Settling Small Estates (KY)

Requirements

To use the small estate process, there must be a surviving spouse and the gross probatable estate must be worth <$30,000 (with some exceptions when preferred debts exist).

In determining gross probatable value of an estate, you should value assets as of the date of death. Do not include any assets that would not normally go through probate, such as assets owned in joint tenancy, assets payable on death with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.

If there are preferred debts (such as funeral expenses) that the surviving spouse has already paid from his or her own estate, then the $30,000 limit can be increased by the amounts of those paid debts. See Distribution Considerations below for a list of preferred debt types.

Process

To use the small estate process:

1. Submit to the probate court a Petition to Dispense with Administration (Form AOC 830)
2. You will receive a court order, which you can use to obtain custody of the estate assets
3. There is no legal requirement to do anything else, since the assets transferred are exempt from any creditor claims

Requirements

To dispense with administration by agreement, the following conditions must be true:

• There is no will
• There are no (remaining) known estate debts
• All heirs agree in writing that there should be no administration

While the statute says that the estate may have no debts, there may be circumstances in which it is worth it for the heirs to separately satisfy those debts in order to qualify for this process.

There is no official limit to the size of an estate that may be handled this way.

Process

To use this approach process:

1. Submit to the probate court a Petition to Dispense with Administration by Agreement (see below)
2. Publish in a newspaper (in local circulation) a notice to creditors to present any claims to the clerk designated by the court.
3. Obtain a bond for the value of the personal estate (this bond may be used by the court to pay any currently unknown debts that are legitimately claimed within 6 months of the requested court order
4. After the 6-week notice period has expired, you will receive a court order transferring ownership estate assets
5. Use the order to collect estate assets and distribute them to the rightful heirs
6. After 6 months, you can collect the funds from the bond which were not used to pay previously unknown debts

Petition

This process is not commonly used, and thus there is no official form for the petition.

In your petition, you must include:

• The name, residence, and date of death of the decedent
• A statement that there is no known will
• An inventory of estate assets
• A statement that there are no estate debts
• A list of all heirs entitled to inherit, including their names, addresses, and percent of estate due
• If there are claims due to the estate, name someone who will be granted the power to collect such claims
• Include plans for paying any state inheritance and federal estate taxes, if appropriate

Attach a copy of the death certificate, and have each heir sign the petition. Every signature must be notarized at the time of signing.

Requirements

You can use an informal settlement if:

• The personal representative is the sole beneficiary of the estate,
• Or all inheritors agree to an informal settlement

The estate must be solvent (able to pay all its debts).

Process

To proceed with informal settlement:

1. Submit to the court a Petition for Probate (Form AOC-805)
2. Obtain any required Fiduciary Bond (Form AOC-825)
3. The court will appoint you personal representative and give a Certificate of Qualification
4. Use your Certificate of Qualification to collect estate assets
5. Wait at least 6 months after you were appointed personal representative
6. Settle the estate in the normal way (pay all obligations, distribute net assets)
7. Submit to the court a Motion for Informal Settlement (Form AOC-850), along with a Waiver of Formal Settlement (Form AOC-851)) signed by all the heirs (if a spouse is not the sole heir)