KRS 386.120: Deposits in fiduciary's personal account.

If a fiduciary makes a deposit in a bank or trust company to his personal credit of checks

drawn by him upon an account in his own name as fiduciary, or of checks payable to him

as fiduciary, or of checks drawn by him upon an account in the name of his principal if he

is empowered to draw checks thereon, or of checks payable to his principal and endorsed

by him if he is empowered to endorse them, or if he otherwise makes a deposit of funds

held by him as fiduciary, the bank or trust company receiving the de posit is not bound to

inquire whether the fiduciary is committing thereby a breach of his obligation as

fiduciary. The bank or trust company may pay the amount of the deposit or any part

thereof upon the personal check of the fiduciary without being liable to the principal,

unless it receives the deposit or pays the check with actual knowledge that the fiduciary is

committing a breach of his obligation as fiduciary in making the deposit or in drawing the

check or with knowledge of such facts that its action in receiving the deposit or paying

the check amounts to bad faith.