(1) Except as otherwise provided in subsection (2) of this section, relations among the statutory trust, the beneficial owners, and the trustees are governed by the governing instrument. To the extent the governing instrument does not otherwise provide, KRS § 386A.1-010 to KRS § 386A.10-040 govern relations among the statutory trust, the beneficial owners, and the trustees.
(2) The governing instrument may not:
(a) Eliminate the obligation of good faith and fair dealing in the governing instrument, but it may prescribe the standards by which the performance of the obligations are to be measured provided the standards are not manifestly unreasonable;
(b) Vary KRS § 386A.1-050(3), (5), or (7);
(c) Vary the requirements of Subchapter 2 of this chapter; (d) Vary KRS § 386A.3-010;
(e) Negate KRS § 386A.3-030(2);
(f) Except as provided therein, vary the provisions pertaining to series trusts in
Subchapter 4 of this chapter; (g) Vary KRS § 386A.5-010(2); (h) Vary KRS § 386A.5-020(2);
(i) Vary KRS § 386A.5-030(3);
(j) Vary the standards of conduct for trustees under KRS § 386A.5-050, but the governing instrument may prescribe the standards by which good faith, best interests of the statutory trust, and care that a person in a similar position would reasonably believe appropriate under similar circumstances are determined, if the standards are not manifestly unreasonable;
(k) Vary KRS § 386A.5-070, but the governing instrument may provide a mechanism for prior approval, upon full disclosure, of a transaction with a covered party by at least two (2) disinterested trustees or the disinterested beneficial owners;
(l) Restrict the right of a trustee to information under KRS § 386A.5-080, but the governing instrument may prescribe the standards for assessing whether information is reasonably related to the trustee’s discharge of the trustee’s duties as trustee, if the standards are not manifestly unreasonable;
(m) Vary KRS § 386A.5-100(2);
(n) Vary KRS § 386A.5-110(3) and (4); (o) Vary KRS § 386A.6-010(4);
(p) Restrict the right of a judgment creditor of a beneficial owner to seek a charging order under KRS § 386A.6-060;
(q) Provide indemnification, advancement of expenses, or exoneration for conduct involving bad faith, willful misconduct, self-dealing, reckless indifference, approval or consent to a distribution violating KRS § 386A.6-080,
or a transaction from which the trustee derived an improper personal benefit or in which the trustee’s personal financial interest was in conflict with those of the statutory trust;
(r) Permit a trustee to follow a direction that is contrary to the terms of the governing instrument or would constitute a breach of fiduciary duty by the trustee;
(s) Vary KRS § 386A.6-080(3), (4), (6), or (7); (t) Vary KRS § 386A.6-090;
(u) Restrict the right of a beneficial owner to information under KRS § 386A.6-100, but the governing instrument may prescribe the standards for assessing whether information is reasonably related to the beneficial owner’s interest, if the standards are not manifestly unreasonable;
(v) Restrict the right of a beneficial owner to bring an action under KRS § 386A.6-
110;
(w) Vary Subchapter 7 of this chapter;
(x) Except to the extent expressly provided therein, vary Subchapter 8 of this chapter;
(y) Vary Subchapter 9 of this chapter; or
(z) Vary Subchapter 10 of this chapter.
Effective: July 12, 2012
History: Created 2012 Ky. Acts ch. 81, sec. 4, effective July 12, 2012.