How to Settle an Estate in Kentucky

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Whether or not you leave a will, some of your estate will likely go through a settlement process called probate. Probate begins when someone files form AOC-805 with a Kentucky court, opening a case for your estate. After your court-appointed representative inventories your estate and pays your creditors, he can distribute any remaining assets to your beneficiaries. In Kentucky, probate procedures vary slightly between county probate courts, but the process is generally the same statewide.

Opening the Case

After your death, someone, typically a family member or person named in your will, must locate your original will and file it with the probate court in the county where you live. Kentucky courts require the petitioner to file form AOC-805 to ask the court to admit the will to probate and appoint a personal representative, or executor, to manage the estate. This form includes information about you, such as your Social Security number and date of death, and information about your estate and family members. Your estate's representative can obtain a copy of the form from the Kentucky Courts' website.

If your will has a self-proving affidavit, the court can admit it without any witnesses, but a will without this affidavit requires at least one of the people who witnessed you sign the will to testify in court. If you do not leave a will, the court uses the same form, AOC-805, to appoint a personal representative without admitting a will.

Inventory and Payments

After the court appoints your representative, he has a duty to take over your assets during the probate process. Within 60 days of his appointment, your representative must file two copies of an inventory of your assets with the court, listing the value of your assets at the time of your death. He must also provide notice of the open probate case to your creditors as well as potential heirs and beneficiaries. Your estate must remain open for at least six months to allow creditors to make claims against your estate, and valid claims from creditors must be paid out of the estate’s assets. Though it is your personal representative’s duty to pay these debts, he is not required to pay them from his own personal funds even if the estate runs out of money to pay. Your personal representative must also pay any taxes due, including federal and state income taxes and estate taxes.

Distribution of Assets

Your personal representative must pay creditors, court expenses and taxes before your estate’s assets can be distributed to your beneficiaries. For example, if your estate has $50,000 in assets, $40,000 in debts and owed $1,000 in taxes and expenses, your personal representative must pay the debts and taxes first, leaving only $9,000 for your beneficiaries. Some expenses, including funeral expenses and some federal and state taxes, are given preferential treatment, so they may be paid more than your other creditors if money runs short. Your representative must use the terms in your will to properly distribute the remaining funds to the beneficiaries you named. Then, he must file a final accounting with the court. Kentucky courts provide different forms for a final inventory and settlement depending on the size of your estate.

Probate Vs. Non-Probate Assets

Not all assets have to go through probate, so some of your assets can skip this process if you create the proper paperwork to transfer them outside the probate process. For example, life insurance is a non-probate asset so your life insurance policy will be paid directly to the beneficiaries you named on the policy documents without going through probate—unless you listed your estate as your beneficiary. Also, if you jointly own property with someone else as “joint tenants with rights of survivorship,” the property automatically passes to that co-owner upon your death without going through probate.

Read More: When Do the Assets Get Distributed After the Probate of a Will?

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