The estate planning and estate administration process can be more complicated than you think. Yet, you have to understand them, otherwise you could make mistakes that cause the estate to incur otherwise avoidable costs and that subject certain assets to contentious disputes that can ruin familial relationship. The good news, though, is that with a little education and prep work on your side, you can avoid these problematic outcomes.
One way to do so is to gain an understanding of which assets are susceptible to the probate process and which aren’t. This is important because the probate process can be expensive, and it can delay the distribution of estate assets. It can also open assets up to collection by creditors if you’re not careful. So, let’s jump in and look at which assets will need to go through the probate process so that you know which actions you need to take to protect your interests as well as those of the estate.
Which assets need to go through the probate process in Kentucky?
A lot of people think that certain types of assets have to go through the probate process, but that isn’t necessarily the case. Instead, the way your property is titled, and its value, can play a significant role in the determination of whether they need to go through the probate process. Here are some considerations to take into account as you think about how the probate process may impact the estate with which you’re dealing:
- How the property in question is titled: If you’re the sole owner of your property, then it’s likely going to have to go through the probate process. But if it’s held in joint tenancy, has beneficiary designations or is payable on death, then those assets will most likely bypass the probate process since they already specify who will take ownership of them once you pass away.
- The size of the estate: If the total value of your estate falls below a certain threshold, currently $30,000, then it’ll be considered a small estate that can bypass the probate process. This is one reason why some people try to reduce the size of their estate by giving away financial gifts during their lifetime.
- Whether the assets are in a specific type of trust: Some trust types allow assets to bypass the probate process. Amongst them are living trusts, which are created and utilized while you’re still around. You can name the trustee responsible for managing the trust’s assets, and you can make the trust revocable or irrevocable. Keep in mind, too, that you can place just about any type of asset in this trust, too, which gives you a wide range of flexibility to avoid probate.
Keep in mind that assets that are owned solely by you are generally subjected to the probate process. This can include bank accounts that don’t have a named beneficiary, real estate that’s titled in only your name and your personal property. On the other hand, assets that are subjected to ownership by someone else upon your passing are generally exempt from the probate process. That’s why using trusts, beneficiary designations and payable on death accounts can be imperative to sparing your estate the difficulties of probate.
Know how to competently navigate your estate planning or estate administration issues
We know that once you dive into the estate planning or estate administration process, it can seem enormously complex. While there are challenges that you’ll have to be sure to address, they’re certainly not insurmountable. So, if you have questions or concerns about how to appropriately navigate your estate planning or estate administration issues, then please continue to read our blog and consider discussing your circumstances in-depth with your attorney.