Probate is the process in which a court validates a will and supervises the distribution of a decedent’s estates. The testator, or person who drafts the will, normally names an executor in the will to carry out the will's instructions upon the testator’s death. Generally, the first step an executor takes in executing a will is filing it with the decedent’s local court for probate. In Kentucky, however, not all wills have to be probated.
The Kentucky Revised Statute 395.455 provides that small estates may be administered without going through probate. In Kentucky, a small estate is defined as an estate with probatable assets worth less than $15,000. Under Kentucky law, this scenario is the only one in which a will does not have to be filed for probate. However, an individual can use what is referred to as a “will substitute” to avoid the probate process.
One example of a will substitute is “Joint Tenants with Rights of Survivorship.” This situation can be common with married couples, where two people own accounts, real property or other assets jointly with rights in survivorship. In this arrangement, once one spouse dies, the other spouse immediately takes ownership of the property. This transfer of ownership may occur without going through the probate process.
Another example of a will substitute is a “payable on death,” or POD, account. The estate owner holds a POD account during his lifetime. Once he dies, the ownership transfers to a person he designated without going through probate. IRAs and 401(k)s are common types of POD accounts. In fact, Kentucky Revised Statute 391.315 bars an estate holder from changing the designation of a POD account in a will.
A final example of a will substitute is a revocable trust, or living trust. A revocable trust is a legal instrument that an estate holder may create to take ownership of her assets. The estate holder usually designates herself as trustee and therefore retains control over her assets. In the trust, the estate holder usually designates a substitute trustee who takes control over the trust upon the estate holder’s death. The estate holder may revoke or change the trust at any time while she is alive. Upon the estate holder’s death, the assets in the trust do not have to go through probate.
- Stockbyte/Stockbyte/Getty Images