Jun 2017 AFR: 2.4%
Gift Annuity State Regulations

Kentucky


Intestacy


General Definition

A decedent's intestate estate is defined as any part of the estate not effectively disposed of by a valid will.

Order of Distribution

When a person having right or title to any real estate of inheritance dies intestate as to such estate, it shall descend in common to his kindred in the following order:

  1. To his children and their descendants; if there are none, then
  2. To his father and mother, if both are living, one moiety each; but if the father is dead, the mother, if living, shall take the whole estate; if the mother is dead, the whole estate shall pass to the father; if there is no father or mother, then
  3. To his brothers and sisters and their descendants; if there are none, then
  4. To the husband or wife of the intestate; if there are none surviving, then
  5. One moiety (half of the full ownership of the property) of the estate shall pass to the paternal and the other to the maternal kindred, in the following order:
  6. (a) The grandfather and grandmother equally, if both are living; but if one is dead, the entire moiety shall go to the survivor; if there is no grandfather or grandmother, then
    (b) To the uncles and aunts and their descendants; if there are none, then
    (c) To the great-grandfathers and great-grandmothers, in the same manner prescribed for grandfather and grandmother by subsection (a); if there are none, then
    (d) To the brothers and sisters of the grandfathers and grandmothers and their descendants; and so on in other cases without end, passing to the nearest lineal ancestors and their descendants.
  7. If there is no such kindred to one of the parents as is described in subsection (5), the whole to go to the kindred of the other. If there is neither paternal nor maternal kindred, the whole shall go to the kindred of the husband or wife, as if he or she had survived the intestate and died entitled to the estate. Sec. 391.010.

In the event that one of the distrubtees predeceases the decedent, the descendants of the above named distributees take per stirpes. Sec. 391.040

Where any person dies intestate as to his or her personal estate, the surplus, after payment of funeral expenses, charges of administration and debts, shall pass and be distributed among the same persons, and in the proportions, to whom and in which real estate is directed to descend, except as is detailed in Sec. 391.030.

If the owner of any property having a situs in Kentucky dies without heirs or distributees entitled to it and without disposing of it by will, it shall vest in the state, subject to all legal and equitable demands. Any property that vests in the state under this section shall be liquidated, and the proceeds, less costs, fees, and expenses incidental to all legal proceedings of the liquidation shall be paid to the department. Sec. 393.020.

Will Qualifications


Common Law or Community Property

Kentucky is a common law property state.

Capacity

Any person of sound mind and 18 years of age or over may make a will disposing of any estate, right, or interest in real or personal estate that he may be entitled to at his death. Sec. 394.020. A person under the age of 18 and is a parent may make a will to appoint a guardian for their child. Sec. 394.030.

Drafting

No will is valid unless it is in writing with the name of the testator subscribed by himself, or by some other person in his presence and by his direction. If the will is not wholly written by the testator, the subscription shall be made or the will acknowledged by him in the presence of at least two credible witnesses. Each witness must subscribe the will with their names in the presence of the testator and in the presence of each other. Sec. 394.040.

If a will is attested by a person to whom, or to whose wife or husband, any beneficial interest in the estate is devised or bequeathed, and the will cannot otherwise be proved, such person shall be deemed a competent witness; but such devise or bequest will be void, unless such witness would be entitled to a share of the estate of the testator if the will were not established, in which case he shall receive so much of his share as does not exceed the value of that devised or bequeathed. Sec. 394.210.

A will may be made simultaneously executed, attest and made self-proved by acknowledgment by the testator and affidavits of the witnesses, each made before an office authorized to administer oath under the laws Kentucky and evidenced by the officer's certificate in a form substantially similar to that detailed in Sec. 394.225.


Modifications

No will or codicil, or any part thereof, shall be revoked, except:

  1. By subsequent will or codicil;
  2. By some writing declaring an intention to revoke the will or codicil, and executed in the manner in which a will is required to be executed; or
  3. By the person who made the will, or some person in his presence and by his direction, cutting, tearing, burning, obliterating, canceling, or destroying the will or codicil, or the signature thereto, with the intent to revoke. Sec. 394.080.

A will or codicil, or part thereof, that has been revoked shall be revived only by re-execution or by a codicil executed in the manner required for making a will, and then only to the extent to which an intention to revive is shown thereby. Sec. 394.100.

Probate Process


Naming of Executor

The person named in a will as executor shall not act as executor to any extent until the will or an authenticated copy of the will is admitted to record, and he has executed bond and taken oath in the court in which the record is made. He may, however, provide for the burial of the testator, pay the reasonable funeral expenses, and take care of and preserve the estate. Sec. 395.020.

If the decedent failed to name an executor, any resident of the state of Kentucky over 18 years of age or any nonresident of legal age who is as to the decedent, ward, or incompetent, related by consanguinity, marriage, adoption or the spouse of such person so related may be appointed to act as an executor. Sec. 395.005.

The court shall grant administration to the relations of the deceased who apply for administration, preferring the surviving husband or wife, or if the surviving husband or wife does not nominate a suitable administrator, then such others as are next entitled to distribution, or one or more of them whom the court judges will best manage the estate. Sec. 395.040.

Submission of Will

When any will is offered for probate, the court will require a verified application to be filed by the person offering the same. Such application must state the residence of the testator at the time of his death and such other facts as may be necessary to establish the jurisdiction of the court, and the names, ages and post office addresses of the testator's surviving spouse and, if required by the court, heirs at law, or such as are known. Sec. 394.145.

