Estate planning in Kentucky: what you need to know

1 min read by Unbiased team Last updated June 28, 2024

Investigate how inheritance tax laws, estate planning costs, and legal structures impact Kentucky estate planning decisions.


  • Kentucky does not impose an estate tax but does have an inheritance tax ranging from 4% to 16%, depending on your relationship to the decedent. 

  • If you die without a will, your assets are distributed according to intestate succession law, meaning your estate passes to your closest relatives. 

  • "Dower and curtesy" laws in Kentucky affect asset distribution, with surviving spouses receiving a life estate in one-third of real property. 

  • A financial advisor can help you make sense of the laws and regulations surrounding estate planning and build an estate plan that works for you and your family.  

How much does estate planning cost in Kentucky? 

Estate planning includes the preparation of tasks to manage an individual's asset base in the event of their incapacitation or death, which often involves a will, power of attorney, and healthcare directives. 

The costs of a Kentucky estate plan can vary significantly based on the complexity of your estate and the services you need. Generally, you might spend between $1,500 and $4,950 for a comprehensive estate plan. 

When we compare these costs to those in nearby states, Kentucky estate planning tends to be slightly more expensive than in Ohio or Indiana, where a comprehensive estate plan may cost between $1,150 and $4,250.  

How does Kentucky estate tax work? 

While there is no estate tax, Kentucky does impose an inheritance tax that can affect how your assets are distributed. This inheritance tax varies based on the relationship between the deceased and the beneficiary.  

Immediate family members (spouses, parents, children, and grandchildren) are exempt. Distant relatives and non-family members may face taxes ranging from 4% to 16%, depending on the inherited amount. 

The estate's value includes all outright property, such as real estate, personal belongings, and financial assets.  

Jointly held property adds the decedent's share to the total.  

Life insurance payouts directly to a named beneficiary generally avoid Kentucky's inheritance tax. However, if the estate is the beneficiary, these funds count towards the estate's total value. 

How does estate planning for blended families work in Kentucky? 

Without a will that clearly defines your wishes, the Kentucky probate court will distribute your assets according to state law.  

In the context of blended families or families with multiple children, this can lead to unintended consequences.  

For instance, descendants might receive only a fraction of your estate, or they may have no inheritance rights at all. To avoid such outcomes, it's crucial to create a comprehensive estate plan that explicitly states how you want your assets distributed.  

How does tax planning for single parents work in Kentucky? 

Estate planning for single parents in Kentucky is essential to ensure that their children are well provided for. If a single parent passes away without a will,  

Kentucky inheritance laws dictate that the entire estate goes to the surviving children.  

Utilizing a testamentary trust, which is created through a will, can help manage and protect assets until the children reach adulthood.  

Single parents should also consider life insurance policies with designated beneficiaries to provide financial support for their children

How does tax planning for married couples work in Kentucky? 

Estate planning for married couples in Kentucky must consider the state's distinctive and rather antiquated "dower and curtesy" inheritance laws.  

Unlike most states, Kentucky ensures that if a spouse dies without a will, the surviving spouse receives a dower share, which is a life estate in one-third of the deceased's real property. However, this doesn't guarantee the entire estate to the surviving spouse.  

The rest of the estate is divided according to state law, often among children or other relatives, which may not align with your personal wishes. This reinforces the need to have a comprehensive estate plan in place. 

How does probate work in Kentucky? 

Probate is the legal process of settling a deceased person's estate.  

In Kentucky, probate is required if the deceased owns property in their own name alone. If the estate includes jointly-held property or assets with designated beneficiaries, those may bypass probate. 

The probate process in Kentucky generally takes six months to a year but can take longer for complex estates. If you fail to file probate, the estate cannot be legally settled, leading to potential legal issues and delays in asset distribution.  

What are the final arrangement & organ donation laws in Kentucky? 

In Kentucky, laws governing final arrangements and organ donation are designed to respect the wishes of the deceased.  

You can specify your preferences for burial or cremation in your will or through a pre-need contract with a funeral home. Without clear instructions, the decision typically falls to the next of kin. 

You can register as an organ donor through the Kentucky Organ Donor Affiliates (KODA) or indicate your wishes on your driver's license.  

Your estate planning checklist 

Estate planning involves several crucial steps to ensure your wishes are carried out. Here’s a checklist specific to Kentucky to help you get started: 

  • Last will & testament 

A last will and testament outlines how your assets will be distributed after your death. In Kentucky, it must be in writing, signed by the testator, and witnessed by at least two individuals. This document can also designate guardians for minor children. 

  • Healthcare documentation 

Healthcare documentation includes a living will and a healthcare power of attorney. A living will specifies your medical treatment preferences if you become incapacitated. A healthcare power of attorney appoints someone to make medical decisions on your behalf. 

  • Trusts 

In Kentucky, you can establish revocable trusts, which you can change during your lifetime, or irrevocable trusts, which cannot be altered once created. Trusts can help manage and protect assets for beneficiaries, potentially reducing estate taxes and avoiding probate. 

  • Power of attorney 

A power of attorney grants someone the authority to handle your financial and legal matters if you become unable to do so. This can include managing bank accounts, paying bills, and making investment decisions. It’s crucial to choose a trustworthy person for this role. 

  • Pre-need guardian 

Designating a pre-need guardian ensures someone will take care of your personal and property affairs if you become incapacitated. This is especially important for parents of minor children or adults with special needs, ensuring continuity of care and management of their well-being and assets. 

Get expert financial advice 

Kentucky estate tax laws require careful consideration, from managing costs and navigating inheritance taxes to addressing specific family dynamics like blended families and single parenthood.  

By taking proactive steps, such as creating a comprehensive estate plan, specifying final arrangements, and designating guardianship, you can protect your loved ones and secure their future with clarity and peace of mind. 

Let Unbiased connect you with a financial advisor for expert financial advice on estate planning in Kentucky and the rest of the US. 


Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.