KY Bar Wills Trusts and Estates 3

Question 1

What are the essential elements to create a valid private express trust in Kentucky?

Accepted Answer

Intent, trust property, ascertainable beneficiaries, and a lawful purpose

Answer

Kentucky's Uniform Trust Code (KRS 386B.4-020) requires settlor capacity and intent, definite beneficiaries, trustee duties, and a valid purpose.

Question 2

Under the Kentucky Uniform Trust Code, a trust is presumed revocable or irrevocable if the instrument is silent?

Accepted Answer

Revocable

Answer

KRS 386B.6-020 provides that a settlor may revoke or amend a trust unless the terms expressly state it is irrevocable.

Question 3

A Kentucky trust instrument contains a spendthrift clause. Which creditor can still reach the beneficiary's interest?

Accepted Answer

A claimant with a judgment for child support or maintenance

Answer

Under KRS 386B.5-030, spendthrift protection does not bar claims for child support, spousal maintenance, or certain governmental claims.

Question 4

A trustee in Kentucky invests the entire trust corpus in a single speculative stock. Which duty has the trustee most likely breached?

Accepted Answer

The duty of prudent investment, including diversification

Answer

The prudent investor rule requires trustees to diversify investments absent special circumstances.

Question 5

A trustee buys trust property for herself at fair market value without court approval or beneficiary consent. Under Kentucky law, this transaction is:

Accepted Answer

Voidable by the beneficiaries as self-dealing regardless of fairness

Answer

Self-dealing violates the duty of loyalty and is voidable under the no-further-inquiry rule even if the price was fair.

(KY Bar) Kentucky Bar Exam Practice Test

(KY Bar) Kentucky Bar Exam Practice Test

KY Bar Wills Trusts and Estates 3