Kentucky Estate Planning Laws

Estate & Inheritance Tax

Kentucky does not impose a state estate tax. Residents are still subject to the federal estate tax for estates exceeding the federal exemption amount ($13.61 million in 2024).

Inheritance Tax: Kentucky imposes an inheritance tax on beneficiaries who are not Class A (spouse, children, grandchildren, parents, siblings). Class B heirs pay 4-16%. Class C heirs (non-relatives) pay 6-16%. Exemptions: Class A fully exempt; Class B $1,000; Class C $500.

Probate Process

Kentucky uses a both probate system. Estates valued below $15,000 may qualify for simplified small estate procedures, such as a small estate affidavit, which avoids full probate.

Elective Share: The surviving spouse may elect to take one-half of the surplus estate (after debts) if there are no children, or one-third if there are children, plus the right to reside in the principal residence for life.

Will Requirements

In Kentucky, a valid will requires:

• The testator must be at least 18 years old and of sound mind
• The will must be in writing
• The will must be signed by the testator (or by another person at the testator's direction)
• 2 witnesses must sign the will

Holographic (Handwritten) Wills: Recognized as valid in Kentucky. A holographic will must be entirely in the testator's handwriting and signed by the testator.

Self-Proving Affidavit: Notarization is required for a self-proving affidavit, which allows the will to be admitted to probate without witness testimony.

Digital/Electronic Wills: Not currently authorized under state law.

Power of Attorney

Kentucky follows common law principles for powers of attorney. While there is no mandatory statutory form, the document should clearly specify the powers granted.

A durable power of attorney remains effective if the principal becomes incapacitated. This is a critical estate planning document for Kentucky residents.

Medicaid Planning

Kentucky follows the federal Medicaid look-back period of 60 months (5 years). Any transfers of assets for less than fair market value made within this period before applying for Medicaid may result in a penalty period of ineligibility.

Planning for potential long-term care needs should begin well in advance of the look-back period. Consult with an elder law attorney in Kentucky for strategies specific to your situation.