1.1 Declaration and Name. I, Margaret Ann Thompson, of 412 Walnut Street, Lexington, KY 40507, declare that I hold, and will hold, the property described in Schedule A and all other property hereafter made subject to this instrument, in trust, on the terms stated in this instrument, including the funding terms stated in Article II. This trust shall be known as "The Margaret Ann Thompson Revocable Living Trust". I create this trust by declaration of the owner of property under KRS 386B.4-010(2), which provides that a trust may be created by declaration by the owner of property that the owner holds identifiable property as trustee.
1.2 Settlor and Initial Trustee. I am the settlor of this trust. I am also the initial trustee of this trust, and I shall serve as trustee until my death, my incapacity as determined under Article III, or my earlier resignation. Although I am both the initial trustee and the primary beneficiary during my lifetime, the beneficiaries named in Article V hold beneficial interests under this instrument, so the same person is not the sole trustee and sole beneficiary, as KRS 386B.4-020(1)(e) requires for the creation of a trust.
1.3 Revocability. I expressly declare that this trust is revocable. I may revoke or amend this trust, in whole or in part, at any time during my lifetime. Under KRS 386B.6-020(1), unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust; this instrument is revocable both by that statutory presumption and by its express terms.
1.4 Method of Revocation or Amendment. I may revoke or amend this trust by a signed writing delivered to the then-serving trustee during my lifetime. This method is not exclusive. Because the method stated in this Section is not expressly made exclusive, KRS 386B.6-020(3) preserves the statutory methods, and I may also revoke or amend this trust by a later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust, or by any other method manifesting clear and convincing evidence of my intent.
1.5 Capacity Standard. Under KRS 386B.6-010, the capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
1.6 Exercise of My Powers by Others. Under KRS 386B.6-020(5), my powers of revocation, amendment, and distribution may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the trust or of the power; this instrument itself grants no such authority to any agent. Under KRS 386B.6-020(6), except as otherwise provided in the terms of the trust, a conservator appointed for me or, if no conservator has been appointed, a guardian or, if neither a conservator nor guardian has been appointed, a curator may exercise those powers only with the approval of the court supervising the conservatorship, guardianship, or curatorship; this instrument provides no different rule.
2.1 Initial Trust Property. The initial trust property is the sum of ten dollars ($10.00) held by me as trustee, together with each asset listed on Schedule A that I have actually retitled to myself as trustee. A titled asset listed on Schedule A becomes subject to this instrument only when I actually retitle it to myself as trustee, as Section 2.3 describes; listing an asset on Schedule A records my intention to fund it but does not, by itself, make it trust property.
2.2 Added and After-Acquired Property. I may add property to this trust at any time - by retitling an asset into my name as trustee, by naming the trustee as the payee or beneficiary of an asset, or by any other lawful method of transfer - and any person may add property to this trust with the consent of the trustee. All added property shall be held subject to this instrument.
2.3 FUNDING REALITY - READ THIS SECTION. Signing this declaration does not, by itself, retitle any account, any deed, or any other asset. An asset becomes effective trust property as to the institutions that hold it only when it is actually retitled to me as trustee - for example, a bank account re-registered to me as trustee of The Margaret Ann Thompson Revocable Living Trust, or a deed conveying Kentucky real property to me as trustee, executed and recorded. AN UNFUNDED TRUST CONTROLS NOTHING: an asset that is neither listed on Schedule A nor retitled into the trust does not pass under this instrument at my death; it passes under my will, or, if I have no will, under the intestate succession rules of KRS Chapter 391. For a titled asset that is listed on Schedule A but never retitled, this instrument does not hold that asset: under the terms of this trust a titled asset becomes trust property only when it is actually retitled to me as trustee, so a listed-but-never-retitled asset passes under my will, or, if I have no will, under the intestate succession rules of KRS Chapter 391, exactly as an unlisted asset does. A pour-over will is the safeguard that directs such an asset into this trust at my death. The most common failure of revocable living trusts is that they are signed and never funded. Assets actually titled in this trust at my death pass under this instrument outside my probate estate; an asset never retitled may not achieve that result. The funding work - retitling accounts, preparing and recording deeds, and coordinating beneficiary designations - is performed in the separate Johnson Legal execution and funding session.
