved the 14
intestate and died entitled to the estate]. 15
Section 2. KRS 392.020 is amended to read as follows: 16
(1) (a) After the death of the husband or wife intestate, the survivor shall have , in 17
addition to his or her share under Section 1 of this Act, an estate[ in fee of 18
one-half (1/2) of the surplus real estate of which the other spouse or anyone 19
for the use of the other spouse, was seized of an estate in fee simple at the 20
time of death, and shall have an estate] for his or her life in one -third (1/3) of 21
any real estate of which the other spouse or anyone for the use of the other 22
spouse, was seized of an estate in fee simple during the coverture but not at 23
the time of death, unless the survivor's right to the[such] interest has been 24
barred, forfeited, or relinquished. 25
(b) The survivor shall also have an absolute estate in one -half (1/2) of the surplus 26
personalty left by the decedent. Unless the context otherwise requires, any 27
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reference in the statutes of this state to "dow er" or "curtesy" shall be deemed 1
to refer to the surviving spouse's interest created by this section. 2
(2) Except as otherwise provided in subsection (4) of this section, surplus personalty 3
includes personal property owned by the decedent at death that is: 4
(a) Payable pursuant to a: 5
1. Beneficiary designation; 6
2. Transfer on death designation; or 7
3. Payable on death designation, including retirement accounts whether 8
designated as an individual retirement account or otherwise; or 9
(b) Jointly owned with right of survivorship to another person. 10
(3) The surviving spouse's share of the decedent's surplus personalty shall be 11
credited with any property described in subsection (2) of this section received by 12
the surviving spouse at the decedent's death, less the amou nt of payment made 13
for the decedent's funeral and burial expenses as confirmed by receipt of 14
payment, or by contract or other written document of obligation for payment. 15
(4) (a) Surplus personalty shall not include the death benefit payable on any life 16
insurance policy insuring the life of the decedent; 17
(b) Life insurance proceeds payable to the surviving spouse shall be credited 18
against the surviving spouse's share of the decedent's surplus personalty; 19
and 20
(c) Life insurance proceeds payable to a trust of which the surviving spouse is a 21
beneficiary shall be credited against the surviving spouse's share of the 22
decedent's surplus personalty in an amount determined under subsection 23
(7) of this section. 24
(5) Surplus real estate and surplus personalty include all property held by or payable 25
at the decedent's death: 26
(a) To a trust over which the decedent held at the time of death a power of 27
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revocation; and 1
(b) Over which the decedent held at the time of death a general power of 2
appointment as defined in KRS 390.020. 3
(6) Property of any kind transferred by the decedent to a person or trust, other than a 4
trust for the benefit of the surviving spouse, the decedent, or a qualified 5
charitable organization two (2) years or more prior to death, is not surplus 6
personalty and is not surplus real estate. Property of any kind tr ansferred by the 7
decedent to a person or trust less than two (2) years prior to death is surplus 8
personalty or surplus real estate. 9
(7) Property of any kind transferred prior to the decedent's death and held at the 10
decedent's death by a trust created by th e decedent and of which the surviving 11
spouse is a beneficiary shall be: 12
(a) Deemed surplus personalty or surplus real estate as applicable; and 13
(b) Credited against the surviving spouse's share of the decedent's surplus real 14
estate and surplus personalty, in an amount computed under 26 U.S.C. sec. 15
7520. 16
(8) The surviving spouse may bring an action against any person receiving property 17
that is part of the surplus real estate or surplus personalty as necessary to satisfy 18
the dower or curtesy claim of the surviving spouse with respect to that property. 19
Section 3. KRS 394.300 is amended to read as follows: 20
(1) (a) Every will[ or authenticated copy] admitted to probate[record] by any court 21
shall be recorded by the county clerk, and shall remain in the[his] office of 22
the county clerk[,] except: 23
1. During such time as it may be carried to another court under subpoena 24
duces tecum; or 25
2. As provided in paragraph (d) of this subsection. 26
(b) For any will recorded on or after January 1, 2027, the county clerk shall 27
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return the will to the person designated in the order admitting the will to 1
probate no earlier than two (2) years after it has been recorded by the 2
county clerk. 3
(c) Any will recorded with the county clerk after January 1, 1978, and prior to 4
January 1, 2027, that remains in the office of the county clerk may be 5
destroyed or returned to either the person designated in the order admitting 6
the will to probate or the person appoi nted as the executor or executrix of 7
the decedent's estate no earlier than ten (10) years after the date of 8
recording. 9
(d) Upon receipt of any notice required under KRS 394.240, the county clerk 10
shall not return a will under paragraph (b) or (c) of this subsection until: 11
1. The adversarial proceeding is final and nonappealable; or 12
2. Authorized by a court of competent jurisdiction. 13
(e) Any attempted return of a will under paragraph (b) or (c) of this subsection 14
that is: 15
1. Returned to the county clerk as undeliverable; or 16
2. Precluded due to insufficient information regarding an address or to 17
whom the will should be returned; 18
may be destroyed. 19
(2) (a) A will probated in the court of one Kentucky county and recorded in the 20
office of the county clerk for that county may be recorded in the office of the 21
county clerk for other counties without the process of probate in the other 22
county. 23
(b) Production of an attested copy of the will together with an attested copy of the 24
order of probate shall be required by the county clerk of the other county 25
before recordation. 26
(c) The clerk shall make the same charge for recordation as is otherwise provided 27
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for recording a will. 1
Section 4. KRS 395.015 is amended to read as follows: 2
(1) Before being appointed as executor, administrator, curator, or administrator with 3
the will annexed, every person shall make and file in duplicate a written application 4
for appointment under oath, which shall include:[must state] 5
(a) The names of the deceased's surviving spouse and all of his or her heirs-at-6
law[ or such] as are known, and the United States postal address and 7
electronic mail[their post office] address of each if known;[,] 8
(b) The date of death;[ and also a statement in general terms as to what the estate 9
consists of and the probable value of the personal and real estate and also] 10
(c) A statement of any indebtedness owing by the applicant to the deceased; 11
(d) If the decedent died testate, the name and address of the person to whom 12
any will admitted to probate and recorded with the county clerk is to be 13
returned under Section 3 of this Act; and 14
(e) An acknowledgment by the person seeking appointment as executor, 15
administrator, curator, or admini strator with the will annexed in 16
substantially the following form: 17
"Upon appointment, I agree to faithfully execute the duties required by law, 18
and such additional duties ordered by the court, and that I am subject to 19
removal as a fiduciary if I fail to p erform the required duties, and subject to 20
possible civil and criminal penalties for improper conversion of any 21
property I hold as a fiduciary." 22
(2) (a) If the decedent died testate, the decedent's will shall be presented to the 23
court prior to or at the time of any appointment. 24
(b) After the will is admitted to probate, the clerk of the court shall: 25
1. Beginning January 1, 2028, collect the fee required by the county 26
clerk under Section 56 of this Act for the filing of a will and the tax 27
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required under Section 57 of this Act; and 1
2. Deliver the following to the county clerk: 2
a. The will and a certified copy of the order admitting the will to 3
probate, which shall include the name and address of the person 4
to whom the will is to be returned as provided under S ection 3 of 5
this Act; and 6
b. The filing fee and tax collected under subparagraph 1. of this 7
paragraph. 8
(3) (a) A written general financial disclosure statement of the property of the 9
decedent, to the extent known, shall be filed separately at the time of f iling 10
the application for appointment. 11
(b) The general financial disclosure statement shall comply with the 12
requirements in subsection (4) of this section and shall include the 13
approximate value, determined in good faith, of all real and personal 14
property known by the applicant which may include: 15
1. Furniture and household goods; 16
2. Personal effects, including jewelry and collectibles; 17
3. Stocks, bonds, bank accounts, and retirement accounts that do not 18
constitute a nontestamentary transfer on death as prov ided in KRS 19
391.360; 20
4. Insurance policies if payable to the estate of the decedent; 21
5. Real property that is not held in joint ownership with another with 22
right of survivorship; and 23
6. Any other personal property accurately identified, including the 24
decedent's share in any partnership or ownership in any other entity. 25
(c) The general financial disclosure statement shall be confidential, placed 26
under seal when filed, and disclosed only: 27
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1. To the personal representative; 1
2. To the personal representative's attorney; 2
3. To any beneficiary or heir at law; 3
4. As required under subsection (9) of this section and Section 13 of this 4
Act; or 5
5. By order of the court upon a showing of good cause that shall include 6
a creditor who has filed a verified statement of claim against the 7
estate. 8
(d) As used in paragraph (c) of this subsection, and in subsection (7) of Section 9
13 of this Act, a finding of good cause shall not: 10
1. Be based solely on the position of the decedent as a public offi cial, 11
public figure, or other person who has drawn substantial public 12
attention due to the person's official acts, fame, notoriety, or celebrity; 13
or 14
2. Be made if the release of the protected information would constitute a 15
clearly unwarranted invasion or e xploitation of personal privacy or 16
proprietary interests of a beneficiary of the estate or an heir at law 17
without substantial evidence of irreparable harm or material financial 18
loss if release of the requested information to the requesting party is 19
denied. 20
(4) The application for appointment and the general financial disclosure statement 21
shall be signed and dated by the person seeking the appointment and the 22
acknowledgment required under subsections (1) and (3) of this section may be 23
satisfied, with like fo rce and effect, by a written and dated declaration under the 24
penalty of perjury, in substantially the following form: 25
"I declare under the penalties of perjury of the laws of the Commonwealth of 26
Kentucky, which may include a fine or imprisonment, that the foregoing is true 27
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and correct." 1
(5) If[The foregoing requirement in respect to names and addresses of heirs-at-law may 2
be omitted when] the application for appointment is being made by the executor 3
named in the will , the names and addresses of the heirs at law may be omitted 4
unless requested by the court. 5
(6) The application of a nonresident shall include the designation of a resident of the 6
county where probate or administration is pending as his or her agent for the 7
service of process in any action against him or her as personal representative or 8
personally, provided that the[such] personal action must have accrued in the 9
administration of the estate[. A duplicate copy of said application shall be mailed by 10
the clerk to the secretary of revenue of the State of Kentucky]. 11
(7) (a) Except as provided in paragraph (b) of this subsection, the court shall set a 12
time for hearing the application for appointment when: 13
1. [(2) In the case of intestacy, or where ] An administrator with will 14
annexed or de bonis non is to be appointed and there is[, if there be ] no 15
surviving spouse; or[, or if such ] 16
2. The surviving spouse waives the right of appointment or is not qualified 17
to act and does not nominate a suitable administrator , and there is more 18
than one (1) resident heir-at-law entitled to appointment[, the court shall 19
thereupon set a time for hearing such application]. 20
(b) No hearing shall be required under paragraph (a)2. of thi s subsection if the 21
surviving spouse and all of the known heirs at law have executed a waiver 22
of the right to a hearing. 23
(c) Notice of any[said] hearing set under this subsection shall be given to the 24
surviving spouse and all known heirs of the deceased r esiding in the state, or 25
elsewhere, in the manner provided in KRS 395.016. 26
(8) Upon receipt of the filings and presentation of the will as required under this 27
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section, the court, in its discretion, shall determine if a hearing on the application 1
for the appointment of a fiduciary is required. 2
(9) The clerk of the court shall transmit a copy of the application and general 3
financial disclosure statement to the commissioner of the Department of 4
Revenue. 5
Section 5. KRS 395.016 is amended to read as follows: 6
(1) (a) When a hearing is ordered by the court, notice of the hearing on[of] an 7
application for the appointment of a fiduciary, or petition for the probate of a 8
will,[an administrator, administrator with will annexed or gua rdian is required 9
, it] shall be given by mailing written notice of the time, place , and purpose of 10
the[such] hearing at least five (5) days before the[said] hearing. 11
(b) Proof of[ such] notice shall be by: 12
1. Certified mail, return receipt requested; or[ by] 13
2. The applicant's written and dated declaration in conformity with the 14
requirements of a declaration under subsection (4) of Section 4 of this 15
Act[affidavit] that notice of the hearing [the same] was mailed to each 16
of the parties [ entitled thereto] in a sealed envelope, postage prepaid, 17
and the date when posted.[, which] 18
(c) Proof of notice shall be filed at the time of the hearing. 19
(2) If all parties entitled to notice are under no disability and waive notice in writing, 20
the court may hear the[such] application as if notice had been given. The waiver of 21
notice may be filed before or at the time of the hearing. 22
(3) A minor over fourteen ( 14) years of age may waive notice of the hearing if he or 23
she is present in person at the [ time of] hearing.[ of application for appointment of 24
his guardian; provided, however] 25
(4) In any estate where the gross amount involved is less than five thousand do llars 26
($5,000) the court , in its discretion , may dispense with the notice requirements of 27
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this section[ relating to notice]. 1
Section 6. KRS 395.020 is amended to read as follows: 2
(1) The person named in a will as executor shall not act as executor to any extent until: 3
(a) The will or an authenticated copy of the will is admitted to probate;[record, 4
and] 5
(b) He or she has presented an executed surety bond when required under 6
Section 11 of this Act; and 7
(c) He or she has taken an oath in the court in which the record is made , or if no 8
hearing is required by the court for appointment, has filed with the court in 9
which the record is made the declaration executed under penalty of perjury 10
in accordance with Section 10 of this Act. 11
(2) The person named in a will as executor [He] may, however, provide for the burial 12
of the testator, pay the reasonable funeral expenses, and take care of and preserve 13
the estate. 14
Section 7. KRS 395.050 is amended to read as follows: 15
(1) If no executor is appointed by the will, or if all the executors named in the will die, 16
refuse the executorship , or fail to provide surety [give] bond if required by the 17
court, the court may grant a dministration with the will annexed to the person who 18
would have been entitled to administration if there had been no will, but a[no] 19
person whose interests are antagonistic to the provisions of the will shall not be 20
eligible to appointment as administrato r with the will annexed [ whose interests are 21
antagonistic to the provisions of the will] . Failure to provide surety [give] bond 22
when required by the court shall amount to refusal to act as executor. 23
(2) An administrator with the will annexed shall possess and exercise all power and 24
authority, have the same rights and interest, and be responsible in like manner as the 25
executors named in it. 26
Section 8. KRS 395.080 is amended to read as follows: 27
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If all the persons nominated as executors are under the age of eighteen (18) at the time of 1
probating the will, or those who are of age fail to qualify, administration with the will 2
annexed may be granted during [ such] minority. [But ]If a testator, by his or her will, so 3
directs, however , then the[such] infant executor may qualify and , if required by the 4
court, give surety bond as an adult. 5
Section 9. KRS 395.105 is amended to read as follows: 6
(1) Every fiduciary, before entering upon the execution of the trust, shall receive letters 7
of appointment from the District Court having jurisdiction as[ now] fixed by law. 8
(2) The duties of a fiduciary shall be those[such as are] required by law, and any[such] 9
additional duties[ not inconsistent therewith] as the court may order. 10
(3) The appointment of the personal representative shall be effective upon[with] the 11
signing of an order by the judge , the presentation to the clerk of an executed 12
surety bond when required under Section 11 of t his Act, and either the 13
administration of any oaths required in Section 10 of this Act, or the filing of the 14
declaration in Section 10 of this Act if no hearing is required. 15
Section 10. KRS 395.120 is amended to read as follows: 16
(1) If the court requires a hearing for the appointment of the fiduciary, each 17
executor, administrator,[ and] curator, and administrator with the will annexed or 18
de bonis non shall take an oath before the court in which the application for 19
appointment is made to faithfully perform the duties of his or her office to the best 20
of his or her judgment. 21
(2) (a) The oaths required of the executor, administrator, curator, and 22
administrator with the will annexed or de bonis non may be satisfied by 23
execution of the following declaration: 24
"1. I, the undersigned, agree to faithfully perform the duties of the office 25
as required by law, including but not limited to: 26
a. Deposit all funds which come into my hands in a lawful 27
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depository located within this Commonwe alth and provide 1
canceled checks as may be required to prove accounts; 2
b. Keep estate funds in separate estate accounts at all times during 3
the administration of the estate; 4
c. Invest all funds in a lawful manner; 5
d. Make and file all required documents when due as required by 6
law; 7
e. File all tax documents as required by law; 8
f. Maintain adequate insurance to reasonably protect any property 9
that I may hold as a fiduciary; and 10
g. Obey all orders of the court; 11
2. I, the undersigned, understand I am subject to removal as the 12
fiduciary if I fail to perform the duties required of me under the laws 13
of this state and that I am subject to possible fines, and civil and 14
criminal penalties for improper conversion of the property that I hold 15
as fiduciary; and 16
3. If applicable, I, the undersigned, declare that my intestate, so far as I 17
know or believe, died without leaving a will." 18
(b) The oath sworn or affirmed in the presence of a notary public, or the 19
declaration if authorized by the court, shall be presented to the appropriate 20
clerk of the court with the fiduciary's application for appointment [ Each 21
administrator shall also take an oath that his intestate, so far as he knows or 22
believes, died without leaving a will]. 23
Section 11. KRS 395.130 is amended to read as follows: 24
(1) No bond shall be required of a personal representative appointed under this 25
chapter except as provided in subsection (2) of this section. 26
(2) The court shall orde r a surety bond of a personal representative appointed under 27
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this chapter when the: 1
(a) Appointment is of a public administrator under Section 16 of this Act or a 2
curator under Section 19 of this Act; or 3
(b) Court, in its discretion, determines that a sur ety bond is required to 4
adequately protect all interests in the estate. In exercising its discretion 5
under this paragraph, the court may consider the: 6
1. Expression of intent of the testator under a will or trust; however, 7
notwithstanding any other law to the contrary, the court shall not be 8
bound by the expressed intent; and 9
2. Experience of the personal representative, including whether or not 10
the personal representative is acting as a fiduciary in any other matter. 11
(3) (a) Every fiduciary of whom surety bond is required under subsection (2) of this 12
section[, except as provided in KRS 286.3 -220 and 386B.7 -020,] shall 13
provide the surety bond as ordered by the court. [on his bond unless, on the 14
petition of any interested party, the court upon being satisfied that all interests 15
are adequately protected excuses the requirement of a surety, or unless, by the 16
terms of the will or trust, surety is not required. Subsequent to the 17
qualification of a fiduciary and] 18
(b) On motion of any interested party the court may: 19
1. Reduce or increase the amount of the surety bond;[, release the surety,] 20
or 21
2. Permit the substitution of another surety bond with the same or different 22
sureties. 23
(4) If an executor does not give surety bond when required to do so, he or she shall not 24
be authorized to act as executor[permitted to qualify], and, if he or she has already 25
been appointed,[qualified, he] shall be removed. 26
(5)[(2)] Whenever any personal representative, guardian, conservator, or fiduciary 27
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who is required by law to execute a surety bond for the faithful discharge of his or 1
her duties or fulfillment of his or her trust, procures as surety on his or her bond an 2
incorporated surety company authorized to do business in this state, the necessary 3
and reasonable cost incident to the surety bond shall be a lawful charge against the 4
estate in the hands of the fiduciary, as other expenses of administration, and in his 5
or her settlement the fiduciary shall be entitled to credit by the amount actually paid 6
by him or her for that purpose, subject to the approval of the court which has 7
approved the surety bond. 8
Section 12. KRS 395.140 is amended to read as follows: 9
(1) A fiduciary required to execute a surety bond shall deliver to the cl erk of the 10
court of the county in which he or she is appointed a surety bond payable to and 11
with the Commonwealth, subscribed to by the principal and sureties in the 12
presence of a notary, in the amount, and with sufficient sureties, as may be 13
approved by the court in its order of appointment. 14
(2) The District Court shall not accept as surety, in any surety bond of a personal 15
representative, any master or other commissioner whose duty is to settle the 16
accounts of personal representatives , or any judge or cle rk of a District Court or 17
practicing attorney of that court. 18
(3)[(2)] The surety bond shall be filed[subscribed by the principal and sureties, 19
approved by the court, attested by the clerk of the court and carefully kept] by the 20
clerk in his or her office i n a record maintained [book to be provided] for that 21
purpose. 22
Section 13. KRS 395.250 is amended to read as follows: 23
(1) (a) It shall be the duty of a personal representative of a decedent to file[return] an 24
inventory[ in duplicate] no later than ninety (90) days[within two (2) months] 25
from the time of qualifying as personal representative. [ such, to the clerk's 26
office of the court in which he qualified,] 27
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(b) The inventory[original of which] shall be confidential except as provided in 1
subsection (2)(a) of this section, and shall be placed under seal when filed. 2
The clerk of the court shall transmit a copy of the inventory[ recorded by the 3
clerk and the duplicate shall be mailed by the clerk] to the 4
commissioner[secretary] of the Department of Revenue. 5
(2) (a) It shall be the duty of the personal representative of a decedent to furnish a 6
filed copy of the inventory required under subsection (1) of this section to 7
any person authorized under subsection (3)(c) of Section 4 of this Act who 8
has requested a copy, or to whom the court has ordered disclosure of assets 9
and liabilities. 10
(b) No person or entity authorized under subsection (3 )(c) of Section 4 of this 11
Act or by the court to receive records under seal, including the inventory 12
filed under this section, shall copy, reproduce, or in any way release any 13
information contained in the records without specific authorization from 14
the cou rt in which the personal representative qualified. Violation of this 15
paragraph shall be a basis for a finding of contempt of court. 16
(3) Copies from the record of the inventory or appraisement shall be prima facie 17
evidence for or against the personal [such] representative when required and 18
approved for release by the court for that purpose. 19
(4) If any property not included in the initial inventory comes to the knowledge of the 20
personal representative, or if the personal representative learns that the value o r 21
description of any item listed in the initial inventory is erroneous or misleading, 22
the personal representative shall file an amended inventory with the court. 23
(5) (a) If the personal representative has cause to believe that any of the assets of 24
the esta te are concealed or wrongfully withheld from the personal 25
representative, or that any person has in his or her possession or under his 26
or her control any records, books, documents, or related information 27
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concerning withheld assets or the ownership of withheld assets, the personal 1
representative shall petition the court before which the estate action is 2
pending for an order compelling discovery of the required information. 3
(b) All parties named in the petition may be compelled to provide under oath 4
either by response to the petition or by personal testimony to the court, all 5
the facts known to them concerning the assets of the estate and any adverse 6
claims relating to the assets of the estate. 7
(c) If the court finds that any person has property or assets of t he estate to 8
which there is no adverse claim, the court shall direct the property or asset 9
be delivered to the personal representative who shall account for the 10
property or asset in an amended inventory filed with the court no later than 11
twenty (20) days following entry of the court's order. 12
(6) Any settlement ordered or filed under this chapter shall be filed in compliance 13
with the confidentiality provisions in subsections (1) and (2) of this section. 14
(7) Additional documents containing information regarding the assets or value of the 15
decedent's estate shall not be ordered to be filed except upon motion with good 16
cause shown, and any document filed under this section shall be in compliance 17
with the confidentiality provisions in subsections (1) and (2) of this section. 18
(8) Failure to timely file any inventory when due shall be subject to the penalties in 19
Sections 14 and 30 of this Act. 20
Section 14. KRS 395.255 is amended to read as follows: 21
(1) It shall be the duty of the c lerk of the court to report to the judge once each 22
month the names and addresses of all fiduciaries who failed to submit an 23
inventory or settlement due according to law during the previous calendar month. 24
(2) The judge shall notify the fiduciaries reported under subsection (1) of this section 25
of their failure to file an inventory or settlement and shall warn them of the 26
penalties provided by law. 27
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(3) If a fiduciary neglects or refuses to file an inventory or settlement[account] when 1
due according to law, or when ordered by the court, the court shall notify the 2
fiduciary of his or her delinquency and fix a date when the[such] inventory or 3
settlement shall[account must] be filed.[ Unless there is pending in the circuit court 4
a suit to settle the estate such ne glect or refusal shall be grounds for removal by the 5
court.] 6
(4) (a) If the fiduciary fails to file the inventory or settlement by the extended date 7
ordered by the court [such account within thirty days after the date fixed in 8
said notice], the court shall enter an order for the fiduciary to appear before 9
the court to show cause why he or she should not be found to have breached 10
his or her fiduciary duty and be: 11
1. Removed from service as a fiduciary; 12
2. Found in contempt of court; 13
3. Fined in accordance with Section 30 of this Act; 14
4. Denied any[no] allowance[ shall be made] for his or her services; or 15
5. Be subject to any other penalty authorized by law for breach of a 16
fiduciary duty [ unless the court enters upon its minutes an order that 17
such delay was justified]. 18
(b) Failure to appear at a show cause hearing under this subsection shall result 19
in automatic removal from service as a fiduciary. 20
(5) The time for filing an inventory or settlement under this section shall not be 21
extended by more than thirty (30) days following a hearing: 22
(a) Unless there is pending in Circuit Court a suit to settle the estate; or 23
(b) Upon good cause shown by the fiduciary. 24
Section 15. KRS 395.300 is amended to read as follows: 25
An administrator de bonis non or any other successor appointed in the place of a personal 26
representative who has resigned ,[ or] has been removed ,[ or] whose letters have been 27
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revoked,[ or who] has ceased to ac t, or has died, may maintain an action against the 1
former personal representative and the sureties on the administration surety bond, if any, 2
and against the predecessor's real and personal representatives, for all damages or debts 3
arising from the maladministration or omission of the predecessor. 4
Section 16. KRS 395.380 is amended to read as follows: 5
(1) The District Court of each county shall appoint a discreet, qualified[fit] person to 6
act as administrator of decedents' estates of which there is no personal 7
representative, and as guardian of orphans who have no guardian. 8
(2) The public administrator or guardian appointed under this section:[He] 9
(a) Shall serve at the discretion of the District Court;[.] 10
(b)[(3) He] Shall be sworn and execute bond with good surety to the state for 11
the faithful discharge of his or her duties;[,] and 12
(c) Upon being duly sworn and executing surety bond[when so sworn with bond 13
so executed], shall be accepted by the court in every estate in which the public 14
administrator is appointed without the necessity of additional surety. 15
Section 17. KRS 395.390 is amended to read as follows: 16
(1) (a) The District Court of a county which has a public administrator and guardian 17
shall, after the expiration of sixty (60) days from the death of the decedent, 18
order the public administrator and guardian to administe r the estate of the 19
decedent where: 20
1. The surviving spouse and heirs waive their right to be appointed;[, or if ] 21
2. The surviving spouse does not nominate a suitable administrator ;[, or in 22
the event ] 23
3. Any of the persons designated in KRS 395.040 are u nable[,] or found to 24
be incapable of handling or managing the estate;[,] or 25
4. [If ]From any other cause there is no personal representative. 26
(b) If there is no public administrator and guardian, the court shall use its 27
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discretion to appoint an administra tor[order the sheriff] to administer the 1
estate. 2
(2) (a) The District Court shall also confide to the public administrator and guardian 3
the care and control of the persons and estates of all minors when it appears 4
that a minor has no testamentary guardian and no one will apply for 5
appointment, or serve, as guardian. 6
(b) If there i s no public administrator and guardian, the court shall use its 7
discretion to appoint a guardian to serve under this subsection. 8
Section 18. KRS 395.400 is amended to read as follows: 9
(1) The public administrator and gua rdian or person appointed under Section 17 of 10
this Act [sheriff] shall, by [ virtue of his office and the] order of the court, be the 11
administrator or administrator de bonis non, or if there is a will, administrator with 12
the will annexed, and shall have all the rights and powers,[ and] be subjected to the 13
same liabilities , and be governed by the same laws prescribed for administrators 14
and guardians.[ If the sheriff is acting, his powers, rights, duties and liabilities shall 15
not expire with his office of sheriff.] 16
(2) The court may, however, at any time, set aside the order entrusting the estate to the 17
public administrator and guardian or person appointed under Section 17 of this 18
Act[sheriff] and allow an executor or administrator to qualify. 19
Section 19. KRS 395.410 is amended to read as follows: 20
(1) During the contest about the probate of a will, or when the court for any valid cause 21
