HB 155 — AN ACT relating to property and trusts.

UNOFFICIAL COPY 20 RS BRHB 1002155/GA AN ACT relating to property and trusts.

(a) Expressly declares that the trust is a Kentucky community property trust Page 1 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA that meets the requirements of Sections 1 to 3 of this Act;

(3) Either spouse may amend a community property trust regarding the disposition Page 2 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA of that spouse's one-half (1/2) share of the community property in the event of a spouse's death.

Unless provided otherwise in the trust agreement, the trustee shall have the power to distribute assets of the trust in divided or undivided Page 3 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA interests and to adjust resulting differences in valuation.

(d) Exclude employee pension contributions picked up as provided for in KRS 6.505, 16.545, 21.360, 61.523, 61.560, 65.155, 67A.320, 67A.510, 78.610, and 161.540 upon a ruling by the Internal Revenue Service or the federal courts that these contributions shall not be included as gross income until such Page 4 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA time as the contributions are distributed or made available to the employee;

"Pension plans, profit-sharing plans, retirement plans, or employee Page 5 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA savings plans" means any trust or other entity created or organized under a written retirement plan and forming part of a stock bonus, pension, or profit-sharing plan of a public or private employer for the exclusive benefit of employees or their beneficiaries and includes plans qualified or unqualified under Section 401 of the Internal Revenue Code and individual retirement accounts as defined in Section 408 of the Internal Revenue Code;

Exclude all income from all sources for members of the Armed Forces who are on active duty and who are killed in the line of duty, for the year Page 6 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA during which the death occurred and the year prior to the year during which the death occurred.

(f) Any deduction allowed by the Internal Revenue Code for amounts allowable under KRS 140.090(1)(h) in calculating the value of the distributive shares of Page 7 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA the estate of a decedent, unless there is filed with the income return a statement that the deduction has not been claimed under KRS 140.090(1)(h);

and Page 8 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA (c) "Second trust" means a trust established under an irrevocable trust instrument, the current beneficiaries of which are one (1) or more of the current beneficiaries of the original trust.

(d) If any contribution to the original trust qualified for a marital or charitable Page 9 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA deduction for federal income, gift, or estate tax purposes under the Internal Revenue Code, then the second trust shall not contain any provision that, if included in the original trust, would have prevented the original trust from qualifying for the deduction or that would have reduced the amount of the deduction;

and Page 10 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA (i) The second trust may confer a power of appointment upon a beneficiary of the original trust to whom or for the benefit of whom the trustee has the power to distribute principal or income of the original trust.

(a) The exercise of the power to appoint shall be made by an instrument in Page 11 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA writing, signed and acknowledged by the trustee, setting forth the manner of the exercise of the power, including the terms of the second trust and the effective date of the exercise of the power.

Page 12 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA (8) Nothing in this section shall be construed to create or imply a duty of the trustee to exercise the power to distribute principal or income, and no inference of impropriety shall be made as a result of a trustee not exercising the power to appoint principal or income conferred under subsection (2) of this section.

(1) All claims against a decedent's estate which arose before the death of the decedent, Page 13 of 14 BR100200.100HB015510.100 - 1002 - XXXX JacketedGA UNOFFICIAL COPY 20 RS BRHB 1002155/GA excluding claims of the United States, the State of Kentucky and any subdivision thereof, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal basis, if not barred earlier by other statute of limitations or non-claim statutes, are barred against the estate, the personal representative, and the heirs and devisees and non-probate transferees of the decedent, unless presented within the earlier of the following:

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