Estate Planning: Last Will and Testament 101
I hear people all the time say why do I need a last will; it’s all going to go to my spouse anyway. Then I tell them the following story. I recently ran into an old friend whose spouse had passed away unexpectedly. She soon found out that her spouse did not have a will. She assumed that because they were married, everything would go to her when her spouse passed. Boy was she wrong. When a Kentucky married resident dies without a will, their assets do not automatically convey to their spouse. In this instance, she had a fourteen year old son who, according to Kentucky law, would receive her spouse’s inheritance with a few exceptions. Also, she eventually had to go to guardianship court so that she could handle the inheritance for her son. This scenario could have been avoided with a little planning.
The Law in Kentucky for Dying without a Will (Intestate)
At law, the spouse receives a 50% interest in the assets, but not all of the assets. For example, Bob and Mary have no children. This is a second marriage for Bob and Mary. The house remained in Bob’s name. Bob dies without a will. Mary receives a 50% interest in the house and shares the remaining interest in the home with Bob’s parents. Awkward??? Probably so!
At law, the surviving spouse is fourth in line to receive the full estate if the spouse has died without a will. This means the assets convey first to children, next to parents, then to siblings, and the spouse is finally recognized – fourth in line.
Factors to Consider for Your Last Will
There are number of additional factors to consider when forming even the simplest will based estate plan.
- Does the will consider the tax consequences of gifts to nieces, nephews, neighbors, or unmarried partners?
- Does the will allow Co-Executors to act independently? If not, some banks will refuse to open an account with Co-Executors that must act in unison due to liability concerns.
- Are any of the beneficiary’s receiving governmental benefits? If so, an inheritance will disqualify the beneficiary from continuing to receive their current benefits which may include Medicaid, SSI, or SSDI.
- Was your last will and testament prepare…15-20 years ago?
What you can do
There are methods an estate planning attorney can use to avoid these scenario. If you have a will, it is always important to periodically have an estate planning attorney review your estate plan with you to make sure your choices of the past are still your choices today. Let Christina Cochran in our office help you navigate these question. Call (502 423-70203) to set up an appointment.
This is an advertisement.