is delayed in granting letters testamentary or of administration, it may appoint a 22
curator to collect and preserve the estate of the decedent until probate of the will is 23
granted, or until the cause for which the order was made is removed. 24
(2) When any resident of this state or person owning property in this state has been 25
absent from his or her last known place of residence for a period of one (1) year 26
and is not known to have been living during that time, the District Court of any 27
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county in which a personal representative could be appointed for that person's estate 1
if deceased, may appoint a cura tor to collect and preserve the estate of that absent 2
person. 3
(3) The court shall take a surety bond payable to and with the Commonwealth [with 4
good surety] from the person appointed curator . The surety bond shall be 5
subscribed to by the principal and sureties in the presence of a notary or as may 6
be otherwise authorized by the court, for the full and faithful performance of the 7
trust confided in him or her. 8
(4) The surety bond shall be kept by the clerk of the court in his or her office in a 9
record to be maintained for that purpose. 10
Section 20. KRS 395.455 is amended to read as follows: 11
(1) Where the exemption for[of] the surviving spouse or children, alone[,] or together 12
with preferred claims , paid by either the surviving spouse or children or by the 13
surviving spouse where the surviving spouse's [a widow or by the widower where 14
the wife's] estate is legally liable for payment, equals or exceeds the amount of 15
distributable[probatable] assets, the court may order that administration of the 16
estate be dispensed with and the[such] assets be transferred to the surviving spouse 17
or, if there is no surviving spouse, to the surviving children, or to a person 18
designated by the[such] surviving spouse[ to receive all or part of such assets] . The 19
court may[ so] order that administration of the estate be dispensed with in both 20
testate and intestate estates[ and] without requiring the renunciation of a will[ or the 21
giving of bond]. 22
(2) If the court is satisfied that no distributable[probatable] estate will pass through the 23
hands of the personal representative, it may order that no letters of administration 24
be issued and in the case of a testate estate, order that the will be probated only. 25
(3) The court may order that the administration of the estate be dispensed with and 26
the assets transferred in favor of a preferred creditor or other person where: 27
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(a) A surviving spouse or, if there is no surviving spouse, the surviving children 1
have[has] waived[ his or her right to] the exemption accorded by law in favor 2
of a person who has paid preferred claims in an amount equaling[equalling] 3
or exceeding the amount of distributable[probatable] assets or who is legally 4
entitled to[ such] payment;[,] or 5
(b) [where ] There is no surviving spouse or surviving children, and 6
another[such] person has paid preferred claims [made such payment] or is 7
legally entitled to payment [thereto, the court may order that the 8
administration of the estate be dispensed with and such assets transferred to 9
such person. The court may so order without requiring the giving of bond]. 10
(4) For purpose of this section, the exemption for[of] the surviving s pouse and 11
children shall be the [ is such] exemption[ as has been] created by KRS 391.030 , 12
and preferred claims shall be [are] those listed in KRS 396.095 and in the order 13
listed[thereof]. 14
Section 21. KRS 395.470 is amended to read as follows: 15
(1) Administration of the estate of a person dying testate or intestate may be dispensed 16
with by agreement if: 17
(a) There are no debts owing by the estate; 18
(b) All beneficiaries[persons beneficially] entitled to the personal estate have 19
agreed in writing , under penalty of perjury, that there shall be no further 20
administration, and if applicable, have designated a trustee with power to 21
collect claims and demands; 22
(c) Advertisement has occurred as required in sub section (7) of this section, as 23
evidenced by an acknowledgment under penalty of perjury; 24
(d) Provision has been made for the state inheritance tax and the federal estate 25
tax, if any; and 26
(e) [Either ]There are no claims or demands due the estate, if no trustee has been 27
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designated by agreement [or the written agreement to dispense with 1
administration designates a trustee with power to collect claims and 2
demands]. 3
(2) (a) The written agreement required[provided] in subsection (1)(b) of this section 4
shall be acknowledged under penalty of perjury by the beneficiaries; and 5
(b) The agreements of all beneficiaries shall be [parties and] filed in the District 6
Court together with the motion [ of the parties] for an order dispensing with 7
administration by agreement. 8
(3) An agreement prescribed in subsection (1)(b) of this section shall be effective if it 9
is executed by a person who had authority to contract on behalf of a beneficiary 10
when signed. 11
(4) A motion to dispense with administration by agreement may be filed at an y time 12
after: 13
(a) Probate of the will, if any; 14
(b) Appointment of a personal representative: and 15
(c) Advertisement for creditors as required under this section. 16
(5) If the court is satisfied by the agreements[affidavit or otherwise] that the conditions 17
prescribed in subsection (1) of this section exist, the court[it] shall enter an order 18
dispensing with any further administration by agreement. 19
(6) If the motion and the agreements [written agreement] of the beneficiaries 20
designate[designates] a trustee to collect claims or demands, the order shall confirm 21
the designation, and the person [ so] designated as the trustee shall have the same 22
right to sue for and collect claims and demands as[that] an administrator appointed 23
under this chapter[has. 24
(3) The District Court shall be satisfied that provision has been made for the state 25
inheritance tax and the United States estate tax]. 26
(7) (a)[(4)] Prior to moving to dispense with administration by agreement, the 27
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beneficiaries[persons applying for an order dispensing with administration] 1
shall advertise for creditors of the estate[intestate] to appear and present 2
any[their] claims to some person at t he county seat. The person and place 3
shall be designated in the advertisement. 4
(b) The advertisement shall also give notice of when, where, and by whom the 5
order dispensing with administration by agreement will be applied for. 6
(c) The advertisement shall be posted at the courthouse door for six (6) weeks [,] 7
and published pursuant to KRS Chapter 424. [ The order dispensing with 8
administration shall not be granted until the persons applying for the order file 9
in the District Court the affidavit of one (1) of them showing that 10
advertisement for creditors has been made.] 11
(8)[(5)] The court may order that the beneficiaries [persons] applying for the order 12
dispensing with administration by agreement [shall], before the order is entered, 13
execute a surety [give] bond[ with surety] in the amount of the personal estate for 14
the benefit of any creditors who, within six (6) months from the order dispensing 15
with administration by agreement, appear and file their claims with the court clerk. 16
This surety bond shall be approved by the District Court and shall run to the state 17
for the benefit of those creditors and be conditioned to be void if none of them files 18
a[his] claim with the clerk within six (6) months from the date of the order 19
dispensing with administration by agreement. 20
Section 22. KRS 395.605 is amended to read as follows: 21
(1) Upon the[ sworn] application of any fiduciary, under penalty of perjury, that the 22
fiduciary is the sole beneficiary of any estate, the court may dispense with the 23
requirements of this chapter regarding [ periodic or final] settlement of fiduciaries' 24
accounts[ and may dispense with the requirements of a surety for the fiduciary] and 25
shall accept from the fiduciary an informal final settlement if: 26
(a) [. The informal settlement shall be made, under oath, by the fiduciary and 27
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shall state that ]The estate was solvent;[ that] 1
(b) All legal claims and debts have been paid, or if not p aid, the manner in which 2
the claims and debts have been provided for; 3
(c) [that, for final settlement, ] The requirements of the inheritance, estate , or 4
similar death statutes have been met and the tax paid, if due and payable; 5
(d) [that ]All court costs have been paid; 6
(e) The name of the attorney(s), if any, representing the fiduciary, and the amount 7
of the attorney's fee have been provided;[,] and 8
(f) [that ]The beneficiary has received his or her share [. An informal settlement 9
may be filed at any time after expiration of six (6) months from the fiduciary's 10
appointment. Upon the filing of the informal final settlement, the court may 11
enter an order discharging the fiduciary, and his or her surety, if any. When a 12
settlement is effected in the informal manne r, no notice to any person shall be 13
required nor shall the court be compelled to inquire into detailed items of 14
income or disbursements]. 15
(2) (a) Upon application of any fiduciary, under penalty of perjury, [If a proposed 16
periodic or final settlement of a f iduciary is] accompanied by [ a] verified 17
waivers[waiver] executed by all of the beneficiaries of an estate,[ and] none of 18
whom is[the beneficiaries is] under a disability, the court shall accept from the 19
fiduciary an informal final settlement which meets t he requirements of 20
subsection (1) of this section. 21
(b) Any beneficiary[Said beneficiaries] may request an accounting of the assets 22
of the estate prior to execution of the waiver. 23
(c) A[No] verified waiver shall not be required [need be obtained] from a 24
nonresiduary legatee who has received and receipted for his or her legacy, 25
and the canceled check or signed receipt attached to the proposed settlement 26
shall be[being] sufficient evidence of satisfaction. [ The court may require the 27
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fiduciary to execute bond with or without surety to insure the application of 1
the estate assets to the debts of the decedent.] 2
(3) An informal final settlement may be filed at any time after expiration of six (6) 3
months from the date of the fiduciary's appointment. 4
(4) The court sh all not require notice to any person or a hearing prior to approval 5
and confirmation of an informal final settlement. 6
(5) Upon approval and confirmation of the informal final settlement, the court may 7
enter an order discharging the fiduciary, and his or her surety, if any. 8
(6) In the event that one (1) or more of the beneficiaries of the estate is under a 9
disability, the court may allow the filing of an informal final settlement if the court 10
is of the opinion that the best interests of the person under the disability would be 11
served. 12
Section 23. KRS 395.610 is amended to read as follows: 13
(1) Two (2) years after appointment and annually thereafter, unless otherwise provided 14
by law, every fiduciary as defined in KRS 395.001, other than a guardian or 15
conservator of a mentally disabled person, shall render an account of the execution 16
of his or her trust and file it with [to] the court by which he or she was appointed[, 17
including in the account an itemized statement of receipts and disbursements 18
supported by vouchers accompanying the account and a statement of all 19
investments on hand and changes in i nvestments since the filing of his last account. 20
The settlements, when approved and confirmed by the court, shall be recorded and 21
indexed by the clerk, and the original and the vouchers carefully kept by him in his 22
office]. 23
(2) A periodic settlement shall be filed until all trust assets and investments have 24
been fully distributed and all debts, costs, fees, and taxes have been paid or 25
accounted for. 26
(3) A periodic settlement shall identify all assets and investments of the trust estate 27
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on hand, including a beginning and current value, and shall account for all 1
receipts and disbursements occurring since the last inventory or settlement with 2
supporting documentation. 3
(4) Notwithstanding subsection (1) of this section [ An account shall be rendered by a 4
fiduciary], at any other time upon order of the court either on [upon] its own 5
motion, or upon the motion [that] of any person interested in the trust, for good 6
cause shown , a fiduciary shall file a periodic settlement that meets the 7
requirements of subsection (3) o f this section and as otherwise ordered by the 8
court. 9
(5) In addition to the requirements of subsection (3) of this section, all final 10
settlements shall include: 11
(a) A complete accounting [ on affidavit. At the expiration of his trust, the 12
fiduciary shall fully account] for and distribution of[pay over] the trust estate 13
assets and investments, including whether the distribution was: 14
1. In kind and if so to whom; or 15
2. Liquidated for cash for payment of debts, costs of administration, or 16
pecuniary legacies; 17
(b) A[to the person or persons entitled thereto. Every such account shall] list of all 18
unpaid creditors whose claims have been allowed and all creditors whose 19
claims have been disallowed; 20
(c) Fees and commissions paid to the fiduciary and his or her attorney; and 21
(d) Provision for state inheritance tax and federal estate tax, if any. 22
(6) No settlement[account] of a fiduciary, except of corporate fiduciaries under the 23
supervision of state or federal banking authorities, shall be approved until there are 24
exhibited to the court, for its examination, the security or securities shown in the 25
account as being in the hands of the fiduciary, or the certificate of a bank having 26
possession thereof or in which they have been deposited for safekeeping, and a 27
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certified bank statement showing the funds to the credit of the trust. 1
(7) The clerk of the court shall record all settlements that are approved and 2
confirmed by the court. 3
(8)[(2)] Guardians and conservators of mentally disabled persons may be required to 4
render accountings to the court under the provisions of this section. Guardians and 5
conservators of mentally disabled persons shall comply with the reporting 6
requirements of KRS Chapter 387. 7
Section 24. KRS 395.617 is amended to read as follows: 8
(1) A fiduciary may, prior to filing a periodic or final settlement and prior to a 9
distribution of assets, file with the court a proposed periodic or final settlement 10
within the time prescribed for filing settlements in Section 23 of this Act. 11
(2) The proposed settlement shall be set for hearing, and in addition to the notice given 12
as provided in Section 26 of this Act as for any other settlement, the fiduciary shall 13
notify all[ except that] beneficiaries of the estate, other than nonresiduary legatees 14
who have received and receipted for their legacies, [ shall also receive notice from 15
the fiduciary] by certified mail, return receipt requested, at least twenty (20) days 16
prior to the hearing date. 17
(3) The proposed settlement shall comply with the requirements for periodic and final 18
settlements in Section 23 of this Act, except the proposed settlement [set forth all 19
assets and disbursements previously made,] shall also indicate any assets[ on hand 20
and] anticipated to be received subsequent to filing[the date of] the proposed 21
settlement and prior to the filing of the periodic or final settlement and the 22
proposed distribution of all or a portion of the a ssets. Documentation supporting 23
receipts and past disbursements shall not be required to be filed with the proposed 24
settlement unless ordered by the court if exceptions are filed [, and shall further 25
indicate the manner in which the remaining and anticipate d assets are proposed to 26
be distributed. The proposal may set forth which assets are to be distributed in kind 27
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and to whom and which assets may be liquidated for distribution of cash or for 1
payment of debts, costs of administration, or pecuniary legacies. The proposal may 2
also indicate claims proposed to be allowed or disallowed, in whole or in part, and 3
may also indicate fees and commissions proposed to be paid to the fiduciary and his 4
attorney. The inclusion of evidence and vouchers to accompany the propo sal shall 5
not be necessary unless required by the court upon exceptions filed]. 6
(4) At the hearing, if no exceptions are filed, the proposal, if made according to law, 7
shall be approved. If exceptions are filed, other evidence besides that reported may 8
be heard, and the court shall, upon the whole case, reject, confirm, alter, or amend 9
the proposal. 10
(5) Following the entry of an order approving, confirming, or amending the proposed 11
settlement[of approval or of an order of amendment] , the fiduciary shall d isburse 12
the assets in accordance with the order [therewith]. Following the distribution, the 13
fiduciary shall file a settlement accompanied by documentation[evidence and 14
vouchers] showing that distribution was effected in conformity with the [ court] 15
order approving, confirming, or amending [. If it appears to the court that the 16
distribution was in conformity, the court shall confirm the settlement and, if the 17
settlement is final, discharge the fiduciary and his surety without further hearing or 18
notice to any person]. 19
(6) [(2)] An aggrieved party may, no later than thirty (30) days from the entry of the 20
order upon the proposed settlement, institute an adversary proceeding in Circuit 21
Court pursuant to KRS 24A.120(2). 22
Section 25. KRS 395.620 is amended to read as follows: 23
(1) The District Judge shall review a periodic or final settlement filed by a fiduciary, 24
accompanied by documentation showing receipts, payments, and distribution. 25
(2) If the settlement is not submitted as provi ded in subsection (5) of Section 24 of 26
this Act and otherwise found by the court to be complete, the court shall direct the 27
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clerk of the court to [make a written report of the settlement, showing each item of 1
debit and credit, and the general result, and re turn it, with all evidence heard and 2
vouchers filed, to the Circuit Clerk. The clerk shall note it of record, and indorse on 3
it the time of filing, and] set a date for a hearing on the settlement and give notice 4
as required in Section 26 of this Act [report]. 5
(3)[(2)] If the settlement is found to be[A hearing on a settlement filed] in conformity 6
with an order approving, confirming, or amending a [approved] proposed 7
settlement made under KRS 395.617 , the court shall confirm the settlement 8
without further hearing or notice to any person and, if the settlement is final, 9
discharge the fiduciary and his or her surety, if any[ shall not be necessary]. 10
Section 26. KRS 395.625 is amended to read as follows: 11
(1) Except as provided in subsection (5) of this section, not less than ten (10) days 12
prior to the date of the settlement hearing under Section 25 of this Act, the clerk of 13
the court shall publish[cause] notice of the[ filing of a] settlement[ to be published] 14
pursuant to KRS Chapter 424. 15
(2) The notice required under subsection (1) of this section shall include the: 16
(a) [, stating the ]Name of the fiduciary;[, the ] 17
(b) Name of the trust;[, the ] 18
(c) Nature of the account; and[ the ] 19
(d) Date of hearing, with a statement that exceptions shall[must] be filed before 20
the hearing.[that time; except that] 21
(3) (a) Notwithstanding the publication requi rement under subsection (1) of this 22
section, with the court's approval the fiduciary may, in lieu of the[such] 23
publication, send a written notice of the hearing [thereof] to all unpaid 24
creditors and distributees;[, which ] 25
(b) The notice shall be mailed at least ten (10) days before the[said] date of 26
hearing; and[. ] 27
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(c) The fiduciary [ in such cases] shall file his or her affidavit that the[such] 1
notice has been mailed. 2
(4) The actual cost of the notice, or the proportionate part of the notice [thereof], if 3
more than one (1) settlement, shall be taxed as costs. 4
(5) The provisions of this section shall not apply if the value of the trust or estate is [ 5
not more than] two thousand five hundred dollars ($2,500) or less and the assets of 6
the trust or estate are held in an account that may be accessed only upon order of 7
the court[, the provisions of this section shall not apply to settlements involving that 8
trust or estate]. 9
Section 27. KRS 395.630 is amended to read as follows: 10
(1) At the settlement hearing, if no exceptions are filed, the settlement[report], if made 11
according to law, shall be approved[ and recorded]. 12
(2) If exceptions are filed, other evidence[ besides that reported] may be heard, and the 13
court shall upon the whole case, reject, confirm, alter , or amend the 14
settlement[report, and, if confirmed, order it to be recorded. The vouchers 15
accompanying the report shall not be recorded, but must be carefully kept on file 16
with the report in the clerk's office]. 17
(3) Any[ new] evidence given in court must be electronically recorded and filed in the 18
court record[with the report]. 19
(4) Settlements confirmed[so made] and filed in the court record [recorded] shall be 20
prima facie evidence between the interested parties[ interested]. 21
Section 28. KRS 395.640 is amended to read as follows: 22
(1) The district judge shall at least once each year carefully inquire into the solvency of 23
all the sureties upon the bond of each fiduciary that is required by law, or has been 24
ordered by the court to post surety bond. 25
(2) [, and ] If there is reason to believe that any bond is not amply sufficient to protect 26
those interested, the district judge[he] shall at once give notice to the fiduciary that 27
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a new bond, or additional surety on the old bond[one], is required, and upon the 1
failure of the fiduciary to give the required bond or surety within a reasonable time 2
fixed by the court, the court shall remove the fiduciary[him]. 3
Section 29. KRS 395.645 is amended to read as follows: 4
When the court directs, settlements of the accounts of fiduciaries made before and 5
reported by any trial commissioner, and all settlements[reports] of estates or funds 6
received or disbursed, under order of the court, by its trial commissioner, after they have 7
been confirmed by the court, shall be filed in the court record with the documentation 8
showing receipts, payments, and distributio ns[recorded by the clerk of the court in a 9
book to be provided for that purpose. The vouchers accompanying the settlements or 10
reports shall not be recorded]. 11
Section 30. KRS 395.990 is amended to read as follows: 12
Any f iduciary failing, without good cause [ therefor] , to file his or her inventory or 13
account as required by notice given pursuant to KRS 395.255 shall be fined by the court, 14
for each day he or she neglects or refuses after the date fixed in the[said] notice, the sum 15
of one hundred[ten] dollars ($100)[($10)], to be collected by rule or other process. 16
Section 31. KRS 199.520 is amended to read as follows: 17
(1) (a) After hearing the case, the court shall enter a judgment of adoption [,] if it 18
finds that: 19
1. The facts stated in the petition were established; 20
2. [that ] All legal requirements, including jurisdiction, relating to the 21
adoption have been complied with; 22
3. [that ]The petitioners are of good moral character, of reputable standing 23
in the community and of ability to properly maintain and educate the 24
child; and 25
4. [that ]The best interest of the child will be promoted by the adoption and 26
that the child is suitable for adoption. 27
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(b) In the judgment, the name of the child shall be changed to conform with the 1
prayer of the petition. The judgment and all orders required to be entered and 2
recorded in the order book, including the caption, shall contain only the names 3
of the petitioners and the proposed adopted name of the child, without any 4
reference to its former name or the names of its birth parents. 5
(2) (a) Upon entry of the judgment of adoption, from and after the date of the filing 6
of the petition, the child shall be: 7
1. Deemed the child of petitioners; and 8
2. Except as provided in paragraph (b) of this subsection, [ shall be 9
considered for purposes of inheritance and succession and] for all [ 10
other] legal considerat ions, the natural child of the parents adopting it 11
the same as if born of their bodies. 12
(b) For purposes of inheritance and succession, the child shall only be deemed 13
the child of the petitioners if the child was adopted and resided in the 14
household of the petitioners prior to eighteen (18) years of age. 15
(c) Upon granting an adoption, all legal relationship between the adopted child 16
and the biological parents shall be terminated except the relationship of a 17
biological parent who is the spouse of an adoptive parent. 18
(3) The clerk of the court shall notify the cabinet of any action of the court with respect 19
to entering a judgment granting an adoption, the amendment of an adoption, or the 20
denial or dismissal of a petition for adoption. 21
(4) (a) The cabinet or ot her child -placing agency shall provide to the adoptive 22
parents and the Circuit Court, [health history and other nonidentifying 23
background information of biological parents and blood relatives of the 24
adopted person,] in writing, on a standardized form[,] provided by the cabinet, 25
the health history and other nonidentifying background information of 26
biological parents and blood relatives of the adopted person to the extent [if] 27
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known,[ shall be given by the cabinet or child -placing agency which has the 1
information to the adoptive parents and to the Circuit Court] not later than the 2
date of finalization of the adoption proceedings. This information shall 3
include the results of any tests for HIV or hepatitis A, B, and C; and 4
(b) The information provided for in para graph (a) of this subsection, if known, 5
shall, upon the request in person or in writing of the adult adopted person , be 6
made available in writing to that person. The information shall not be made 7
available if it [ is of a nature that] would[ tend to] identify the biological 8
parents of the adopted person , except as provided in KRS 199.570 and 9
199.572. 10
SECTION 32. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 11
READ AS FOLLOWS: 12
As used in Sections 32 to 40 of this Act: 13
(1) "Electronic" means relating to technology having electrical, digital, magnetic, 14
wireless, optical, electromagnetic, or similar capabilities; 15
(2) "Electronic presence" means the relationship of two (2) or more individuals in 16
different locations communicatin g in real time to the same extent as if the 17
individuals were physically present in the same location; 18
(3) "Electronic will" means a will executed electronically in compliance with the 19
requirements of Section 35 of this Act; 20
(4) "Record" means information t hat is inscribed on a tangible medium or that is 21
stored in an electronic or other medium and is retrievable in perceivable form; 22
(5) "Sign" means, with present intent to authenticate or adopt a record: 23
(a) To execute or adopt a tangible symbol; or 24
(b) To a ffix to or logically associate with the record an electronic symbol or 25
process; 26
(6) "State" has the same meaning as in Section 116 of this Act; and 27
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(7) "Will" has the same meaning as in Section 123 of this Act. 1
SECTION 33. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 2
READ AS FOLLOWS: 3
An electronic will is a will for all purposes of the law of this Commonwealth. The law 4
of this Commonwealth applicable to wills and principles of equity apply to an 5
electronic will, except as modified by Sections 32 to 40 of this Act. 6
SECTION 34. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 7
READ AS FOLLOWS: 8
A will executed electronically but not in compliance with Section 35 of this Act is an 9
electronic will if executed in compliance with the law of the jurisdiction where the 10
testator is: 11
(1) Physically located when the will is signed; or 12
(2) Domiciled or residing when the will is signed or when the testator dies. 13
SECTION 35. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 14
READ AS FOLLOWS: 15
(1) Subject to subsection (3) of Section 37 of this Act, an electronic will shall be: 16
(a) A record that is readable as text at the time of signing under paragraph (b) 17
of this subsection; 18
(b) Signed by: 19
1. The testator; or 20
2. Another individual in the testator's name, in the testator's physical 21
presence, and by the testator's direction; and 22
(c) Signed in the physical or electronic presence of the testator by at least two 23
(2) individuals, each of whom is a resident of this Commonwealth and 24
physically located in this Commonwealth at the time of signing and within a 25
reasonable time after witnessing: 26
1. The signing of the will under paragraph (b) of this subsection; or 27
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2. The testator's acknowledgment of the signing of the will under 1
paragraph (b) of this subsection or acknowledgment of the will. 2
(2) An electronic symbol of a testator or witness shall consist of an electronic image 3
of the testator's or witness's signature in his or her handwriting affixed to the 4
electronic will. 5
(3) A testator's intent that the record under subsection (1)(a) of this section be the 6
testator's electronic will may be established by extrinsic evidence. 7
SECTION 36. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 8
READ AS FOLLOWS: 9
(1) An electronic will may revoke all or part of a previous will. 10
(2) All or part of an electronic will may be revoked by: 11
(a) A subsequent will that revokes all or part of the electronic will expressly or 12
by inconsistency; or 13
(b) A physical act, if it is established by clear and convincing evidence that the 14
testator, with the intent of revoking all or part of the wi ll, performed the act 15
or directed another individual who performed the act in the testator's 16
physical presence. 17
SECTION 37. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 18
READ AS FOLLOWS: 19
(1) An electronic will may be si multaneously executed, attested, and made self -20
proving by acknowledgment of the testator and affidavits of witnesses. 21
(2) The acknowledgment and affidavits under subsection (1) of this section shall be: 22
(a) Made before a notary public authorized to adminis ter oaths under the law 23
of the state in which execution occurs or, if fewer than two (2) attesting 24
witnesses are physically present in the same location as the testator at the 25
time of signing under subsection (1)(b) of Section 35 of this Act, before a 26
notary public authorized under KRS 423.455; 27
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(b) Evidenced by the notary public's certificate under official seal affixed to or 1
logically associated with the electronic will; and 2
(c) In a form substantially similar to subsections (1) and (2) of KRS 394.225. 3
(3) A signature physically or electronically affixed to an affidavit that is affixed to or 4
logically associated with an electronic will under Sections 32 to 40 of this Act is 5
deemed a signature of the electronic will under subsection (1) of Section 35 of 6
this Act. 7
SECTION 38. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 8
READ AS FOLLOWS: 9
An individual may create a certified paper copy of an electronic will by affirming under 10
penalty of perjury that a paper copy of the elect ronic will is a complete, true, and 11
accurate copy of the electronic will. If the electronic will is made self -proving, the 12
certified paper copy of the will shall include the self-proving affidavits. 13
SECTION 39. A NEW SEC TION OF KRS CHAPTER 394 IS CREATED TO 14
READ AS FOLLOWS: 15
In applying and construing Sections 32 to 40 of this Act, consideration shall be given 16
to the need to promote uniformity of the law with respect to its subject matter among 17
states that enact it. 18
SECTION 40. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 19
READ AS FOLLOWS: 20
Sections 32 to 40 of this Act shall apply to the will of a decedent who dies on or after 21
the effective date of this Act. 22
SECTION 41. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 23
READ AS FOLLOWS: 24
As used in Sections 41 to 55 of this Act: 25
(1) "Electronic" has the same meaning as in Section 32 of this Act; 26
(2) "Electronic record" means a record created, generated, sent, communicated, 27
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received, or stored by electronic means; 1
(3) "Electronic signature" means an electronic symbol or process attached to or 2
logically associated with a record and executed or adopted by a person with the 3
intent to sign the record; 4
(4) "Information" includes data, text, images, codes, computer programs, software, 5
and databases; 6
(5) "Nontestamentary estate planning document" means a record relating to estate 7
planning that is readable as text at the time of signing and is not a will or 8
contained in a will. The term: 9
(a) Includes a record readable as text at the time of signing that creates, 10
exercises, modifies, releases, or revokes: 11
1. A trust instrument; 12
2. A trust power that under the terms of the trust requires a signed 13
record; 14
3. A certification of a trust under KRS 386B.10-120; 15
4. A power of attorney that is durable under KRS Chapter 457; 16
