Assets that remain in your Kentucky estate after you pass away will likely be subject to probate. This is a process by which your debts are settled and assets are transferred to beneficiaries. Assets may be transferred either in accordance with instructions left in your will or in accordance with state law if you die intestate.
Incomplete transfers
You may have decided to gift assets during your lifetime to ensure that assets were properly distributed. This may also be done to reduce the value of your estate for tax purposes. However, if a gift transfer is not completed prior to your death, the subject of that gift will likely return to your estate. For instance, if you gave your child $10,000, that money might revert back to your estate if it wasn’t put into that child’s bank account or otherwise transferred to an account that you had no control over.
Probate is a matter of public record
Another issue to consider when dealing with an incomplete transfer is that probate is a matter of public record. Therefore, anyone who is interested can learn the terms of your estate plan or learn more about any transfers deemed to be incomplete. This may lead to an increased risk of a child, sibling or other potential beneficiaries making claims against your estate based on the new information that becomes available.
Estate planning steps may be taken to avoid an incomplete transfer. For instance, you can direct deposit money into a recipient’s account or simply refrain from making gifts during your lifetime. Taking these or other actions may prevent assets from going to an estranged relative or increasing the value of your estate to the point where taxable events occur.