The probate courts oversee the transfer of resources from one generation to the next. When an individual dies, their property becomes their estate. The Kentucky probate courts help ensure that the assets in the estate transfer to the appropriate parties. That process may either follow the rules established in state statutes or the instructions provided in an estate plan by the deceased individual.
Higher-value assets could potentially cause conflict among heirs or beneficiaries. They could also be at risk of creditor claims that force their liquidation. In cases involving large estates, major resources could influence estate tax liability. Assets that do not become part of an individual’s estate do not need to pass through probate court.
How can homeowners in Kentucky avoid the probate courts controlling the transfer of their real property?
With a deed
Deeds are the documents that adjust title records for a property. Owners execute deeds when they purchase the property or when they sell their homes. They can also establish deeds as part of an estate plan. Two of the types of deeds associated with estate planning are not valid options in Kentucky. Lady bird deeds, sometimes referred to as enhanced life estate deeds, are not an option in Kentucky. The state also does not recognize transfer-on-death deeds.
For a deed to keep a home out of probate court, the testator typically needs to execute and record the deed before they die. They could add their child who serves as a caregiver or new romantic partner to the title of the property. They can grant them rights of survivorship so that they inherit the property directly when their co-owner passes.
With a trust
Another common strategy that people use to bypass probate court is the creation of a trust. The assets held by a trust typically do not become a part of an estate.
People can transfer their homes, personal property and financial resources to fund a trust. The assets owned by the trust are generally not subject to probate court oversight when the trustor who funded the trust dies.
Depending on one’s personal circumstances, there are potentially other solutions for those hoping to avoid probate or keep certain assets out of probate court. Creating or updating an estate plan can help people achieve their goal of transferring certain assets without involving the probate courts.