5. An agent's certification under KRS 457.430; 17
6. A power of appointment; 18
7. An advance directive or medical order for scope of treatment under 19
KRS 311.621 to 311.643; 20
8. A record directing disposition of an individual's body after death; 21
9. A nomination of a guardian for the signing individual; 22
10. A nomination of a guardian for a minor child or disabled adult child; 23
11. An advance directive for mental he alth treatment under KRS 24
202A.420 to 202A.432; 25
12. A community property survivorship agreement; 26
13. A disclaimer under KRS 394.035 or KRS 394.610 to 394.670; and 27
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14. Any other record intended to carry out an individual's intent 1
regarding property or health care while incapacitated or on death; and 2
(b) Does not include a deed of real property or certificate of title for a motor 3
vehicle, watercraft, or aircraft; 4
(6) "Person" has the same meaning as in Section 116 of this Act; 5
(7) "Power of attorney" means a record that grants authority to an agent in place of 6
the principal, even if the term is not used in the record; 7
(8) "Record" has the same meaning as in Section 32 of this Act; 8
(9) "Security procedure" means a procedure to verify that an electronic signature, 9
record, or performance is that of a specific person or to detect a change or error 10
in an electronic record. The term includes a procedure that uses an algorithm, 11
code, identifying word or number, encryption, or callback or ot her 12
acknowledgment procedure; 13
(10) "Settlor" has the same meaning as in Section 116 of this Act; 14
(11) "Sign" has the same meaning as in Section 32 of this Act; 15
(12) "State" has the same meaning as in Section 116 of this Act; 16
(13) "Terms of a trust" has the same meaning as in Section 116 of this Act; 17
(14) "Trust instrument" has the same meaning as in Section 116 of this Act; and 18
(15) "Will" has the same meaning as in Section 123 of this Act. 19
SECTION 42. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 20
READ AS FOLLOWS: 21
Sections 41 to 55 of this Act shall be construed and applied to: 22
(1) Facilitate electronic estate planning documents and signatures consistent with 23
other law; and 24
(2) Be consistent with re asonable practices concerning electronic documents and 25
signatures and continued expansion of those practices. 26
SECTION 43. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 27
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READ AS FOLLOWS: 1
(1) Except as provided in subsecti on (2) of this section, Sections 41 to 55 of this Act 2
apply to an electronic nontestamentary estate planning document and an 3
electronic signature on a nontestamentary estate planning document. 4
(2) Sections 41 to 55 of this Act do not apply to a nontestamen tary estate planning 5
document if the document precludes use of an electronic record or electronic 6
signature. 7
(3) Sections 41 to 55 of this Act do not affect the validity of an electronic record or 8
electronic signature that is valid under: 9
(a) The Uniform Electronic Transactions Act, KRS 369.101 to 369.120; or 10
(b) The Uniform Electronic Wills Act, Sections 32 to 40 of this Act. 11
SECTION 44. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 12
READ AS FOLLOWS: 13
The law of this Comm onwealth and principles of equity applicable to a 14
nontestamentary estate planning document apply to an electronic nontestamentary 15
estate planning document except as modified by Sections 41 to 55 of this Act. 16
SECTION 45. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 17
READ AS FOLLOWS: 18
(1) Sections 41 to 55 of this Act do not require a nontestamentary estate planning 19
document or signature on a nontestamentary estate planning document to be 20
created, generated, sent, communica ted, received, stored, or otherwise processed 21
or used by electronic means or in electronic form. 22
(2) A person is not required to have a nontestamentary estate planning document in 23
electronic form or signed electronically even if the person previously creat ed or 24
signed a nontestamentary estate planning document by electronic means. 25
(3) A person may not waive the provisions of this section. 26
SECTION 46. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 27
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READ AS FOLLOWS: 1
(1) A nontestamentary estate planning document or signature on a nontestamentary 2
estate planning document shall not be denied legal effect or enforceability solely 3
because it is in electronic form. 4
(2) If any other law of this Commonwealth requires a signature on a 5
nontestamentary estate planning document to be in writing, an electronic record 6
of the document satisfies the requirement. 7
(3) If other law of this Commonwealth requires a signature on a nonte stamentary 8
estate planning document, an electronic signature satisfies the requirement. 9
SECTION 47. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 10
READ AS FOLLOWS: 11
(1) An electronic nontestamentary estate planning docume nt or electronic signature 12
on an electronic nontestamentary estate planning document is attributable to a 13
person if it was the act of the person. The act of the person may be shown in any 14
manner, including by showing the efficacy of a security procedure ap plied to 15
determine the person to which the electronic record or electronic signature was 16
attributable. 17
(2) The effect of attribution to a person under subsection (1) of this section of a 18
document or signature is determined from the context and surrounding 19
circumstances at the time of its creation, execution, or adoption and as provided 20
by other law. 21
SECTION 48. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 22
READ AS FOLLOWS: 23
If other law of this Commonwealth requires a sig nature or record to be notarized, 24
acknowledged, verified, or made under oath, the requirement is satisfied with respect to 25
an electronic nontestamentary estate planning document if an individual authorized to 26
perform the notarization, acknowledgment, verif ication, or oath attaches or logically 27
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associates the individual's electronic signature on the document together with all other 1
information required to be included under the other law. 2
SECTION 49. A NEW SECTION OF KRS CH APTER 394 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) If any other law of this Commonwealth bases the validity of a nontestamentary 5
estate planning document on whether it is signed, witnessed, or attested by 6
another individual, the signature, witnessing, or attestation of that individual may 7
be electronic. 8
(2) If other law of this Commonwealth bases the validity of a nontestamentary estate 9
planning document on whether it is signed, witnessed, or attested by another 10
individual in the presence of the individual signin g the document, the presence 11
requirement is satisfied if the individuals are in each other's electronic presence. 12
SECTION 50. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 13
READ AS FOLLOWS: 14
(1) Except as provided in subs ection (2) of this section, if other law of this 15
Commonwealth requires an electronic nontestamentary estate planning 16
document to be retained, transmitted, copied, or filed, the requirement is satisfied 17
by retaining, transmitting, copying, or filing an electronic record that: 18
(a) Accurately reflects the information in the document after it was first 19
generated in final form as an electronic record or under Section 51 of this 20
Act; and 21
(b) Remains accessible to the extent required by the other law. 22
(2) A requir ement under subsection (1) of this section to retain a record does not 23
apply to information the sole purpose of which is to enable the record to be sent, 24
communicated, or received. 25
(3) A person may satisfy subsection (1) of this section by using the servic es of 26
another person. 27
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(4) If other law of this Commonwealth requires a nontestamentary estate planning 1
document to be presented or retained in its original form, or provides 2
consequences if a nontestamentary estate planning document is not presented or 3
retained in its original form, an electronic record retained in accordance with 4
subsection (1) of this section satisfies the other law. 5
(5) This section does not preclude a governmental agency from specifying 6
requirements for the retention of a record subject to the agency's jurisdiction in 7
addition to those in this section. In this subsection, "governmental agency" 8
means an executive, legislative, or judicial agency, department, board, 9
commission, authority, institution, or instrumentality of the federal gove rnment 10
or of a state or of a county, municipality, or other political subdivision of a state. 11
SECTION 51. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 12
READ AS FOLLOWS: 13
An individual may create a certified paper copy of an electronic nontestamentary estate 14
planning document by affirming under penalty of perjury that the paper copy is a 15
complete and accurate copy of the document. 16
SECTION 52. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 17
READ AS FOLLOWS: 18
Evidence relating to an electronic nontestamentary estate planning document or an 19
electronic signature on the document may not be excluded in a proceeding solely 20
because it is in electronic form. 21
SECTION 53. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 22
READ AS FOLLOWS: 23
In applying and construing Sections 41 to 55 of this Act, a court shall consider the 24
promotion of uniformity of the law among the jurisdictions that enact it. 25
SECTION 54. A NEW SECTION OF KRS CHAPTER 394 IS CREATED TO 26
READ AS FOLLOWS: 27
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Sections 41 to 55 of this Act modify, limit, or supersede the Electronic Signatures in 1
Global and National Commerce Act, 15 U.S.C. sec. 7001 et seq., as amended, but do 2
not modify, limit, or supersede 15 U.S.C. sec. 7001(c), or authorize electronic delivery 3
of any of the notices described in 15 U.S.C. sec. 7003(b). 4
SECTION 55. A NEW SECTIO N OF KRS CHAPTER 394 IS CREATED TO 5
READ AS FOLLOWS: 6
Sections 41 to 55 of this Act apply to an electronic nontestamentary estate planning 7
document created, signed, generated, sent, received, or stored before, on, or after the 8
effective date of this Act. 9
Section 56. KRS 64.012 is amended to read as follows: 10
(1) The county clerk shall receive for the following services the following fees: 11
(a) 1. Recording and indexing of a: 12
a. Deed of trust or assignment for the benefit of creditors; 13
b. Deed; 14
c. Deed of assignment; 15
d. File-stamped copy of documents set forth in KRS 14A.2 -040(1) or 16
(2) that have been filed first with the Secretary of State; 17
e. Real estate option; 18
f. Power of attorney; 19
g. Revocation of power of attorney; 20
h. Lease which is recordable by law; 21
i. Deed of release of a mortgage or lien under KRS 382.360; 22
j. United States lien; 23
k. Release of a United States lien; 24
l. Release of any recorded encumbrance other than state liens; 25
m. Lis pendens notice concerning proceedings in bankruptcy; 26
n. Lis pendens notice; 27
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o. Mechanic's and artisan's lien under KRS Chapter 376; 1
p. Assumed name; 2
q. Notice of lien issued by the Internal Revenue Service; 3
r. Notice of lien discharge issued by the Internal Revenue Service; 4
s. Original, assignment, amendment, or continuation financing 5
statement; 6
t. Making a record for the establishment of a city, recording the plan 7
or plat thereof, and all other service incident; 8
u. Survey of a city, or any part thereof, or any addition to or 9
extensions of the boundary of a city; 10
v. Recording with statutory authority for which no specific fee is set, 11
except a military discharge; 12
w. Will or other probate document pursuant to KRS Chapter 392 or 13
394; 14
x. Court ordered name change pursuant to KRS Chapter 401; 15
y. Land use restriction according to KRS 100.3681; and 16
z. Filing with statutory authority for which no specific fee is set. 17
For all items in this subsection if the entire thereof does not exceed 18
five (5) pages .........................................................................$33.00 19
And, for all items in this subsection exce eding five (5) pages , 20
except any will or other probate document pursuant to KRS 21
Chapter 392 or 394 under subdivision w. of this subparagraph, 22
or any court-ordered name change pursuant to KRS Chapter 401 23
under subdivision x. of this subparagraph, 24
for each additional page ..........................................................$3.00 25
And, for all items in this subsection for each additional reference 26
relating to same instrument .....................................................$4.00 27
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2. The thirty -three dollar ($33) fee imposed by this subsection shall be 1
divided as follows: 2
a. Twenty-seven dollars ($27) shall be retained by the county clerk; 3
and 4
b. Six dollars ($6) shall be paid to the affordable housing trust fund 5
established in KRS 198A.710 and shall be remitted by the county 6
clerk within ten (10) days following the end of the quarter in 7
which the fee was re ceived. Each remittance to the affordable 8
housing trust fund shall be accompanied by a summary report on a 9
form prescribed by the Kentucky Housing Corporation. 10
(b) For noting a security interest on a certificate of title pursuant to 11
KRS Chapter 186A ..................................................................................$12.00 12
(c) For filing the release of collateral under a financing statement 13
and noting same upon the face of the title pursuant to KRS Chapter 14
186 or 186A ...............................................................................................$5.00 15
(d) Filing or recording state tax or other state liens ........................................$5.00 16
(e) Filing release of a state tax or other state lien ...........................................$5.00 17
(f) Acknowledging or notarizing any deed, mortgage, power of attorney, 18
or other written instrument required by law for recording and certifying 19
same ..................................... ......................................................................$5.00 20
(g) Recording plats, maps, and surveys, not exceeding 24 inches by 21
36 inches, per page ..................................................................................$40.00 22
(h) Recording a bond, for each bond .............................................................$10.00 23
(i) Each bond required to be taken or prepared by the clerk ..........................$4.00 24
(j) Copy of any bond when ordered ................................................................$3.00 25
(k) Administering an oath and certificate thereof ...........................................$5.00 26
(l) Issuing a license for which no other fee is fixed by law ............................$8.00 27
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(m) Issuing a solicitor's license ......................................................................$15.00 1
(n) Marriage license, indexing, recording, and issuing certificate thereof ....$26.50 2
(o) Every order concerning the establishment, changing, closing, or 3
discontinuing of roads, to be paid out of the county levy when 4
the road is established, changed, closed, or discontinued, and by 5
the applicant when it is not ...............................................................$3.00 6
(p) Registration of licenses for professional persons required to register 7
with the county clerk ......................................................................$10.00 8
(q) Certified copy of any record ......................................................................$5.00 9
Plus fifty cents ($.50) per page after three (3) pages 10
(r) Filing certification required by KRS 65.070(2)(a) ....................................$5.00 11
(s) Filing notification and declaration and petition of candidates 12
for Commonwealth's attorney ........................................................$200.00 13
(t) Filing notification and declaration and petition of candidates for county 14
and independent boards of education .............................................$20.00 15
(u) Filing notification and declaration and petition of candidates for 16
boards of soil and water conservation districts ...............................$20.00 17
(v) Filing notification and declaration and petition of candidates for 18
other office ......................................................................................$50.00 19
(w) Filing declaration of intent to be a write-in candidate for office ..............$50.00 20
(x) Filing petitions for elections, other than nominating petitions ................$50.00 21
(y) Notarizing any signature, per signature .....................................................$2.00 22
(z) Filing bond for receiving bodies under KRS 311.310 .............................$10.00 23
(aa) Noting the assignment of a certificate of delinquency and recording 24
and indexing the encumbrance under KRS 134.126 or 134.127 .............$27.00 25
(ab) Filing a going-out-of-business permit under KRS 365.445 .....................$50.00 26
(ac) Filing a renewal of a going-out-of-business permit under KRS 365.445 $50.00 27
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(ad) Filing and processing a transient merchant permit under KRS 365.680 .$25.00 1
(ae) Recording and indexing a real estate mortgage: 2
1. For a mortgage that does not exceed thirty (30) pages ....................$63.00 3
2. And, for a mortgage that exceeds thirty (30) pages, for each additional 4
page .........................................................................................$3.00 5
(af) Filing or recording a lien or release of lien by a consolidated local 6
government, urban -county government, unified local government, or city of 7
any class ................................................................................................$20.00 8
(2) The sixty-three dollar ($63) fee imposed by subsection (1)(ae) of this section shall 9
be divided as follows: 10
(a) Fifty-seven dollars ($57) shall be retained by the county clerk; and 11
(b) Six dollars ($6) shall be paid to the affordable housing trust fund established 12
in KRS 198A.710 and shall be remitted by the county clerk within ten (10) 13
days following the end of the quarter in which the fee w as received. Each 14
remittance to the affordable housing trust fund shall be accompanied by a 15
summary report on a form prescribed by the Kentucky Housing Corporation. 16
(3) (a) For services related to the permanent storage of records listed in paragraphs 17
(a), (g), (n), and (ae) of subsection (1) of this section, the clerk shall be 18
entitled to receive a reimbursement of ten dollars ($10). 19
(b) In counties or a county containing an urban -county government, charter 20
county government, or unified local government: 21
1. This fee shall: 22
a. Not be paid annually to the fiscal court under KRS 64.152; 23
b. Not be paid to the Finance and Administration Cabinet under KRS 24
64.345; 25
c. Be accumulated and transferred to the fiscal court or the legislative 26
body of an urban -county gover nment on a monthly basis within 27
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ten (10) days following the end of the month; 1
d. Be maintained by the fiscal court or the legislative body of an 2
urban-county government in a separate bank account and 3
accounted for in a separate fund; and 4
e. Not lapse to th e general fund of the county or urban -county 5
government. 6
2. The moneys accumulated from this fee shall be held in perpetuity by the 7
fiscal court or the legislative body of an urban -county government for 8
the county clerk's exclusive use for: 9
a. Equipment re lated to the permanent storage of and access to 10
records, including deed books, binders, shelves, microfilm 11
equipment, and fireproof equipment; 12
b. Hardware for the permanent storage of and access to records, 13
including computers, servers, and scanners; 14
c. Software for the permanent storage of and access to records, 15
including vendor services and consumer subscription fees; 16
d. Personnel costs for the permanent storage of and access to records, 17
including overtime costs for personnel involved in the digitization 18
of records; and 19
e. Cloud storage and cybersecurity services for the permanent storage 20
of and access to records. 21
3. Notwithstanding KRS 68.275, claims by a county clerk that are for the 22
approved expenditures in subparagraph 2. of this paragraph shall be paid 23
by the county judge/executive or the chief executive officer of an urban -24
county government by a warrant drawn on the fund and co-signed by the 25
treasurer of the county or urban-county government. 26
4. No later than July 1 of each year, each county fiscal court or legislative 27
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body of an urban -county government shall submit a report to the 1
Legislative Research Commission detailing the receipts, expenditures, 2
and any amounts remaining in the fund. 3
(c) In a county containing a consolidated local government: 4
1. The fee shall not: 5
a. Be paid to the Finance and Administration Cabinet under KRS 6
64.345; or 7
b. Lapse to the general fund of the consolidated local government. 8
2. The moneys accumulated from this fee shall be held in perpetuity by the 9
county clerk in a separate fund to be used exclusively for: 10
a. Equipment related to the permanent storage of and access to 11
records, inclu ding deed books, binders, shelves, microfilm 12
equipment, and fireproof equipment; 13
b. Hardware for the permanent storage of and access to records, 14
including computers, servers, and scanners; 15
c. Software for the permanent storage of and access to records, 16
including vendor services and consumer subscription fees; 17
d. Personnel costs for the permanent storage of and access to records, 18
including overtime costs for personnel involved in the digitization 19
of records; and 20
e. Cloud storage and cybersecurity services for the permanent storage 21
of and access to records. 22
3. No later than July 1 of each year, the county clerk shall submit a report 23
to the consolidated local government and the Legislative Research 24
Commission detailing the receipts, expenditures, and any amount s 25
remaining in the fund. 26
Section 57. KRS 142.010 is amended to read as follows: 27
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(1) The following taxes shall be paid: 1
(a) A tax of four dollars and fifty cents ($4.50) on each marriage license; 2
(b) A tax of four dollars ($4) on each power of attorney to convey real or personal 3
property; 4
(c) A tax of four dollars ($4) on each mortgage, financing statement, or security 5
agreement and on each notation of a security interest on a certificate of title 6
under KRS 186A.190; 7
(d) A tax of four dollars ($4) on each conveyance of real property;[ and] 8
(e) A tax of four dollars ($4) on each lien or conveyance of coal, oil, gas, or other 9
mineral right or privilege; and 10
(f) A tax of four dollars ($4) on each recorded will. 11
(2) Except as provided in Section 4 of this Act, the tax imposed by this section shall be 12
collected by each county clerk as a prerequisite to the issuance of a marriage license 13
or the original filing of an instrument subject to the tax. Subsequent assignment of 14
the original instrument shall not be cause for additional taxation under this section. 15
This section shall not be construed to require any tax upon a deed of release of a 16
lien retained in a deed or mortgage. 17
(3) Taxes imposed under this section shall be reported and paid to the Department of 18
Revenue by each county clerk within ten (10) days following the end of the 19
calendar month in which instruments subject to tax are filed or marriage licenses 20
issued. Each remittance shall be accompanied by a summary report on a fo rm 21
prescribed by the department. 22
(4) Any county clerk who violates any of the provisions of this section shall be subject 23
to the uniform civil penalties imposed pursuant to KRS 131.180. In every case, any 24
tax not paid on or before the due date shall bear i nterest at the tax interest rate as 25
defined in KRS 131.010(6) from the date due until the date of payment. 26
(5) (a) One dollar ($1) of the amount collected under each paragraph of subsection 27
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(1) of this section shall be placed in an agency fund in the Depar tment for 1
Libraries and Archives to be used exclusively for the purpose of preserving 2
and retaining public records by continuing the local records grant program 3
active in the Department for Libraries and Archives. 4
(b) Ninety percent (90%) of all funds allocated to the Department for Libraries 5
and Archives under paragraph (a) of this subsection for the local records grant 6
program shall be set aside for grants to county clerks and distributed annually, 7
except as provided in paragraph (c) of this subsection. 8
(c) If there are insufficient grant applications from county clerks for the 9
Department for Libraries and Archives to distribute ninety percent (90%) of 10
all funds allocated under paragraph (a) of this subsection, the Dep artment for 11
Libraries and Archives may grant those funds to other agencies. 12
Section 58. KRS 401.040 is amended to read as follows: 13
(1) (a) If the District Court, Family Court, or Circuit Court, as authorized by KRS 14
401.020, orders any person's name to be changed under this chapter, a copy of 15
the order shall be certified by the clerk of that court to the county clerk, for 16
record, unless the court has ordered the record sealed or otherwise restricted 17
from public inspection. 18
(b) Beginning January 1, 2028, the clerk of the court shall collect the fee 19
required under Section 56 of this Act for the filing of a court -ordered name 20
change under subsection (2) of this section and forward the fee with the 21
copy of the order to the coun ty clerk, except as provided in paragraph (a) of 22
this subsection. 23
(2) The county clerk shall keep an alphabetical index for each book of records, 24
referring to the page on which each person's name change appears, and giving the 25
name from and to which it is changed. 26
SECTION 59. A NEW SECTION OF KRS CHAPTER 386 IS CREATED TO 27
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READ AS FOLLOWS: 1
As used in Sections 59 to 69 of this Act, unless the context otherwise requires: 2
(1) "Claim" means a right to payment, whether or not the right is reduced to 3
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, 4
disputed, undisputed, legal, equitable, secured, or unsecured; 5
(2) "Creditor" means, with respect to a transferor, a person who has a claim; 6
(3) "Debt" means liability on a claim; 7
(4) "Disposition": 8
(a) Means a transfer, conveyance, or assignment of property, including a 9
change in the legal ownership of property occurring upon the substitution 10
of one (1) trustee for another or the addition of one (1) or more new 11
trustees; and 12
(b) Includes the exercise of a power so as to cause a transfer of property to a 13
trustee or trustees, but shall not include the release or relinquishment of an 14
interest in property that, until the release or relinquishment, was the subject 15
of a qualified disposition; 16
(5) "Investment advisor" means a person given authority by the terms of a qualified 17
trust to direct, consent to, or disapprove a transferor's actual or proposed 18
investment decisions, distribution decisions, or other decisions of the transferor; 19
(6) "Investment decision" means the retention, purchase, sale, exchange, tender, or 20
other transaction affecting the ownership of or rights in investments; 21
(7) "Person" has the same meaning as in Section 116 of this Act; 22
(8) "Property" means anything that may be the subject of ownership, including real 23
property, personal property, and interests in real or personal property, but does 24
not include any property that is encumbered by a valid lien; 25
(9) "Qualified affidavit" means a sworn affidavit signed by the transferor before a 26
disposition of assets to a qualified trust that meets the requirements of Section 60 27
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of this Act. In the event of a disposition by a transferor who is a trustee, the 1
affidavit shall be signed by the transferor who made the original disposition to the 2
trustee or a predecessor trustee in a form that meets the requirements of 3
paragraphs (b) and (c) of subsection (11) of this section and shall state facts as of 4
the time of the original disposition; 5
(10) "Qualified disposition" means a disposition by or from a transferor with or 6
without consideration to a qualified trust after the transferor executes a qualified 7
affidavit; 8
(11) "Qualified trust" means an instrument appointing a qu alified trustee or qualified 9
trustees for property that is the subject of a disposition, which instrument: 10
(a) Expressly incorporates the law of this Commonwealth to govern the validity, 11
construction, and administration of the trust; 12
(b) Is irrevocable; and 13
(c) Provides that the interest of the transferor or other beneficiary in trust 14
property or income from trust property may not be transferred, assigned, 15
pledged, or mortgaged, whether voluntarily or involuntarily, before the 16
qualified trustee or qualifie d trustees actually distribute property or income 17
from the trust to the beneficiary; 18
(12) "Qualified trustee" means a person who: 19
(a) In the case of a natural person, is a resident of this Commonwealth, or in 20
all other cases, is authorized by the law of th is Commonwealth to act as a 21
trustee and whose activities are subject to supervision by the Kentucky 22
Department of Financial Institutions, the Federal Deposit Insurance 23
Corporation, the Comptroller of the Currency, or any successor to those 24
entities; 25
(b) Maintains or arranges for custody in this Commonwealth of some or all of 26
the property that is the subject of the qualified disposition, maintains 27
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records for the qualified trust on an exclusive or nonexclusive basis, 1
prepares or arranges for the preparatio n of required income tax returns for 2
the qualified trust, or otherwise materially participates in the administration 3
of the qualified trust; and 4
(c) Is not the transferor; 5
(13) "Spouse or former spouse" means only persons to whom the transferor was 6
legally married at or before the time the qualified disposition is made; 7
(14) "Transferor" means a person who, directly or indirectly, makes a disposition or 8
causes a disposition to be made in the person's capacity: 9
(a) As an owner of property; 10
(b) As a holder of a power of appointment that authorizes the holder to appoint 11
in favor of the holder, the holder's creditors, the holder's estate, or the 12
creditors of the holder's estate; or 13
(c) As a trustee; and 14
(15) "Trustee" means an original, additional, and successo r trustee, and a cotrustee, 15
whether singular or plural, who is a fiduciary relative to any power or duty held 16
by that person that could otherwise be held by a trustee. 17
SECTION 60. A NEW SECTION OF KRS CHAPTER 386 IS CREA TED TO 18
READ AS FOLLOWS: 19
A qualified affidavit shall state that: 20
(1) The transferor has full right, title, and authority to transfer the assets to the trust; 21
(2) The transfer of the assets to the trust will not render the transferor insolvent; 22
(3) The transferor does not intend to defraud a creditor by transferring the assets to 23
the trust; 24
(4) The transferor does not have any pending or threatened court actions against the 25
transferor, except for those court actions identified by the transferor on an 26
attachment to the affidavit; 27
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(5) The transferor is not involved in any administrative proceedings, except for those 1
administrative proceedings identified on an attachment to the affidavit; 2
(6) The transferor does not contemplate filing for relief under the federal bankruptcy 3
code; and 4
(7) The assets being transferred to the trust were not derived from unlawful activities. 5
SECTION 61. A NEW SECTION OF KRS CHAPTER 386 IS CREATED TO 6
READ AS FOLLOWS: 7
(1) Notwithstanding any law to th e contrary, including KRS 386B.5 -020(7)(a), no 8
action of any kind, including but not limited to an action to enforce a judgment 9
entered by a court or other body having adjudicative authority, shall be brought 10
at law or in equity for an attachment or other provisional remedy against property 11
that is the subject of a qualified disposition to a qualified trust or for the 12
avoidance of a qualified disposition to a qualified trust, unless: 13
(a) The action is brought pursuant to the Kentucky Uniform Voidable 14
Transactions Act, KRS 378A.005 to 378A.140; and 15
(b) The qualified disposition was made with actual intent to defraud a creditor 16
whose claim arose after a qualified disposition. 17
(2) (a) Notwithstanding KRS 378A.090, a creditor's claim under subsection (1) of 18
this section shall be extinguished: 19
1. If the person is a creditor when the qualified disposition to a qualified 20
trust is made, unless the action is commenced within the later of two 21
(2) years after the qualified disposition is made or six (6) months after 22
the person discovers or reasonably should have discovered the 23
qualified disposition; or 24
2. If the person becomes a creditor after a qualified disposition to a 25
qualified trust is made, unless the action is commenced within two (2) 26
years after the qualified disposition is made. 27
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(b) Any valid lien attaching to property before a disposition of that property to a 1
trustee of a qualified trust shall survive the disposition, and the trustee shall 2
take title to the property subject to the valid lien and subject to any 3
agreements that created or perfected the valid lien. This chapter shall not be 4
construed to authorize any disposition that is prohibited by the terms of any 5
