{"data":{"id":"us-ky/krs-386a.1-040","jurisdiction":"us-ky","citation":"KRS 386A.1-040","heading":"Mandatory rules.","body":"(1) Except as otherwise provided in subsection (2) of this section, relations among the\nstatutory trust, the beneficial owners, and the trustees are governed by the governing\ninstrument. To the extent the governing instrument does not otherwise provide,\nKRS 38 6A.1-010 to 386A.10 -040 govern relations among the statutory trust, the\nbeneficial owners, and the trustees.\n(2) The governing instrument may not:\n(a) Eliminate the obligation of good faith and fair dealing in the governing\ninstrument, but it may prescribe the standards by which the performance of the\nobligations are to be measured provided the standards are not manifestly\nunreasonable;\n(b) Vary KRS 386A.1-050(3), (5), or (7);\n(c) Vary the requirements of Subchapter 2 of this chapter;\n(d) Vary KRS 386A.3-010;\n(e) Negate KRS 386A.3-030(2);\n(f) Except as provided therein, vary the provisions pertaining to series trusts in\nSubchapter 4 of this chapter;\n(g) Vary KRS 386A.5-010(2);\n(h) Vary KRS 386A.5-020(2);\n(i) Vary KRS 386A.5-030(3);\n(j) Vary the standards of conduct for trustees under KRS 386A.5 -050, but the\ngoverning instrument may prescribe the standards by which good faith, best\ninterests of the statutory trust, and care that a person in a similar position\nwould reasonably believe appropriate under similar circumstances are\ndetermined, if the standards are not manifestly unreasonable;\n(k) Vary KRS 386A.5 -070, but the governing instrument may provide a\nmechanism for prior approval, upon full disclosure, of a transaction with a\ncovered party by at least two (2 ) disinterested trustees or the disinterested\nbeneficial owners;\n(l) Restrict the right of a trustee to information under KRS 386A.5 -080, but the\ngoverning instrument may prescribe the standards for assessing whether\ninformation is reasonably related to th e trustee's discharge of the trustee's\nduties as trustee, if the standards are not manifestly unreasonable;\n(m) Vary KRS 386A.5-100(2);\n(n) Vary KRS 386A.5-110(3) and (4);\n(o) Vary KRS 386A.6-010(4);\n(p) Restrict the right of a judgment creditor of a beneficial owner to seek a\ncharging order under KRS 386A.6-060;\n(q) Provide indemnification, advancement of expenses, or exoneration for\nconduct involving bad faith, willful misconduct, self -dealing, reckless\nindifference, approval or consent to a distribution violating KRS 386A.6 -080,\nor a transaction from which the trustee derived an improper personal benefit\nor in which the trustee's personal financial interest was in conflict with those\nof the statutory trust;\n(r) Permit a trustee to follow a direction that is contrary to the terms of the\ngoverning instrument or would constitute a breach of fiduciary duty by the\ntrustee;\n(s) Vary KRS 386A.6-080(3), (4), (6), or (7);\n(t) Vary KRS 386A.6-090;\n(u) Restrict the right of a beneficial owner to information under KRS 386A.6-100,\nbut the governing instrument may prescribe the standards for assessing\nwhether information is reasonably related to the beneficial owner's interest, if\nthe standards are not manifestly unreasonable;\n(v) Restrict the right of a beneficial owner to bring an action under KRS 386A.6 -\n110;\n(w) Vary Subchapter 7 of this chapter;\n(x) Except to the extent expressly provided therein, vary Subchapter 8 of this\nchapter;\n(y) Vary Subchapter 9 of this chapter; or\n(z) Vary Subchapter 10 of this chapter.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40346","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:17Z","sha256":"78cc52c2b543862cedd5170c7c3f388a5986426dd7b5fbfe9f48c662b9595a58","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386a.1-030","next":"us-ky/krs-386a.1-050"},"notice":"GroundRules: Original legal text. Not legal advice."}