Jarvis v. National City, 410 S.W.3d 148

Three testamentary trusts are at issue: two "Jarvis" trusts (created 1992, 1998) with National City as trustee and no compensation clause, and the Caperton trust (will executed 1932; trustee predecessor appointed 1944) with PNC as trustee and no compensation clause.
Under former KRS 386.180 trustees had to elect either an annual principal fee or a termination (distribution) fee and statutory maxima applied; income fees were capped as well and courts could review reasonableness.
In 2008 the Kentucky General Assembly repealed KRS 386.180 (HB 615), removing the statutory fee structure and caps for testamentary trustees.
Trustees filed a declaratory-judgment action seeking confirmation they may charge reasonable fees under current law for trusts predating the repeal; beneficiaries (Jarvis, Caperton) argued trustees remain bound to prior statutory election and repeal cannot be applied retroactively.
Trial court and Court of Appeals ruled for trustees; the Kentucky Supreme Court granted review and affirmed: repeal was complete and trustees may charge reasonable fees going forward, subject to fiduciary duties and court review.

Issue	Beneficiaries' Argument	Trustees' Argument	Held
Effect of repeal of KRS 386.180 on pre-2008 testamentary trusts	Repeal should not change compensation mode for existing trusts; trustees are bound by prior statutory election	Repeal removed statutory restrictions; trustees may seek reasonable fees under the law in effect when compensation is claimed	Repeal applies; trustees may collect reasonable fees going forward for trusts created before 2008
Retroactivity / vested rights	Applying repeal to existing trusts is retroactive and impairs beneficiaries' vested rights and expectations	Legislature may change statutory scheme; beneficiaries had only an expectation, not vested right; courts will police reasonableness	No unconstitutional retroactivity; beneficiaries did not have vested rights that preclude application of repeal
Need to join contingent remaindermen	Remaindermen have potentially different interests and must be joined	Remaindermen are contingent and adequately virtually represented by life beneficiaries	Remaindermen were not necessary parties; virtual representation is sufficient
Judicial review / justiciability of declaratory action	(Implicit) Action may be advisory	Trustees sought a present declaration; controversy is real because parties disagree on compensation method	Case presents a justiciable controversy; declaratory relief appropriate

Goldsmith v. Allied Bldg. Components, Inc., 833 S.W.2d 378 (Ky. 1992) (summary-judgment standard and de novo review principles)
Veith v. City of Louisville, 355 S.W.2d 295 (Ky. 1962) (court will not render advisory opinions; justiciability principles)
First Sec. Nat’l Bank & Trust Co. v. des Cognets, 563 S.W.2d 476 (Ky. Ct. App. 1978) (interpreting application of trustee-compensation statute to trusts predating or operating under the statute)
MPM Fin. Group, Inc. v. Morton, 289 S.W.3d 193 (Ky. 2009) (statutory construction principles)
Humphrey v. McClain, 292 S.W. 794 (Ky. 1927) (trustee entitled to reasonable compensation where instrument is silent)