Kentucky Statutes 386B.10-080 – Exculpation of trustee
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(1) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:
(a) Relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
(b) Was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.
(2) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor. The requirements of this subsection are satisfied if the settlor was represented by independent counsel at the time the exculpatory term was drafted or caused to be drafted.
Effective: July 15, 2014
History: Created 2014 Ky. Acts ch. 25, sec. 86, effective July 15, 2014.
(a) Relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
Terms Used In Kentucky Statutes 386B.10-080
- Fiduciary: A trustee, executor, or administrator.
- Interests of the beneficiaries: means the beneficial interests provided in the terms of the trust. 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
(b) Was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.
(2) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor. The requirements of this subsection are satisfied if the settlor was represented by independent counsel at the time the exculpatory term was drafted or caused to be drafted.
Effective: July 15, 2014
History: Created 2014 Ky. Acts ch. 25, sec. 86, effective July 15, 2014.