Bench & Bar September/October 2026

regarding charitable interests. Furthermore, the Attorney General is now to be included as a qualified beneficiary entitled to notice of the decanting of any trust with a charita ble interest. 22 Charities are often named as last-resort remainder beneficiaries under trust agreements – the implications of such a provision could be wide reaching and substantially limit the ability of trustees to decant for the benefit of other beneficiaries. CONCLUSION Senate Bill 50 adopted a variety of sweeping changes in the worlds of estate administra tion and estate planning. From an overview perspective, the changes to estate admin istration implement confidentiality and streamline various aspects of the process. The adoption of new uniform acts will substantially impact the realm of estate planning. The adoption of the Uniform Electronic Will Act and the Uniform Elec tronic Estate Planning Documents Act will provide practitioners access to electronic execution. The Uniform Directed Trust Act offers practitioner clarity on the roles of trust directors. The Kentucky Quali fied Asset Protection Act provides for the creation of Kentucky domestic asset protec tion trusts and introduces Kentucky to the DAPT arms race. These DAPT trusts may even have planning, creditor, and estate tax advantages. Lastly, the Kentucky Uniform

Trust Decanting Act updates the Common wealth’s decanting statute to align with the Uniform Law Commission. It will critically impact the breadth and scope of decanting in the Commonwealth. Taken as a whole, these changes are an improvement to the estate and trust laws of the Commonwealth. But, all of these changes will require careful study by the Kentucky Bar due to their comprehen sive impact to the legal practice in the Commonwealth.

The adoption of the UTDA changes many aspects of the requirements for decanting. Only the major changes will be identified herein. First, the UTDA does not apply to fully revocable trusts, trusts solely for charitable purposes, or trusts that expressly prohibit decanting. 17 Otherwise, the UTDA applies quite broadly to any trust agreement in which the trustee holds a discretionary power to distribute principal. This is a change from the previous KRS 386 standard, which required the authority to distribute principal or income . 18 One major exception under the Act is that a trustee may decant to a trust that would qualify as a special needs trust, even if the trustee may not have the required discretionary authority over the principal of the first trust. 19 Under the UTDA, the distributive discre tion that a trustee retains may determine the degree and manner in which the trustee may decant. If a trustee may only distribute assets under the first trust by an “ascertain able standard” or a “reasonably definite standard”, as the statute defines the terms, then the trustee retains “limited distribu tive discretion” and may only decant to the second trust upon the substantially same terms as the first trust. 20 If, however, the trustee’s discretion is not limited by either of the aforementioned standards, then the trustee has “expanded distributive discre tion” and may decant to the second trust on a much greater scope. For example, a trustee with expanded distributive discretion may omit beneficiaries of the first trust who do not have a vested or noncontingent interest. A trustee with expanded distributive discre tion may also omit powers of appointment in the second trust, provided the power of appointment is not presently exercisable. 21 Accordingly, the trustee may also create or modify the powers of appointment, with some statutory restrictions. Another major change of note is the treat ment of charitable interests under the UTDA. Unlike the current law under KRS 386, the UTDA as adopted places several restrictions on a trustee’s ability to decant when a charitable interest exists under the first trust. A trustee may not decant a trust in such a way that: (1) diminishes a charita ble interest; (2) alters a charitable purpose, (3) or alters any condition or restriction

ENDNOTES 1

KRS 391.010 KRS 392.020 KRS 392.020 KRS 395.015 KRS 395.470 KRS 140.160 KRS 140.070

2 3 4 5 6 7 8 9

KRS 395.015; KRS 395.250

KRS 394.706 10 KRS 394.722 11 KRS 386B.12-070 12 KRS 386B.12-080

13 KRS 386.603 14 KRS 386.611 15 KRS 386.617 16 KRS 386.605

17 KRS 386B.13-020 18 KRS 386B.13-010 19 KRS 386B.13-210 20 KRS 386B.13-110 21 KRS 386B.13-100 22 KRS 386B.13-130

ABOUT THE AUTHORS WAYNE F. WILSON is a partner at Dinsmore & Shohl LLP where he co-chairs the firm’s tax benefits and wealth planning practice group. He received his J.D. from the Brandeis School of Law at the University of Louisville and his B.A. from Transylvania University. Wilson is on the faculty of the Bondurant / Bagby Estate Planning Institute at the University of Kentucky and is a Fellow of the American College of Trust and Estates Counsel.

EASTON B. DEPP is an associate at Dinsmore & Shohl LLP specializing in estate planning and trust administration. He received his J.D. from the University of Notre Dame and his B.A. from the University of Louisville. Licensed in both Kentucky and Indiana, he is an active member of the Young Lawyers Division of the Kentucky Bar Association.

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