RESOURCES

Often the biggest barrier to creating an effective estate plan is knowing where to begin. The terms can be confusing, but the meanings are straightforward. My approach is to be transparent and approachable when it comes to helping you make the right decisions for your family.

Glossary of Terms

Estate:

All that you own, including real and personal property.

Beneficiary:

The person or people you choose to receive your estate. You can also choose to give your estate to a charity or organization.

Power of Attorney:

A document by which you give someone authority to transact business on your behalf. A power of attorney is only valid during your lifetime.

Durable Power of Attorney:

A document by which you give someone authority to transact business on your behalf and the authority remains in effect during your incapacity.

Will/Last Will and Testament:

A will is a document giving instructions on who you want to manage your estate and who you want to inherit your property and assets. In your will, you also can appoint a guardian for your minor children and a custodian for pets. A will becomes effective at death and is not enforceable during your lifetime.

Executor/Personal Representative:

The person you choose to carry out the terms of your will.

Revocable Living Trust:

A revocable trust can be changed or revoked during your lifetime. It is a contract/agreement and is a way to manage your assets. Generally, you are the Trustee of your trust during your lifetime. After your lifetime, the trust becomes irrevocable (unable to be changed). Your specified loved ones (beneficiaries) will receive assets from your trust in the way you specify. You can structure when your beneficiaries can receive money, what percentages you would like them to receive at certain ages, and for what purposes distributions can be made from the trust assets, for instance, health and education.

Testamentary Trust:

A trust that is part of an individual’s will. It does not take effect, and therefore cannot be funded, until the individual’s death. Because a testamentary trust is part of a will, it is a public document that gets filed with the court and is subject to probate and court supervision.

Trustee:

The person (or a trust company or bank) you appoint to manage the assets you place in your trust. The Trustee will distribute your estate to your loved ones pursuant to the terms you set forth in your trust.

Living Will:

A document stating your wishes about your medical care when you are unconscious or too ill to communicate. If you are able to express your own decisions, you can accept and refuse any medical treatment and your living will will not be used. In your living will, you can also specify whether you want to be an organ donor.

Health Care Surrogate:

The person you appoint in your living will or health care power of attorney to carry out your wishes regarding your medical care.

Probate:

Probate: Probate is a court process. The objective of probate is to ensure that the proper heirs (people entitled to inherit) receive the assets and property that they are entitled to receive. In some states, probate can be very complicated and expensive. However, in Kentucky, the probate process is relatively straightforward and inexpensive. If you have a will, the Court will distribute your estate as you specify in your will. If you do not have a will, the Court will distribute your estate intestate (by the laws specified in the Kentucky Revised Statutes).

Intestate:

A legal term meaning a person who dies without a will. If you don’t have a will, your estate will be distributed according to Kentucky law.

Per Stirpes:

Per Stirpes designation means that if a primary beneficiary dies before the person making the will, the deceased beneficiary’s share is passed down to deceased beneficiary’s children or other direct descendants. “Per stirpes” is a Latin term meaning “by branch” or “by family line,” ensuring that the intended portion of the inheritance stays within that specific family branch, rather than being divided among the remaining living beneficiaries.

Assets you own jointly with rights of survivorship:

Typically, property that you own jointly with another person (i.e., a home with both people listed on the deed in joint right of survivorship), will automatically pass to the joint owner at the end of your lifetime. However, property that is only owned by you (i.e., cars, bank accounts, real estate, etc.,) will pass intestate.

Federal Tax Exemption:

Currently in 2025, the federal tax exemption amount is $13.99 million per individual or $27.98 million for a married couple. If the gross estate (an accounting of everything owed) is more than this amount, a federal tax return will need to be filed within nine months of a person’s death. The current tax rate for estates larger than the federal exemption amount ranges in 2025 from 18% to 40%.

Kentucky Inheritance Tax:

Whether inheritance taxes are owed depends upon the relationship the beneficiary has with the deceased. Generally, the closer the relationship with the deceased, the greater the exemption. For example, Kentucky allows an exemption (meaning no inheritance taxes owed) for Class A beneficiaries. This includes, spouses, children, stepchildren, grandchildren, parents, brothers and sisters, and half brothers and sisters.