Request By:
Mr. Edward A. Rothschild, P.S.C.
Washer, Kaplan, Rothschild, Aberson & Miller
725 Marion E. Taylor Building
312 South Fourth Avenue
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Penny R. Warren, Assistant Attorney General
You refer to the provisions of KRS 386.180 which state in part (as amended effective July 15, 1982):
"(1) Trustees of estates may receive for their services as such a commission of six percent (6%) of the income collected by them, payable as the income is collected. They may also receive an annual commission of three-tenths of one percent (.3%) of the fair value of the real and personal estate in the care of the fiduciary, or, at the option of the fiduciary and in lieu of the annual commission on principal, a commission which shall not exceed six percent (6%) of the fair value of the principal distributed, payable at the time the principal is distributed. In the absence of some provision, agreement, or direction to the contrary, the commission on income shall be paid out of the income from the estate, and the commission on principal shall be paid out of the principal of the estate."
You then ask, for a trust in which there are periodic distributions of principal and income, whether a trustee who elects the commission on the fair value of principal distributed is entitled to receive that commission (1) periodically upon each distribution of principal, or (2) at the time the trust is terminated but based upon the total principal, or (3) at the time the trust is terminated but based only upon the amount of principal remaining immediately prior to termination.
KRS 386.180 was considered in First Security National Bank and Trust Company of Lexington v. des Cogents, Ky.App., 563 S.W.2d 476 (1978), at which time the Court noted:
"This is a case of first impression. There is no similar statute in any other state. There are no Kentucky cases interpreting the statute." Id. at 477.
(There have been no subsequent interpretations of the statute.) In the First Security case there was no indication of a distribution of principal prior to termination of the trust. The Court held that the trustee, by not exercising for thirty-three years its right to receive an annual fee on the principal in its care, waived that right and exercised its "statutory option to collect its fee upon termination of the trust."
In our opinion, the Court's holding with regard to the facts before it is not to be construed as limiting the statutory option to the time of termination of the trust. Where no exception is made to the positive terms of a statute, the presumption is that none are intended, and it is not the province of a court to introduce an exception by construction. Hawley Coal Company v. Bruce, 252 Ky. 455, 67 S.W.2d 703 (1934); Commonwealth v. Boarman, Ky.App., 610 S.W.2d 922 (1980). The positive language of the statute states a trustee may choose "a commission which shall not exceed six percent (6%) of the fair value of the principal distributed, payable at the time the principal is distributed. " (Emphasis added.) See also 18 A.L.R.2d 1379.
Thus, in our opinion, a trustee who elects the statutory option to commission upon distribution of principal is entitled to his commission at the time of each distribution, if more than one, but the commission is based upon only the portion distributed at that time.