Episode 9:  You know Louisville attorney Scott Scheynost as a workers’ compensation and injury lawyer.  However, an important part of his practice involves Wills and Probate issues.  In today’s episode, Scott discusses some basic documents people should have and why they’re important.

When live changes occur, it’s important for people to consider either creating or updating documents such as a Will, Power of Attorney and Living Will Directive.  Unfortunately, at some point, all of us are going to have to face this; as are those who are left behind. 

Common Life Changes include:

• Significant injury or illness
• Marriage
• Divorce
• Children reaching the age of 18 and/or leaving for college
• And many more

It’s important to understand that this process doesn’t have to be intimidating or complicated.  Scott guides his clients through the steps and helps them to consider options and important decisions.  It’s usually a significant weight off of someone’s shoulders, once they know they’ve established a plan.

Other than the wealthy or severely disabled, three standard documents can generally cover the majority of people.

What’s a Will?

This is probably the most familiar document.  It covers your assets once you’ve passed away.  There are three distinct benefits:

• It tells everyone what you want or wish to happen
• It simplifies the probate process
• It can reduce the attorney fees associated with settling a person’s estate

Your Will designates a person or persons who will take care of business for you, after you pass away.  This person is your Executor (male) or your Executrix (female).  There are many details that need to be handled and having someone already appointed can save time, money and emotional stress related to the loss of a loved one.

Kentucky Allows a Holographic Will

This is simply a Will that’s be written out in your own hand.  It can work, but there are some pitfalls and other issues created by holographic Will that was executed improperly.  In fact, in Scott’s experience, these usually create more problems than they solve.  In fact, someone can inadvertently create a holographic Will, without realizing it.  If you’ve written down your wishes on a napkin, it can be argued that this is a Will.  This can cause problems if you already have a Will and this napkin gets treated as a “codicil.”  You should really speak with an attorney to make sure your Will is done properly.  They’re fairly inexpensive.

Wills Must Be Properly Executed

It’s not uncommon to have to deal with a Will that was improperly signed or otherwise executed.  Did you know if a Will has been typed, signed and notarized, it still may be invalid?

In Kentucky, a Will should be signed by the person executing it, along with 2 witnesses and their signatures.  If you only have a notary sign it, that’s just 1 witness.  There are many technical aspects you need to consider to ensure it is legally valid.

You Must Revoke a Previous Will or Wills

If there was a previous Will, and you are now making a new one, you should be sure to state that you are revoking the previous Will.  At a minimum, care should be taken to make sure the new Will “fits in” with the old Will.  Generally, it’s easier to simply revoke previous versions and start over.

What is an Estate?

Legally speaking, this doesn’t mean a mansion, stock portfolios and limousines.  When you pass away your belongings, bank account(s) and property are your estate.  Think of it as a snapshot of everything you own, at the time of your death.  Everyone has an estate. 

If you don’t have a Will and other documents in order, the assets you’ve left behind sit there and can risk incurring property taxes, decay or even theft.

Doesn’t the Spouse Get Your Belongings When You Die?

Generally, yes, if both the husband and wife are listed on titles to the items (e.g. your house, cars, etc.).  This is referred to as “Joint-Ownership with Right of Survivorship.”  This means when the first spouse passes, it automatically belongs to the second spouse.  The items pass outside of the estate. 

This doesn’t mean you don’t need a Will.  We don’t know which spouse will pass away, first and ultimately, once both spouses pass, the estate still needs to probated and distributed.  Also, there may be other times that are not jointly-owned, which need to be covered in the Will.

What’s a Power of Attorney?

This is another important document that most people should have.  It’s often referred to as a POA.  This allows you to designate an agent to take care of business on your behalf.  This can be wide-ranging or limited to a single transaction. 

In Kentucky, the spouse does not automatically get to sign documents for the other spouse.  This can be extremely important when buying or selling property. 

As you grow older, the importance of a Power of Attorney increases.  The chance of you becoming ill, disabled or incapacitated is much more likely.  If you are hospitalized or go to a nursing home, having a POA is not just a convenience, it’s a necessity. 

It’s important that you properly execute your POA document while you’re alert and competent.  If you’re incapacitated or heavily medicated, it may be too late.  In fact, many hospitals or nursing homes won’t let you execute these documents on the premises to avoid someone raising an issue that you didn’t know what you were signing at the time.

Does my College-Aged Child Need a Will or POA?

Actually, it’s a good idea especially if he/she is 18 years old or older (legal adult) or is considering traveling abroad.  Many issues can come up that can be handled much more efficiently with a POA in place.  Even if your son or daughter doesn’t have significant assets, this will minimize the issues if something needs to be signed or handle on his/her behalf.

