Revocable Living Trust Plan for Individuals in Kentucky

It does not protect assets from creditors or nursing home costs

Because you retain the power to revoke the trust and take everything back, the law treats those assets as still yours. They remain available to your creditors and countable for Medicaid eligibility. KRS 386B.5-020 is explicit that a self-settled spendthrift interest is subject to alienation by operation of law or legal process. If protecting the house from long-term care costs is your goal, the tool is an irrevocable trust and the timing matters enormously. See trusts and asset protection trusts.

What the Individual Trust Plan Includes

The revocable living trust

Drafted under KRS Chapter 386B, naming you as initial trustee, your successor trustees in order, and your beneficiaries, with the distribution terms you choose, including trusts that hold a beneficiary share to an age rather than paying it outright.

A pour-over will

You still need a will. It catches anything never transferred into the trust and directs it there, and it is the only place you can nominate a guardian for a minor child under KRS 387.040.

Deed preparation and recording

Kentucky real property is moved into the trust by a new deed, prepared and recorded in the county where the land sits, meeting the requirements of KRS 382.130 and the consideration certificate in KRS 382.135.

Funding instructions and assistance

Written, asset-by-asset instructions for retitling accounts and updating beneficiary designations, and we do the work with you rather than hand you a checklist.

Certification of trust

A short document that proves the trust exists and identifies the trustee powers without exposing your beneficiaries or terms. Banks and title companies ask for this, and it protects your privacy.

Powers of attorney and advance directives

A durable financial power of attorney under KRS Chapter 457 covers assets outside the trust, and Kentucky advance directives under KRS 311.621 to 311.643 cover medical decisions the trust cannot address.

You own real property in more than one state

This is the clearest case. Land is governed by the law of the state where it sits, so out-of-state property means a second ancillary probate in that state, with separate counsel and separate fees. A trust holding both parcels avoids both proceedings.

You are planning for your own incapacity

A successor trustee takes over the moment you cannot manage your affairs, with no court involvement. The alternative, if a power of attorney is refused or insufficient, is a guardianship proceeding under KRS Chapter 387, which involves a petition, a hearing and ongoing court supervision.

Trust or Will? How We Decide With You

The honest comparison is not trust versus will. A trust plan includes a will, so the real question is whether the additional cost and the funding work buy you enough to be worth it.

Kentucky probate is not the catastrophe it is in some states, but it is not trivial either. A personal representative files an inventory within two months of qualifying under KRS 395.250, creditors have six months from appointment to bring claims under KRS 396.011, and a formal settlement cannot be made earlier than six months after appointment under KRS 395.190. A straightforward estate commonly takes eight months to a year.

Where the estate is small and simple, Kentucky offers a shortcut. If the personal estate is thirty thousand dollars or less after preferred claims, the court can transfer assets without a full administration under KRS 395.455, using the exemption in KRS 391.030. That is a court petition, not a form handed to a bank, and it does not apply to real property.

We look at what you own, where it sits, how it is titled and who is going to be handling it, and give you a recommendation with the reasoning behind it.

• You own real property outside Kentucky
• You want your estate kept out of the public record
• You want a seamless handover if you lose capacity
• Your beneficiaries include a minor, or someone who should not receive a lump sum
• Your estate is large enough that probate costs outweigh the trust cost
• You anticipate disagreement among family members
• You own rental property, a farm, or business interests

Common Mistakes With Revocable Trusts

Never funding it

By far the most common. The trust is signed, the binder goes in a drawer, and the deed and accounts are never changed. At death everything passes under the pour-over will, through probate, having paid for a trust to avoid exactly that.

Believing it protects assets from a nursing home

It does not, because you kept the right to revoke it. KRS 386B.5-020 leaves a self-settled interest reachable. Long-term care protection requires an irrevocable trust and lead time.

Assuming it defeats Kentucky estate recovery

907 KAR 1:585 expressly reaches assets passing through a living trust. This is a point on which Kentucky differs from the generic advice, and it needs to be understood before the plan is built.

Retitling retirement accounts into the trust

Transferring an IRA or 401k into a revocable trust can be treated as a full distribution and trigger income tax on the entire balance. These pass by beneficiary designation, and naming the trust should be a deliberate choice.

Buying new property in your own name afterward

Funding is not a one-time event. Property bought after the trust is signed has to be titled into it, and a refinance will sometimes quietly move a house back out.

Naming a successor trustee who cannot do the job

Trusteeship is real work: accounting, tax filings, dealing with beneficiaries. We talk about whether the person you have in mind can actually manage it, and about co-trustees or a professional trustee where they cannot.