agreements, notes, guaranties, mortgages, indentures, instruments, 6
undertakings, or other documents . In the event of any conflict between this 7
subparagraph and any other provision of this chapter, this subparagraph 8
shall control. 9
(c) If paragraph (a) of this subsection applies: 10
1. A person shall be deemed to have discovered the existence of a 11
qualified disposition to a qualified trust at the time any public record 12
is made of any transfer of property relative to the qualified disposition, 13
including but not limited to the conveyance o f real property that is 14
recorded in the office of the county clerk in which the property is 15
located, the filing of a financing statement under Article 9 of KRS 16
Chapter 355, or the equivalent recording or filing of either with the 17
appropriate person or offi cial under the laws of a jurisdiction other 18
than this Commonwealth; and 19
2. No creditor shall bring an action with respect to property that is the 20
subject of a qualified disposition unless that creditor proves by clear 21
and convincing evidence that the settl or's transfer of the property was 22
made with intent to defraud that specific creditor. 23
(3) For purposes of Sections 59 to 69 of this Act, a qualified disposition that is made 24
by means of a disposition by a transferor who is a trustee shall be deemed to have 25
been made as of the time the property that is the subject of the qualified 26
disposition was originally transferred to the transferor acting in the capacity of 27
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trustee, or any predecessor trustee, in a form that meets the requirements of 1
subsection (11)(a) and (c) of Section 59 of this Act. 2
(4) Notwithstanding any law to the contrary: 3
(a) A creditor, including a creditor whose claim arose before or after a 4
qualified disposition, or any other person shall have only the rights with 5
respect to a qualified dispo sition that are provided in this section and 6
Section 63 of this Act; 7
(b) Neither a creditor nor any other person shall have any claim or cause of 8
action against the trustee, an advisor of a qualified trust, or any person 9
involved in the counseling, drafting, preparation, execution, or funding of a 10
qualified trust; and 11
(c) For purposes of this subsection, counseling, drafting, preparation, 12
execution, or funding of a qualified trust includes the counseling, drafting, 13
preparation, execution, or funding of a li mited partnership or limited 14
liability company if interests in the limited partnership or limited liability 15
company are subsequently transferred to the qualified trust. 16
(5) Notwithstanding any law to the contrary, no action of any kind, including but not 17
limited to an action to enforce a judgment entered by a court or other body 18
having adjudicative authority, shall be brought at law or in equity against a 19
trustee or an advisor of a qualified trust, or against any person involved in the 20
counseling, drafting, preparation, execution, or funding of a qualified trust if, as 21
of the date the action is brought, an action by a creditor with respect to the 22
qualified trust would be barred under this section. 23
(6) In circumstances where more than one (1) qualified disposition is made by means 24
of the same qualified trust: 25
(a) The making of a subsequent qualified disposition shall be disregarded in 26
determining whether a creditor's claim with respect to a prior qualified 27
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disposition is extinguished as provided in subsection (2) of this section; and 1
(b) Any distribution to a beneficiary shall be deemed to have been made from 2
the latest qualified disposition. 3
(7) (a) If, in any action brought against a qualified trust, a court takes any action 4
whereby the court declines to appl y the law of this Commonwealth in 5
determining the effect of a spendthrift provision of the trust: 6
1. The trustee shall immediately, upon the court's action and without the 7
further order of any court, cease in all respects to be trustee and a 8
successor trustee shall succeed as trustee in accordance with the terms 9
of the trust; or 10
2. If the trust does not provide for a successor trustee and the trust would 11
otherwise be without a trustee, a court of this Commonwealth, upon 12
the application of any beneficiary o f the trust, shall appoint a 13
successor trustee upon the terms and conditions it determines to be 14
consistent with the purposes of the trust and Sections 59 to 69 of this 15
Act. 16
(b) Upon the trustee's ceasing to be trustee, the trustee shall have no power or 17
authority other than to convey the trust property to the successor trustee 18
named in the trust in accordance with this subsection. 19
(8) A qualified trust shall be subject to this section whether or not the transferor 20
retains any or all of the powers and right s described in Section 68 of this Act or 21
serves as an investment advisor pursuant to Section 66 of this Act. 22
(9) (a) Notwithstanding subsection (1) or (2) of this section, the limitations on 23
actions by creditors in law or equity shall not apply, and such c reditors' 24
claims shall not be extinguished, if the transferor is indebted on account of 25
an agreement, judgment, or order of a court for the payment of any of the 26
following: 27
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1. Past due child support; 1
2. Past due temporary or permanent maintenance to a spou se or former 2
spouse; 3
3. A written agreement, judgment, or order of a court for division of 4
marital property of a spouse or former spouse, but only to the extent of 5
the debt, legally mandated interest on the debt, and the reasonable cost 6
of collection of the debt; or 7
4. A valid note, mortgage, security interest, or debt instrument in 8
existence prior to the qualified disposition. 9
(b) 1. A claim under this subsection shall be asserted against a trustee only: 10
a. Upon a final, nonappealable determination of a Ke ntucky court 11
or a fully domesticated, final, nonappealable order of a court of 12
another state as defined by Section 116 of this Act that the debt is 13
past due; and 14
b. After the court has determined that the claimant has made 15
reasonable attempts to collect the debt from any other sources of 16
the transferor or that such attempts would be futile. 17
2. Nothing in this paragraph shall be construed to prohibit the court 18
from mak ing the findings required in subparagraph 1. of this 19
paragraph in the same proceeding and order. 20
(c) This subsection shall not apply to any claim for forced heirship, legitime, or 21
elective share. 22
SECTION 62. A NEW SECTIO N OF KRS CHAPTER 386 IS CREATED TO 23
READ AS FOLLOWS: 24
A transferor shall only have the powers and rights conferred by the qualified trust. The 25
powers and rights conferred by the qualified trust upon the transferor are personal 26
powers and rights that may not be exercised by a creditor or any other person, except 27
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as expressly permitted by the trust. Except as permitted by Sections 66 and 68 of this 1
Act, the transferor shall have no rights or authority with respect to the corpus of the 2
qualified trust or the inc ome from the trust, and any agreement or understanding 3
purporting to grant or permit the retention of any greater rights or authority shall be 4
void. 5
SECTION 63. A NEW SECTION OF KRS CHAPTER 386 IS CREATED TO 6
READ AS FOLLOWS: 7
(1) A qualified disposition to a qualified trust shall be avoided only to the extent 8
necessary to satisfy the transferor's debt to the creditor at whose instance the 9
disposition was avoided, together with costs, including attorneys' fees, that the 10
court may allow. 11
(2) In the event any qualified disposition is avoided as described in subsection (1) of 12
this section: 13
(a) If the court is satisfied that a qualified trustee has not acted in bad faith in 14
accepting or administering the property that is the sub ject of the qualified 15
disposition: 16
1. The qualified trustee shall have a first and paramount lien against the 17
property that is the subject of the qualified disposition in an amount 18
equal to the entire cost, including attorneys' fees, properly incurred by 19
the qualified trustee in defense of the action or proceedings to avoid 20
the qualified disposition except any valid lien attaching to the property 21
before a disposition of that property to a trustee of a qualified trust 22
shall survive the disposition, and the t rustee shall take title to the 23
property subject to the valid lien and subject to any agreements that 24
created or perfected the valid lien; 25
2. The qualified disposition shall be avoided subject to the proper fees, 26
costs, preexisting rights, claims, and inter ests of the qualified trustee 27
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and of any predecessor qualified trustee that has not acted in bad 1
faith; and 2
3. For purposes of this paragraph, it shall be presumed that the qualified 3
trustee did not act in bad faith merely by accepting the property; and 4
(b) 1. If the court is satisfied that a beneficiary of a qualified trust has not 5
acted in bad faith, the avoidance of the qualified disposition shall be 6
subject to the beneficiary's right to retain any distribution made upon 7
the exercise of a trust power or discretion vested in the qualified 8
trustee or qualified trustees of the qualified trust, which power or 9
discretion was properly exercised prior to the creditor's 10
commencement of an action to avoid a qualified disposition. 11
2. For purposes of this paragraph, it shall be presumed that the 12
beneficiary, including a beneficiary who is also a transferor of the 13
trust, did not act in bad faith merely by creating the trust or by 14
accepting a distribution made in accordance with the terms of the 15
trust. 16
(3) A dispositio n by a trustee that is not a qualified trustee to a trustee that is a 17
qualified trustee shall not be treated as other than a qualified disposition solely 18
because the trust instrument fails to meet the requirements of subsection (11)(a) 19
of Section 59 of this Act. 20
(4) In the case of a disposition to more than one (1) trustee, a disposition that is 21
otherwise a qualified disposition shall not be treated as other than a qualified 22
disposition solely because not all of the recipient trustees are qualified trustees. 23
SECTION 64. A NEW SECTION OF KRS CHAPTER 386 IS CREATED TO 24
READ AS FOLLOWS: 25
A spendthrift provision as described in subsection (11)(c) of Section 59 of this Act shall 26
be deemed to be a restriction on the transfer of th e transferor's beneficial interest in 27
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the trust that is enforceable under applicable nonbankruptcy law within the meaning 1
of 11 U.S.C. sec. 541(c)(2) or any successor provision. 2
SECTION 65. A NEW SECTION OF KRS CHAPTER 3 86 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) For purposes of Sections 59 to 69 of this Act, none of the following shall be 5
considered a qualified trustee: 6
(a) The transferor or any other natural person who is a nonresident of this 7
Commonwealth; or 8
(b) An entity: 9
1. That is not authorized by the law of this Commonwealth to act as a 10
trustee; or 11
2. Whose activities are not subject to supervision as provided in 12
subsection (12)(a) of Section 59 of this Act. 13
(2) (a) Nothing in Sections 59 to 69 of this Act shall preclude a transferor from 14
appointing one (1) or more advisors, including but not limited to: 15
1. Advisors who have authority under the terms of the trust instrument to 16
remove and appoint qualified trustees or trust advisors; 17
2. Advisors who have authority under the terms of the trust instrument to 18
direct, consent to, or disapprove distributions from the trust; or 19
3. Investment advisors, whether or not the advisors would meet the 20
requirements of subsection (12) of Section 59 of this Act. 21
(b) For purposes of this subsection, "advisor" includes a trust protector or any 22
other person who, in addition to a qualified trustee, holds one (1) or more 23
trust powers. 24
SECTION 66. A NEW SECT ION OF KRS CHAPTER 386 IS CREATED TO 25
READ AS FOLLOWS: 26
A person may serve as an investment advisor notwithstanding that the person is the 27
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transferor of the qualified disposition. 1
SECTION 67. A NEW SECTION OF KRS CHAPTER 3 86 IS CREATED TO 2
READ AS FOLLOWS: 3
In the event that a qualified trustee of a qualified trust ceases to meet the requirements 4
of subsection (12)(a) of Section 59 of this Act, and there remains no trustee that meets 5
the requirements, the qualified trustee sh all be deemed to have resigned as of the time 6
of that cessation, and thereupon, the successor qualified trustee provided for in the 7
qualified trust shall become a qualified trustee of the qualified trust, or in the absence 8
of any successor qualified truste e provided for in the qualified trust, then a court of 9
this Commonwealth shall, upon application of any interested party, appoint a successor 10
qualified trustee. 11
SECTION 68. A NEW SECTION OF KRS CHAPTER 386 IS CREATED TO 12
READ AS FOLLOWS: 13
A qualified trust shall not be deemed revocable on account of its inclusion of one (1) or 14
more of the following: 15
(1) A transferor's power to veto a distribution from the trust; 16
(2) A power of appointment, other than a power to appoint to t he transferor, the 17
transferor's creditors, the transferor's estate, or the creditors of the transferor's 18
estate, either exercisable by written instrument of the transferor during the 19
transferor's life or exercisable by will or other written instrument of t he 20
transferor effective upon the transferor's death; 21
(3) The transferor's potential or actual receipt of income, including rights to the 22
income retained in the trust; 23
(4) The transferor's potential or actual receipt of income or principal from a 24
charitable remainder unitrust or charitable remainder annuity trust as those 25
terms are defined in 26 U.S.C. sec. 664 or any successor provision; 26
(5) The transferor's receipt each year of an amount specified in the trust, the amount 27
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not to exceed five percent (5%) of the initial value of the trust or its value 1
determined from time to time pursuant to the trust; 2
(6) The transferor's potential or actual receipt or use of principal if the potential or 3
actual receipt or use of principal would be the result of a qualified trustee's or 4
qualified trustees' acting: 5
(a) In the qualified trustee's or trustees' discretion. For purposes of this 6
subsection, a qualified trustee is presumed to have discretion with respect to 7
the distribution of principal unless the discretion is expr essly denied to the 8
trustee by the terms of the trust; 9
(b) Pursuant to a standard that governs the distribution of principal and does 10
not confer upon the transferor a power to consume, invade, or appropriate 11
property for the benefit of the transferor, unle ss the power of the transferor 12
is limited by an ascertainable standard relating to the health, education, 13
support, or maintenance within the meaning of 26 U.S.C. sec. 2041(b)(1)(A) 14
or 2514(c)(1), as amended; or 15
(c) At the direction of an advisor described in Section 65 of this Act who is 16
acting: 17
1. In the advisor's discretion; or 18
2. Pursuant to a standard that governs the distribution of principal and 19
does not confer upon the transferor a power to consume, invade, or 20
appropriate property for the benefit of the transferor, unless the power 21
of the transferor is limited by an ascertainable standard relating to the 22
health, education, support, or maintenance within the meaning of 26 23
U.S.C. sec. 2041(b)(1)(A) or 2514(c)(1), as amended; 24
(7) The transferor's right to remove a trustee or advisor and to appoint a new trustee 25
or advisor; provided, however, that the right shall not include the appointment of 26
a person who is a related or subordinate party with respect to the transferor 27
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within the meaning of 26 U.S.C. sec. 672(c) or any successor provision; 1
(8) The transferor's potential or actual use of real property held under a qualified 2
personal residence trust within the meaning of the term as described in 26 U.S.C. 3
sec. 2702(c) or any successor provision; 4
(9) The tran sferor's potential or actual receipt of income or principal to pay, in 5
whole or in part, income taxes due on income of the trust if the potential or actual 6
receipt of income or principal is pursuant to a provision in the trust instrument 7
that expressly per mits a distribution to the transferor as reimbursement for such 8
taxes and if the distribution would be the result of a qualified trustee's or 9
qualified trustees' acting: 10
(a) In the qualified trustee's or trustees' discretion or pursuant to a mandatory 11
direction in the trust instrument; or 12
(b) At the direction of an advisor described in Section 65 of this Act who is 13
acting in that advisor's discretion; 14
(10) The ability, whether pursuant to direction in the qualified trust or discretion of a 15
qualified trustee to pay, after the death of the transferor, all or any part of the 16
debts of the transferor outstanding at the time of the transferor's death, the 17
expenses of administering th e transferor's estate, or any estate or inheritance tax 18
imposed on or with respect to the transferor's estate; or 19
(11) A qualified trustee's or qualified trustees' authority to make distributions to pay 20
taxes in lieu of or in addition to the power to make a distribution for taxes 21
pursuant to subsections (3), (6), (9), or (10) of this section by direct payment to 22
taxing authorities. 23
SECTION 69. A NEW SECTION OF KRS CHAPTER 386 IS CREATED TO 24
READ AS FOLLOWS: 25
Sections 59 to 69 of this Act shall apply to qualified dispositions to qualified trusts and 26
dispositions by transferors who are trustees made on or after the effective date of this 27
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Act. 1
SECTION 70. SUBCHAPTER 12 OF KRS CHAPTER 386B IS 2
ESTABLISHED, AND A NEW SECTION THEREOF IS CREATED TO READ AS 3
FOLLOWS: 4
As used in this subchapter: 5
(1) "Breach of trust" includes a violation by a trust director or trustee o f a duty 6
imposed on that director or trustee by the terms of the trust, the provisions of 7
Sections 70 to 86 of this Act, or other law of this Commonwealth pertaining to 8
trusts; 9
(2) "Directed trust" means a trust for which the terms of the trust grant a pow er of 10
direction; 11
(3) "Directed trustee" means a trustee that is subject to a trust director's power of 12
direction; 13
(4) "Person" has the same meaning as in Section 116 of this Act; 14
(5) "Power of direction" has the same meaning as in Section 116 of this Act; 15
(6) "Settlor" has the same meaning as in Section 116 of this Act; 16
(7) "State" has the same meaning as in Section 116 of this Act; 17
(8) "Terms of a trust" has the same meaning as in Section 116 of this Act; 18
(9) "Trust director" has the same meaning as in Section 116 of this Act; and 19
(10) "Trustee" has the same meaning as in Section 116 of this Act. 20
SECTION 71. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 21
386B IS CREATED TO READ AS FOLLOWS: 22
Sections 70 to 86 of this Act app ly to a trust, whenever created, that has its principal 23
place of administration in this Commonwealth, subject to the following rules: 24
(1) If the trust was created before the effective date of this Act, Sections 70 to 86 of 25
this Act apply only to a decision or action occurring on or after the effective date 26
of this Act; and 27
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(2) If the principal place of administration of the trust is changed to this 1
Commonwealth on or after the effective date of this Act, Sections 70 to 86 of this 2
Act apply only to a decisio n or action occurring on or after the date of the 3
change. 4
SECTION 72. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 5
386B IS CREATED TO READ AS FOLLOWS: 6
The common law and principles of equity supplement the provisions of Sections 70 to 7
86 of this Act, except to the extent modified by Sections 70 to 86 of this Act or another 8
statute of this Commonwealth. 9
SECTION 73. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 10
386B IS CREATED TO READ AS FOLLOWS: 11
(1) As used in this section, "power of appointment" means a power that enables a 12
person acting in a nonfiduciary capacity to designate a recipient of an ownership 13
interest in or another power of appointment over trust property. 14
(2) The provisions of Sections 70 to 86 of this Act shall not apply to a: 15
(a) Power of appointment; 16
(b) Power to appoint or remove a trustee or trust director; 17
(c) Power of a settlor over a trust to the extent the settlor has a power to revoke 18
the trust; 19
(d) Power of a beneficiary over a trust to the extent the exercise or nonexercise 20
of the power affects the beneficial interest of: 21
1. The beneficiary; or 22
2. Another beneficiary represented by the beneficiary under KRS 23
386B.3-010 to 386B.3 -050 with respect to the exercise or nonexercise 24
of the power; or 25
(e) Power over a trust if: 26
1. The terms of the trust provide that the power is held in a nonfiduciary 27
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capacity; and 1
2. The power must be held in a nonfiduciary capacity to achieve the 2
settlor's tax objectives under the United States Internal Revenue Code 3
of 1986, as amended, and regulations issued thereunder, as amended. 4
(3) Unless the terms of a trust provide otherwise, a power granted to a person to 5
designate a recipient of an ownership interest in or power of appointment over 6
trust property which is exercisable while the person is not serving as a trustee is a 7
power of appointment and not a power of direction. 8
SECTION 74. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 9
386B IS CREATED TO READ AS FOLLOWS: 10
(1) Subject to Section 75 of this Act, the terms of a trust may grant a power of 11
direction to a trust director. 12
(2) Unless the terms of a trust provide otherwise: 13
(a) A trust director may exercise any further power appropriate to the exercise 14
or nonexercise of power of direction granted to the director under 15
subsection (1) of this section; and 16
(b) Trust directors with joint powers shall act by majority decision. 17
SECTION 75. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 18
386B IS CREATED TO READ AS FOLLOWS: 19
A trust director is subject to the same rules as a trustee in a like position and under 20
similar circumstances in the exercise or nonexercise of a power of direction or further 21
power under subsection (2)(a) of Section 74 of this Act regarding: 22
(1) A payback provision in the terms of a trust necessary to comply with the 23
reimbursement requirements of Medica id law in Section 1917 of the Social 24
Security Act, 42 U.S.C. sec. 1396p(d)(4)(A), as amended, and regulations issued 25
thereunder, as amended; and 26
(2) A charitable interest in the trust, including notice regarding the interest to the 27
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Attorney General. 1
SECTION 76. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 2
386B IS CREATED TO READ AS FOLLOWS: 3
(1) Subject to subsection (2) of this section, with respect to a power of direction or 4
further power under subsection (2)(a) of Section 74 of this Act: 5
(a) A trust director has the same fiduciary duty and liability in the exercise or 6
nonexercise of the power: 7
1. If the power is held individually, as a sole trustee in a like position and 8
under similar circumstances; or 9
2. If the power is held jointly with a trustee or another trust director, as a 10
cotrustee in like position and under similar circumstances; and 11
(b) The terms of the trust may vary the director's duty or liability to the same 12
extent the terms of the trust could vary the duty or liability of a trustee in a 13
like position and under similar circumstances. 14
(2) Unless the terms of a trust provide otherwise, if a trust director is licensed, 15
certified, or otherwise authorized or permitted by law other than the provisions of 16
Sections 70 to 86 of this Act to provide health care in the ordinary course of the 17
director's business or practice of a profession, to the extent the director acts in 18
that capacity, the director shall have no duty or liability under Sections 70 to 86 19
of this Act. 20
(3) The terms of a trust may impose a duty or liability on a trust director in addition 21
to the duties and liabilities under this section. 22
SECTION 77. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 23
386B IS CREATED TO READ AS FOLLOWS: 24
(1) Subject to subsection (2) of this section, a directed trustee shall take reasonable 25
action to comply with a trust director's exercise or nonexercise of a power of 26
direction or further power under subsection (2)(a) of Section 74 of this Act, and 27
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the trustee is not liable for the action. 1
(2) A directed trustee shall not comply with a trust director's exercise or nonexercise 2
of a power of direction or further power under Section 74 of this Act to the extent 3
that by complying, the trustee would engage in willful misconduct. 4
(3) An exercise of a power of direction under which a trust director may release a 5
trustee or another trust director from liability for breach of trust is not effective 6
if: 7
(a) The breach involved the trustee's or other director's willful misconduct; 8
(b) The release was induced by improper conduct of the trustee or other 9
director in procuring the release; or 10
(c) At the time of the release, the director did not know the material facts 11
relating to the breach. 12
(4) A directed trustee that has reasonable doubt about its duty under this section may 13
petition a court with jurisdiction under Subchapter 2 of KRS Chapter 386B for 14
instructions. 15
(5) The terms of a trust may impose a duty or liability on a directed trustee in 16
addition to the duties and liabilities under this section. 17
SECTION 78. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 18
386B IS CREATED TO READ AS FOLLOWS: 19
(1) Subject to Section 79 of this Act, a trustee shall provide information to a trust 20
director to the extent the information is reasonably related to both: 21
(a) The powers or duties of the trustee; and 22
(b) The powers or duties of the director. 23
(2) Subject to Se ction 79 of this Act, a trust director shall provide information to a 24
trustee or another trust director to the extent the information is reasonably 25
related to both: 26
(a) The powers or duties of the director; and 27
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(b) The powers or duties of the trustee or other director. 1
(3) A trustee that acts in reliance on information provided by a trust director is not 2
liable for breach of trust to the extent the breach resulted from the reliance, 3
unless by so acting the trust director engages in willful misconduct. 4
(4) A trust director that acts in reliance on information provided by a trustee or 5
another trust director is not liable for a breach of trust to the extent the breach 6
resulted from the reliance, unless by so acting the trust director engages in willful 7
misconduct. 8
SECTION 79. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 9
386B IS CREATED TO READ AS FOLLOWS: 10
(1) Unless the terms of a trust provide otherwise: 11
(a) The trustee shall not have a duty to: 12
1. Monitor a trust director; or 13
2. Inform or give advice to a settlor, beneficiary, trustee, or trust director 14
concerning an instance in which the trustee might have acted 15
differently than the director; and 16
(b) By taking an action described in paragraph (a) of this subsection, a trust ee 17
does not assume the duty excluded by paragraph (a) of this subsection. 18
(2) Unless the terms of a trust provide otherwise: 19
(a) The trust director shall not have a duty to: 20
1. Monitor a trustee or another trust director; or 21
2. Inform or give advice to a settlor, beneficiary, trustee, or another trust 22
director concerning an instance in which the director might have 23
acted differently than a trustee or another director; and 24
(b) By taking an action described in paragraph (a) of this subsection, a trust 25
director does not assume the duty excluded by paragraph (a) of this 26
subsection. 27
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SECTION 80. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 1
386B IS CREATED TO READ AS FOLLOWS: 2
The terms of a trust may relieve a cotrustee from duty and liability with respect to 3
another cotrustee's exercise or nonexercise of a power of the other cotrustee to the 4
same extent that in a directed trust a directed trustee is r elieved from duty and liability 5
with respect to a trust director's power under Sections 77, 78, and 79 of this Act. 6
SECTION 81. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 7
386B IS CREATED TO READ AS FOLLOWS: 8
(1) An action against a trust director for breach of trust shall be commenced within 9
the same limitation period as under KRS 386B.10 -050 for an action for breach of 10
trust against a trustee in a like position and under similar circumstances. 11
(2) A report or accountin g has the same effect on the limitation period for an action 12
against a trust director for breach of trust that the report or accounting would 13
have under KRS 386B.10-050 in an action for breach of trust against a trustee in 14
a like position and under similar circumstances. 15
SECTION 82. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 16
386B IS CREATED TO READ AS FOLLOWS: 17
In an action against a trust director for breach of trust, the director may assert the 18
same defenses a trustee in a like position and under similar circumstances could assert 19
in an action for breach of trust against the trustee. 20
SECTION 83. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 21
386B IS CREATED TO READ AS FOLLOWS: 22
(1) By accepting appointment as a trust director of a trust subject to the provisions of 23
Sections 70 to 86 of this Act, the director submits to personal jurisdiction of the 24
courts of this Commonwealth regarding any matter related to a power or duty of 25
the director. 26
(2) This section shall not preclude other methods of obtaining jurisdiction over a 27
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trust director. 1
SECTION 84. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 2
386B IS CREATED TO READ AS FOLLOWS: 3
Unless the terms of a trust provide otherwise, the rules applicable to a trustee apply to a 4
trust director regarding the following matters: 5
(1) Acceptance under KRS 386B.7-010; 6
(2) Giving of bond to secure performance under KRS 386B.7-020; 7
(3) Reasonable compensation under KRS 386B.7-080; 8
(4) Resignation under KRS 386B.7-050; 9
(5) Removal under KRS 386B.7-060; and 10
(6) Vacancy and appointment of successor under KRS 386B.7-040. 11
SECTION 85. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 12
386B IS CREATED TO READ AS FOLLOWS: 13
In applying and construing Sections 75 to 86 of this Act, consideration shall be given 14
to the need to promote uniformity of the law with respect to its subject matter among 15
states that enact it. 16
SECTION 86. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 17
386B IS CREATED TO READ AS FOLLOWS: 18
The provisions of Sections 70 to 86 of this Act modify, limit, or supersede the 19
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. sec. 7001 et 20
seq., but do not modify, limit, or supersede 15 U.S.C. sec. 7001(c) or authorize 21
electronic delivery of any of the notices described in 15 U.S.C. sec. 7003(b). 22
SECTION 87. SUBCHAPTER 13 OF KRS CHAPTER 386B IS 23
ESTABLISHED, AND A NEW SECTION THEREOF IS CREATED TO READ AS 24
FOLLOWS: 25
As used in this subchapter: 26
(1) "Appointive property" means the property or property interest subject to a power 27
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of appointment; 1
(2) "Ascertainable standard" means the same as in Section 116 of this Act; 2
(3) "Authorized fiduciary" means: 3
(a) A trustee or other fiduciary, other than a settlor, that has discretion to 4
distribute or direct a trustee to distribute part or all of the principal of the 5
first trust to one (1) or more current beneficiaries; 6
(b) A special fiduciary appointed under Section 94 of this Act; or 7
(c) A special needs fiduciary under Section 98 of this Act; 8
(4) "Beneficiary" means a person that: 9
(a) Has a present or future, vested or contingent, beneficial interest in a trust; 10
(b) Holds a power of appointment over trust property; or 11
(c) Is an identified charitable organization that will or may receive distributions 12
under the terms of the trust; 13
(5) "Charitable interest" means an interest in a trust which: 14
(a) Is held by an identified charitable organization and makes the organization 15
a qualified beneficiary; 16
(b) Benefits only charitable organizations and, if the interest were held by an 17
identified charitable organization, would make the organization a qualified 18
beneficiary; or 19
(c) Is held solely for charitable purposes and, if the interest were held by an 20
identified charitable organization, would make the organization a qualified 21
beneficiary; 22
(6) "Charitable organization" means: 23
(a) A person, other than an individual, organized and operated exclusively for 24
charitable purposes; or 25
(b) A government or governmental subdivision, agency, or instrumentality, to 26
the extent it holds funds exclusively for a charitable purpose; 27
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(7) "Charitable purpose" means the relief of poverty, the advancement of education 1
or religion, the promotion of health, a municipal or other governmental purpose, 2
or another purpose the achievement of which is beneficial to the community; 3
(8) "Court" means a court in this Co mmonwealth having jurisdiction in matters 4
relating to trusts under Subchapter 2 of this chapter; 5
(9) "Current beneficiary": 6
(a) Means a beneficiary that on the date of the beneficiary's qualification is 7
determined is a distributee or permissible distribute e of trust income or 8
