Kentucky Wills Lawyer – Helping Clients Prepare for Estate Distribution
I help clients plan for the ultimate distribution of their estate, so that their assets are distributed to their loved ones in accordance with their wishes.
It’s important to understand that in Kentucky (and in other states), if you die without a will or a trust that holds title to your assets, state law determines how your property will be distributed. It doesn’t matter how clearly you expressed your distribution wishes during your lifetime. Further, without a will, the personal representative of your estate cannot make distributions of your property that are not in accordance with state law, even if this person wants to comply with your wishes.
As a result, the only way to ensure that your property is distributed in accordance with your wishes is to provide for the legal disposition of your assets through a will, trust, or other legally-recognized methods.
Estate Planning Basics
Here are some of the key aspects to understand about estate distribution:
- A Will. A will is the legal instrument that specifies how property owned by a person will be distributed after the person’s death. If a person dies without a will, the person is said to have died “intestate.” When a person dies intestate, state law specifies how property must be divided among a person’s heirs. By law, people who are not heirs (legally related to the person who died) inherit nothing.
In Kentucky, if you are in an unmarried relationship and your partner dies without a will, you are not an heir with respect to your partner, and thus will inherit nothing from your partner under intestate distribution laws. It is therefore critical for unmarried partners to create a will, trust, or other joint property arrangements if they wish for some or all of their property to pass to their partner at death; otherwise, a person’s property will pass to their heirs, not their partner.
- A Trust. Trusts hold legal title to assets. Typically a trust is created when a person legally transfers most or all of his or her property to the trust. The person creating the trust usually is the beneficiary of the trust during his or her lifetime, and upon death, others named in the trust become the trust beneficiaries. When a person dies, the assets contributed to the trust will be managed (or distributed) in accordance with the trust documents for the benefit of the new trust beneficiaries. Because the trust, and not the person who died, holds legal title to the property, property held in trust is not distributed in accordance with the person’s will. A trust is sometimes beneficial if there is the possibility that a parent may die while his or her children are young. If the parent may have substantial assets, a “spendthrift” trust can be created that limits the amount of assets distributed, and the purposes for which assets may be distributed, until the children reach a specified age. This type of trust can be helpful for ensuring that minor children do not inherit a large sum of money at once (which could be spent foolishly). A trust can sometimes be beneficial for tax purposes, but only for those who have substantial estates. Under the tax laws enacted at the beginning of 2013, in order for a person to benefit from a trust solely for tax purposes, the value of a person’s estate (including insurance) usually needs to be around $5 million. Nonetheless, those with smaller estates (perhaps with a current value of $1 million or more) may wish to consider a trust as the value of their estate may appreciate considerably before death.
- Joint Tenants with Right of Survivorship and Payable Upon Death Accounts. Property held in joint tenancy with a right of survivorship automatically becomes owned 100% by the survivor when one of the co-owners dies. Similarly, assets in payable on death (“POD”) accounts can be immediately transferred to the designated beneficiary upon the death of the account holder without the need to go through probate.
Estate Distribution is only part of the process of protecting your property. You should also ensure that your interests are protected in the event of incapacitation if you are unable to communicate your wishes concerning healthcare and financial matters. Read about Kentucky healthcare directives, powers of attorney, and living wills.
Please Call Me to Schedule an Appointment to Discuss Your Estate Planning Needs
The fees for comprehensive estate planning are generally modest, particularly when compared to the legal costs and frustration that can result when no will or trust is made. I can meet with you to answer your questions and explain what documents are necessary to carry out your estate distribution wishes.