2013 Kentucky Revised Statutes CHAPTER 386 - ADMINISTRATION OF TRUSTS -- LEGAL INVESTMENTS -- UNIFORM PRINCIPAL AND INCOME ACT 386.810 Powers of trustees conferred by this chapter.
Download as PDF
386.810 Powers of trustees conferred by this chapter.
(1)
(2)
(3)
From time of creation of the trust until final distribution of the assets of the trust,
a trustee has the power to perform, without court authorization, every act which
a prudent man would perform for the purposes of the trust including but not
limited to the powers specified in subsection (3).
In the exercise of his powers including the powers granted by this chapter, a
trustee has a duty to act with due regard to his obligation as a fiduciary,
including a duty to give consideration to available tax exemptions, deductions,
or credits for tax purposes. "Tax" includes, but is not limited to, any federal,
state, or local income, gift, estate, or inheritance tax.
A trustee has the power, subject to subsections (1) and (2) of this section:
(a) To collect, hold, and retain trust assets received from a trustor until, in the
judgment of the trustee, disposition of the assets should be made; and the
assets may be retained even though they include an asset in which the
trustee is personally interested;
(b) To receive additions to the assets of the trust;
(c) To continue or participate in the operation of any business or other
enterprise, and to effect incorporation, dissolution, or other change in the
form of the organization of the business or enterprise;
(d) To acquire an undivided interest in a trust asset in which the trustee, in
any trust capacity, holds an undivided interest;
(e) To invest and reinvest trust assets in accordance with the provisions of
the trust or as provided by law;
(f) To deposit trust funds in a bank, including a bank operated by the trustee;
(g) To acquire or dispose of an asset, for cash or on credit, at public or
private sale; and to manage, develop, improve, exchange, partition,
change the character of, or abandon a trust asset or any interest therein;
and to encumber, mortgage, or pledge a trust asset for a term within or
extending beyond the term of the trust, in connection with the exercise of
any power vested in the trustee;
(h) To make ordinary or extraordinary repairs or alterations in buildings or
other structures, to demolish any improvements, to raze existing or erect
new party walls or buildings;
(i) To subdivide, develop, or dedicate land to public use; or to make or
obtain the vacation of plats and adjust boundaries; or to adjust differences
in valuation on exchange or partition by giving or receiving consideration;
or to dedicate easements to public use without consideration;
(j) To enter for any purpose into a lease as lessor or lessee with or without
option to purchase or renew for a term within or extending beyond the
term of the trust;
(k) To enter into a lease or arrangement for exploration and removal of
minerals or other natural resources or enter into a pooling or unitization
agreement;
(l) To grant an option involving disposition of a trust asset, or to take an
option for the acquisition of any asset;
(m) To vote a security, in person or by general or limited proxy;
(n) To pay calls, assessments, and any other sums chargeable or accruing
against or on account of securities;
(o) To sell or exercise stock subscription or conversion rights; to consent,
directly or through a committee or other agent, to the reorganization,
consolidation, merger, dissolution, or liquidation of a corporation or other
business enterprise;
(p) To hold a security in the name of a nominee or in other form without
disclosure of the trust, so that title to the security may pass by delivery,
but the trustee is liable for any act of the nominee in connection with the
stock so held;
(q) To insure the assets of the trust against damage or loss, and the trustee
against liability with respect to third persons;
(r) To borrow money to be repaid from trust assets or otherwise; to advance
money for the protection of the trust, and for all expenses, losses, and
liability sustained in the administration of the trust or because of the
holding or ownership of any trust assets, for which advances with any
interest the trustee has a lien on the trust assets as against the
beneficiary;
(s) To pay or contest any claim; to settle a claim by or against the trust by
compromise, arbitration, or otherwise; and to release, in whole or in part,
any claim belonging to the trust to the extent that the claim is
uncollectible;
(t) To pay taxes, assessments, compensation of the trustee, and other
expenses incurred in the collection, care, administration, and protection of
the trust;
(u) To allocate items of income or expense to either trust income or principal,
as provided by law, including creation of reserves out of income for
depreciation, obsolescence, or amortization, or for depletion in mineral or
timber properties;
(v) To pay any sum distributable to a beneficiary under legal disability,
without liability to the trustee, by paying the sum to the beneficiary or by
paying the sum for the use of the beneficiary either to a legal
representative appointed by the court, or if none, to a relative;
(w) To effect distribution of property and money in divided or undivided
interests and to adjust resulting differences in valuation;
(x) To employ persons, including attorneys, auditors, investment advisors, or
agents to advise or assist the trustee in the performance of his
administrative duties; to act without independent investigation upon their
recommendations; and instead of acting personally, to employ one (1) or
more agents to perform any act of administration, whether or not
discretionary;
(y) To prosecute or defend actions, claims, or proceedings for the protection
of trust assets and of the trustee in the performance of his duties;
(z) To execute and deliver all instruments which will accomplish or facilitate
the exercise of the powers vested in the trustee; and
(aa) To take such actions as are necessary to cause gains from the sale or
exchange of trust assets, as determined for federal income tax purposes,
to be taxed for federal income tax purposes as a part of a distribution of
income, including the power to allocate such gains to income for the
purpose of making discretionary distributions and to allocate such gains to
income which has been increased by an adjustment from principal to
income pursuant to KRS 386.454(2), to a unitrust distribution, or to a
distribution of principal to a beneficiary.
Effective:July 12, 2012
History: Amended 2012 Ky. Acts ch. 59, sec. 5, effective July 12, 2012. -- Created
1976 Ky. Acts ch. 218, sec. 46.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.