principal; and 9
(b) Includes the holder of a presently exercisable general power of appointment 10
but does not include a person that is a beneficiary only because the person 11
holds any other power of appointment; 12
(10) "Decanting power" or "the decanting power" means the power of an authorized 13
fiduciary under Sections 70 to 86 of this Act to distribute property of a first trust 14
to one (1) or more second trusts or to modify the terms of the first trust; 15
(11) "Expanded distributive discretion" means a discretionary power of distribution 16
that is not limited to an ascertainable standard or a reasonably definite standard; 17
(12) "First trust" means a trust over which an authorized fiduciary may exercise the 18
decanting power; 19
(13) "First-trust instrument" means the trust instrument for a first trust; 20
(14) "General power of appointment" means a power of appointment exercisable in 21
favor of a powerholder, the powerholder's estate, a creditor of the powerholder, 22
or a creditor of the powerholder's estate; 23
(15) "Jurisdiction" has the same meaning as in Section 116 of this Act; 24
(16) "Person" has the same meaning as in Section 116 of this Act; 25
(17) "Power of appointment": 26
(a) Means a power that enables a powerholder acting in a nonfiduciary 27
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capacity to designate a recipient of an ownership interest in or another 1
power of appointment over the appointive property; and 2
(b) Does not include a power of attorney; 3
(18) "Powerholder" means a person in which a donor creates a power of 4
appointment; 5
(19) "Presently exercisable power of appointment" means a power of appointment 6
exercisable by the powerholder at the relevant time and: 7
(a) Includes a power of appointment exercisable only after the occurrence of a 8
specified event, the satisfaction of an asce rtainable standard, or the passage 9
of a specified time only after: 10
1. The occurrence of the specified event; 11
2. The satisfaction of the ascertainable standard; or 12
3. The passage of the specified time; and 13
(b) Does not include a power exercisable only at the powerholder's death; 14
(20) "Qualified beneficiary" has the same meaning as in Section 116 of this Act; 15
(21) "Reasonably definite standard" means a clearly measurable standard under 16
which a holder of a power of distribution is legally accountable within th e 17
meaning of 26 U.S.C. sec. 674(b)(5)(A), as amended, and any applicable 18
regulations; 19
(22) "Record" has the same meaning as in Section 32 of this Act; 20
(23) "Second-trust instrument" means the trust instrument for a second trust; 21
(24) "Settlor," except as o therwise provided in Section 110 of this Act, has the same 22
meaning as in Section 116 of this Act; 23
(25) "Sign" has the same meaning as in Section 32 of this Act; 24
(26) "State" has the same meaning as in Section 116 of this Act; 25
(27) "Terms of the trust" has the same meaning as in Section 116 of this Act; and 26
(28) "Trust instrument" has the same meaning as in Section 116 of this Act. 27
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SECTION 88. A NEW SECTION OF S UBCHAPTER 13 OF KRS CHAPTER 1
386B IS CREATED TO READ AS FOLLOWS: 2
(1) Except as otherwise provided in subsections (2) and (3) of this section, the 3
provisions of Sections 87 to 114 of this Act shall apply to an express trust that is 4
irrevocable or revocable b y the settlor only with the consent of the trustee or a 5
person holding an adverse interest. 6
(2) Sections 87 to 114 of this Act shall not apply to a trust held solely for charitable 7
purposes. 8
(3) Subject to Section 100 of this Act, a trust instrument may restrict or prohibit 9
exercise of the decanting power. 10
(4) Sections 87 to 114 of this Act do not limit the power of a trustee, powerholder, or 11
other person to distribute or appoint property in furth er trust or to modify a trust 12
under the trust instrument, statutes of this Commonwealth other than the 13
provisions of Sections 87 to 114 of this Act, common law, a court order, or a 14
nonjudicial settlement agreement. 15
(5) Sections 87 to 114 of this Act do not affect the ability of a settlor to provide in a 16
trust instrument for the distribution of the trust property or appointment in 17
further trust of the trust property or for modification of the trust instrument. 18
SECTION 89. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 19
386B IS CREATED TO READ AS FOLLOWS: 20
(1) In exercising the decanting power, an authorized fiduciary shall act in 21
accordance with its fiduciary duties, including the duty to act in accordance with 22
the purposes of the first trust. 23
(2) Sections 87 to 114 of this Act do not create or imply a duty to exercise the 24
decanting power or to inform the beneficiaries about the applicability of Sections 25
87 to 114 of this Act. 26
(3) Except as otherwise provided in a first -trust instrument, for purposes of Sections 27
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70 to 86 of this Act and KRS 386B.8 -010 and 386B.8 -020, the terms of the first 1
trust are deemed to include the decanting power. 2
SECTION 90. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTE R 3
386B IS CREATED TO READ AS FOLLOWS: 4
Sections 87 to 114 of this Act shall apply to a trust created before, on, or after the 5
effective date of this Act which: 6
(1) Has its principal place of administration in this Commonwealth, including a trust 7
whose princ ipal place of administration has been changed to this 8
Commonwealth; or 9
(2) Provides by its trust instrument that it is governed by the law of this 10
Commonwealth or is governed by the law of this Commonwealth for the purpose 11
of: 12
(a) Administration, including administration of a trust whose governing law for 13
purposes of administration has been changed to the law of this 14
Commonwealth; 15
(b) Construction of the terms of the trust; or 16
(c) Determining the meaning or effect of terms of the trust. 17
SECTION 91. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 18
386B IS CREATED TO READ AS FOLLOWS: 19
A trustee or other person that reasonably relies on the validity of a distribution of part 20
or all of the property of a trust to another trust, or a modification of a trust, under 21
Sections 87 to 114 of this Act, statutes of this Commonwealth other than Sections 87 to 22
114 of this Act, or the law of another jurisdiction is not liable to any person for any 23
action or failure to act as a result of the reliance. 24
SECTION 92. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 25
386B IS CREATED TO READ AS FOLLOWS: 26
(1) A notice period in this section begins on the day notice is given under subsection 27
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(3) of this section and ends fifty-nine (59) days after the day notice is given. 1
(2) Except as otherwise provided in Sections 87 to 114 of this Act, an authorized 2
fiduciary may exercise the decanting power without the consent of any person 3
and without court approval. 4
(3) Except as other wise provided in subsection (6) of this section, an authorized 5
fiduciary shall give notice in a record of the intended exercise of the decanting 6
power not less than sixty (60) days before the exercise to: 7
(a) Each settlor of the first trust, if living or then in existence; 8
(b) Each qualified beneficiary of the first trust; 9
(c) Each holder of a presently exercisable power of appointment over any part 10
or all of the first trust; 11
(d) Each person that currently has the right to remove or replace the authorized 12
fiduciary; 13
(e) Each other fiduciary of the first trust; 14
(f) Each fiduciary of the second trust; and 15
(g) The Attorney General, if subsection (2) of Section 99 of this Act applies. 16
(4) An authorized fiduciary is not required to give notice under subsection (3) of this 17
section to a person that is not known to the fiduciary or is known to the fiduciary 18
but cannot be located by the fiduciary after reasonable diligence. 19
(5) A notice under subsection (3) of this section shall: 20
(a) Specify the manner in which the authorized fiduciary intends to exercise the 21
decanting power; 22
(b) Specify the proposed effective date for exercise of the power; and 23
(c) Include a copy of: 24
1. The first-trust instrument; or 25
2. All second-trust instruments. 26
(6) The decanting power may be exercised before the expiration of the notice period 27
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under subsection (1) of this section if all persons entitled to receive notice waive 1
the period in a signed record. 2
(7) The receipt of notice, wai ver of the notice period, or expiration of the notice 3
period does not affect the right of a person to file an application under Section 94 4
of this Act asserting that: 5
(a) An attempted exercise of the decanting power is ineffective because it did 6
not comply with the provisions of Sections 87 to 114 of this Act or was an 7
abuse of discretion or breach of fiduciary duty; or 8
(b) Section 107 of this Act applies to the exercise of the decanting power. 9
(8) An exercise of the decanting power is not ineffective because of the failure to give 10
notice to one (1) or more persons under subsection (3) of this section if the 11
authorized fiduciary acted with reasonable care to comply with subsection (3) of 12
this section. 13
SECTION 93. A NEW SEC TION OF SUBCHAPTER 13 OF KRS CHAPTER 14
386B IS CREATED TO READ AS FOLLOWS: 15
(1) Notice to a person with authority to represent and bind another person under a 16
first-trust instrument or the provisions of this chapter has the same effect as 17
notice given directly to the person represented. 18
(2) Consent of or waiver by a person with authority to represent and bind another 19
person under a first -trust instrument or the provisions of this chapter is binding 20
on the person represented unless the person represented object s to the 21
representation before the consent or waiver otherwise would become effective. 22
(3) A person with authority to represent and bind another person under a first -trust 23
instrument or the provisions of this chapter may file an application under Section 24
94 of this Act on behalf of the person represented. 25
(4) A settlor may not bind or represent a beneficiary under Sections 87 to 114 of this 26
Act. 27
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SECTION 94. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 1
386B IS CREATED TO READ AS FOLLOWS: 2
(1) On application of an authorized fiduciary, a person entitled to notice under 3
subsection (3) of Section 92 of this Act, a beneficiary, or with respect to a 4
charitable interest, the Attorney General or other person that has standing to 5
enforce the charitable interest, the court may: 6
(a) Provide instructions to the authorized fiduciary regarding whether a 7
proposed exercise of the decanting power is permitted under Sections 87 to 8
114 of this Act and consistent with the fiduciary duties of t he authorized 9
fiduciary; 10
(b) Appoint a special fiduciary and authorize the special fiduciary to determine 11
whether the decanting power should be exercised under Sections 87 to 114 12
of this Act and to exercise the decanting power; 13
(c) Approve an exercise of the decanting power; 14
(d) Determine that a proposed or attempted exercise of the decanting power is 15
ineffective because: 16
1. After applying Section 107 of this Act, the proposed or attempted 17
exercise does not or did not comply with the provisions of Sections 87 18
to 114 of this Act; or 19
2. The proposed or attempted exercise would be or was an abuse of 20
fiduciary's discretion or a breach of fiduciary duty; 21
(e) Determine the extent to which Section 107 of this Act applies to a prior 22
exercise of the decanting power; 23
(f) Provide instructions to the trustee regarding the application of Section 107 24
of this Act to a prior exercise of the decanting power; or 25
(g) Order other relief to carry out the purposes of Sections 87 to 114 of this Act. 26
(2) On application of an authorized fiduciary, the court may approve: 27
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(a) An increase in the fiduciary's compensation under Section 101 of this Act; 1
or 2
(b) A modification under Section 103 of this Act of a provision granting a 3
person the right to remove or replace the fiduciary. 4
SECTION 95. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 5
386B IS CREATED TO READ AS FOLLOWS: 6
An exercise of the decanting power shall be made in a record signed by an authorized 7
fiduciary. The signed record shall, directly or by re ference to the notice required by 8
Section 92 of this Act, identify the first trust and the second trust or trusts and state the 9
property of the first trust being distributed to each second trust and the property, if any, 10
that remains in the first trust. 11
SECTION 96. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 12
386B IS CREATED TO READ AS FOLLOWS: 13
(1) As used in this section: 14
(a) "Noncontingent right" means a right that is not subject to the exercise of 15
discretion or the occurrence of a specified event that is not certain to occur. 16
The term does not include a right held by a beneficiary if any person has 17
discretion to distribute property subject to the right to any person other than 18
the beneficiary or the beneficiary's estate; 19
(b) "Presumptive remainder beneficiary" means a qualified beneficiary other 20
than a current beneficiary; 21
(c) "Successor beneficiary" means a beneficiary that is not a qualified 22
beneficiary on the date the beneficiary's qualification is determined. The 23
term does not include a person that is a beneficiary only because the person 24
holds a nongeneral power of appointment; and 25
(d) "Vested interest" means: 26
1. A right to a mandatory distribution that is a noncontingent right as of 27
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the date of the exercise of the decanting power; 1
2. A current and noncontingent right, annually or more frequently, to a 2
mandatory distribution of income, a specified dollar amount, or a 3
percentage of value of some or all of the trust property; 4
3. A current and noncontingent right, annua lly or more frequently, to 5
withdraw income, a specified dollar amount, or a percentage of value 6
of some or all of the trust property; 7
4. A presently exercisable general power of appointment; or 8
5. A right to receive an ascertainable part of the trust prope rty on the 9
trust's termination which is not subject to the exercise of discretion or 10
to the occurrence of a specified event that is not certain to occur. 11
(2) Subject to subsection (3) of this section and Section 99 of this Act, an authorized 12
fiduciary that has expanded distributive discretion over the principal of a first 13
trust for the benefit of one (1) or more current beneficiaries may exercise the 14
decanting power over the principal of the first trust. 15
(3) Subject to Section 98 of this Act, in an exercise of the decanting power under this 16
section, a second trust shall not: 17
(a) Include as a current beneficiary a person that is not a current beneficiary of 18
the first trust, except as otherwise provided in subsection (4) of this section; 19
(b) Include as a presu mptive remainder beneficiary or successor beneficiary a 20
person that is not a current beneficiary, presumptive remainder beneficiary, 21
or successor beneficiary of the first trust, except as otherwise provided in 22
subsection (4) of this section; or 23
(c) Reduce or eliminate a vested interest. 24
(4) Subject to subsection (3)(c) of this section and Section 99 of this Act, in an 25
exercise of the decanting power under this section, a second trust may be a trust 26
created or administered under the law of any jurisdiction and may: 27
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(a) Retain a power of appointment granted in the first trust; 1
(b) Omit a power of appointment granted in the first trust, other than a 2
presently exercisable general power of appointment; 3
(c) Create or modify a power of appointment if the powerholder is a current 4
beneficiary of the first trust and the authorized fiduciary has expanded 5
distributive discretion to distribute principal to the beneficiary; and 6
(d) Create or modify a power of appoin tment if the powerholder is a 7
presumptive remainder beneficiary or successor beneficiary of the first 8
trust, but the exercise of the power may take effect only after the 9
powerholder becomes, or would have become if then living, a current 10
beneficiary. 11
(5) A power of appointment described in paragraphs (a) to (d) of subsection (4) of 12
this section may be general or nongeneral. The class of permissible appointees in 13
favor of which the power may be exercised may be broader than or different from 14
the beneficiaries of the first trust. 15
(6) If an authorized fiduciary has expanded distributive discretion over part but not 16
all of the principal of a first trust, the fiduciary may exercise the decanting power 17
under this section over that part of the principal over which the authorized 18
fiduciary has expanded distributive discretion. 19
SECTION 97. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 20
386B IS CREATED TO READ AS FOLLOWS: 21
(1) As used in this section, "limited distributive discretion" means a discretionary 22
power of distribution that is limited to an ascertainable standard or a reasonably 23
definite standard. 24
(2) An authorized fiduciary that has limited distributive discretion over the principal 25
of the first trust for the benefit of one (1 ) or more current beneficiaries may 26
exercise the decanting power over the principal of the first trust. 27
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(3) Under this section and subject to Section 99 of this Act, a second trust may be 1
created or administered under the law of any jurisdiction. Under thi s section, the 2
second trusts, in the aggregate, shall grant each beneficiary of the first trust 3
beneficial interests which are substantially similar to the beneficial interests of 4
the beneficiary of the first trust. 5
(4) A power to make a distribution under a second trust for the benefit of a 6
beneficiary who is an individual is substantially similar to a power under the first 7
trust to make a distribution directly to the beneficiary. A distribution is for the 8
benefit of a beneficiary if: 9
(a) The distribution is applied for the benefit of the beneficiary; 10
(b) The beneficiary is under a legal disability or the trustee reasonably believes 11
the beneficiary is incapacitated, and the distribution is made as permitted 12
under this chapter; or 13
(c) The distribution is mad e as permitted under the terms of the first -trust 14
instrument and the second -trust instrument for the benefit of the 15
beneficiary. 16
(5) If an authorized fiduciary has limited distributive discretion over part but not all 17
of the principal of a first trust, the fiduciary may exercise the decanting power 18
under this section over that part of the principal over which the authorized 19
fiduciary has limited distributive discretion. 20
SECTION 98. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 21
386B IS CREATED TO READ AS FOLLOWS: 22
(1) As used in this section: 23
(a) "Beneficiary with a disability" means a beneficiary of a first trust who the 24
special needs fiduciary believes may qualify for governmental benefits based 25
on disability, whether or not the beneficiary currently receives those benefits 26
or is an in individual who has been adjudicated incompetent; 27
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(b) "Governmental benefits" means financial aid or services from a state, 1
federal, or other public agency; 2
(c) "Special needs fiduciary" means, with respect to a trust that has a 3
beneficiary with a disability: 4
1. A trustee or other fiduciary, other than a settlor, that has discretion to 5
distribute part or all of the principal of a first trust to one (1 ) or more 6
current beneficiaries; 7
2. If no trustee or fiduciary has discretion under subparagraph 1. of this 8
paragraph, a trustee or other fiduciary, other than a settlor, that has 9
discretion to distribute part or all of the income of the first trust to one 10
(1) or more current beneficiaries; or 11
3. If no trustee or beneficiary has discretion under subparagraphs 1. and 12
2. of this paragraph, a trustee or other fiduciary, other than a settlor, 13
that is required to distribute part or all of the income or principal of 14
the first trust to one (1) or more current beneficiaries; and 15
(d) "Special needs trust" means a trust that the trustee believes would not be 16
considered a resource for purposes of determining whether a beneficiary 17
with a disability is eligible for governmental benefits. 18
(2) A special needs fiduciary may exercise the decanting power in Section 96 of this 19
Act over the principal of the first trust as if the fiduciary had authority to 20
distribute principal to a beneficiary with a disability subject to expande d 21
distributive discretion if: 22
(a) A second trust is a special needs trust that benefits the beneficiary with a 23
disability; and 24
(b) The special needs fiduciary determines that exercise of the decanting power 25
will further the purposes of the first trust. 26
(3) In an exercise of the decanting power under this section, the following rules 27
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apply: 1
(a) Notwithstanding subsection (3)(b) of Section 96 of this Act, the interest in 2
the second trust of a beneficiary with a disability may: 3
1. Be a pooled trust as defined by Medicaid law for the benefit of the 4
beneficiary with a disability under 42 U.S.C. sec. 1396p(d)(4)(A), as 5
amended; or 6
2. Contain payback provisions complying with reimbursement 7
requirements of Medicaid law under 42 U.S.C. sec. 1396p(d)(4)(A), as 8
amended; 9
(b) Subsection (3)(c) of Section 96 of this Act shall not apply to the interests of 10
the beneficiary with a disability; and 11
(c) Except as affected by any change to the interests of the beneficiary with a 12
disability, the second trust, or if there are two (2) or more second trusts, the 13
second trusts in the aggregate, shall grant each other benef iciary of the first 14
trust beneficial interests in the second trust which are substantially similar 15
to the beneficiary's beneficial interests in the first trust. 16
SECTION 99. A NEW SECTION OF SUBCHAPTER 13 OF KRS CHAPTER 17
386B IS CREATED TO READ AS FOLLOWS: 18
(1) As used in this section: 19
(a) "Determinable charitable interest" means a charitable interest that is a 20
right to a mandatory distribution currently, periodically, on the occurrence 21
of a specified event, or after the pas sage of a specified time and which is 22
unconditional or will be held solely for charitable purposes; and 23
(b) "Unconditional" means not subject to the occurrence of a specified event 24
that is not certain to occur, other than a requirement in a trust instrumen t 25
that a charitable organization be in existence or qualify under a particular 26
provision of the United States Internal Revenue Code of 1986, as amended, 27
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on the date of the distribution, if the charitable organization meets the 1
requirement on the date of determination. 2
(2) If a first trust contains a determinable charitable interest, the Attorney General 3
has the rights of a qualified beneficiary and may represent and bind the 4
charitable interest. 5
(3) If a first trust contains a charitable interest, the second trust or trusts shall not: 6
(a) Diminish the charitable interest; 7
(b) Diminish the interest of an identified charitable organization that holds the 8
charitable interest; 9
(c) Alter any charitable purpose stated in the first-trust instrument; or 10
(d) Alter any condition or restriction related to the charitable interest. 11
(4) If there are two (2) or more second trusts, the second trusts shall be treated as one 12
(1) trust for purposes of determining whether the exercise of the decanting power 13
diminishes the charit able interest or diminishes the interest of an identified 14
charitable organization for purposes of subsection (3) of this section. 15
(5) If a first trust contains a determinable charitable interest, the second trust or 16
trusts that include a charitable interes t pursuant to subsection (3) of this section 17
shall be administered under the law of this Commonwealth unless: 18
(a) The Attorney General, after having received notice under Section 92 of this 19
Act, fails to object in a signed record delivered to the authorize d fiduciary 20
within the notice period; 21
(b) The Attorney General consents in a signed record to the second trust or 22
trusts being administered under the law of another jurisdiction; or 23
(c) The court approves the exercise of the decanting power. 24
(6) Sections 87 to 114 of this Act do not limit the powers and duties of the Attorney 25
General under the law of this Commonwealth other than the provisions of 26
Sections 87 to 114 of this Act. 27
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SECTION 100. A NEW SECTION OF SUBCHAPTER 13 OF KRS 1
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 2
(1) An authorized fiduciary may not exercise the decanting power to the extent the 3
first-trust instrument expressly prohibits the exercise of: 4
(a) The decanting power; or 5
(b) A power granted by state law t o the fiduciary to distribute part or all of the 6
principal of the trust to another trust or to modify the trust. 7
(2) Exercise of the decanting power is subject to any restriction in the first -trust 8
instrument that expressly applies to the exercise of: 9
(a) The decanting power; or 10
(b) A power granted by state law to a fiduciary to distribute part or all of the 11
principal of the trust to another trust or to modify the trust. 12
(3) A general prohibition of the amendment or revocation of a first trust, a 13
spendthrift clause, or a clause restraining the voluntary or involuntary transfer of 14
a beneficiary's interest does not preclude exercise of the decanting power. 15
(4) Subject to subsections (1) and (2) of this section, an authorized fiduciary may 16
exercise the decanting power under Sections 87 to 114 of this Act even if the first -17
trust instrument permits the authorized fiduciary or another person to modify the 18
first-trust instrument or to distribute part or all of the principal of the first trust to 19
another trust. 20
(5) If a first-trust instrument contains an express prohibition described in subsection 21
(1) of this section or an express restriction described in subsection (2) of this 22
section, the provision shall be included in the second-trust instrument. 23
SECTION 101. A NEW SECTION OF SUBCHAPTER 13 OF KRS 24
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 25
(1) If a first -trust instrument specifies an authorized fiduciary's compensation, the 26
fiduciary may not exercise the decanting power to inc rease the fiduciary's 27
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compensation above the specified compensation unless: 1
(a) All qualified beneficiaries of the second trust consent to the increase in a 2
signed record; or 3
(b) The increase is approved by the court. 4
(2) If a first -trust instrument does n ot specify an authorized fiduciary's 5
compensation, the fiduciary may not exercise the decanting power to increase the 6
fiduciary's compensation above the compensation permitted by this chapter 7
unless: 8
(a) All qualified beneficiaries of the second trust cons ent to the increase in a 9
signed record; or 10
(b) The increase is approved by the court. 11
(3) A change in an authorized fiduciary's compensation which is incidental to other 12
changes made by the exercise of the decanting power is not an increase in the 13
fiduciary's compensation for purposes of subsections (1) and (2) of this section. 14
SECTION 102. A NEW SECTION OF SUBCHAPTER 13 OF KRS 15
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 16
(1) Except as otherwise provided in this section, a second-trust instrument may not 17
relieve an authorized fiduciary from liability for breach of trust to a greater 18
extent than the first-trust instrument. 19
(2) A second -trust instrument may provide for indemnification of an authorized 20
fiduciary of the first t rust or another person acting in a fiduciary capacity under 21
the first trust for any liability or claim that would have been payable from the first 22
trust if the decanting power had not been exercised. 23
(3) A second-trust instrument may not reduce fiduciary liability in the aggregate. 24
(4) Subject to subsection (3) of this section, a second-trust instrument may divide and 25
reallocate fiduciary powers among the fiduciaries, including one (1) or more 26
trustees, distribution advisors, investment advisors, trust prot ectors, or other 27
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persons, and relieve a fiduciary from liability for an act or failure to act of 1
another fiduciary as permitted by law of this Commonwealth other than Sections 2
87 to 114 of this Act. 3
SECTION 103. A NEW SE CTION OF SUBCHAPTER 13 OF KRS 4
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 5
An authorized fiduciary may not exercise the decanting power to modify a provision in 6
a first -trust instrument granting another person power to remove or replace the 7
fiduciary unless: 8
(1) The person holding the power consents to the modification in a signed record and 9
the modification applies only to that person; 10
(2) The person holding the power and the qualified beneficiaries of the second trust 11
consent to the modification in a signe d record and the modification grants a 12
substantially similar power to another person; or 13
(3) The court approves the modification and the modification grants a substantially 14
similar power to another person. 15
SECTION 104. A NEW SECTION OF SUBCHAPTER 13 OF KRS 16
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 17
(1) As used in this section: 18
(a) "Grantor trust" means a trust as to which a settlor of a first trust is 19
considered the owner under 26 U.S.C. secs. 671 to 677, as amended, or 26 20
U.S.C. sec. 679, as amended; 21
(b) "Internal Revenue Code" means the United States Internal Revenue Code 22
of 1986, as amended; 23
(c) "Nongrantor trust" means a trust that is not a grantor trust; and 24
(d) "Qualified benefits property" means property subject to the minimum 25
distribution requirements of 26 U.S.C. sec. 401(a)(9), as amended, and any 26
applicable regulations, or to any similar r equirements that refer to 26 27
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U.S.C. sec. 401(a)(9) or the regulations. 1
(2) An exercise of the decanting power is subject to the following limitations: 2
(a) If a first trust contains property that qualified, or would have qualified but 3
for provisions of Sections 87 to 114 of this Act other than this section, for a 4
marital deduction for purposes of the gift or estate tax under the Internal 5
Revenue Code or a state gift, estate, or inheritance tax, the second -trust 6
instrument shall not include or omit any term t hat, if included in or omitted 7
from the trust instrument for the trust to which the property was 8
transferred, would have prevented the transfer from qualifying for the 9
deduction, or would have reduced the amount of the deduction, under the 10
same provisions of the Internal Revenue Code or state law under which the 11
transfer qualified; 12
(b) If the first trust contains property that qualified, or would have qualified but 13
for provisions of Sections 87 to 114 of this Act other than this section, for a 14
charitable deduction for purposes of the income, gift, or estate tax under the 15
Internal Revenue Code or a state income, gift, estate, or inheritance tax, the 16
second-trust instrument shall not include or omit any term that, if included 17
from or omitted from the trust instrument for the trust to which the property 18
was transferred, would have prevented the transfer from qualifying for the 19
deduction, or would have reduced the amount of the deduction, under the 20
same provisions of the Internal Revenue Code or state law under w hich the 21
transfer qualified; 22
(c) If the first trust contains property that qualified, or would have qualified but 23
for provisions of Sections 87 to 114 of this Act other than this section, for 24
the exclusion from the gift tax described in: 25
1. 26 U.S.C. sec. 2503(b), as amended, the second -trust instrument shall 26
not include or omit a term that, if included in or omitted from the trust 27
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instrument for the trust to which the property was transferred, would 1
have prevented the transfer from qualifying under 26 U.S. C. sec. 2
2503(b), as amended; or 3
2. 26 U.S.C. sec. 2503(c), as amended, the second -trust instrument shall 4
not include or omit a term that, if included in or omitted from the trust 5
instrument for the trust to which the property was transferred, would 6
have pr evented the transfer from qualifying under 26 U.S.C. sec. 7
2503(c), as amended; 8
(d) If the property of the first trust includes shares of stock in an S corporation 9
as defined in 26 U.S.C. sec. 1361, as amended, and the first trust is, or but 10
for provisions of Sections 87 to 114 of this Act other than this section would 11
be, a permitted shareholder under any provision of 26 U.S.C. sec. 1361, as 12
amended, an authorized fiduciary may exercise the power with respect to 13
part of all the S corporation stock only if a ny second trust receiving the 14
stock is a permitted shareholder under 26 U.S.C. sec. 1361(c)(2), as 15
amended. If the property of the first trust includes shares of stock in an S 16
corporation and the first trust is, or but for provisions of Sections 87 to 114 17
of this Act other than this section would be, a qualified subchapter S trust 18
within the meaning of 26 U.S.C. sec. 1361(d), as amended, the second -trust 19
instrument shall not include or omit a term that prevents the second trust 20
from qualifying as a qualified subchapter S trust; 21
(e) If the first trust contains property that qualified, or would have qualified but 22
for provisions of Sections 87 to 114 of this Act other than this section, for a 23
zero inclusion ratio for purposes of the generation -skipping transfer tax 24
