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Kentucky Probate and Estate Tax Laws

When someone dies, their property is distributed to their heirs. If a court of law helps distribute the deceased's property, the process that the estate goes through is called probate. The main idea behind the probate process is to distribute the estate according to the deceased's wishes while also paying any applicable debts and taxes. The Kentucky probate process basically involves three steps:

  • Step 1: Filing the Petition
    • A petition (along with a filing fee) must be filed with the district court clerk in the county where the decedent lived. If the deceased died with a valid will then the original will must also be submitted.
  • Step 2: Inventory
    • The executor of the will (or personal representative) must file an inventory of the deceased's estate within two months.
  • Step 3: The Final Settlement
    • The executor of the will must file an accounting of all receipts and disbursements that relate to the estate.

After all debts, claims, and taxes owed by the estate are paid off, the remaining estate passes to the deceased's heirs. If the deceased died without a will (or intestate) then the remaining property passes based on Kentucky's succession laws. The chart below provides a quick overview of Kentucky's order of succession.

Code Section

Kentucky Revised Statute section 391.010, 391.030 & 392.020: Descent of Real Estate and Personal Property

Surviving Spouse Share

Generally, if the deceased leaves behind a surviving spouse then the spouse receives half of the deceased's estate. The remaining half of the estate passes according to the order of inheritance below.

Order of Inheritance

The court will look at the following levels of kin in this order until someone is alive to inherit the remaining half of the deceased's estate:
  • Deceased's children and their descendants, if none then
  • Deceased's father and mother, if neither are living then
  • Deceased's brothers and sisters and their descendants, if none then
  • The deceased's husband or wife, if none surviving then
  • Deceased's grandparents, if none then
  • Deceased's aunts and uncles and their descendants, if none then
  • Deceased's great-grandparents, if none then
  • The brothers and sisters of the deceased's grandparents, and so on passing to the nearest lineal ancestors and their descendants

Non-Probate Property

Not all property in Kentucky passes through probate. For example, property that passes at death to a named beneficiary (ex. payable on death accounts, transfer on death accounts, life insurance policies, or IRAs) and property that is held in a joint-tenancy is non-probate property and passes outside of probate. Because probate can be time consuming it may be advisable to avoid the probate process where possible.

Kentucky Doesn't Collect an Estate Tax

Both federal and state governments have the power to impose an estate tax, which is a tax on property transferred at death. Kentucky previously collected an estate tax but hasn't since January 1st, 2005. The estate tax (see Kentucky Revised Statutes section 140.130) is tied to a federal tax credit that became obsolete in 2001 when the federal government passed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), thereby essentially eliminating Kentucky's estate tax.

Additional Resources

Get Legal Help with Your Kentucky Probate and Estate Tax Questions

People typically deal with probate and estate tax issues after a close relative or loved one has passed away. Navigating the complexities of the law while grieving and juggling other responsibilities can be downright nerve-racking. If you have questions related to Kentucky probate and estate taxes, it's best you contact a local tax lawyer who can answer your questions and guide you through the process.

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