Notifications

Before being appointed as executor or administration, every person must make and file in duplicate a written application under oath, which must state the names of the deceased's surviving spouse and all of his heirs-at-law or such as are known, their post office address if known, the date of death and also a statement in general terms as to what the estate consists of and the probable value of the personal and real estate and also a statement of any indebtedness owing by the applicant to the deceased. The foregoing requirement in respect to names and addresses of heirs-at-law may be omitted when the application is being made by the executor named in the will unless requested by the court. The application of a nonresident must include the designation of a resident of the county where administration is pending as his agent for the service of process in any action against him as personal representative or personally, provided that such personal action must have accrued in the administration of the estate. Sec. 395.015.

Inventory

It is the duty of a personal representative of a decedent to return an inventory in duplicate within two months from the time of qualifying as such, to the clerk's office of the court in which he qualified, the original of which shall be recorded by the clerk and the duplicate will be mailed by the clerk to the secretary of revenue. Sec. 395.250.

Homestead, Elective Share and Exempt Property

The surviving spouse is entitled to 1/2 of the surplus real estate of which the decedent owned at the time of death and life estate for life in 1/3 of any other real estate. In addition, the surviving is entitled to 1/2 of the surplus personalty left by the decedent. Sec. 392.020.

When a husband or wife dies testate, the surviving spouse may release what is given to him or her by will, if any, and receive his or her share under Sec. 392.020 as if no will had been made, except that in such case the share in any real estate of which the decedent or anyone for the use of the decedent was seized of an estate in fee simple at the time of death must be only one-third of such real estate. Such relinquishment must be acknowledged before an officer authorized to administer oaths under the laws of this state and evidenced by the officer's certificate. Sec. 393.080.

The surviving spouse may petition the court for the right to withdrawal $2,500 belonging to the estate. Upon presentation of the order, the bank or depository must permit the surviving spouse to withdraw the sum. The surviving spouse or, if there is no surviving spouse, the surviving children may make their selection out of the personal property of the estate to the extent that the value of the property does not exceed $15,000. Sec. 391.030(3).

Debts and Distributions

In all actions the court will make an order for the creditors of the decedent to appear before a commissioner, to be appointed by the court, and prove their claims before a certain day to be named in the order, notice of which shall be given by publication. Sec. 395.520.

Upon the expiration of six months from the date of his appointment, the personal representative may proceed to pay the claims allowed against the estate in the order of priority prescribed, after making appropriate provision for exemptions and allowances provided by law, for claims already presented which have not yet been allowed and for unbarred claims which may yet be presented, including costs and expenses of administration. Sec. 396.075.

If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment of claims in the following order:

  1. Costs and expenses of administration; then
  2. Funeral expenses; then
  3. Debts and taxes with preference under federal law and other laws of this state; then
  4. All other claims.

No preference will be given in the payment of any claim over any other claim of the same class. Sec. 396.095.

Estate/Inheritance Tax


Kentucky imposes an inheritance tax on individuals receiving the assets of a decedent. However, parents, children, grandchildren, siblings and surviving spouses are exempt from paying the inheritance tax. Sec. 104.080. Bequests to charitable institutions are also exempt. Sec. 140.60. The inheritance tax rates are determined by Sec. 140.070. The top rate is 16% and there is an exemption of $500 to $1,000 depending on the individual.

Income Tax Charitable Deductions and/or Credits


Kentucky allows a taxpaying resident to deduct itemized charitable gifts in the same manner as the IRS. Sec. 141.010(10). Except that gifts of artwork created by the donor at least one year prior to the gift are eligible for a deduction at fair market value. In no event shall the amount of the deduction exceed the taxpayer's adjusted gross income attributable to artistic creations during the applicable tax year. Sec. 141.0201.

A taxpayer providing an endowment gift to a permanent endowment fund of a qualified community foundation, a county-specific component fund or an affiliate community foundation that has been certified under KRS 147A.325, and meeting the requirements of KRS 141.438(7), may claim a credit against the taxes imposed by KRS 141.020 or 141.040 and 141.0401. The ordering of the credit shall be as provided in KRS 141.0205(3). The credit shall be equal to 20% of the value of the endowment gift provided by the taxpayer, not to exceed $10,000. The credit is nonrefundable, but any amount of credit that a taxpayer is not able to utilize during a particular taxable year may be carried forward for up to five years.

Also, for taxable years beginning on or after January 1, 2014, but before January 1, 2018, any donor shall be allowed a nonrefundable credit against the tax imposed by KRS 141.020, or 141.040 and 141.0401, with the ordering of credits as provided in KRS 141.0205, in the amount equal to 10% of the value of the donated edible agricultural products. KRS 141.392.

Gift Annuity Requirements


Kentucky, a "conditional exemption" state, regulates the issuance of charitable gift annuities under Sec. 304.1-120. Charities must meet certain conditions before issuing a charitable gift annuity in this state in order to qualify for exemption from regulation as an insurance business transaction.

Exemption Qualifications

Organizations must either: (i) be a charitable organization exempt from taxation under Sec. 501(c)(3) and, unless a Sec. 501(c)(3) religious organization, also file a copy of federal Form 990 with the Division of Consumer Protection in the Office of the Attorney General; or (ii) be a publicly owned or nonprofit-privately endowed education institution approved or licensed by the Kentucky Board of Education, the Southern Association of Colleges and Schools or an equivalent public authority of the jurisdiction where the institution is located.

Disclosure Language

Kentucky does not require specific disclosure language in an issuing charity's gift annuity contracts.

Reserve Requirements

Kentucky does not require an issuing charity to hold any amount in reserve.

Annual Filing Requirements

No annual reporting or notification is required.

State Forms

None
scriptsknown

Would you like to learn more about our services?
Please contact us for a free demonstration