The days, weeks, and months following the death of a loved one are difficult for family and friends. It is difficult to focus on everyday activities. The last thing family members want to think about are activities related to settling the decedent’s estate. However, thinking about the legal requirements is necessary as before your loved one’s property can be legally transferred, the estate must go through probate. Probate is a legal process during which a decedent’s estate is managed, debts are paid, and assets distributed. In Kentucky, the District Court (probate court) has jurisdiction over probate matters.
Probate in Kentucky is initiated by a petition being filed with the District Court clerk in the county where the decedent resided at the time of their death. If the decedent has a will, the will must also be submitted. The court will officially appoint the executor, empowering them to act on behalf of the estate and move forward with managing the estate and eventually distributing its assets. The major steps that the executor is responsible for include:
- Identifying estate assets. All property that is subject to probate must be identified and secured. Not all of the decedent’s assets are probate property. Some assets such as joint bank accounts, 401(k) plans, and life insurance proceeds are not probate property. Assets that are not probate property transfer to the new owner right away outside of the probate process.
- Appraising assets. The executor must determine the value of the decedent’s estate at the time of the decedent’s death. Depending on the type of assets, the executor may need to get them professionally appraised. With other assets such as financial accounts, reviewing the account statement would provide its value.
- Paying debts. The executor must settle all of the estate’s financial obligations including creditor claims, expenses of administration, and taxes. These expenses must be paid out of estate assets. If there is not enough money to pay everything, the executor must decide what can be paid based on an order of priority set forth in the statute.
- Distributing assets. The executor is responsible for transferring ownership of estate assets to beneficiaries or heirs. This is one of the last steps in the probate administration process. Note that if debts and expenses exceed assets, there will not be anything left in the probate estate to distribute, regardless of what the will says.
Problems During Probate
While there are definite steps that that the executor must follow, there also may be unexpected issues. One issue might be addressing probate disputes that can lead to litigation. Probate litigation occurs when there is a disagreement among parties that gets to the point that the parties must litigate the issues in court. There are a wide range of issues that may be the center of probate litigation. However, they generally center of issues related to the will, the executor, claims against the estate, or the questions about inheritance rights.
When it comes to the will, the disagreements may come very early in the process when someone initiates a will contest because they believe that the will is fraudulent or in some other way invalid. The law allows interested parties to file objections to the will and present evidence to the judge. Another type of challenge is a will construction. That happens when provisions of the will were poorly drafted, leading to conflicting interpretations. The court will have to step in and determine the intention of the testator.
Conflicts related to the executor can be linked to questions about their qualifications or accusations of malfeasance. If the court finds that an executor is not qualified or breached their fiduciary duty, the court can strip them of their authority.
Not every person leaves a will. This does not automatically exempt the estate from probate. Intestate estates still must go through an administration process. The District Court judge will appoint an executor or administrator who will perform the same activities that an executor would perform for a testate estate. The main difference is that instead of distributing assets to named beneficiaries, the administrator would distribute assets to the decedent’s heirs according to Kentucky’s rules of intestate succession. Ky. Rev. Stat. Ann. § 391.105. Estate property will go to the decedent’s surviving spouse or children, or other relatives according to the stated order of priority.
Summary Probate Administration
Eligible small estates can avoid the long, formal probate administration process and opt for a much simpler administration process. The process applies if the estate means one of the two following requirements:
- No personal property is left in a will, there is a surviving spouse, and the value of the probate property is $15,000 or less
- No personal property is left in a will, there is no surviving spouse, and someone else has paid at least $15,000 in preferred claims.
- The value of the estate is less than the surviving spouse’s exemption or the exemption and preferred claims.