{"data":{"id":"us-ky/krs-386.605","jurisdiction":"us-ky","citation":"KRS 386.605","heading":"Restrictions on actions, remedies, and claims.  (Effective July 15, 2026)","body":"(1) Notwithstanding any law to the contrary, including KRS 386B.5 -020(7)(a), no\naction of any kind, including but not limited to an action to enforce a judgment\nentered by a court or other body having adjudicative authority, shall be brought at\nlaw or in equity for an attachment or other provisional remedy against property that\nis the subject of a qualified disposition to a qualified trust or for the avoidance of a\nqualified disposition to a qualified trust, unless:\n(a) The action is brought pursuant to the Kentucky Uniform Voidable\nTransactions Act, KRS 378A.005 to 378A.140; and\n(b) The qualified disposition was made with actual intent to defraud a creditor\nwhose claim arose after a qualified disposition.\n(2) (a) Notwithstanding KRS 378A.090, a creditor's claim under subsection (1) of\nthis section shall be extinguished:\n1. If the person is a creditor when the qualified disposition to a qualified\ntrust is made, unless the acti on is commenced within the later of two (2)\nyears after the qualified disposition is made or six (6) months after the\nperson discovers or reasonably should have discovered the qualified\ndisposition; or\n2. If the person becomes a creditor after a qualified disposition to a\nqualified trust is made, unless the action is commenced within two (2)\nyears after the qualified disposition is made.\n(b) Any valid lien attaching to property before a disposition of that property to a\ntrustee of a qualified trust shall su rvive the disposition, and the trustee shall\ntake title to the property subject to the valid lien and subject to any\nagreements that created or perfected the valid lien. This chapter shall not be\nconstrued to authorize any disposition that is prohibited by  the terms of any\nagreements, notes, guaranties, mortgages, indentures, instruments,\nundertakings, or other documents. In the event of any conflict between this\nparagraph and any other provision of this chapter, this paragraph shall control.\n(c) If paragraph (a) of this subsection applies:\n1. A person shall be deemed to have discovered the existence of a qualified\ndisposition to a qualified trust at the time any public record is made of\nany transfer of property relative to the qualified dispositio n, including\nbut not limited to the conveyance of real property that is recorded in the\noffice of the county clerk in which the property is located, the filing of a\nfinancing statement under Article 9 of KRS Chapter 355, or the\nequivalent recording or fili ng of either with the appropriate person or\nofficial under the laws of a jurisdiction other than this Commonwealth;\nand\n2. No creditor shall bring an action with respect to property that is the\nsubject of a qualified disposition unless that creditor proves  by clear and\nconvincing evidence that the settlor's transfer of the property was made\nwith intent to defraud that specific creditor.\n(3) For purposes of KRS 386.601 to 386.619, a qualified disposition that is made by\nmeans of a disposition by a transferor who is a trustee shall be deemed to have been\nmade as of the time the property that is the subject of the qualified disposition was\noriginally transferred to the transferor acting in the capacity of trustee, or any\npredecessor trustee, in a form that meet s the requirements of KRS 386.601(11)(a)\nand (c).\n(4) Notwithstanding any law to the contrary:\n(a) A creditor, including a creditor whose claim arose before or after a qualified\ndisposition, or any other person shall have only the rights with respect to a\nqualified disposition that are provided in this section and KRS 386.609;\n(b) Neither a creditor nor any other person shall have any claim or cause of action\nagainst the trustee, an advisor of a qualified trust, or any person involved in\nthe counseling, dra fting, preparation, execution, or funding of a qualified\ntrust; and\n(c) For purposes of this subsection, counseling, drafting, preparation, execution,\nor funding of a qualified trust includes the counseling, drafting, preparation,\nexecution, or funding of a limited partnership or limited liability company if\ninterests in the limited partnership or limited liability company are\nsubsequently transferred to the qualified trust.\n(5) Notwithstanding any law to the contrary, no action of any kind, including but n ot\nlimited to an action to enforce a judgment entered by a court or other body having\nadjudicative authority, shall be brought at law or in equity against a trustee or an\nadvisor of a qualified trust, or against any person involved in the counseling,\ndrafting, preparation, execution, or funding of a qualified trust if, as of the date the\naction is brought, an action by a creditor with respect to the qualified trust would be\nbarred under this section.\n(6) In circumstances where more than one (1) qualified di sposition is made by means\nof the same qualified trust:\n(a) The making of a subsequent qualified disposition shall be disregarded in\ndetermining whether a creditor's claim with respect to a prior qualified\ndisposition is extinguished as provided in subsection (2) of this section; and\n(b) Any distribution to a beneficiary shall be deemed to have been made from the\nlatest qualified disposition.\n(7) (a) If, in any action brought against a qualified trust, a court takes any action\nwhereby the court declines to apply the law of this Commonwealth in\ndetermining the effect of a spendthrift provision of the trust:\n1. The trustee shall immediately, upon the court's action and without the\nfurther order of any court, cease in all respects to be trustee and a\nsuccessor trustee shall succeed as trustee in accordance with the terms of\nthe trust; or\n2. If the trust does not provide for a successor trustee and the trust would\notherwise be without a trustee, a court of this Commonwealth, upon the\napplication of any beneficia ry of the trust, shall appoint a successor\ntrustee upon the terms and conditions it determines to be consistent with\nthe purposes of the trust and KRS 386.601 to 386.619.\n(b) Upon the trustee's ceasing to be trustee, the trustee shall have no power or\nauthority other than to convey the trust property to the successor trustee\nnamed in the trust in accordance with this subsection.\n(8) A qualified trust shall be subject to this section whether or not the transferor retains\nany or all of the powers and rights d escribed in KRS 386.617 or serves as an\ninvestment advisor pursuant to KRS 386.613.\n(9) (a) Notwithstanding subsection (1) or (2) of this section, the limitations on\nactions by creditors in law or equity shall not apply, and such creditors' claims\nshall no t be extinguished, if the transferor is indebted on account of an\nagreement, judgment, or order of a court for the payment of any of the\nfollowing:\n1. Past due child support;\n2. Past due temporary or permanent maintenance to a spouse or former\nspouse;\n3. A written agreement, judgment, or order of a court for division of\nmarital property of a spouse or former spouse, but only to the extent of\nthe debt, legally mandated interest on the debt, and the reasonable cost\nof collection of the debt; or\n4. A valid note, mortgage, security interest, or debt instrument in existence\nprior to the qualified disposition.\n(b) 1. A claim under this subsection shall be asserted against a trustee only:\na. Upon a final, nonappealable determination of a Kentucky court or\na fully d omesticated, final, nonappealable order of a court of\nanother state as defined by KRS 386B.1 -010 that the debt is past\ndue; and\nb. After the court has determined that the claimant has made\nreasonable attempts to collect the debt from any other sources of\nthe transferor or that such attempts would be futile.\n2. Nothing in this paragraph shall be construed to prohibit the court from\nmaking the findings required in subparagraph 1. of this paragraph in the\nsame proceeding and order.\n(c) This subsection shall not apply to any claim for forced heirship, legitime, or\nelective share.","path":["KRS Chapter 386"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57724","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:17Z","sha256":"d226c7d92a9ea3ed41f2b2d38d95ef6fc1d5ef67298f75331a6a190135c553a4","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386.603","next":"us-ky/krs-386.607"},"notice":"GroundRules: Original legal text. Not legal advice."}