under 26 U.S.C. sec. 2642(c), as amended, the second -trust instrument shall 25
not include or omit a term that, if included in or omitted from the first -trust 26
instrument, would have prevented the transfer to the first trust from 27
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qualifying for a zero inc lusion ratio under 26 U.S.C. sec. 2642(c), as 1
amended; 2
(f) If the first trust is directly or indirectly the beneficiary of qualified benefits 3
property, the second -trust instrument shall not include or omit any term 4
that, if included in or omitted from the first-trust instrument, would have 5
increased the minimum distributions required with respect to the qualified 6
benefits property under 26 U.S.C. sec. 401(a)(9), as amended, and any 7
applicable regulations, or any similar requirements that refer to 26 U.S.C. 8
sec. 401(a)(9), as amended, or the regulations. If an attempted exercise of 9
the decanting power violates the preceding sentence, the trustee is deemed to 10
have held the qualified benefits property and any reinvested distributions of 11
the property as a separa te share from the date of the exercise of the power, 12
and Section 107 of this Act applies to the separate share; 13
(g) If the first trust qualifies as a grantor trust because of the application of 26 14
U.S.C. sec. 672(f)(2)(A), as amended, the second trust shal l not include or 15
omit a term that, if included in or omitted from the first -trust instrument, 16
would have prevented the first trust from qualifying under 26 U.S.C. sec. 17
672(f)(2)(A), as amended; 18
(h) As used in this paragraph, "tax benefit" means a federal o r state tax 19
deduction, exemption, exclusion, or other benefit not otherwise listed in this 20
section, except for a benefit arising from being a grantor trust. Subject to 21
paragraph (i) of this subsection, a second -trust instrument shall not include 22
or omit a term that, if included in or omitted from the first -trust instrument, 23
would have prevented qualification for a tax benefit if: 24
1. The first -trust instrument expressly indicates an intent to qualify for 25
the benefit or the first -trust instrument clearly is d esigned to enable 26
the first trust to qualify for the benefit; and 27
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2. The transfer of property held by the first trust or the first trust 1
qualified, or but for the provisions of Sections 87 to 114 of this Act 2
other than this section, would have qualified for the tax benefit; 3
(i) Subject to paragraph (d) of this subsection: 4
1. Except as otherwise provided in paragraph (g) of this subsection, the 5
second trust may be a nongrantor trust, even if the first trust is a 6
grantor trust; and 7
2. Except as otherwise prov ided in paragraph (j) of this subsection, the 8
second trust may be a grantor trust, even if the first trust is a 9
nongrantor trust; and 10
(j) An authorized fiduciary may not exercise the decanting power if a settlor 11
objects in a signed record delivered to the fiduciary within the notice period 12
and: 13
1. The first trust and a second trust are both grantor trusts, in whole or 14
in part, the first trust grants the settlor or another person the power to 15
cause the first trust to cease to be a grantor trust, and the seco nd trust 16
does not grant an equivalent power to the settlor or other person; or 17
2. The first trust is a nongrantor trust and a second trust is a grantor 18
trust, in whole or in part, with respect to the settlor, unless: 19
a. The settlor has the power at all tim es to cause the second trust to 20
cease to be a grantor trust; or 21
b. The first -trust instrument contains a provision granting the 22
settlor or another person a power that would cause the first trust 23
to cease to be a grantor trust and the second -trust instrumen t 24
contains the same provision. 25
SECTION 105. A NEW SECTION OF SUBCHAPTER 13 OF KRS 26
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 27
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(1) Subject to subsection (2) of this section, a second trust may have a duration that 1
is the same as or different from the duration of the first trust. 2
(2) To the extent that property of a second trust is attributable to property of the first 3
trust, the property of the second trust is subject to any rules governing maximum 4
perpetuity, accumulation, or suspension of the power of alienation which apply to 5
the property of the first trust. 6
SECTION 106. A NEW SECTION OF SUBCH APTER 13 OF KRS 7
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 8
An authorized fiduciary may exercise the decanting power whether or not under the 9
first trust's discretionary distribution standard the fiduciary would have made or could 10
have been compelled to make a discretionary distribution of principal at the time of the 11
exercise. 12
SECTION 107. A NEW SECTION OF SUBCHAPTER 13 OF KRS 13
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 14
(1) If exercise of the decanting power would be effective under Sections 87 to 114 of 15
this Act except that the second -trust instrument in part does not comply with the 16
provisions of Sections 87 to 114 of this Act, the exercise of the power is effective 17
and the following rules shall apply with respect to the principal of the second 18
trust attributable to the exercise of the power: 19
(a) A provision in the second -trust instrume nt which is not permitted under 20
Sections 87 to 114 of this Act is void to the extent necessary to comply with 21
Sections 87 to 114 of this Act; and 22
(b) A provision required by Sections 87 to 114 of this Act to be in the second -23
trust instrument which is not c ontained in the instrument is deemed to be 24
included in the instrument to the extent necessary to comply with Sections 25
87 to 114 of this Act. 26
(2) If a trustee or other fiduciary of a second trust determines that subsection (1) of 27
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this section applies to a p rior exercise of the decanting power, the fiduciary shall 1
take corrective action consistent with the fiduciary's duties. 2
SECTION 108. A NEW SECTION OF SUBCHAPTER 13 OF KRS 3
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Animal trust" means a trust or an interest in a trust created to provide for 6
the care of one (1) or more animals; and 7
(b) "Protector" means a person appointed in an animal trust to enforce the 8
trust on behalf of the animal or, if no such person is appointed in the trust, 9
a person appointed by the court for that purpose. 10
(2) The decanting power may be exercised over an animal trust that has a protector 11
to the extent the trust could be decanted under Sections 87 to 114 of this Ac t if 12
each animal that benefits from the trust were an individual, if the protector 13
consents in a signed record to the exercise of the power. 14
(3) A protector for an animal has the rights under Sections 87 to 114 of this Act of a 15
qualified beneficiary. 16
(4) Notwithstanding any other provision of Sections 87 to 114 of this Act, if a first 17
trust is an animal trust, in an exercise of the decanting power, the second trust 18
shall provide that trust property may be applied only to its intended purpose for 19
the period the first trust benefitted the animal. 20
SECTION 109. A NEW SECTION OF SUBCHAPTER 13 OF KRS 21
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 22
A reference in KRS Chapter 386B to a trust instrument or terms of the trust includes a 23
second-trust instrument and the terms of the second trust. 24
SECTION 110. A NEW SECTION OF SUBCHAPTER 13 OF KRS 25
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 26
(1) For purposes of law of this Commonwealth other than Sections 87 to 114 of this 27
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Act and subject to subsection (2) of this section, a settlor of a first trust is deemed 1
to be the settlor of the second trust with respect to the portion of the principal of 2
the first trust subject to the exercise of the decanting power. 3
(2) In determining settlor intent with respect to a second trust, the intent of a settlor 4
of the first trust, a settlor of the second trust, and the authorized fiduciary may be 5
considered. 6
SECTION 111. A NEW SECTION OF S UBCHAPTER 13 OF KRS 7
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 8
(1) Except as otherwise provided in subsection (3) of this section, if exercise of the 9
decanting power was intended to distribute all the principal of the first trust to 10
one (1) or more second trusts, later -discovered property belonging to the first 11
trust and property paid to or acquired by the first trust after the exercise of the 12
power is part of the trust estate of the second trust or trusts. 13
(2) Except as otherwise provided in subsection (3 ) of this section, if exercise of the 14
decanting power was intended to distribute less than all the principal of the first 15
trust to one (1) or more second trusts, later -discovered property belonging to the 16
first trust or property paid to or acquired by the first trust after exercise of the 17
power remains part of the trust estate of the first trust. 18
(3) An authorized fiduciary may provide in an exercise of the decanting power or by 19
the terms of a second trust for disposition of later -discovered property belong ing 20
to the first trust or property paid to or acquired by the first trust after exercise of 21
the power. 22
SECTION 112. A NEW SECTION OF SUBCHAPTER 13 OF KRS 23
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 24
A debt, liability, or other obligation enforceable against property of a first trust is 25
enforceable to the same extent against the property when held by the second trust after 26
exercise of the decanting power. 27
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SECTION 113. A NEW SECTION OF SUB CHAPTER 13 OF KRS 1
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 2
In applying and construing Sections 87 to 114 of this Act, consideration shall be given 3
to the need to promote uniformity of the law with respect to its subject matter among 4
states that enact it. 5
SECTION 114. A NEW SECTION OF SUBCHAPTER 13 OF KRS 6
CHAPTER 386B IS CREATED TO READ AS FOLLOWS: 7
The provisions of Sections 87 to 114 of this Act modify, limit, or supersede the 8
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. sec. 7001 et 9
seq., but do not modify, limit, or supersede Section 101(c) of that Act, 15 U.S.C. sec. 10
7001(c), or authorize electronic delivery of any of the notices described in Section 11
103(b) of that Act, 15 U.S.C. sec. 7003(b). 12
Section 115. KRS 386.010 is amended to read as follows: 13
As used in KRS 386.010 to 386.170[386.175], unless the context requires otherwise: 14
(1) "Fiduciary" means any trustee, guardian, executor, administrator, conservator or 15
other individual or corporation holding funds or otherwise acting in a fiduciary 16
capacity. 17
(2) "Principal" means any person to whom a fiduciary, as such, owes an obligation. 18
Section 116. KRS 386B.1-010 is amended to read as follows: 19
As used in this chapter, unless the context requires otherwise: 20
(1) "Action" with respect to an act of a trustee, includes a failure to act; 21
(2) "Ascertainable standard" means a standard relating to an individual's health, 22
education, support, or maintenanc e within the meaning of 26 U.S.C. sec. 23
2041(b)(1)(A) or 26 U.S.C. sec. 2514(c)(1), as amended; 24
(3) "Beneficiary" means a person that: 25
(a) Has a present or future beneficial interest in a trust, vested or contingent; or 26
(b) In a capacity other than that of trustee, holds a power of appointment over 27
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trust property; 1
(4) "Charitable trust" means a trust, or part of a trust, established for a charitable 2
purpose as described in KRS 386B.4-050(1); 3
(5) "Conservator" means a person appointed by the court to administ er the estate of a 4
minor or adult individual; 5
(6) "Environmental law" means a federal, state, or local law, rule, regulation, or 6
ordinance relating to protection of the environment; 7
(7) "Guardian" means a person appointed by the court, a parent, or a spous e to make 8
decisions regarding the support, care, education, health, and welfare of a minor or 9
adult individual. The term shall not include a guardian ad litem; 10
(8) "Interests of the beneficiaries" means the beneficial interests provided in the terms 11
of the trust; 12
(9) "Jurisdiction," with respect to a geographic area, includes a state or country; 13
(10) "Person" means any individual or entity as defined in KRS 446.010; 14
(11) "Power of direction": 15
(a) Means a power over a trust granted to a person by the terms o f the trust to 16
the extent the power is exercisable while the person is not serving as a 17
trustee; 18
(b) Includes a power over the investment, management, or distribution of trust 19
property or other matters of trust administration; and 20
(c) Excludes the powers described in subsection (2) of Section 73 of this Act; 21
(12)[(11)] "Power of withdrawal" means a presently exercisable general power of 22
appointment other than a power: 23
(a) Exercisable by a trustee and limited by an ascertainable standard; or 24
(b) Exercisable by another person only on the consent of the trustee or a person 25
holding an adverse interest; 26
(13)[(12)] "Property" means anything that may be the subject of ownership, whether 27
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legal or equitable, or any interest therein; 1
(14)[(13)] "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's 2
qualification is determined: 3
(a) Is a distributee or permissible distributee of trust income or principal; 4
(b) Would be a distributee or permissible distributee of trust income or principal 5
if the interests of the distributees described in paragraph (a) of this subsection 6
ended on that date without causing the trust to end; or 7
(c) Would be a distributee or permissible distributee of trust income or principal 8
if the trust ended on that date; 9
(15)[(14)] "Revocable," as applied to a trust, means revocable by the settlor without the 10
consent of the trustee or a person holding an adverse interest; 11
(16)[(15)] "Settlor" means a person, including a testator, who creates or contributes 12
property to a trust. If more than one (1) person creates or contributes property to a 13
trust, each person is a settlor of the part of the trust property attributable to that 14
person's contribution except to the extent another person has the power to revoke or 15
withdraw that part; 16
(17)[(16)] "Spendthrift provision" means a term of a trust which restrains both voluntary 17
and involuntary transfer of a beneficiary's interest; 18
(18)[(17)] "State" means a state of the United States, the District of Columbia, Puerto 19
Rico, the United States Virgin Islands, or any territory or insular possession subject 20
to the jurisdiction of the United States. The t erm includes an Indian tribe or band 21
recognized by federal law or formally acknowledged by a state; 22
(19)[(18)] "Terms of a trust" means: 23
(a) Except as otherwise provided in paragraph (b) of this subsection, the 24
manifestation of the settlor's intent regarding a trust's provisions as: 25
1. Expressed in the trust instrument; or[ as may be ] 26
2. Established by other evidence that would be admissible in a judicial 27
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proceeding; or 1
(b) The trust's provisions as established, determined, or amended by: 2
1. A trustee or trust director in accordance with applicable law; 3
2. A court order; or 4
3. A nonjudicial settlement agreement under KRS 386B.1-090; 5
(20)[(19)] (a) "Trust" means an express trust established by a trust instrument, 6
including a will, whereby a trustee has the duty to administer a trust asset for 7
the benefit of a named or otherwise described income or principal beneficiary, 8
or both. This definition includes oral trusts. 9
(b) "Trust" does not include a resulting or constructive trust, a business trust 10
which provides for certificates to be issued to the beneficiary, an investment 11
trust, a voting trust, a security instrument, a trust established by the judgment 12
of a court, a liquidation trust, or a trust for the primary purpose of paying 13
dividends, interests, interes t coupons, salaries, wages, pensions or profits, or 14
employee benefits of any kind, an instrument in which a person is nominee or 15
escrowee for another, a trust established in deposits in any financial 16
institution, or other trust the nature of which does not admit of general trust 17
administration; 18
(21) "Trust director" means a person that is granted power of direction by the terms 19
of a trust to the extent the power is exercisable while the person is not serving as 20
a trustee. The person is a trust director whe ther or not the terms of the trust refer 21
to the person as a trust director and whether or not the person is a beneficiary or 22
settlor of the trust; 23
(22)[(20)] "Trust instrument" means an instrument signed by the settlor that contains 24
terms of the trust, including any amendments thereto; and 25
(23)[(21)] "Trustee" includes an original, additional, and successor trustee, and a 26
cotrustee. 27
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Section 117. KRS 386B.1-030 is amended to read as follows: 1
(1) Except as otherwise provide d in the terms of the trust, this chapter governs the 2
duties and powers of a trustee, relations among trustees, and the rights and interests 3
of a beneficiary. 4
(2) The terms of a trust prevail over any provision of this chapter, except: 5
(a) The requirements for creating a trust; 6
(b) Subject to Sections 77, 79, and 80 of this Act, the duty of a trustee to act in 7
good faith and in the interests of the beneficiaries; 8
(c) The requirement that a trust and its terms be for the benefit of its 9
beneficiaries, and that the trust have a purpose that is lawful, not contrary to 10
public policy, and possible to achieve; 11
(d) The power of the court to change or terminate a trust under Subchapter 4 of 12
this chapter; 13
(e) The effect of a spendthrift provision and the rights of certain creditors and 14
assignees to reach a trust as provided in Subchapter 5 of this chapter; 15
(f) The power of the court under KRS 386B.7 -020 to require, dispense with, or 16
modify or terminate a bond; 17
(g) The power of the court under KRS 386B. 7-080(2) to adjust a trustee's 18
compensation as specified in the terms of the trust which is unreasonably low 19
or high; 20
(h) The duty to notify and report under KRS 386B.8-130(2); 21
(i) The effect of an exculpatory term under KRS 386B.10-080; 22
(j) The rights und er KRS 386B.10 -100, 386B.10 -110, and 386B.10 -120 of a 23
person other than a trustee or beneficiary; 24
(k) Periods of limitation for commencing a judicial proceeding; 25
(l) The power of the court to take such action and exercise such jurisdiction as 26
may be necessary in the interests of justice; and 27
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(m) The subject -matter jurisdiction of the court and venue for commencing a 1
proceeding as provided in KRS 386B.2-030 and 386B.2-040. 2
Section 118. KRS 386B.1-060 is amended to read as follows: 3
(1) Without precluding other means for establishing a connection with the designated 4
jurisdiction, terms of a trust designating the principal place of administration are 5
valid and controlling if: 6
(a) A trustee's principal place of business is located in or a trustee is a resident of 7
the designated jurisdiction;[ or] 8
(b) A trust director's principal place of business is located in or a trust director 9
is a resident of the designated jurisdiction; or 10
(c)[(b)] All or part of the administration occurs in the designated jurisdiction. 11
(2) A trustee is under a continuing duty to administer the trust at a place appropriate to 12
its purposes, its administration, and the interests of the beneficiaries. 13
(3) Without precluding the right of the court to order, approve, or disapprove a transfer, 14
the trustee, in furtherance of the duty prescribed by subsection (2) of this section, 15
may transfer the trust's principal place of administration to another state or to a 16
jurisdiction outside of the United States. 17
(4) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's 18
principal place of administration not less than sixty (60) days before initiating the 19
transfer. The notice of proposed transfer shall include: 20
(a) The name of the jurisdiction to which the principal place of administration is 21
to be transferred; 22
(b) The address and telephone number at the new location at which the trustee 23
can be contacted; 24
(c) An explanation of the reasons for the proposed transfer; 25
(d) The date on which the proposed transfer is anticipated to occur; and 26
(e) The date, not less than sixty (60) days after the giving of the notice, by which 27
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the qualified beneficiary shall notify the trustee of an objection to the 1
proposed transfer. 2
(5) The authority of a trustee under this section to transfer a trust's principal place of 3
administration ends if a qualified beneficiary notifies the trustee of an objection to 4
the proposed transfer on or before the date specified in the notice. 5
(6) In connection with a transfer of the trust's principal place of administration, the 6
trustee may transfer some or all of the trust property to a successor trustee 7
designated in the terms of the trust or appointed under KRS 386B.7-040. 8
(7) The District Court shall have exclusive jurisdiction over matters under this section. 9
Section 119. KRS 386B.3-010 is amended to read as follows: 10
(1) Notice to a person who may represent and bind another person under this 11
subchapter has the same effect as if notice were given directly to the other person. 12
(2) The consent of a person who may represent and bind another person under this 13
subchapter is binding on the person represented unless the person represented 14
objects to the representation before the consent would otherwise have become 15
effective. 16
(3) Except as otherwise provided under KRS 386B.4 -110 and 386B.6 -020, a person 17
who under this subchapter may represent a settlor who lacks capacity, may receive 18
notice and give a binding consent on the settlor's behalf. 19
(4) A settlor may not represent and bind a beneficiary under this subchapter with 20
respect to the termination or modification of a trust under KRS 386B.4-110(1). 21
(5) Provisions of this subchapter shall also be applic able to Sections 87 to 114 of this 22
Act[KRS 386.175] regarding a trustee's power to appoint principal and income in 23
favor of a trustee of a second trust and KRS 386.454 regarding a trustee's power to 24
adjust between principal and income and conversion to unitrust. 25
Section 120. KRS 386B.6-030 is amended to read as follows: 26
(1) While a trust is revocable: 27
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(a) And, in the reasonable belief of the trustee, the settlor has capacity to revoke 1
the trust, rights of the beneficiaries are subject to the control of, and the duties 2
of the trustee are owed exclusively to, the settlor; and 3
(b) The trustee may follow a direction of the settlor that is contrary to the terms 4
of the trust. 5
(2) During the period the power may be exercised, the holder of a power of withdrawal 6
has the rights of a settlor of a revocable trust under this section to the extent of the 7
property subject to the power. 8
Section 121. KRS 386B.7-030 is amended to read as follows: 9
(1) Cotrustees who are unable to reach a unanimous decision may act by majority 10
decision. 11
(2) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the 12
trust. 13
(3) Subject to Section 80 of this Act, a cotrustee shall participate in the perfor mance of 14
a trustee's function unless the cotrustee is unavailable to perform the function 15
because of absence, illness, disqualification under other law, or other temporary 16
incapacity or the cotrustee has properly delegated the performance of the function 17
to another trustee. 18
(4) If a cotrustee is unavailable to perform duties because of absence, illness, 19
disqualification under other law, or other temporary incapacity, and prompt action 20
is necessary to achieve the purposes of the trust or to avoid injury to t he trust 21
property, the remaining cotrustee or a majority of the remaining cotrustees may act 22
for the trust. 23
(5) A trustee may not delegate to a cotrustee the performance of a function the settlor 24
reasonably expected the trustees to perform jointly. Unless a delegation was 25
irrevocable, a trustee may revoke a delegation previously made. 26
(6) Except as otherwise provided in subsection (7) of this section, a trustee who does 27
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not join in an action of another trustee is not liable for the action. 1
(7) Subject to Section 80 of this Act, each trustee shall exercise reasonable care to: 2
(a) Prevent a cotrustee from committing a breach of trust; and 3
(b) Compel a cotrustee to redress a breach of trust. 4
(8) A dissenting trustee who joins in an action at the direction of th e majority of the 5
trustees and who notified any cotrustee of the dissent at or before the time of the 6
action is not liable for the action unless the action is a breach of trust. 7
Section 122. KRS 386B.8-180 is amended to read as follows: 8
(1) (a) When a trust terminates pursuant to the terms of the trust, the trustee may 9
follow the requirements for distribution upon termination as provided in KRS 10
386B.8-170 or, if proceeding under this section, within a reasonable amount 11
of time after such termination, the trustee shall provide to the qualified 12
beneficiaries a statement showing the fair market value of the net assets to be 13
distributed, a trust accounting for the prior five (5) years and an estimate for 14
any items reasonably anticipated but not yet received or disbursed, the amount 15
of any fees, including trustee fees, remaining to be paid, and notice that the 16
trust is terminating. The trustee may also provide such statement and notice to 17
any other person whom the trustee reasonably believes may have an interest in 18
the trust. 19
(b) If, after receiving the notice and trust information described in paragraph (a) 20
of this subsection, a qualified beneficiary objects to an action or omission 21
disclosed, he or she shall provide written not ice of the objection to the trustee 22
within forty-five (45) days of the notice having been sent by the trustee. If no 23
written objection is provided within the forty -five (45) day time period, the 24
information provided pursuant to paragraph (a) of this subsec tion shall be 25
considered approved by the recipient and the trustee shall, within a reasonable 26
period of time following the expiration of such period, distribute the assets as 27
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provided in the trust. If the trustee receives a written objection within the 1
applicable forty-five (45) day time period, the trustee may: 2
1. Submit the written objection to the District Court for resolution and 3
charge the expense of commencing such a proceeding to the trust; or 4
2. Resolve the objection with the qualified beneficiary, whether by 5
nonjudicial settlement agreement or otherwise. Any agreement entered 6
into pursuant to this paragraph may include a release, an indemnity 7
clause, or both on the part of the beneficiary against the trustee relating 8
to the trust. If the parties agree to a nonjudicial settlement agreement, 9
any related expenses shall be charged to the trust. 10
Upon a resolution of an objection pursuant to subparagraph 1. or 2. of this 11
paragraph, within a reasonable period of time thereafter the trustee shall 12
distribute the remaining trust assets as provided in the trust. 13
(c) The trustee may rely upon the written statement of a person receiving notice 14
that such person does not object. 15
(2) (a) When a trustee is removed or resigns pursuant to the terms of the trust, the 16
trustee may follow the requirements for distribution upon termi nation as 17
provided in KRS 386B.8 -170 or, if proceeding under this section, the trustee, 18
within a reasonable time after such removal or resignation, shall provide to 19
the successor trustee a statement showing the net assets to be distributed, a 20
trust account ing for the prior five (5) years, an estimate for any items 21
reasonably anticipated but not yet received or disbursed, the amount of any 22
fees, including trustee fees, remaining to be paid, and notice that the trustee 23
has resigned or been removed. The truste e may also provide such statement 24
and notice to any other person whom trustee reasonably believes may have an 25
interest in the trust. 26
(b) Any person provided notice and trust information as described in paragraph 27
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(a) of this subsection who objects to an act ion or omission disclosed shall 1
provide written notice of the objection to the trustee within forty -five (45) 2
days of the notice having been sent by the trustee. If no written objection is 3
provided within the forty -five (45) day time period, the informatio n provided 4
pursuant to paragraph (a) of this subsection will be considered approved, and 5
the trustee shall, within a reasonable period following the expiration of such 6
forty-five (45) day period, distribute the assets to the successor trustee. If the 7
trustee receives a written objection within the applicable forty -five (45) day 8
time period, the trustee may: 9
1. Submit the written objection to the District Court for resolution and 10
charge the expense of commencing such a proceeding to the trust; or 11
2. Resolve the objection with the opposing party, whether by nonjudicial 12
settlement agreement or otherwise. Any agreement entered into pursuant 13
to this paragraph may include a release, an indemnity clause, or both on 14
the part of the opposing party against the trustee relating to the trust. If 15
the parties agree to a nonjudicial settlement agreement, any related 16
expenses shall be charged to the trust. 17
Upon a resolution of any objection raised by an opposing party pursuant to 18
subparagraph 1. or 2. of this paragraph, wit hin a reasonable period of time 19
thereafter the trustee shall distribute the remaining trust assets as provided in 20
the trust. 21
(c) The trustee may rely upon the written statement of a person receiving notice 22
that such person does not object. 23
(3) When a trustee distributes assets of the trust pursuant to subsection (1) or (2) of this 24
section, the limitations in KRS 386B.6 -040 and 386B.10 -050 are waived by each 25
person who received notice and either consented or failed to object pursuant to this 26
section, and any such person is barred from bringing a claim against the trustee for 27
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breach of trust or challenging the validity of the trust, to the same extent and with 1
the same preclusive effect as if the court had entered a final order approving the 2
trustee's final account. 3
(4) Notice provided under subsection (1) or (2) of this section shall clearly warn of the 4
impending bar of claims against a trustee under KRS 386B.6 -040 and 386B.10-050 5
that will result if an objection is not timely made. 6
(5) No trustee trust shall request that any beneficiary indemnify the trustee against loss 7
in exchange for the trustee forgoing a request to the court to approve its accounts at 8
the time the trust terminates or at the time the trustee is removed or resigns, except 9
as agreed upon by the parties pursuant to paragraph (b)1. or 2. of subsections (1) 10
and (2) of this section. 11
(6) For purposes of this section, a termination of a trust under Subchapter 4 of KRS 12
Chapter 386B shall be considered a termination pursuant to the trust terms. 13
(7) The District Court shall have exclusive jurisdiction over matters under this section. 14
Section 123. KRS 394.010 is amended to read as follows: 15
As used in this chapter, unless the context requires otherwise, "will": 16
(1) Means a last will or testament, codicil, appointment by will, writing in the nature of 17
a will in exercise of a power, and any other testamentary disposition; and 18
(2) Includes a codicil and any testamentary instrument that merely appoints an 19
executor, revokes or revises another will, nominates a guardian, or expressly 20
excludes or limits the right of an individual or class to succeed to property of the 21
decedent passing by intestate succession. 22
SECTION 124. A NEW SECTION OF KR S CHAPTER 186A IS CREATED 23
TO READ AS FOLLOWS: 24
(1) As used in this section: 25
(a) "Beneficiary" means a person designated to receive title to a vehicle upon 26
the death of the preceding owner or joint owners; 27
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(b) "Beneficiary designation form" means a form that contains the intention of 1
a present owner or joint owners of a vehicle to name one (1) beneficiary to 2
receive title to the vehicle upon the death of the owner or last surviving joint 3
owner of the vehicle; 4
(c) "Joint owner": 5
1. Means an individual who owns a vehicle with one (1) or more other 6
individuals as joint tenants with rights of survivorship; and 7
2. Does not include an individual who owns a vehicle with one (1) or 8
more other individuals as tenants in common; 9
(d) "Owner" means an individual who owns a vehicle; and 10
(e) "Vehicle" includes any motor vehicle, motorcycle, motor home, trailer, or 11
other item for which a certificate of title is issued by the cabinet. 12
(2) The cabinet shall promulgate administrative regulations in accordance with KRS 13
Chapter 13A to: 14
(a) Provide a beneficiary designation form that allows the owner or joint 15
owners of a vehicle to provide for the transfer of the vehicle's title to one (1) 16
named beneficiary upon the death of the owner or upon the death of all 17
joint owners of the vehicle. The form shall include but not be limited to 18
fields for the following information: 19
1. The manufacturer, model, year, and vehicle identification number of 20
the vehicle; 21
2. The name of the owner or every joint owner of the vehicle; 22
3. The words "transfer on death to," or the abbreviation "TOD," 23
followed by the name of the beneficiary; and 24
