Inheritance Laws in Kentucky

by Holly Cameron, studioD
By making a will, you can decide what happens to your estate when you die.

By making a will, you can decide what happens to your estate when you die.

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Inheritance laws in Kentucky depend on whether or not the deceased person, known as the decedent, has written a will. If he has made a valid will, his estate passes to his chosen beneficiaries in accordance with his wishes. However, if he did not make a will, his estate will be distributed in accordance with state law. This is known as intestate succession. Additionally, Kentucky requires certain beneficiaries to pay tax on bequests over a certain value.

Intestate Succession

If the decedent has not written a will and has a surviving spouse, the spouse is entitled to half his estate after payment of debts and funeral expenses. The remaining half goes to the decedent’s children or grandchildren. If he has no children or grandchildren, his parents are entitled to half the estate. If he has no surviving children, grandchildren or parents, his siblings share the remaining half. Where a person dies intestate with no surviving spouse, state laws provide that his estate be distributed to children, grandchildren, parents and siblings in a similar order.

Inheritance Tax

The Kentucky Department of Revenue levies taxes on bequests received by beneficiaries. The law divides beneficiaries into three categories: Class A, Class B and Class C. Class A beneficiaries include a surviving spouse, parent and child of the decedent. Class B beneficiaries comprise more distant relatives such as nephews, nieces and relations by marriage. Beneficiaries who do not fall within classes A and B are deemed Class C beneficiaries.

Amount of Inheritance Tax

The amount of inheritance tax depends on the value of the bequest and the relationship between the beneficiary and the decedent. In most cases, a Class A beneficiary is exempt from paying inheritance tax. Class B beneficiaries only pay inheritance tax on bequests over $1000 at a rate of between 4 and 16 percent. Class C beneficiaries pay inheritance tax if the values of their bequests exceed $500.

Joint Assets and Insurance

Even if the deceased has written a will, certain assets may not pass in accordance with the terms of the will. For example, if a husband and wife own a house together, the house deed may state that upon the death of either spouse, the deceased spouse's share will pass directly to the other spouse. Similarly, if a decedent has taken out an insurance policy and specified another person as his beneficiary, that person is entitled to the benefits, regardless of the terms of the will.