Stoll Keenon Ogden PLLC | Advertising Material
November 17, 2020
Sarah Sloan Reeves
Member, Stoll Keenon Ogden PLLC
Kelly Ball Broadbent
Attorney, Stoll Keenon Ogden PLLC
The 2020 Session of the Kentucky General Assembly enacted some notable changes to Kentucky’s probate laws that shorten the time in which creditors can bring claims against a decedent’s estate. Prior to these statutory amendments, a creditor had six months from the date of appointment of the personal representative or, if no personal representative was appointed, two years from the decedent’s date of death. Effective July 15, 2020, creditors must present their claims “within the earlier of” (1) eight months after the decedent’s death, (2) six months after the appointment of a personal representative, or (3) within sixty days after a creditor receives “actual notice” from a personal representative.
Because this change may, in certain cases, have the effect of shortening the statute of limitations, heirs and creditors should take note of the new rules. While the amended statutes do not expressly indicate when these new changes are effective, Kentucky law generally provides that a law will not apply retroactively unless it states so expressly. As a result, if a decedent died before July 15, the old rules regarding time limitations should apply.
Though these new changes generally affect heirs and creditors, they do not change a secured creditor’s rights to pursue its collateral. Also, creditors may have the ability to open the estate if the family refuses to do so. KRS 395.040(2) provides that if no person related to a decedent applies for administration within sixty days of the decedent’s death, the probate court has the discretion to grant administration to a creditor or any other person.
Another potential change affecting both heirs and creditors alike is the expansion of the personal property exemption, which allows personal property to pass to a surviving spouse or child free from creditor claims. As a result of the new legislation, the exemption amount has increased from $15,000 to $30,000. Because the new law does not state when the increase goes into effect, it is not clear how the new exemption amount will be applied to some estates. The statute provides that the court awards the exemption “on application to the surviving spouse…or to the surviving children.” Thus, for example, it is possible that the increased amount may apply to an estate of a decedent who died prior to July 15, 2020, if the application is made after that date.
As you can see, there remains some uncertainty with these statutory amendments. Whether you are a creditor or an heir, it is important to seek legal advice when faced with situations like this. Stoll Keenon Ogden is ready to assist in any way we can.
Stoll Keenon Ogden PLLC (SKO) understands that these are trying times for our clients and our country. Our firm operations have continued uninterrupted and our attorneys are equipped to serve clients as we always have – for more than 120 years.
Our firm’s Trusts & Estates Law practice meets the needs of families, businesses and individuals through the application of our attorneys’ significant skills and experience and our firm’s comprehensive, team-oriented services. We recognize that trusts and estates matters touch the very core of our clients’ personal lives and the lives of their families, and we strive to build relationships with them that will last a lifetime.
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