3.1 Trust for My Benefit. During my lifetime, the trustee shall pay to me, or apply for my benefit, all of the net income of the trust and so much of the principal as I direct, at the times and in the manner I direct. While this trust is revocable and, in the reasonable belief of the trustee, I have capacity to revoke it, the rights of the beneficiaries are subject to my control, and the duties of the trustee are owed exclusively to me, as KRS 386B.6-030 provides.
3.2 Creditor Statement. This trust is not a shield against my own creditors. Under KRS 386B.5-040(1)(a), during the lifetime of the settlor, the property of a revocable trust is subject to claims of the creditors of the settlor.
3.3 Incapacity of the Settlor. For purposes of this instrument, I shall be considered incapacitated upon the earlier of: (a) a written certification, signed by my attending physician, that I am unable to manage my financial affairs; or (b) the appointment by a court of a guardian or conservator for me. Upon such a determination, the successor trustee designated in Article IV shall serve as trustee. During my incapacity, this trust continues for my benefit: the trustee shall apply so much of the income and principal of the trust as the trustee determines appropriate for my care, my living expenses, and the support of any person I am legally obligated to support. If my attending physician later certifies in a signed writing that I am again able to manage my financial affairs, I shall resume serving as trustee.
3.4 No Court Proceeding Required for Succession. The incapacity succession in this Article is intended to operate without a guardianship or conservatorship proceeding; nothing in this Article, however, limits any power a court has under KRS Chapter 386B or other law.
4.1 Initial Trustee. I am the initial trustee of this trust.
4.2 Successor Trustees. Upon my death, my incapacity as determined under Article III, or my resignation, I designate James Robert Thompson, of 23 Mill Creek Road, Elizabethtown, KY 42701, my son, to serve as successor trustee. If James Robert Thompson is unable or unwilling to serve, or ceases to serve, I designate Carol Sue Hardin, my sister, to serve as successor trustee. If no successor trustee designated in this instrument is able and willing to serve, the vacancy shall be filled in the order of priority stated in KRS 386B.7-040(3): by a person designated in the terms of the trust to act as successor trustee; then by a person appointed by unanimous agreement of the qualified beneficiaries; then by a person appointed by the court.
4.3 Acceptance of Trusteeship. A person designated as trustee under this instrument accepts the trusteeship as KRS 386B.7-010 provides - by signing a written acceptance delivered to me or, after my death or during my incapacity, to a qualified beneficiary, or by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
4.4 Resignation. A trustee may resign as KRS 386B.7-050 provides - upon at least thirty (30) days notice to the qualified beneficiaries and all cotrustees, or with the approval of the court.
4.5 Bond. I request and direct that no trustee named in or appointed under this instrument be required to give bond or other security in any jurisdiction; the terms of this trust do not require a bond. Under KRS 386B.7-020(1), a trustee shall give bond to secure performance only if the court finds that a bond is needed to protect the interests of the beneficiaries or a bond is required by the terms of the trust and the court has not dispensed with the requirement. I acknowledge that under KRS 386B.1-030(2)(f) the power of the court under KRS 386B.7-020 to require, dispense with, or modify or terminate a bond prevails over the terms of this trust.
4.6 Compensation and Expenses. A trustee is entitled to compensation that is reasonable under the circumstances, as KRS 386B.7-080(1) provides for a trust whose terms do not specify compensation, together with reimbursement of expenses properly incurred in the administration of the trust.
4.7 One Trustee at a Time. This instrument contemplates one trustee serving at a time; it names no cotrustees.
5.1 Irrevocability at My Death. This trust shall become irrevocable upon my death. My powers to revoke and amend end at my death, and no other person holds them.
5.2 Administrative Powers at My Death. After my death, the trustee may pay from the trust property the legally enforceable debts of my estate, the expenses of my last illness and funeral, the costs of administering this trust, and any taxes payable by reason of my death, in coordination with the personal representative of my probate estate, if any. This Section is administrative only; it is not tax advice and makes no representation about the amount or applicability of any tax. I acknowledge that under KRS 386B.5-040(1)(c), after the death of a settlor, the property of a trust that was revocable at the death of the settlor is subject to claims of the creditors of the settlor, costs of administration of the estate of the settlor, the expenses of the funeral and disposal of remains, and statutory allowances to a surviving spouse and children, to the extent the probate estate of the settlor is inadequate to satisfy them.
5.3 Distribution Protection. Upon my death, the trustee may proceed to distribute the trust property in accordance with the terms of the trust as KRS 386B.6-040(2) provides, subject to the limitations stated in that section.
