Kentucky Statutes 386B.1-120 – Insurable interest of trustee
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(1) As used in this section, “settlor” means a person that executes a trust instrument.
The term includes a person for which a fiduciary or agent is acting.
(2) A trustee of a trust has an insurable interest in the life of an individual insured under a life insurance policy that is owned by the trustee of the trust acting in a fiduciary capacity or that designates the trust itself as the owner if, on the date the policy is issued:
(a) The insured is:
1. A settlor of the trust; or
2. An individual in whom a settlor of the trust has, or would have had if living at the time the policy was issued, an insurable interest; and
(b) The life insurance proceeds are primarily for the benefit of one (1) or more trust beneficiaries that have:
1. An insurable interest in the life of the insured; or
2. A substantial interest engendered by love and affection in the continuation of the life of the insured and, if not already included under subparagraph 1. of this paragraph, who are:
a. Related within the third degree or closer, as measured by the civil law system of determining degrees of relation, either by blood or law, to the insured; or
b. Stepchildren of the insured.
Effective: July 15, 2014
History: Created 2014 Ky. Acts ch. 25, sec. 12, effective July 15, 2014.
The term includes a person for which a fiduciary or agent is acting.
Terms Used In Kentucky Statutes 386B.1-120
- Fiduciary: A trustee, executor, or administrator.
- Owner: when applied to any animal, means any person having a property interest in such animal. See Kentucky Statutes 446.010
- Person: means any individual or entity as defined in KRS §. See Kentucky Statutes 386B.1-010
- Settlor: means a person, including a testator, who creates or contributes property to a trust. See Kentucky Statutes 386B.1-010
- Trust: means an express trust established by a trust instrument, including a will, whereby a trustee has the duty to administer a trust asset for the benefit of a named or otherwise described income or principal beneficiary, or both. See Kentucky Statutes 386B.1-010
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional, and successor trustee, and a cotrustee. See Kentucky Statutes 386B.1-010
(2) A trustee of a trust has an insurable interest in the life of an individual insured under a life insurance policy that is owned by the trustee of the trust acting in a fiduciary capacity or that designates the trust itself as the owner if, on the date the policy is issued:
(a) The insured is:
1. A settlor of the trust; or
2. An individual in whom a settlor of the trust has, or would have had if living at the time the policy was issued, an insurable interest; and
(b) The life insurance proceeds are primarily for the benefit of one (1) or more trust beneficiaries that have:
1. An insurable interest in the life of the insured; or
2. A substantial interest engendered by love and affection in the continuation of the life of the insured and, if not already included under subparagraph 1. of this paragraph, who are:
a. Related within the third degree or closer, as measured by the civil law system of determining degrees of relation, either by blood or law, to the insured; or
b. Stepchildren of the insured.
Effective: July 15, 2014
History: Created 2014 Ky. Acts ch. 25, sec. 12, effective July 15, 2014.