4. The signature of the owner of the vehicle or of each joint owner of the 25
vehicle; and 26
(b) Require the county clerk to record the name of the beneficiary on the title 27
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upon receipt of the fee under KRS 186A.130. 1
(3) The cabinet shall make beneficiary forms available: 2
(a) In each county clerk's office; and 3
(b) On the cabinet's public website. 4
(4) Upon the death of the owner, or the last surviving joint owner, of a vehicle for 5
which a beneficiary has been designated under subsection (2) of this section, the 6
beneficiary shall present to the county clerk: 7
(a) A death certificate of the owner or last surviving joint owner of the vehicle; 8
(b) Proof of payment of ad valorem taxes on the vehicle for the current year, or 9
if the taxes have not been paid, the beneficiary may elect to pay the taxes to 10
facilitate the transfer; 11
(c) The paper title, or duplicate title, if the title is not held in electronic format; 12
and 13
(d) The fee required under KRS 186A.130 for the certificate of title transfer. 14
(5) Upon presentation of the documents as r equired under subsection (4) of this 15
section, the county clerk, subject to any security interest in the vehicle, shall issue 16
a new certificate of title to the beneficiary. 17
(6) During the lifetime of the owner of the vehicle for which a beneficiary has been 18
designated or before the death of the last surviving joint owner of the vehicle: 19
(a) The signature or consent of the beneficiary shall not be required for any 20
transaction relating to the vehicle; and 21
(b) The owner or surviving joint owners of the vehicle may revoke or change 22
the beneficiary designation at any time by: 23
1. Selling the vehicle with proper transfer and delivery of the certificate 24
of title to another person; or 25
2. Properly executing a subsequent beneficiary designation form that 26
removes the cur rent beneficiary or designates a new beneficiary in 27
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conformity with subsection (2) of this section. 1
(7) Upon the death of the owner or the last surviving joint owner of a vehicle for 2
which a beneficiary has been designated, the interest of the beneficiary in the 3
vehicle shall be subject to any contract of sale, assignment, or ownership or 4
security interest to which the owner or joint owners of the vehicle were subject 5
during their lifetime. 6
(8) Except as provided in subsection (6)(b) of this section, the de signation of a 7
beneficiary shall not be changed or revoked by will, codicil, or by other 8
instrument. 9
(9) A beneficiary may disclaim the interest in the motor vehicle on a form 10
promulgated by the Transportation Cabinet in accordance with KRS Chapter 11
13A. 12
(10) The transfer on death of a vehicle under this section shall be a nontestamentary 13
transfer and shall not be subject to any tax under KRS 138.460. 14
Section 125. KRS 138.470 is amended to read as follows: 15
There is expressly exempted from the tax imposed by KRS 138.460: 16
(1) (a) Motor vehicles titled or registered to the United States, or to the 17
Commonwealth of Kentucky or any of its political subdivisions; and 18
(b) The gross rental or lease charges for the rental or lease of a motor vehicle paid 19
by the United States, or the Commonwealth of Kentucky or any of its political 20
subdivisions; 21
(2) Motor vehicles titled or registered to institutions of purely public charit y and 22
institutions of education not used or employed for gain by any person or 23
corporation; 24
(3) Motor vehicles which have been previously titled in Kentucky on or after July 1, 25
2005, or previously registered and titled in any state or by the federal govern ment 26
when being sold or transferred to licensed motor vehicle dealers for resale. The 27
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motor vehicles shall not be leased, rented, or loaned to any person and shall be held 1
for resale only; 2
(4) Motor vehicles sold by or transferred from dealers registered a nd licensed in 3
compliance with the provisions of KRS 186.070 and KRS 190.010 to 190.080 to 4
members of the Armed Forces on duty in this Commonwealth under orders from 5
the United States government; 6
(5) Commercial motor vehicles, excluding passenger vehicles having a seating capacity 7
for nine (9) persons or less, owned by nonresident owners and used primarily in 8
interstate commerce and based in a state other than Kentucky which are required to 9
be registered in Kentucky by reason of operational requirements or fleet proration 10
agreements and are registered pursuant to KRS 186.145; 11
(6) Motor vehicles titled in Kentucky on or after July 1, 2005, or previously registered 12
in Kentucky, transferred between husband and wife, parent and child, stepparent 13
and stepchild, or grandparent and grandchild; 14
(7) Motor vehicles transferred when a business changes its name and no other 15
transaction has taken place or an individual changes his or her name; 16
(8) Motor vehicles transferred to a corporation from a proprietorship or limite d liability 17
company, to a limited liability company from a corporation or proprietorship, or 18
from a corporation or limited liability company to a proprietorship, within six (6) 19
months from the time that the business is incorporated, organized, or dissolved , if 20
the transferor and the transferee are the same business entity except for a change in 21
legal form; 22
(9) Motor vehicles transferred by will, court order, or under the statutes covering 23
descent and distribution of property, if the vehicles were titled in Kentucky on or 24
after July 1, 2005, or previously registered in Kentucky; 25
(10) Motor vehicles transferred between a subsidiary corporation and its parent 26
corporation if there is no consideration, or nominal consideration, or in sole 27
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consideration of the cancellation or surrender of stock; 1
(11) Motor vehicles transferred between a limited liability company and any of its 2
members, if there is no consideration, or nominal consideration, or in sole 3
consideration of the cancellation or surrender of stock; 4
(12) The interest of a partner in a motor vehicle when other interests are transferred to 5
him or her; 6
(13) Motor vehicles repossessed by a secured party who has a security interest in effect 7
at the time of repossession and a repossession affidavit as required by KRS 8
186.045(6). The repossessor shall hold the vehicle for resale only and not for 9
personal use, unless he or she has previously paid the motor vehicle usage tax on 10
the vehicle; 11
(14) Motor vehicles transferred to an insurance company to settle a claim. The se 12
vehicles shall be junked or held for resale only; 13
(15) Motor carriers operating under a charter bus certificate issued by the Transportation 14
Cabinet under KRS Chapter 281; 15
(16) (a) 1. Motor vehicles registered under KRS 186.050 that have a declared gros s 16
vehicle weight with any towed unit of forty -four thousand and one 17
(44,001) pounds or greater; and 18
2. Farm trucks registered under KRS 186.050(4) that have a declared gross 19
vehicle weight with any towed unit of forty -four thousand and one 20
(44,001) pounds or greater. 21
(b) To be eligible for the exemption established in paragraph (a) of this 22
subsection, motor vehicles shall be registered at the appropriate range for the 23
declared gross weight of the vehicle established in KRS 186.050(3)(b) and 24
shall be prohibi ted from registering at a higher weight range. If a motor 25
vehicle is initially registered in one (1) declared gross weight range and 26
subsequently is registered at a declared gross weight range lower than forty -27
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four thousand and one (44,001) pounds, the per son registering the vehicle 1
shall be required to pay the county clerk the usage tax due on the vehicle 2
unless the person can provide written proof to the clerk that the tax has been 3
previously paid; 4
(17) Motor vehicles transferred to a trustee to be held i n trust, or from a trustee to a 5
beneficiary of the trust, if a direct transfer from the grantor of the trust to all 6
individual beneficiaries of the trust would have qualified for an exemption from the 7
tax pursuant to subsection (6) or (9) of this section; 8
(18) Motor vehicles transferred to a trustee to be held in trust, if the grantor of the trust is 9
a natural person and is treated as the owner of any portion of the trust for federal 10
income tax purposes under the provisions of 26 U.S.C. secs. 671 to 679; 11
(19) Motor vehicles transferred from a trustee of a trust to another person if: 12
(a) The grantor of the trust is a natural person and is treated as the owner of any 13
portion of the trust for federal income tax purposes under the provisions of 26 14
U.S.C. secs. 671 to 679; and 15
(b) A direct transfer from the grantor of the trust to the person would have 16
qualified for an exemption from the tax pursuant to subsection (6) or (9) of 17
this section;[ and] 18
(20) Motor vehicles under a manufacturer's statement of origin in possession of a 19
licensed new motor vehicle dealer that are titled and transferred to a licensed used 20
motor vehicle dealer and held for sale; and 21
(21) Motor vehicles transferred under Section 124 of this Act. 22
Section 126. KRS 395.160 is amended to read as follows: 23
(1) If a personal representative moves out of the state and fails to designate a process 24
agent as required by KRS 395.015 [(1)], becomes insane or otherwise incapable to 25
discharge the trust, goes bankrupt or inso lvent or is in failing circumstances, the 26
District Court shall remove him or her , and the other personal representative, if 27
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there is another, shall discharge the trust. If he or she resides in the county of his or 1
her appointment or in an adjoining county, and is not insane, he or she shall have 2
ten (10) days' notice before the order of removal is made. If he or she is insane, the 3
notice shall be given to his or her committee, if he or her has one, and if there is no 4
committee, the court may appoint one. 5
(2) The district court may remove a personal representative for failing to give 6
additional security when required under KRS 62.060 and appoint another. 7
(3) The court shall require a personal representative who is removed to settle his 8
accounts, and deliver over the decedent's estate to the person appointed in his stead. 9
Section 127. KRS 395.140 is amended to read as follows: 10
(1) All fiduciaries required to execute a bond shall deliver to the clerk of the court of 11
the county in which he or she is appointed a bond payable to and with the 12
Commonwealth, subscribed to by the principal and sureties in the presence of a 13
notary, in the amount as may be approved by the court in the order of 14
appointment. 15
(2) The District Court shall n ot accept as surety, in any bond of a personal 16
representative, any master or other commissioner whose duty is to settle the 17
accounts of personal representatives , or any judge or clerk of a District Court or 18
practicing attorney of that court. 19
(3)[(2)] The bond shall be filed[subscribed by the principal and sureties, approved by 20
the court, attested by the clerk of the court and carefully kept] by the clerk in his or 21
her office in a record maintained[book to be provided] for that purpose. 22
Section 128. KRS 45A.045 is amended to read as follows: 23
(1) The Finance and Administration Cabinet shall serve as the central procurement and 24
contracting agency of the Commonwealth. The cabinet shall: 25
(a) [The cabinet shall ] Require all agencies to furnish an estimate of specific 26
needs for supplies, materials, and equipment to be purchased by competitive 27
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bidding for the purpose of permitting scheduling of purchasing in large 1
volume. The cabinet shall establish and enforce sche dules for purchasing 2
supplies, materials, and equipment. In addition, prior to the beginning of each 3
fiscal year all agencies shall submit to the Finance and Administration 4
Cabinet an estimate of all needs for supplies, materials, and equipment during 5
that year which will have to be required through competitive bidding;[.] 6
(b) [The Finance and Administration Cabinet shall ] Have the authority [power], 7
with the approval of the secretary of the Finance and Administration Cabinet, 8
to transfer between departments , to salvage, to exchange, and to condemn 9
supplies, equipment, and real property; and[.] 10
(c) [The Finance and Administration Cabinet shall ] Attempt in every practicable 11
way to ensure that state agencies are fulfilling their business needs through the 12
application of the best value criteria. 13
(2) The Finance and Administration Cabinet shall recommend regulations, rules, and 14
procedures and shall have supervision over all purchases by the various spending 15
agencies, except as otherwise provided by law, and, subje ct to the approval of the 16
secretary of the Finance and Administration Cabinet, shall promulgate 17
administrative regulations to govern purchasing by or for all these agencies. The 18
cabinet shall publish a manual of procedures which shall be incorporated by 19
reference as an administrative regulation in accordance with [pursuant to] KRS 20
Chapter 13A. This manual shall be distributed to agencies and shall be revised upon 21
issuance of amendments to these procedures. No purchase or contract shall be 22
binding on the stat e or any agency thereof unless approved by the Finance and 23
Administration Cabinet or made under general administrative regulations 24
promulgated by the cabinet. 25
(3) The Finance and Administration Cabinet shall purchase or otherwise acquire, or, 26
with the appr oval of the secretary, may delegate and control the purchase and 27
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acquisition of the combined requirements of all spending agencies of the state, 1
including, but not limited to, interests in real property, contractual services, rentals 2
of all types, supplies, materials, equipment, and services. 3
(4) (a) The Finance and Administration Cabinet shall sell, trade, or otherwise dispose 4
of any interest in real property of the state which is not needed, or has become 5
unsuitable for public use, or would be more suitab le to the public's interest if 6
used in another manner, as determined by the secretary of the Finance and 7
Administration Cabinet. 8
(b) The determination of the secretary of the Finance and Administration Cabinet 9
shall be set forth in an order and shall be r eached only after review of a 10
written request by the agency desiring to dispose of the real property. This 11
request shall describe the real property and state the reasons why the agency 12
believes the real property should be disposed. 13
(c) Before the disposal of real property, the secretary of the Finance and 14
Administration Cabinet shall determine that: 15
1. No other state agency has a purpose for the real property; and 16
2. The city, county, urban -county government, or consolidated local 17
government where the real property is located does not have an 18
ownership interest in the real property. 19
(d) All instruments required by law to be recorded which convey any interest in 20
any real property so disposed of shall be executed and signed by the secretary 21
of the Finance and Administration Cabinet and approved by the Governor. 22
(e) Unless the secretary of the Finance and Administration Cabinet deems it in 23
the best interest of the state to proceed otherwise, all interests in real property 24
shall be sold either by invitation of sealed bids or by public auction. The 25
selling price of any interest in real property shall not be less than the appraised 26
value thereof as determined by the cabinet, or the Transportation Cabinet for 27
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the requirements of that cabinet. 1
(f) A state agency notifying the Finance and Administration Cabinet of its 2
intent to dispose of any inter est in real property assigned to the state agency 3
shall continue to provide maintenance and security of the existing 4
structures, buildings, and land included in the real property until the sale or 5
other disposition is complete. 6
(g) In the event the Finance and Administration Cabinet receives no responsive 7
bids for real property being disposed of, either by sealed bid or by public 8
auction, the real property may be disposed of, consistent with the public 9
interest, in any manner deemed appropriate by the secre tary of the Finance 10
and Administration Cabinet. A written description of the real property, the 11
method of disposal, and the amount of compensation, if any, shall be made 12
by the secretary of the Finance and Administration Cabinet. 13
(5) (a) If state-owned real property is observed to be abandoned, or it has not been 14
substantially utilized for a public use, the chief executive officer of the city, 15
county, urban-county government, or consolidated local government where 16
the real property is located may: 17
1. Receive notice inquiring about the real property from a citizen, 18
developer, or consultant as described in paragraph (d) of this 19
subsection; 20
2. Develop a plan for public use of the real property; and 21
3. Submit a written notice to the secretary of the Finance and 22
Administration Cabinet and the Capital Planning Advisory Board: 23
a. Expressing interest in the use of the real property; 24
b. Requesting state utilization information from the Finance and 25
Administration Cabinet on the availability of the real property 26
for disposal; and 27
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c. Requesting the real property to be considered for sale, trade, or 1
disposal. 2
(b) Within sixty (60) calendar days of receiving written notice under paragraph 3
(a)3. of this subsection, the secretary of Finance and Administration 4
Cabinet shall s end a written response to the chief executive officer of the 5
city, county, urban -county government, or consolidated local government 6
and the Capital Planning Advisory Board that includes but is not limited to: 7
1. The current occupancy and use of the real property; 8
2. If the Finance and Administration Cabinet or other applicable state 9
agency intends to evaluate real property for disposal under subsection 10
(4) of this section or to maintain its ownership interest in the real 11
property for public use; and 12
3. Provide a description of the real property, current status, available and 13
planned occupancy, utilization, restrictions of use, and a timeline for 14
full utilization of the property. 15
(c) If the applicable state agency determines to request disposal of the real 16
property, the state agency and Finance and Administration Cabinet shall 17
proceed in accordance with subsection (4) of this section. 18
(d) A citizen, developer, or consultant may notify the chief executive officer of 19
the city, county, urban -county government, o r consolidated local 20
government where state-owned real property is located if he or she observes 21
that the state-owned real property is abandoned or not substantially utilized 22
for public use. 23
(6) The Finance and Administration Cabinet shall sell, trade, or otherwise dispose of all 24
personal property of the state that is not needed, or has become unsuitable for 25
public use, or would be more suitable to the public's interest if used in another 26
manner, or, with the approval of the secretary, may delegate the sale , trade, or other 27
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disposal of the personal property. In the event the authority is delegated, the method 1
for disposal shall be determined by the agency head, in accordance with 2
administrative regulations promulgated by the Finance and Administration Cabine t, 3
and shall be set forth in a document describing the property and stating the method 4
of disposal and the reasons why the agency believes the property should be 5
disposed of. In the event the authority is not delegated, requests to the Finance and 6
Administration Cabinet to sell, trade, or otherwise dispose of the property shall 7
describe the property and state the reasons why the agency believes the property 8
should be disposed of. The method for disposal shall be determined by the Division 9
of Surplus Propert ies, and approved by the secretary of the Finance and 10
Administration Cabinet or his or her designee. 11
(7)[(6)] The Finance and Administration Cabinet shall exercise general supervision 12
and control over all warehouses, storerooms, and stores and of all inven tories of 13
supplies, services, and construction belonging to the Commonwealth. The cabinet 14
shall promulgate administrative regulations to require agencies to take and maintain 15
inventories of plant property, buildings, structures, other fixed assets, and 16
equipment. The cabinet shall conduct periodic physical audits of inventories. 17
(8)[(7)] The Finance and Administration Cabinet shall establish and maintain 18
programs for the development and use of purchasing specifications and for the 19
inspection, testing, and acceptance of supplies, services, and construction. 20
(9)[(8)] Nothing in this section shall prevent the Finance and Administration Cabinet 21
from negotiating with vendors who maintain a General Services Administration 22
price agreement with the United States of America or any agency thereof. No 23
contract executed under this provision shall authorize a price higher than is 24
contained in the contract between the General Services Administration and the 25
vendor affected. 26
(10)[(9)] Except as provided in KRS Chapters 175, 176, 177, and 180, and subject to 27
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the provisions of this code, the Finance and Administration Cabinet shall purchase 1
or otherwise acquire all real property determined to be needed for state use, upon 2
approval of the secretary of the Finance and Administra tion Cabinet as to the 3
determination of need and as to the action of purchase or other acquisition. The 4
amount paid for this real property shall not exceed the appraised value as 5
determined by the cabinet or the Transportation Cabinet (for such requirement s of 6
that cabinet), or the value set by eminent domain procedure. Subject to the 7
provisions of this code, real property or any interest therein may be purchased, 8
leased, or otherwise acquired from any officer or employee of any agency of the 9
state upon a f inding by the Finance and Administration Cabinet, based upon a 10
written application by the head of the agency requesting the purchase, and approved 11
by the secretary of the Finance and Administration Cabinet and the Governor, that 12
the employee has not either himself or herself, or through any other person, 13
influenced or attempted to influence either the agency requesting the acquisition of 14
the property or the Finance and Administration Cabinet in connection with such 15
acquisition. Whenever such an acquisition is consummated, the request and finding 16
shall be recorded and kept by the Secretary of State along with the other documents 17
recorded pursuant to the provisions of KRS Chapter 56. 18
(11)[(10)] The Finance and Administration Cabinet shall maintain records of a ll 19
purchases and sales made under its authority and shall make periodic summary 20
reports of all transactions to the secretary of the Finance and Administration 21
Cabinet, the Governor, and the General Assembly. The Finance and Administration 22
Cabinet shall als o report trends in costs and prices, including savings realized 23
through improved practices, to the above authorities. The Finance and 24
Administration Cabinet shall also compile an annual report of state purchases by all 25
spending agencies in the state's stat ewide accounting and reporting system. The 26
report format shall include, but not be limited to, dollar amount, volume, type of 27
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purchase, and vendor. 1
(12)[(11)] For capital construction projects, subject to the provisions of this code and 2
KRS 45A.180, the pr ocurement may be on whichever of the following alternative 3
project delivery methods, in the judgment of the secretary of the Finance and 4
Administration Cabinet after first considering the traditional design -bid-build 5
project delivery method, offers the best value to the taxpayer: 6
(a) A design-build basis; or 7
(b) A construction management-at-risk basis. 8
Proposals shall be reviewed by the engineering staff to assure quality and value, and 9
compliance with procurement procedures. All specifications shall be written to 10
promote competition. Nothing in this section shall prohibit the procurement of 11
phased bidding or construction manager-agency services. 12
(13)[(12)] The Finance and Administration Cabinet shall have control and supervision 13
over all purchases of energy-consuming equipment, supplies, and related equipment 14
purchased or acquired by any agency of the st ate as provided in this code, and shall 15
promulgate administrative regulations to designate the manner in which an energy -16
consuming item will be purchased so as to promote energy conservation and 17
acquisition of energy efficient products. Major energy compon ents shall be 18
amortized on a seven (7) to ten (10) years' recovery basis and shall take into 19
consideration the projected cost of fuel. The Finance and Administration Cabinet, in 20
consultation with the Cabinet for Economic Development, shall conduct a thorou gh 21
economic feasibility analysis on any major energy-using component of at least three 22
million (3,000,000) BTU's per hour heat input and shall issue a certificate of 23
economic feasibility prior to the Finance and Administration Cabinet's purchasing 24
or retro fitting any such component that utilizes any fuel other than coal. The 25
economic feasibility analysis shall consist of life -cycle cost comparisons of a 26
component that would utilize coal and one(s) that would utilize any fuel other than 27
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coal. For the analysi s, the Finance and Administration Cabinet shall provide 1
detailed estimates of equipment purchase price, installation cost, annual operation 2
and maintenance costs, and usage patterns of energy-using components. 3
Section 129. KRS 56.463 is amended to read as follows: 4
The cabinet shall have the power and duty: 5
(1) To determine the comparative needs and demands of the various state agencies for 6
acquiring real estate and for building projects; 7
(2) To purchase or otherwise acquire all real property determined to be needed for state 8
use and upon the approval of the secretary of the Finance and Administration 9
Cabinet as to the determination of need and as to the action of purchase or other 10
acquisition, except as provided in KRS Cha pters 175, 176, 177, and 180. All such 11
acquisitions of real property or interests therein shall be made in accordance with 12
KRS 45A.045; 13
(3) (a) To sell or otherwise dispose of all property, including any interest in real 14
property, of the state that is not needed or has become unsuitable for public 15
use or would be more suitable consistent with the public interest for some 16
other use as determined by the secretary of the Finance and Administration 17
Cabinet. All such sales or other disposition shall be made in accordance with 18
KRS 45A.045.[;] 19
(b) A state agency notifying the Finance and Administration Cabinet of its 20
intent to dispose of any interest in r eal property assigned to the state agency 21
shall continue to provide maintenance and security of the existing 22
structures, buildings, and land included in the real property until the sale or 23
other disposition is complete in accordance with Section 1 of this Act. 24
(4) (a) To control the use of any real property owned or otherwise held by the 25
Commonwealth, or any state agency, and to determine for what periods of 26
time and for what purposes any state agency may use the same, including the 27
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agency for whose use it was initially acquired or improved, and to determine 1
what appropriate uses shall be made of such real property during periods that 2
the cabinet finds the same is not required for the purposes of any particular 3
state agency. The cabinet shall allocate to the General Assembly and the 4
Legislative Research Commission all space within the New State Capitol 5
Annex in the basement and on the first, second, third, and fourth floors, 6
excluding: 7
1. Mechanical areas, public entrances, vestibules, and restrooms; and 8
2. The following additional space, as allocated on January 1, 2023: 9
a. Areas in the basement occupied by the Kentucky State Police and 10
Facilities Security; 11
b. Areas in the basement operated as the snack bar and cafeteria, as 12
well as storage areas related to th e operation of the snack bar and 13
cafeteria; 14
c. The area in the basement operated as a nurse's station; 15
d. The area in the basement used as an automated teller machine 16
(ATM); 17
e. The office space in the basement occupied by the Secretary of 18
State; 19
f. Utility spaces in the basement west wing and east wing 20
northernmost hallways occupied by janitorial, maintenance, and 21
mechanical staff; 22
g. The loading dock in the rear of the annex basement, along with the 23
office space immediately adjacent to the loading dock on the back 24
wall of the annex, provided that the General Assembly and the 25
Legislative Research Commission shall be given access to and use 26
of the loading dock and the receiving areas adjacent to the loading 27
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dock; and 1
h. Office and studio space on the first fl oor currently occupied and 2
used for broadcasting purposes by Kentucky Educational 3
Television. 4
All space assigned to the legislative branch and plans, uses, furnishings, and 5
equipment therefor are subject to the specific approval of the Legislative 6
Research Commission; 7
(b) All additional space in the New State Capitol Annex, not specifically 8
allocated for use by the General Assembly and the Legislative Research 9
Commission in paragraph (a) of this subsection, shall be allocated for the use 10
of the legislative branch, with occupancy by the legislative branch to be 11
determined by the Legislative Research Commission, upon a vote of a 12
majority of the entire membership of the Legislative Research Commission; 13
(c) In order for the General Assembly and the Legislative Research Commission 14
to efficiently utilize the space provided by paragraphs (a) and (b) of this 15
subsection, the cabinet shall enter into a memorandum of understanding with 16
the Legislative Research Commission on or about February 1, 2024, and as 17
often as ev ery two (2) years thereafter at the request of the Legislative 18
Research Commission, to establish tenancy terms, including but not limited to 19
building maintenance, repairs, renovations, and upgrades; facility security; 20
janitorial services; and applicable re ntal and utilities rates. The Legislative 21
Research Commission shall at any time, and upon at least sixty (60) days' 22
notice, be authorized to discontinue the cabinet's provision of janitorial 23
services for the New State Capitol Annex and to enter into a sepa rate contract 24
for the provision of those services, with the applicable rental and utilities rates 25
to be proportionately reduced to reflect that separate contract, provided that 26
the Legislative Research Commission may also at any time, and upon at least 27
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sixty (60) days' notice, elect to have the cabinet continue or reinstate the 1
provision of those janitorial services at the cabinet's expense; 2
(d) For the purposes of this subsection, real property shall include the parking 3
areas adjacent to the New State Capitol and the New State Capitol Annex, and 4
the cabinet shall allocate to the General Assembly and the Legislative 5
Research Commission all parking spaces within the Capitol campus parking 6
garage, all parking spaces in the east, south, and west parking lots of the New 7
State Capitol Annex, and all parking spaces in the west parking lot of the New 8
State Capitol, except for those spaces in the west parking lot of the New State 9
Capitol allocated, as of January 1, 2023, to the Supreme Court of Kentucky, 10
the Lieutena nt Governor, the Attorney General, and the Secretary of State. 11
Any further allocation of any parking spaces allocated pursuant to this 12
paragraph shall be within the sole discretion of the Legislative Research 13
Commission or its designee; and 14
(e) To determine the housing and furnishings needs of the various state agencies 15
located in Frankfort and to establish and put into effect a permanent program 16
for housing them. Subject to paragraphs (a) and (b) of this subsection, the 17
cabinet is also authorized and directed to allocate office space and furnishings 18
in existing public buildings located in Frankfort, exclusive of the third and 19
fourth floors of the New State Capitol and the space in the New State Capitol 20
Annex allocated to the legislative branch, a ccording to the needs of the 21
various agencies. When necessary, the cabinet is authorized to provide 22
additional office space and furnishings in Frankfort under any building 23
program the cabinet deems most advisable and economical for the state. The 24
permanent housing program shall include provisions for housing the General 25
Assembly and its related agencies, including the Legislative Research 26
Commission, and its subcommittees, the executive offices, the Supreme Court 27
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and the clerk of the Supreme Court, the Depa rtment of Law and the law 1
library, in the New State Capitol, provided the General Assembly and the 2
Legislative Research Commission shall have complete control and exclusive 3
use of the third and fourth floors of the New State Capitol and shall have 4
exclusive use of the space in the New State Capitol Annex allocated to them 5
under paragraphs (a) and (b) of this subsection. If there be any additional 6
