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Do you have to go to Probate Court when someone dies?
Probate is the official way that an estate gets settled under the supervision of the court. A person, usually a surviving spouse or an adult child, is appointed by the court if there is no Will, or nominated by the deceased person’s Will. Once appointed, this person, called an Executor or Personal Representative, has the legal authority to gather and value the assets owned by the estate, to pay bills and taxes, and, ultimately, to distribute the assets to the heirs or beneficiaries.
The purpose of probate is to prevent fraud after someone’s death. It’s a way to freeze the estate until a judge determines that the Will is valid, that all the relevant people have been notified, that all the property in the estate has been identified and appraised, that the creditors have been paid and that all the taxes have been paid. Once all of that’s been done, the court issues an Order distributing the property and the estate is closed.
Not all estates must go through probate though. For example, probate is not necessary for small estates. Here are some scenarios in which you are not required to take an estate through probate.
The executor doesn’t have anything to administer
First, under KRS 395.455(2), if the District Court is satisfied that no probate assets will pass through the hands of the personal representative (also known as the executor), the District Court may “dispense with administration.” In cases in which the person who passed away had a Will, then only the Will is probated. That means that the Will becomes public record, but that the assets that belonged to the person who died won’t go through a court process. They will simply be distributed to the person who is designated to receive those assets.
Example: Your uncle is executor of your mother’s estate, but none of your mother’s assets will go through probate because everything was considered “non-probate” property (please see list below). The court can decide to dispense with administration, and file the Will in the public record.
However keep in mind that under this statute, the executor must have absolutely nothing to transfer. This includes any income tax refunds, utility rebates, unclaimed property, etc., in addition to anything we would typically recognize as a decedent’s asset – such as a bank account or car.
“Non-probate” property includes items that pass from the decedent to another person by a mechanism other than through probate. These items can include any of the following:
- Property that the decedent owned as joint tenants with right of survivorship with another person who is still alive, such as joint bank accounts and certain kinds of real estate. In those situations, upon the death of a joint owner, the decedent’s interest in jointly-owned property automatically passes to the surviving joint owner outside of probate.
- Assets such as retirement plans and life insurance policies that have beneficiary designations as part of the property contract. These items are distributed directly to the designated beneficiaries by the retirement plan or insurance company.
- Bank or investment accounts with “pay on death” or “transfer on death” features. These allow the owner to designate beneficiaries to receive these assets upon the account holder’s death, and these are transferred directly to the designated persons outside of probate.
- Properties that have been transferred into a trust prior to the decedent’s death. After the decedent’s death, these are handled and managed as provided for within the trust documents.
Typically, anything not described above is considered “probate” property, and it requires the Court to transfer ownership of these items to third parties.
The estate has a low value
If a person dies with an estate worth $15,000 or less, and the only people inheriting from the estate are a spouse and/or children, the court can dispense with administration. This means the District Court may order that the administration of the estate be dispensed with and assets be transferred to the surviving spouse or his or her designee.
A few notes about this: the $15,000 exemption is the total value of assets in the estate. Therefore this is not a $15,000 exemption for the spouse, a $15,000 exemption for a son, and then a $15,000 exemption for another child. Also, the preferred claims are taken out of the value of the estate before the exemption is applied.
Example: a husband dies leaving everything to his spouse. He has only one asset, which is debt-free, and is titled only in his name: his boat. It’s worth $20,000. His funeral costs are $5,000. That’s a preferred claim, and that $5,000 is subtracted from the value of the $20,000 boat in the estate. The same would be true of any federal or state tax debt or a bill from an attorney or CPA for work related to the estate. All of those items should be paid from the estate, and then the value of the estate is calculated.
If a decedent had created a Living Trust to hold his or her’s largest assets, then that estate will not go through probate unless the assets left outside of the trust add up to more than Kentucky’s small estate limit of $15,000. That, in fact, is why that Living Trust was created, to avoid probate after the death of the trust’s Grantor.
For estates in Kentucky that exceed the small estate’s threshold, and for which there is either no Will, or a Will (but not a Living Trust), probate will be required before an estate can be transferred to the decedent’s heirs or beneficiaries.
If you are unsure whether you will need to go through the Probate process, please reach out to us and we can help connect you with a reputable Estate Law Attorney who can assist.