What is Probate Law?
As if dealing with the death of a loved one isn’t stressful enough, there are often legal and financial obligations that family members must deal with during these difficult times. When a person dies, his or her property is usually distributed to surviving heirs. Depending on how the deceased (the “decedent”) planned any owned estate prior to death, there may or may not be probate involved.
What is Probate?
In the most simple terms, probate is the process that the courts take to conclude all of the legal and financial matters related to a death. Through probate, the courts will distribute a deceased’s estate. Provided there is a will, the process might be simple enough. Many people die without leaving a will, which can complicate matters and require a lengthier settlement process.
The purpose of probate is to prevent fraud after a person dies. The probate process freezes assets until the court can confirm that the estate is being distributed to the proper parties. How this process works varies by state, and Kentucky has its own laws and procedures related to probate.
How Probate Works in Kentucky
Kentucky’s rules for probate can be found in the Kentucky Revised Statutes, chapters 394-396. There are essentially three steps to probate in this state. In the first step, the probate process begins when the decedent’s County of residence files a petition. What happens next depends on whether or not there was a will in place at the time of death.
A valid will in Kentucky must be in writing, signed by the decedent, and submitted with the probate petition. However, if there is no will, the decedent is said to have died “intestate.” In that case the court sets a hearing, and then they will appoint an executor or administrator that will handle the estate through this process.
The second step in a Kentucky probate is the inventory. The courts allow two months after an administrator is appointed to create and file an inventory. This accounting will include all the assets of the estate, with values at the time of the decedent’s death.
The final step in Kentucky’s probate process is the settlement. Before assets can be distributed, the estate also pays off all of the decedent’s valid debts, including taxes. As soon as those debts have been paid, and the executor or administrator’s expenses are covered, the remaining assets in the estate are distributed to the estate’s beneficiaries. Once all of this is complete, the court will close probate.
Avoiding the Probate Process in Kentucky
Probate can be a lengthy and stressful process for survivors who have just suffered a loss and may be facing some financial challenges. Most probate cases stay open for a minimum of six months, so avoiding this process is the most desirable scenario.
The good news is that many estates in Kentucky are not subject to probate at all. A “small estate,” which is an estate with a value of $15,000 or less, would not have to go through probate even if there is no will. You can also avoid the probate process by structuring certain assets to automatically transfer to a beneficiary upon your death. Some of the ways to do this include:
- Living Trusts. A living trust allows you to put just about any asset – bank accounts, real estate, vehicles – into a trust that will transfer ownership to the trustee upon your death.
- Joint Tenancy. In Kentucky, if you own property with another person and it includes “right of survivorship,” the surviving owner will hold onto that property if the other passes away. No probate is necessary in these cases.
- Payable on Death. In Kentucky, you can add a “payable-on-death” (POD) designation to your bank accounts so that the money and control of those accounts will automatically transfer to a beneficiary at the time of your death.
- Transfer on Death. Kentucky allows you to “transfer-on-death” (TOD) the ownership of brokerage and retirement accounts upon death, but not the ownership of real estate or vehicles.
Whether you have acquired assets and wish to avoid probate or are dealing with the loss of a loved one and need help with this challenging process, the Kentucky estate planning attorneys at the Law Office of Lanna Martin Kilgore, PLLC can help. Contact our Bowling Green office now at (270) 846-3700 or online to schedule a consultation to discuss your options.