THE KENTUCKY WILLS AND TRUSTS MANUAL BY NICK C. THOMPSON ©2002, Nick C. Thompson. All Rights Reserved. Updated for 2006 Phone: (502) 429-0057 Email: [email protected] Address: 800 Stone Creek Parkway Suite 6 Louisville, Ky. 40223 Or visit us on the World Wide Web for Bankruptcy, Divorce, Lemon Auto, Personal Injury, and Wills Information: http://www.bankruptcy-divorce.com Also available free to Kentucky and Indiana Residents: The Tactical Bankruptcy Manual The Tactical Lemon Auto Manual The Tactical Personal Injury Manual The Tactical Divorce Manual FOREWORD AND DISCLAIMER Please Read the Entire Manual! It is meant to be read cover to cover and it is a short explanation of Social Security, Medicaid and Medicare as well as Wills, Trusts, and other retirement subjects. It is packed with information and the subjects are all related to your retirement and estate. If you don’t plan your retirement and passing your wealth to you kids or heirs the government and others will take everything. But, please remember that this Manual is to provide generalized information only. It is impossible for any attorney to give you legal advice through a Manual because every person’s legal situation is different. However, this manual should give you an understanding of most of the retirement and estate planning laws and problems that can arise and how to avoid them and how to protect your children’s interests. It will also provide a basis to help you formulate specific questions that you may wish to ask your attorney, CPA, financial or estate planner. DISCLAIMER: THIS MANUAL ONLY PROVIDES GENERAL INFORMATION ABOUT WILLS; RETIREMENT, MEDICARE AND RELATATED SUBJECTS. NOTHING IN THIS MANUAL SHOULD BE CONSTRUED AS SPECIFIC LEGAL ADVICE. IF YOU HAVE INDIVIDUAL QUESTIONS ABOUT WILLS, CONTACT US ABOUT YOUR PROBLEM. WE ASSUME NO LIABILITY FOR ANY ACTIONS TAKEN AS A RESULT OF INFORMATION DERIVED FROM THIS MANUAL. SHOULD YOU REQUIRE ACTUAL LEGAL SERVICES PLEASE CONTACT MY OFICE AT THE ADDRESS AND PHONE NUMBER LISTED ON THE FRONT PAGE OF THIS MANUAL. 2 TABLE OF CONTENTS FOREWORD AND DISCLAIMER .............................................................................................2 TABLE OF CONTENTS ..............................................................................................................3 Probating an Estate in Kentucky ..................................................................................................4 Checklist of Items for Probate ......................................................................................................7 Common Assets to Locate Where to Look For Them ................................................................7 THE KENTUCKY PROBATE PROCESS .................................................................................8 WILLS IN GENERAL ...............................................................................................................22 Estates ...........................................................................................................................................24 LIVING TRUSTS ........................................................................................................................26 GLOSSARY: TRUST TERMS YOU SHOULD KNOW ........................................................30 TRANSFERS .................................................................................................................................34 TRUSTEES ...................................................................................................................................35 OTHER TYPES OF TRUSTS AND OTHER DEVICES TO TRANSFER WEALTH ........38 IRA’s ..............................................................................................................................................38 Pay-on-death designations .............................................................................................................38 Joint tenancy ..................................................................................................................................39 Partnerships and Corporations .......................................................................................................39 Insurance ........................................................................................................................................39 Gifts................................................................................................................................................39 OTHER TRUSTS ........................................................................................................................39 MARITAL ESTATE LIFE TRUST: .........................................................................................39 Q-TIP TRUST: .............................................................................................................................40 GENERATION-SKIPPING TRUST: ........................................................................................40 TAKING INVENTORY ..............................................................................................................41 THE QUICK CHECKLIST TO PROBATING A WILL ........................................................43 FAQ SECTION ............................................................................................................................44 HOW TO GET YOUR MAXIMUM SOCIAL SECURITY BENEFITS ...............................48 Applying for and receiving Medicaid benefits ...............................................................................48 Medicare .......................................................................................................................................50 Social Security: SSI, Disability, and Retirement .......................................................................51 Social Security Retirement Benefits ...........................................................................................51 Social Security Disability Benefits ..............................................................................................53 Social Security SSI is supplemental income. .............................................................................54 FOOD STAMP PROGRAMS .....................................................................................................55 APPENDIX ...................................................................................................................................56 Living Trust Basic Form .............................................................................................................57 Last Will and Testament ................................................................................................61 Self proving will clause from the Kentucky Statutes ................................................................63 Living Will From the Kentucky Statutes ...................................................................................65 3 There is nothing wrong in tactical planning for your lemon auto, bankruptcy or divorce case. Understanding the proper steps to take, keeps you out of trouble and makes it far more likely that you will win your case. This principal also applies to the planning of your estate. This manual was designed to help you to pass your assets to your spouse and children. It is divided into three parts. The part on wills explains wills the part on trusts explains trusts the part on probate explains how to probate a will. Either you are looking to pass your property to your children and spouse, or you have been given the job of probating your parents estate. Using this manual it will help you to avoid giving unnecessary sums to the government. There are a few lawyers that would be upset if they knew I was telling the public all these secrets about probate and wills but in the next few pages I am going to tell you exactly how to probate a will in Kentucy and how to save your assets for your children and spouse. At the outset, I know this is not written like a perfect college textbook, but it clearly wasn’t meant to be. This is a tactical manual on how to probate a will and how to keep all your assets for the heirs. You can also protect certain assets from the creditors such as Social Security that is now set up to take away your property after you die to reimburse itself for your nursing home care and final expenses. The manual may not be written on a college level, but it wasn’t meant to be. It will only take a couple of hours to read. I practice statewide in all of the Kentucky Counties. I have therefore prepared this manual in broad terms dealing with an overview of all of the applicable counties. Probating an Estate in Kentucky If you downloaded this manual you are probably probating an estate. I will give you the basic guidelines and try to summarize how to do it within 20 or so pages. Probate is first of all a time driven job. There are a lot of very strict guidelines miss a deadline and you will be hauled into court and fined by the judge for not doing something on time. Or worse you will lose money from the estate by not meeting certain deadlines and being able to take advantages of certain deductions that are only given to people that file on time. 4 One of the worst mistakes that you can make is not to use a qualified CPA or attorney. There are good and bad ones. Find one that specializes in estate practice. Each attorney is an individual and will have strong and weak points.