5.4 Specific Gifts. None. I make no specific gifts under this Section; the entire trust estate passes under the residual distribution in Section 5.5.
5.5 Residual Distribution. I direct the trustee to distribute the residual trust estate - all trust property remaining after the applications of Sections 5.2 through 5.4 - as follows:
(1) 60 percent (60%) to James Robert Thompson, my son.
(2) 40 percent (40%) to Anna Marie Whitfield, my daughter.
If a beneficiary named in this Section does not survive me, the share of that beneficiary shall pass to the then-living descendants of that beneficiary, per stirpes (as defined in Article VIII). If that beneficiary has no then-living descendants, that share shall be divided among the other beneficiaries named in this Section in proportion to their stated shares. If no beneficiary named in this Section, and no descendant of one, survives me, the residual trust estate shall pass under Section 5.6.
5.6 Contingent Beneficiary; Final Fallback. If the residual distribution in Section 5.5 fails entirely, the trustee shall distribute the residual trust estate to Carol Sue Hardin, my sister, outright. If Carol Sue Hardin also does not survive me, the residual trust estate shall be distributed to my heirs at law, determined as though I had died intestate, unmarried as to property passing under this sentence, under the descent and distribution rules of KRS Chapter 391 in force at my death.
5.7 Manner of Distribution. Outright Distribution. All distributions under this Article are to be made outright and free of trust. If a distributee is under a legal disability or the trustee reasonably believes the distributee is incapacitated, the trustee may make the distribution using any of the methods KRS 386B.8-160(21) permits, including payment to a conservator, guardian, or custodian under the Kentucky Uniform Transfers to Minors Act.
5.8 Distribution Mechanics. Upon the termination or partial termination of this trust, the trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes, as KRS 386B.8-170(2) provides.
6.1 Statutory Powers Incorporated by Reference. The trustee may exercise all powers conferred on trustees by the Kentucky Uniform Trust Code, including the general powers stated in KRS 386B.8-150 - among them all powers over the trust property which an unmarried competent owner has over individually owned property - and each of the specific powers enumerated in KRS 386B.8-160, all of which are incorporated by reference into this instrument as though set out in full.
6.2 Practical Powers. Without limiting Section 6.1, the trustee may: (a) sell, exchange, or otherwise dispose of any trust property, at public or private sale, for cash or on credit; (b) lease any trust property for any term, whether or not extending beyond the duration of the trust; (c) invest and reinvest the trust property in any kind of property, real or personal; (d) distribute trust property in kind, in cash, or partly in each, and make non-pro-rata distributions; and (e) employ and compensate attorneys, accountants, investment advisors, and other agents reasonably necessary to the administration of the trust.
6.3 Duties. The trustee shall administer this trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries. The trustee shall administer the trust solely in the interests of the beneficiaries, as the duty of loyalty in KRS 386B.8-020(1) requires, and shall administer the trust as a prudent person would, and in doing so shall exercise reasonable care, skill, and caution, as KRS 386B.8-040 requires. While this trust is revocable and I have capacity, these duties are owed exclusively to me under KRS 386B.6-030.
6.4 No Exculpation. This instrument contains no provision relieving any trustee of liability for breach of trust.
Spendthrift Restraint. The interest of each beneficiary of this trust other than me is held subject to a spendthrift restraint: to the fullest extent KRS 386B.5-020 permits, the interest of the beneficiary in the income and principal of this trust shall not be alienable by the beneficiary and shall not be subject to alienation by operation of law or legal process before actual receipt by the beneficiary. This provision restrains both voluntary and involuntary transfer of the interest of a beneficiary, within the meaning of the spendthrift-provision definition in KRS 386B.1-010. Two statutory limits apply and are acknowledged: first, this restraint does not protect my own interest - under KRS 386B.5-020(7)(a), where a person creates a trust for the benefit of that person with a restraint on alienation, the interest of that person nevertheless remains subject to alienation by operation of law or legal process, and under KRS 386B.5-040 the property of this trust remains subject to the claims of my creditors while the trust is revocable; second, certain claims remain enforceable against a spendthrift interest notwithstanding the restraint, as KRS 386B.5-020(6) provides.
8.1 Governing Law. This trust is governed by, and the meaning and effect of its terms are determined by, the laws of the Commonwealth of Kentucky, which I designate under KRS 386B.1-050(1).
8.2 Severability. If any provision of this instrument is held invalid or unenforceable, the remaining provisions remain in full force and effect.
