Here’s What You Need to Know About Avoiding Probate in Kentucky
The probate process can be long and complicated. Here’s everything you need to know about avoiding Kentucky probate.
Probate refers to the administration of a deceased person’s estate. Kentucky probate court oversees the probate process, but the process can often be drawn-out and expensive. If you want to avoid Kentucky probate, there are several methods you can take.
Why Avoid Kentucky Probate?
People typically want to avoid probate because of the potential length and cost of the probate process. Kentucky probate involves distributing property, following the terms of the deceased person’s will, following up on debt with creditors, and more.
The executor, who is responsible for carrying out the terms of the will, has to:
- Notify heirs and creditors of the death and terms of the will.
- Publish a notification in the local newspaper.
- Take inventory of the estate.
- Conduct appraisals on anything valuable, which may require a third party.
- File tax returns and pay any owed taxes.
- Check for debts.
- And distribute the remaining assets to the heirs.
The costs of probate include hiring a probate lawyer, appointing an executor, and fees for filing forms and petitions. Probate courts usually pay executors out of the estate assets. Probate must also stay open for at least six months. Most probate situations take a year or longer to finish.
Related: How to Avoid Probate
In Kentucky, there are five ways to avoid probate:
1. Create a Living Trust
To make a living trust, you make a trust document in which you name someone to take over as the trustee after your passing. You will specify beneficiaries and other necessary information in the trust document. The trust document is similar to a will.
In a living trust, you must transfer ownership of your property from yourself to yourself as the trustee of the trust. Transferring ownership of your property will allow your property to be controlled by the terms of the trust.
Under a Kentucky living trust, the successor trustee you name will be able to transfer your estate to the trust beneficiaries without needing a probate court to oversee this process. If you make a living trust, virtually any asset you own can avoid probate.
2. Joint Ownership
Joint ownership refers to the property you own jointly with another individual. Joint ownership may include the “right to survivorship,” which means if you die, the other owner automatically becomes the sole owner of the property. The right to survivorship does not require probate, but it does require some paperwork demonstrating the surviving wonder holds the necessary title for the property.
Kentucky law stipulates two forms of joint ownership:
Joint tenancy: The other owner automatically possesses the property without probate. Joint tenancy works the best when couples acquire real estate, bank accounts, or other valuable property together. Each owner must own an equal share.
Tenancy by the entirety: Like joint tenancy, but only for married couples and real estate.
3. Payable-on-death Bank Account Designation
When you add a payable-on-death (POD) designation to your bank account, you name a POD beneficiary who can claim the money in your bank account directly from the bank when you pass. While you are still alive, you will still maintain full control over all the money in the account, and the POD beneficiary has no rights to the money.
No probate is required for your POD beneficiary to claim your money.
4. Transfer-on-death Security Registration
Filling out a transfer-on-death (TOD) form allows you to make your stocks and deaths transferable upon death. You will name a beneficiary who will automatically inherit your securities when you die without probate. Beneficiaries will deal directly with the brokerage company to transfer the account.
5. Simplified Probate Procedure
A simplified probate procedure does not avoid probate, but it will make the process easier. If your estate is $30,000, you may qualify for a simplified probate procedure.
FAQs About Avoiding Kentucky Probate
Can I register another property for transfer-on-death?
No, Kentucky prohibits TOD real estate deeds and vehicle registrations.