Kentucky 2010 Legislative Update 2 – HB 188 Offers Many Improvements to Kentucky’s Probate and Trust Laws

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HB 188 passed the Kentucky House unanimously on January 21, and was referred to the Kentucky Senate Judiciary Committee on January 25.  The full text of HB 188, along with the report on the bill’s status, is available here.  HB 188 contains many improvements to Kentucky’s probate and trust laws, including: 

  • Amendments to KRS 381 abolishing the rule against perpetuities
  • An increase in the small trust termination amount under KRS 386.185 from $25,000 to $50,000
  • Streamlining of the requirements for District Court approval under Kentucky’s Principal and Income Act (KRS 386.450 to KRS 386.504)
  • A statutory definition for “notice” under the Principal and Income Act
  • Statutory guidance for fiduciaries exercising discretion to adjust between principal and income under KRS 386.454
  • Provision for a party aggrieved by a fiduciary’s adjustment between income and principal to institute an adversary proceeding in Circuit Court
  • Revisions to KRS 386.480 designed to expand availability of the estate tax marital deduction for QTIP trusts and power of appointment trusts that hold deferred compensation, annuities, IRAs, etc.
  • A statutory fix to problems created by the Longmeyer decision. KRS 386.715 is amended to provide that the trustee’s duty to inform and account to beneficiaries extends only to the settlor of a revocable trust so long as the trust is revocable, and the trustee reasonably believes the settlor has capacity to revoke the trust.
  • An increase in spousal bank account withdrawal rights under KRS 391.030(2) from $1,000 to $2,500
  • Extension of the $15,000 exemption for personal property in favor of the surviving spouse or children to include testate estates
  • Provision that the spousal exemption for testate estates is not dependent on the spouse renouncing the will, and and is prior and additional to the spouse’s dower/curtesy interest
  • Provisions establishing the order of sources for payment of the spousal exemption amount in testate estates
  • A statutory form for the relinquishment  required by KRS 392.080 by a spouse electing against a will
  • Conforming amendments to other statutes relating to abolition of the rule against perpetuities

Many members of the Kentucky T&E Community have noticed and appreciate the good work of State Representative John Tilley (D-Hopkinsville), Chair of the House Judiciary Committee, in taking an active interest in this worthwhile legislation and facilitating its smooth passage through the House. 

A list of Senate Judiciary Committee members is available here. Please click on the link, and if your legislator or another legislator you know is on the committee, consider giving them a call about the bill.  As President Obama knows, bicameralism can be tough, but there’s no getting around it.  HB 118 is only 18 pages long (precisely 1,000 pages shorter than the Health Care Bill), so let’s hope for HB 118’s quick passage in the Senate and signature by Governor Beshear.

(A non-legal note for regular readers of KYEstate$: yes, the site has had a significant redesign over the last two days.  KYEstate$ is very excited about the changes, and hopes you agree that the new site is a substantial improvement. Information on the site build and redesign is here. As always, KYEstate$ welcomes your feedback, and thanks you for your readership and support.)

 

 

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