space in the Capitol, it shall be assigned to agencies whose activities are most 7
closely related to the agencies directed to be located permanently in the 8
Capitol; 9
(5) To acquire, by condemnation in the manner provided in the Eminent Domain Act of 10
Kentucky, any real estate necessary for use by the state or by any state agency, 11
when the cabinet is unable to agree wit h the owner thereof on a price for such real 12
estate; 13
(6) To lease any real property, or any interest in such real property, owned by the state 14
or any agency thereof, in accordance with KRS 45A.045; 15
(7) To provide for and adopt plans and specifications as m ay be necessary, to provide 16
adequate public notice for and receive bids for any expenditures proposed to be 17
made, to award contracts for the purpose authorized, to supervise construction and 18
make changes and revisions in plans and specifications or in cons truction as may 19
become necessary, and generally to do any and all other things as may become 20
necessary or expedient in order to effectively fulfill and carry out the purposes of 21
this chapter, including the right to employ clerks, engineers, statisticians, architects, 22
or other persons required to be employed in order to fulfill the functions of the 23
Commonwealth relating to state property and buildings provided in KRS 56.450 to 24
56.550; and 25
(8) To adopt rules and promulgate administrative regulations as may be necessary to 26
govern the acquisition, control, and disposition of the real property to which this 27
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section is applicable. 1
Section 130. KRS 27A.210 is amended to read as follows: 2
(1) The following books and records shall be maintained by the State Law Library: 3
(a) All copies of Volumes 1 to 77 of the Kentucky Reports; 4
(b) Twenty-five (25) copies each of Volumes 78 to 314 of the Kentucky Reports; 5
(c) Two (2) sets of all future publications of the journals and nine (9) sets o f the 6
Acts of the General Assembly; and 7
(d) Two (2) sets of the official Kentucky statute publications. 8
(2) The state law librarian shall arrange with the proper official of each state of the 9
United States and of the United States and its territories for t he exchanges of the 10
statutes and the acts of the legislatures of each state and of Congress. When an 11
exchange is agreed upon, the state law librarian shall send to the officer one (1) 12
copy of the Acts of the General Assembly and one (1) set of statutes as soon as they 13
are ready for distribution. 14
(3) Copies of acts, statutes, and other materials required to be kept by the state law 15
librarian and to be made available for exchange shall be furnished to the state law 16
librarian, without charge, by the agency or official responsible for the distribution 17
of same. 18
(4) The state law librarian may arrange for the distribution or disposal of materials held 19
by the State Law Library upon concurrence of the administrative assistant to the 20
Chief Justice responsible for law library operations. 21
(5) The state law librarian may acquire, by purchase, exchange, donation, or otherwise, 22
books and other materials the librarian deems suitable for the holdings of the State 23
Law Library. 24
(6) The state law librarian may, with the concurr ence of the administrative assistant to 25
the Chief Justice responsible for law library operations, sell any surplus books in 26
the State Law Library that have a market value, collect the funds received therefor, 27
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and deposit them in the ["]state law library su rplus books fund, ["] which is hereby 1
created in the State Treasury. The ["]state law library surplus books fund ["] shall 2
not lapse. The state law librarian may reinvest the funds in other books and 3
materials that the librarian deems suitable for the holdings of the State Law Library. 4
The provisions of KRS 45A.045 (6)[(5)] concerning the powers and duties of the 5
Finance and Administration Cabinet shall not apply to sales made by the state law 6
librarian under this section. 7
(7) The state law librarian may, with the concurrence of the administrative assistant to 8
the Chief Justice responsible for law library operations, offer and provide technical 9
and other assistance to county law libraries and to other publicly funded law 10
libraries. 11
(8) The state law librarian m ay, upon the request of a county law library or other 12
publicly funded law library and with the concurrence of the administrative assistant 13
to the Chief Justice responsible for law library operations, purchase books, supplies, 14
or other materials for the lib rary. The funds used for these purposes shall be those 15
of the county law library or other publicly funded law library. 16
(9) The state law librarian shall issue, with the concurrence of the administrative 17
assistant to the Chief Justice responsible for law li brary operations, regulations for 18
the operation, management, and lending policy of the State Law Library. 19
Section 131. KRS 45A.050 is amended to read as follows: 20
(1) Except as provided in KRS 45A.800 to 45A.835 and KRS C hapters 175, 176, 177, 21
and 180, all rights, powers, duties, and authority relating to the procurement of 22
supplies, services, and construction, and the management, control, warehousing, 23
sale, and disposal of supplies, services, and construction now vested i n or exercised 24
by any state agency under the several statutes relating thereto, are hereby 25
transferred to the secretary of the Finance and Administration Cabinet as provided 26
in this code, subject to the provisions of subsection (2) of this section. 27
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(2) Unless otherwise ordered by the secretary of the Finance and Administration 1
Cabinet, the acquisition of the following shall not be required through the Finance 2
and Administration Cabinet: 3
(a) Works of art for museum and public display; 4
(b) Published books, maps, periodicals, and technical pamphlets; and 5
(c) Services of visiting speakers, professors, and performing artists. 6
(3) The Finance and Administration Cabinet shall include in all state agency price 7
contracts for the purchase of materials or supplies a pr ovision that, as approved by 8
the secretary of the Finance and Administration Cabinet, any political subdivision, 9
including cities of all classes, counties, school districts, or special districts, may 10
participate in these contracts to the same extent as the Commonwealth. Any 11
political subdivision may purchase materials and supplies in accordance with a 12
contract for supplies and materials entered into by the Finance and Administration 13
Cabinet for the Commonwealth, including those contracts negotiated by the c abinet 14
with vendors who maintain a General Services Administration price agreement as 15
provided in KRS 45A.045 (9)[(8)]. Political subdivisions of the Commonwealth 16
must comply with other provisions of the Kentucky Revised Statutes which require 17
purchase by c ompetitive bidding, before participating in the contract, unless the 18
state contract has been let by competitive bidding, or the contract was negotiated as 19
provided in KRS 45A.045(9)[(8)]. 20
(4) The Finance and Administration Cabinet shall inform the Departme nt for Local 21
Government, which shall then inform the appropriate purchasing agent of each 22
political subdivision interested in participating under this section, of all state agency 23
contracts in effect between the Commonwealth and vendors. 24
(5) The secretary of the Finance and Administration Cabinet shall promulgate 25
administrative regulations necessary for the implementation of this section and 26
necessary to provide that the Commonwealth be reimbursed for any additional 27
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expenses incurred by the Commonwealth in allowing political subdivisions to 1
participate in contracts with vendors. 2
(6) The Finance and Administration Cabinet shall comply with all provisions relating 3
to the methods of purchasing in the Kentucky Revised Statutes. This section is not 4
intended to repeal or otherwise affect any provision of the Kentucky Revised 5
Statutes regarding purchasing methods of the Finance and Administration Cabinet. 6
(7) Notwithstanding any other statute to the contrary, all public agencies as defined in 7
KRS 45A.490 shall comply with the provisions for reciprocal preference for 8
resident bidders in KRS 45A.490 to 45A.494. 9
Section 132. KRS 45A.300 is amended to read as follows: 10
(1) Any public purchasing unit may either participate in, sponsor, conduct, or 11
administer a cooperative purchasing agreement for the acquisition o f any supplies, 12
services, or construction with any other public purchasing unit or foreign 13
purchasing activity, in accordance with an agreement entered into between the 14
participants. This cooperative purchasing may include[,] but is not limited to[,] joint 15
contracts between public purchasing units and access by local public purchasing 16
units to open-ended state public purchasing unit contracts. 17
(2) Nothing in this code shall limit any public purchasing unit from selling to, acquiring 18
from, or using any prope rty belonging to another public purchasing unit or foreign 19
purchasing activity independent of the requirements of KRS 45A.070 to 45A.180. 20
(3) Nothing in this code shall limit or restrict any public purchasing unit from entering 21
into an agreement, independe nt of the requirements of KRS 45A.045 (6)[(5)] and 22
KRS 45A.070 to 45A.165, with any other public purchasing unit or foreign 23
purchasing activity for the cooperative use of supplies or services. 24
(4) Any public purchasing unit may enter into an agreement for t he joint or common 25
use of warehousing facilities or the lease or common use of capital equipment or 26
facilities with any other public purchasing unit or a foreign purchasing activity 27
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subject to the terms as may be agreed upon between the parties. 1
(5) Nothing in this code shall limit or restrict the ability of local school districts to 2
acquire supplies outside of the public purchasing agreements when the supplies and 3
equipment meeting the same specifications as the contract items are available at a 4
lower price elsewhere and the purchase does not exceed two thousand five hundred 5
dollars ($2,500). 6
(6) Nothing in this code shall limit any public purchasing unit from receiving notice of 7
or accepting a price reduction on supplies or equipment when the supplies or 8
equipment are being offered by the vendor with whom a price agreement has been 9
made; the supplies or equipment are being offered in accordance with all terms and 10
conditions that are specified in the price agreement, except those relating to price; 11
and the p rice reduction is offered to all of the participants in the price agreement. 12
Public purchasing units may accept special price reductions under this subsection 13
even if the reduced price requires the purchase of a specified quantity of units 14
different from t he quantity stated in the original price agreement. Price reductions 15
under this subsection shall not be considered to permanently alter the price of the 16
supplies or equipment under the price agreement with the Commonwealth, except 17
where the price reductions are to be made permanent under the express terms of the 18
price agreement and where the purchasing agency which solicited the price 19
agreement determines that the enforcement of those terms serves the best interest of 20
the Commonwealth. 21
(7) The Finance and A dministration Cabinet shall not exclude the Department of Fish 22
and Wildlife Resources from, or interfere with the department's participation in, any 23
contracts available to multiple state agencies for the procurement of goods or 24
services, including but not limited to interfering with the department's electronic 25
access to the statewide accounting system in any way. 26
Section 133. KRS 45A.810 is amended to read as follows: 27
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(1) (a) One (1) or more architectural services selecti on committees and one (1) or 1
more engineering or engineering -related services selection committees shall 2
be created in the Finance and Administration Cabinet. 3
(b) One (1) or more engineering and engineering -related services selection 4
committees shall be created in the Transportation Cabinet. 5
(c) One (1) or more engineering and engineering -related services selection 6
committees shall be created in the Department of Fish and Wildlife 7
Resources. 8
(2) Except when an emergency condition exists as defined by KRS 45 A.095(1)(a), 9
when architectural, engineering, or engineering -related services are procured under 10
KRS 45A.837 and 45A.838, or when the project is constructed under KRS 11
45A.045(12)[(11)](a) or (b): 12
(a) An architectural services selection committee created in the Finance and 13
Administration Cabinet shall participate in every instance of that cabinet's 14
procuring architectural services for its own needs and the needs of other 15
agencies, and upon request from the commissioner of the Department of Fish 16
and Wildlife Resources, shall assist and participate in that department's 17
procuring of architectural services; 18
(b) An engineering and engineering -related services selection committee created 19
in the Finance and Administration Cabinet shall participate in every instance 20
of that cabinet's procuring engineering or engineering-related services; 21
(c) An engineering and engineering -related services selection committee created 22
in the Transportation Cabinet shall participate in every instance of that 23
cabinet's procuring engineering or engineering-related services; and 24
(d) An engineering and engineering -related services selection committee created 25
in the Department of Fish and Wildlife Resources shall participate in every 26
instance of that department's procuring of engineering or en gineering-related 27
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services. 1
(3) An architectural services selection committee created in the Finance and 2
Administration Cabinet to perform its own procurement and assist other state 3
agencies with procuring architectural services shall consist of six (6) or more 4
members selected in the manner specified within each paragraph: 5
(a) Two (2) architects. The secretary of the Finance and Administration Cabinet 6
shall appoint a pool of at least six (6) architects who are employees of the 7
cabinet. At least three (3) o f the architects shall be merit employees of the 8
cabinet. The secretary, or designee, under the supervision of the Auditor of 9
Public Accounts, or designee, shall randomly select architects from the pool. 10
The first employee selected shall be placed on the s election committee. If the 11
first employee selected is a merit employee, the second employee selected 12
shall be placed on the selection committee. If the first employee selected is a 13
nonmerit employee, the selection process shall continue until a merit 14
employee is selected. That merit employee shall be placed on the selection 15
committee; 16
(b) One (1) or more additional employees of the Department for Facilities 17
Management, appointed by the commissioner of the Department for Facilities 18
Management, to serve as a nonvoting technical adviser for a given project 19
selection. Advisory members shall serve on a project -by-project basis and 20
shall have the requisite knowledge, training, or experience pertaining to the 21
professional requirements of the project; 22
(c) Two (2) me rit employees of the user agency appointed by the head of that 23
agency to serve for the duration of the selection committee's participation in 24
the project for which they were appointed by the user agency; 25
(d) An individual. The Kentucky Society of Architect s shall nominate nine (9) 26
individuals, and the Governor shall appoint three (3) of these individuals to 27
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serve in the pool from which the secretary of the Finance and Administration 1
Cabinet, or designee, under the supervision of the Auditor of Public Accounts, 2
or designee, shall randomly select one (1) individual to serve on the 3
committee; 4
(e) One (1) or more merit employees of the Auditor of Public Accounts, 5
appointed by the Auditor, who may, at the discretion of the Auditor, serve as 6
nonvoting members of t he committee. If one (1) employee is appointed, then 7
that employee may attend any committee proceedings. If more than one (1) 8
employee is appointed, then either of the employees may attend any 9
committee proceeding; and 10
(f) Upon completion of the selection process set forth in this subsection, the 11
commissioner of the Department of Facilities Management shall submit a 12
statement to the Auditor of Public Accounts attesting to full compliance with 13
the selection process for each architectural firm appointed to pr ovide 14
architectural services. In addition, a complete record of the selection process 15
for each project shall be maintained by the department and shall be subject to 16
audit by the Auditor of Public Accounts. 17
(4) The engineering and engineering-related services selection committee created in the 18
Finance and Administration Cabinet shall consist of six (6) or more members 19
selected in the manner specified in each paragraph: 20
(a) Two (2) engineers. The secretary of the Finance and Administration Cabinet 21
shall appoint a pool of at least six (6) engineers who are employees of the 22
cabinet. At least three (3) of the engineers shall be merit employees of the 23
cabinet. The secretary, or designee, under the supervision of the Au ditor of 24
Public Accounts, or designee, shall randomly select engineers from the pool. 25
The first employee selected shall be placed on the selection committee. If the 26
first employee selected is a merit employee, the second employee selected 27
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shall be placed o n the selection committee. If the first employee selected is a 1
nonmerit employee, the selection process shall continue until a merit 2
employee is selected. That merit employee shall be placed on the selection 3
committee; 4
(b) Two (2) merit employees of the us er agency appointed by the head of that 5
agency to serve for the duration of the selection committee's participation in 6
the project for which they were appointed by the user agency; 7
(c) An individual. The Kentucky Society of Professional Engineers and the 8
Kentucky Consulting Engineers Council shall together nominate nine (9) 9
individuals, and the Governor shall appoint three (3) of these individuals to 10
serve in the pool from which the secretary of the Finance and Administration 11
Cabinet, or designee, under the supervision of the Auditor of Public Accounts, 12
or designee, shall randomly select one (1) individual to serve on the 13
committee; 14
(d) One (1) or more merit employees of the Auditor of Public Accounts, 15
appointed by the Auditor, who may, at the discretion of the Auditor, serve as 16
nonvoting members of the committee. If one (1) employee is appointed, then 17
that employee may attend any committee proceedings. If more than one (1) 18
employee is appointed, then either of the employees may attend any 19
committee proceeding; 20
(e) One (1) or more additional employees of the Department for Facilities 21
Management to serve as nonvoting technical adviser for a specific project 22
selection. Advisory members shall serve on a project -by-project basis and 23
shall have the requisite knowle dge, training, or experience pertaining to the 24
professional requirements of the project; and 25
(f) Upon completion of the selection process set forth in this subsection, the 26
commissioner of the Department of Facilities Management shall submit a 27
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statement to the Auditor of Public Accounts attesting to full compliance with 1
the selection process for each firm appointed to provide engineering or 2
engineering-related services. In addition, a complete record of the selection 3
process for each project shall be maintai ned by the department and shall be 4
subject to audit by the Auditor of Public Accounts. 5
(5) The engineering and engineering-related services selection committee created in the 6
Transportation Cabinet shall consist of six (6) or more members selected in the 7
manner specified in each paragraph: 8
(a) Two (2) engineers. The secretary of the Transportation Cabinet shall appoint a 9
pool of six (6) engineers who are employees of the cabinet. At least three (3) 10
of the engineers shall be merit employees of the cabinet. T he secretary, or 11
designee, under the supervision of the Auditor of Public Accounts, or 12
designee, shall randomly select engineers from the pool. The first employee 13
selected shall be placed on the selection committee. If the first employee 14
selected is a merit employee, the second employee selected shall be placed on 15
the selection committee. If the first employee selected is a nonmerit 16
employee, the selection process shall continue until a merit employee is 17
selected. That merit employee shall be placed on the selection committee; 18
(b) Two (2) engineers who are merit employees of the user division appointed by 19
the head of that division to serve for the duration of the selection committee's 20
participation in the project for which they were appointed by the user age ncy. 21
However, if two (2) user divisions have approximately equal responsibilities 22
or separate responsibilities for the project, each user division head shall 23
appoint one (1) member to the selection committee; 24
(c) An individual. The Kentucky Society of Prof essional Engineers and the 25
Kentucky Consulting Engineers Council shall together nominate nine (9) 26
individuals, and the Governor shall appoint three (3) of these individuals to 27
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serve in the pool from which the secretary of the Transportation Cabinet, or 1
designee, under the supervision of the Auditor of Public Accounts, or 2
designee, shall randomly select one (1) individual to serve on the committee; 3
(d) One (1) or more merit employees of the Auditor of Public Accounts, 4
appointed by the Auditor, who may, at th e discretion of the Auditor, serve as 5
nonvoting members of the committee. If one (1) employee is appointed, then 6
that employee may attend any committee proceedings. If more than one (1) 7
employee is appointed, then either of the employees may attend any 8
committee proceeding; and 9
(e) Upon completion of the selection process set forth in this subsection, the 10
commissioner of the Department of Highways shall submit a statement to the 11
Auditor of Public Accounts attesting to full compliance with the selection 12
process for each firm appointed to provide engineering or engineering -related 13
services. In addition, a complete record of the selection process for each 14
project shall be maintained by the department and shall be subject to audit by 15
the Auditor of Public Accounts. 16
(6) The engineering and engineering -related services selection committee created 17
within the Department of Fish and Wildlife Resources shall consist of six (6) or 18
more members selected as follows: 19
(a) The commissioner of the Department of Fish and Wildl ife Resources shall 20
appoint five (5) members: 21
1. One (1) department employee in or designated to the job classification 22
of Department of Fish and Wildlife Resources Project Manager; 23
2. Two (2) Department of Fish and Wildlife Resources employees in the 24
Engineering and Geological series, at least one (1) of whom shall be a 25
merit employee; 26
3. One (1) merit employee of the Department of Fish and Wildlife 27
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Resources designated by the division head for the project or by the 1
commissioner; and 2
4. One (1) employee of the Department of Fish and Wildlife Resources 3
who is an attorney; 4
(b) The Kentucky Society of Professional Engineers and the Kentucky Consulting 5
Engineers Council shall together nominate nine (9) individuals, and the 6
Governor shall select three (3) of the se individuals to serve in a pool from 7
which the commissioner of the Department of Fish and Wildlife Resources, or 8
designee, under the supervision of the Auditor of Public Accounts, or 9
designee, shall randomly select one (1) individual to serve on the committee; 10
(c) One (1) or more merit employees of the Auditor of Public Accounts, 11
appointed by the Auditor, who may, at the discretion of the Auditor, serve as 12
nonvoting members of the committee. If one (1) employee is appointed, then 13
that employee may attend any committee proceedings. If more than one (1) 14
employee is appointed, then either of the employees may attend any 15
committee proceeding; and 16
(d) Upon completion of the selection process set forth in this subsection, the 17
commissioner of the Department of Fi sh and Wildlife Resources shall submit 18
a statement to the Auditor of Public Accounts attesting to full compliance 19
with the selection process for each firm appointed to provide engineering or 20
engineering-related services. A complete record of the selection process for 21
each project shall be maintained by the Department of Fish and Wildlife 22
Resources and shall be subject to audit by the Auditor of Public Accounts. 23
(7) (a) All selection committee members shall have experience which qualifies them 24
to serve on the committee. 25
(b) The same appointment procedures set out in this section apply to any user 26
agency or user division listed in subsection (3), (4), (5), or (6) of this section 27
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that does not operate under a merit system. 1
(c) Any individual appointed to serve in a pool from which selection committee 2
members are drawn shall serve in the pool for an initial one (1) year term and 3
may be reappointed. He or she shall serve until his or her successor is 4
appointed and qualified. A successor or a replacement, in the ca se of a 5
vacancy in the pool, shall be appointed in the same manner as the initial 6
appointee. If a selection committee member, drawn from a pool, leaves a 7
selection committee, his or her replacement shall be drawn from the pool in 8
the same manner as he or s he. The replacement shall have the merit or 9
nonmerit status of his or her predecessor. 10
(d) Any individual appointed by the Auditor of Public Accounts to serve on 11
selection committees shall serve an initial one (1) year term and may be 12
reappointed to succeed himself or herself. He or she shall serve until his or her 13
successor is appointed and qualified. A successor or a replacement, in the case 14
of a vacancy, shall be appointed in the same manner as the initial appointee. 15
(e) The selection committee members appointed by the head of a user agency or 16
user division shall serve on a project -by-project basis. These members shall 17
participate only in committee action related to the project for which they were 18
appointed. A replacement, in the case of a vacancy, shall be appointed in the 19
same manner as the initial appointee. 20
Section 134. KRS 56.774 is amended to read as follows: 21
(1) The Energy Efficiency Program for State Government Buildings shall provide for 22
implementation of low cost/no cost energy conservation measures, engineering 23
analyses, energy efficiency measures, building improvements, and monitoring of 24
results for state-owned or state-leased buildings. 25
(2) Any engineering analysis conducted on a state -owned building shall assess the 26
energy efficiency of the building and make recommendations for improving the 27
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efficient use of energy within the building. The analyses shall be performed by 1
qualified engineers, architects, or other persons trained in energy efficiency who 2
may be employees of the cabinet or employed pursuant to KRS Chapter 45A, 3
except that any engineers, architects or other persons trained in energy efficiency 4
and retained under a guaranteed energy savings performance contract, shall not be 5
subject to the provisions of KRS 45A.800 to 45A.835. 6
(3) Except as provided in subsection (5) of this section, measures to improve the energy 7
efficiency of a state -owned buildin g, which have an aggregate simple payback 8
period of five (5) years or less, shall be implemented as general fund appropriations 9
become available. No more than five percent (5%) of the cost of energy 10
conservation measures for a building may be utilized for monitoring the results. 11
(4) If general fund appropriations are available for energy conservation improvements, 12
the cabinet shall prioritize projects among the various state -owned buildings to 13
determine which projects shall be implemented to best utilize the available funding. 14
(5) If general fund appropriations are unavailable, energy conservation measures for a 15
state-owned building may be financed by other means. These other means include 16
but are not limited to guaranteed energy savings performance contract s as defined 17
under KRS 56.770 entered into pursuant to KRS 45A.085 and KRS 18
45A.045(11)[(10)]. Guaranteed energy savings performance contracts shall not be 19
subject to the provisions of KRS 45A.800 to 45A.835. These energy conservation 20
measures shall not be limited to those that have an aggregate simple payback period 21
of five (5) years or less, but shall result in reasonable economic benefit to the 22
Commonwealth. Ownership of the energy conservation measures shall be 23
transferred to the Commonwealth upon comple tion of the guaranteed energy 24
savings performance contract or as otherwise agreed upon in the contract. Savings 25
from the implementation of the energy conservation measures under the guaranteed 26
energy savings performance contract shall be used to satisfy th e obligations under 27
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the guaranteed energy savings performance contract and to repay the cost of the 1
other means used to finance the energy conservation measures, and may be used to 2
repay expenses incurred by the cabinet to reimburse the cabinet for expenses related 3
to the guaranteed energy savings performance contract, including but not limited to 4
staff time for monitoring, overseeing, and managing the project. Notwithstanding 5
KRS 45.229, remaining savings shall remain in the state agency account and shall 6
not lapse. All savings projected under a guaranteed energy savings performance 7
contract shall be guaranteed to the Commonwealth. 8
(6) The savings in reduced expenditures that are specified as payment sources shall be 9
documented in the guaranteed energy savi ngs performance contract. Savings shall 10
be determined by using one (1) of the measurement and verification methodologies 11
listed in the United States Department of Energy's "International Performance 12
Measurement and Verification Protocol." If specific data limitations or documented 13
unique characteristics of the project prevent use of the "International Performance 14
Measurement and Verification Protocol," an alternative method that is compatible 15
shall be adopted upon documentation and approval of the secretary of the cabinet. 16
Section 135. KRS 56.782 is amended to read as follows: 17
The cabinet shall report on or before October 15, 2008, and on or before every October 18
15 thereafter to the Legislative Research Commission on progr ess made to maximize the 19
use of energy -efficiency measures in state government. The Legislative Research 20
Commission shall transmit the report to the appropriate interim joint committees and to 21
the General Assembly when it convenes. The report shall include but not be limited to: 22
(1) A summary of initiatives undertaken by the cabinet during the reporting period to 23
promote adoption of low cost/no cost energy -efficiency measures, including 24
employee training efforts; 25
(2) A summary of energy -efficiency measures installed and energy improvements 26
made during the reporting period; 27
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(3) Energy consumption and expenditure data for facilities owned or leased by state 1
government and any documented savings made as a result of energy -efficiency 2
measures and improvements; 3
(4) Status report on the number of buildings newly constructed, renovated, or leased in 4
accordance with the high -performance building standards required under KRS 5
56.777 and the amount of savings realized based upon a life-cycle cost analysis; 6
(5) Any effor ts made during the reporting period to promote acquisition of energy -7
efficient products pursuant to KRS 45A.045 (13)[(12)] and the amount of savings 8
expected to be realized in the first year of operation from the purchase of ENERGY 9
STAR-qualified products pursuant to KRS 56.775; 10
(6) Any recommendations for future funding of energy improvements or other 11
measures needed to assure energy efficiency in state government; and 12
(7) Any improvements in energy efficiency planned or realized through the use of the 13
LEED rating system, the Green Globes rating system, ENERGY STAR -qualified 14
products, and guaranteed energy savings performance contracts. 15
Section 136. Sections 32 to 40 of this Act may be cited as the Uniform 16
Electronic Wills Act. 17
Section 137. Sections 41 to 55 of this Act may be cited as the Uniform 18
Electronic Estate Planning Documents Act. 19
Section 138. Sections 59 to 69 of this Act may be cited as the Ke ntucky 20
Qualified Dispositions in Trust Act. 21
Section 139. Sections 70 to 86 of this Act may be cited as the Uniform Directed 22
Trust Act. 23
Section 140. Sections 87 to 114 of this Act may b e cited as the Uniform Trust 24
Decanting Act. 25
Section 141. Sections 124 and 125 of this Act take effect January 1, 2028. 26
Section 142. The following KRS sections are repealed: 27
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395.635 Certification of list of fiduciaries delinquent in accounting -- Notice -- Fees. 1
386B.8-080 Powers to direct. 2
386.175 Trustee's power to appoint principal or income in favor of trustee of second 3
trust -- Terms of second trust -- Special fiduciary -- Notice -- Judicial 4
proceedings. 5