This can help should your son or daughter be involved in a car wreck while at college.  There’s a risk of significant illness or other practical reasons.  A POA can greatly simplify things for your child.  The Will can simplify things for the family.

Can I Cancel a Power of Attorney?

A Power of Attorney can be rescinded at any time, as long as the person is competent to do so.  It can be amended or a new POA drafted as the situation changes.  You can also designate an expiration date for the POW.  You can put as many limits on it as you feel necessary. 

What’s a Living Will Directive?

This is a document that allows someone to make healthcare decisions for you, if you’re incapacitated.  It’s not a Will.  It’s taking care of important decisions, while you’re alive.  Think of it as a Power of Attorney for healthcare. 

The Living Will Directive allows you to appoint your agent, but also can include language regarding what you want or do not want.  There are many options to consider on the standard Kentucky form.  Scott recommends giving your surrogate a fairly broad authority to act, rather than limiting his/her/their discretion.  You should have a conversation with your healthcare surrogate(s) so they are well aware of your wishes, should certain decisions need to be made on your behalf.

Your Living Will Directive can be revoke or changed at any time, as long as you are legally competent to do so. 

What if My Documents Were Drafted in another State?

Normally, these documents would be valid in Kentucky, based on the US Constitution.  As long as these documents were legal in the state in which they were drafted, they should be fine in Kentucky. 

What Happens to my Will if I Get a Divorce?

In Kentucky, if a divorce occurs a divorce automatically updates a Will.  The ex-spouse is taken out of your Will.  Issues often occur when you designated other items to go to other individuals related to that ex-spouse. 

If you go through a divorce, it’s a good idea to have an attorney review your Will, POA and Living Will Directive.  A divorce doesn’t automatically cancel a Power of Attorney or Living Will.

What is Probate?

Your belongings must be legally transferred to someone else upon your death.  This is done through a process called Probate.  If there aren’t any assets in the estate, it may not need to go through probate, even if there is a Will. 

Houses, bank accounts, cars and other property can be titled in the names of both spouses. This can often cover the contents of the house.  Again, refer to the previous comments about Joint-Ownership with Right of Survivorship. 

Dispensing with Probate

Kentucky has a spousal exemption of $30,000, currently.  The surviving spouse gets the first $30,000 of the estate.  Typically, this could cover a car, boat or other item that wasn’t titled in the name of both spouses.  For instance, if the car has a value of $10,000, it could pass to the spouse under the exemption.  This can significantly reduce the time and expense of going through probate, once the court is petitioned to resolve the issue via the spousal exemption.  This is called “dispensing with probate.”

The children can also use the spousal exemption if the surviving spouse also passes away.  Again, this can make closing down the estate easier.

How Does Probate Work in Kentucky?

If you have a Will and it needs to be probated, the attorney needs to determine if the Will is self-proving or not.  In Kentucky, a Will is considered to be self-proving if it’s signed by the individual, signed by two witnesses and also signed by the notary who witnessed the signatures.  There are a few other requirements.

If the Will is not self-proving, the witnesses will have to show up in court and testify they witnessed the person signing their Will.  This can be difficult and present a number of challenges.  If the witnesses cannot be found, 2 other people must be able to testify that the signature is valid.

Next, the executor needs to be appointed.  He/She will make the decisions regarding the items in the estate.  The main duty is to follow the terms of the Will.  This can include the payments of debts, charitable contributions and the distribution of the assets.  If there is no Will designating an executor, the court will assign an administrator to perform those duties. 

The emotions involved in settling the estate can be very difficult.  Again, this is a reason to have your documents in place to minimize the stress, potential for arguments and to ensure your wishes are carried out, properly.

What Happens if You Die without a Will in Kentucky?

This is referred to as being “intestate.”  The court will assign an administrator for the estate.  This person will basically have the same duties as an executor.  Without a Will, certain Kentucky statutes will tell us what needs to be done with the assets. 

Can We Avoid Probate?

One way to do this is to give everything away before you die.  However, there are complicated issues related to Medicare/Medicaid and inheritance/gift taxes.  Transferring assets into a Trust is another option. 

People are often scared about probate.  The process can be made much easier if you have the properly executed documents in place.  Having those documents can also make it much easier on your family, when that time comes. 

Contact Scott Scheynost at (502) 937-5287.  This podcast is meant to provide information and is not legal advice.  Scott’s principal office is located at 7619 Dixie Highway, Louisville, KY 40258.  Co-host Jim Ray is a non-attorney spokesperson.  This is an advertisement.