8.3 Definitions. Terms used in this instrument that are defined in KRS 386B.1-010 have the meanings given in that section unless this instrument expressly provides otherwise or the context requires otherwise. The term "trustee" includes any successor trustee. A distribution to the descendants of a person "per stirpes" means a distribution by representation: the share is divided into equal parts at the generation nearest to that person that has a living member, with each living member of that generation taking one part and the part of each deceased member of that generation passing to that deceased member's own then-living descendants in the same manner.
8.4 Marital Status. I am widowed.
8.5 Single Settlor. I am the only settlor of this trust. This instrument is not a joint trust, and no community property is held under it.
I sign this Declaration of Revocable Living Trust as settlor, and I sign separately as trustee to acknowledge and accept the trusteeship under KRS 386B.7-010.
Signed this ________ day of ________________, 20______.
_____________________________________________
Margaret Ann Thompson, Settlor
_____________________________________________
Margaret Ann Thompson, Trustee (acceptance of trusteeship)
NOTARY ACKNOWLEDGMENT (best practice; see note below)
Kentucky law does not condition the validity of a revocable living trust of personal property on notarization - the creation requirements are those stated in KRS 386B.4-020 (capacity, intention to create the trust, a definite beneficiary, duties for the trustee, and the same person not being the sole trustee and sole beneficiary). This acknowledgment is included as best practice: financial institutions commonly require an acknowledged trust instrument, and recording a deed conveying Kentucky real property to the trustee requires acknowledgment.
Commonwealth of Kentucky
County of ________________________
The foregoing Declaration of Revocable Living Trust was acknowledged before me on this ________ day of ________________, 20______, by Margaret Ann Thompson, as settlor and as trustee.
_____________________________________________ (Seal, if any)
Notary Public, Commonwealth of Kentucky
My commission expires: ________________________
Document prepared by:
Johnson Legal PLLC, operating as Bluegrass Cornerstone (registered Kentucky DBA)
Attorney of record: Durward Elton Johnson, Kentucky Bar # 101547. Prepared from settlor input as a revocable living trust under KRS Chapter 386B (Kentucky Uniform Trust Code); reviewed and approved by a Kentucky-licensed attorney before delivery per KBA Ethics Opinion E-457.
This Schedule lists the property of The Margaret Ann Thompson Revocable Living Trust and the property I intend to fund into it. The sum of ten dollars ($10.00) below is held subject to the trust now; each titled asset I list becomes trust property only when I retitle it to myself as trustee, as Article II, Section 2.3 provides:
1. The sum of ten dollars ($10.00) held by the settlor as trustee.
2. All property hereafter retitled to the trustee, made payable to the trustee, or otherwise lawfully made subject to this instrument (after-acquired property).
3. Checking account at Central Bank, Lexington, Kentucky
4. Residence at 412 Walnut Street, Lexington, KY 40507
REAL PROPERTY NOTE: the initial funding includes Kentucky real property. Real property enters the trust only by a deed conveying the property to the trustee, executed and recorded; deed preparation and recording are part of the Johnson Legal execution and funding session, not this drafting engagement.
NOTE ON TITLED ASSETS: listing an asset on this Schedule records my intent that it be held in this trust, but for titled assets - real property, vehicles, and financial accounts - the institutions involved recognize the trust only when the asset is actually retitled to me as trustee. Retitling is performed in the Johnson Legal execution and funding session. See Article II, Section 2.3.
Your revocable living trust has been drafted from your intake answers and reviewed by a Kentucky-licensed attorney. Two things must now happen, in order: (1) EXECUTE the declaration (sign it, as settlor and as trustee, before a notary), and (2) FUND the trust (retitle assets to yourself as trustee). Signing alone moves nothing into the trust - an unfunded trust controls nothing. The funding work is performed in the separate Johnson Legal execution and funding session, which per the published catalog description covers the funding session and the pour-over will.
Bluegrass Cornerstone is a service of Johnson Legal PLLC, a Kentucky law firm. This document was prepared from your intake answers as a revocable living trust under KRS Chapter 386B, and was reviewed and approved by a Kentucky-licensed attorney with Johnson Legal PLLC before delivery, per KBA Ethics Opinion E-457. Attorney of record: Durward Elton Johnson, Kentucky Bar # 101547. For questions, email support@bluegrasscornerstone.com - your message will be routed to the reviewing attorney.