Revocable Living Trust Plan for Couples in Kentucky

A single joint trust

Both spouses are grantors and co-trustees of one trust holding everything. It is simpler to administer, easier to fund because there is only one entity to retitle assets into, and it suits a long first marriage where all the children are shared and both spouses want the same result. The trade-off is flexibility: after the first death the survivor generally retains broad power over the whole trust, including the ability to change who ultimately receives it.

What the Couples Trust Plan Includes

The trust or trusts

Drafted under KRS Chapter 386B in the structure we select together, naming both spouses as co-trustees, the survivor as sole trustee, and your successor trustees and beneficiaries with the distribution terms you choose.

Two pour-over wills

One for each spouse. Each catches assets never transferred into the trust and directs them there, and each nominates guardians for minor children under KRS 387.040.

Deed preparation and recording

Your Kentucky real property is deeded into the trust and recorded in the county where it sits, satisfying KRS 382.130 and the consideration certificate required by KRS 382.135.

Full funding assistance

Account-by-account retitling and beneficiary updates for both spouses, done with you, with a written record of what went into the trust and what stayed out and why.

Certification of trust

A short document banks and title companies accept as proof of the trust and the trustees authority, without disclosing your beneficiaries or terms.

Powers of attorney and advance directives for each spouse

Marriage confers no automatic legal authority. Each spouse needs a durable financial power of attorney under KRS Chapter 457 and Kentucky advance directives under KRS 311.621 to 311.643.

A blended family

The strongest case for separate trusts. Leaving everything outright to the survivor means your children inherit only what remains, on terms the survivor sets later, possibly after a remarriage. A trust that becomes irrevocable at the first death provides for your spouse for life and still guarantees where the remainder goes.

One spouse facing a decline in capacity

A successor or co-trustee steps in with no court involvement. The alternative, where a power of attorney is refused or inadequate, is a guardianship proceeding under KRS Chapter 387, which brings a petition, notice, a hearing and continuing court supervision.

What a Couples Trust Will Not Do

A revocable trust protects nothing from creditors or long-term care costs, for either spouse. You keep the power to revoke it, so the assets stay yours in the eyes of the law and countable for Medicaid. KRS 386B.5-020 states plainly that a self-settled spendthrift interest remains subject to legal process.

It also does not defeat Kentucky Medicaid estate recovery. Kentucky adopted the expanded definition of estate in 907 KAR 1:585, which reaches assets passing through joint tenancy, life estates and living trusts, not merely probate property. The widely repeated claim that a living trust escapes estate recovery is not correct in Kentucky.

And it saves no tax on its own. The federal estate tax exemption is fifteen million dollars per person for 2026, thirty million for a couple with portability, and the scheduled reduction was repealed, so it is now permanent and indexed. Kentucky has had no estate tax since January 1, 2005. Kentucky inheritance tax still applies to Class B and Class C beneficiaries whether or not a trust is used, though a surviving spouse and children are Class A and fully exempt.

If protecting the house from nursing home costs is the actual goal, that is Medicaid planning with an irrevocable trust, and the timing is what determines whether it works.

• Either spouse remarries, or a child divorces
• A child or grandchild is born, adopted, or develops a disability
• You buy or sell real property, in Kentucky or elsewhere
• You refinance, which can quietly move a house back out of the trust
• A named trustee or guardian dies, moves away, or becomes unsuitable
• Either spouse receives a diagnosis affecting capacity or care needs
• Kentucky changes its inheritance law, as it did on July 15, 2026

Common Mistakes Couples Make With Trusts

Funding only one spouse assets

We see trusts where the house went in and the wife accounts never did, or the reverse. Half-funded means half-probated, and the surviving spouse discovers it at the worst possible moment.

Using a joint trust in a blended family

The survivor generally keeps power to amend the whole trust. Children from the first marriage can be written out entirely, and often are, without anyone acting in bad faith. Separate trusts prevent this.

Leaving the deed out of the plan

If the deed lacks survivorship language, KRS 381.120 sends the deceased spouse half to their heirs rather than to the survivor. If the house is meant to be in the trust, a new deed has to be prepared and recorded.

Treating the trust as nursing home protection

Revocable means countable. Couples who believe their trust protects the house from long-term care costs frequently learn otherwise during a Medicaid application, when it is too late to plan.

Forgetting beneficiary designations

Retirement accounts and life insurance pass by designation, not by the trust. Naming the trust as beneficiary of an IRA has real income tax consequences and should be a considered decision.

Never revisiting it

A trust drafted before July 15, 2026 predates a substantial rewrite of Kentucky spousal rights. Plans made before a remarriage, a birth, or a move deserve the same second look.