Common Estate Planning Myths Debunked

Many people put off estate planning. It feels complex, perhaps a little morbid, and it is easy to assume it is a task reserved for the wealthy or the elderly. This procrastination is often fueled by a sea of misinformation. In Kentucky, these misconceptions can lead to serious, costly, and heartbreaking problems for the families left behind. What you think will happen with your assets and what Kentucky law dictates are often two very different things.

Myth: I am not wealthy, so I do not need an estate plan.

Fact: This is perhaps the most pervasive and damaging myth. An estate plan is not just for managing wealth; it is for managing you and your assets, regardless of size.

If you have no plan, Kentucky’s laws of intestate succession (KRS Chapter 391) will make every decision for you. A judge who does not know you will decide who gets your assets, and the formula is rigid. It does not care about your close relationships or your specific wishes.

An estate plan allows you to:

• Nominate a Guardian: If you have minor children, this is the most important reason to have a will. Without it, a court will decide who raises your children.
• Appoint Incapacity Agents: Who will make your medical decisions if you are in an accident? Who will pay your mortgage and bills if you are in a coma? A plan appoints these people through a Healthcare Power of Attorney and a Durable (Financial) Power of Attorney.
• Distribute Sentimental Items: A plan can direct who receives specific items of sentimental value, preventing family fights over things that have little monetary worth but high emotional stakes.
• Avoid Unintended Heirs: Under Kentucky’s intestate laws, if you are married with children, your spouse and children split your estate. If you are married with no children but living parents, your spouse must split the assets with your parents. Most people do not want this.

Myth: A simple will is all I need.

Fact: A Last Will and Testament is a foundational document, but it is often not a complete solution. A will’s primary job is to name an Executor and state who gets what after you pass away.

The major gap is that a will does nothing for you if you become incapacitated. If you have a stroke or are in a serious accident, your will is useless. Your family would have to go to court to have you declared incompetent and have a guardian appointed just to manage your affairs.

A complete plan always includes incapacity documents to protect you while you are alive:

• Durable Power of Attorney for finances.
• Healthcare Power of Attorney for medical decisions.
• Living Will (Advance Directive) to state your wishes for end-of-life care.

For many Kentuckians, a will is not even the most effective tool for transferring assets. It has one major drawback: it guarantees probate.

Myth: A will avoids probate.

Fact: This is completely false. A will is the primary instruction manual for the probate court.

Probate is the court-supervised legal process of validating your will, paying your final debts, and legally transferring your assets to your heirs. In Kentucky, this process is handled by the District Court, often in the probate division of the Family Court in larger areas like Jefferson County.

Relying on a will means your estate must go through probate, which has several disadvantages:

• It is Public: Your will and a complete inventory of your assets (your home, bank accounts, investments) become public records. Anyone can go to the courthouse and see what you owned and who you left it to.
• It is Slow: The probate process in Kentucky can take months, and often more than a year if there are any complications or disputes. During this time, your assets are frozen.
• It is Costly: Your estate must pay for court fees, executor fees, and attorney fees, all of which reduce the inheritance left for your family.

A will directs probate; it does not avoid it. The most common tool used to avoid probate is a Revocable Living Trust.

Myth: A Revocable Living Trust is only for the extremely rich.

Fact: This myth is connected directly to the one above. A Revocable Living Trust is the most effective and common tool for avoiding probate, and it provides immense benefits for modest estates as well as large ones.

A trust is simply a private legal entity you create to hold your assets. You transfer ownership of your house, bank accounts, and other assets into the name of the trust.

• While you are alive, you act as the trustee (the manager) and have 100% control, just as you do now.
• If you become incapacitated, your chosen successor trustee (perhaps a spouse or adult child) can step in immediately to manage your finances without going to court.
• When you pass away, your successor trustee takes over and distributes the trust assets to your beneficiaries according to your private instructions.

The key benefits are:

• Probate Avoidance: All assets in the trust completely bypass the probate court. It is private, fast, and saves your family significant money.
• Incapacity Planning: A trust is a far more powerful incapacity tool than a power of attorney. It allows for seamless management of your assets if you are unable to do so.
• Avoids Ancillary Probate: If you own property in another state, like a vacation condo in Florida or a timeshare in South Carolina, your will would have to be probated in Kentucky and in that other state. A trust holding that property avoids this second, costly ancillary probate process.

Myth: My family is close and will know what to do.

Fact: Oral promises are not legally binding in Kentucky. Even the most harmonious families can fracture under the stress of grief combined with the confusion of handling a loved one’s estate.

Relying on your family to “do the right thing” is not a plan; it is a burden.

• What if one child needs their inheritance immediately, but another wants to keep the family home?
• Who gets the wedding ring? Who gets the antique furniture?
• Who is responsible for paying the final bills and filing the last tax return?

A formal plan removes this burden. It makes your wishes clear and legally enforceable, preventing arguments before they start. It is a final act of care for your family, giving them a clear roadmap to follow during a difficult time.

Myth: I am too young for estate planning.

Fact: Incapacity can happen at any age. Every adult in Kentucky over the age of 18 needs, at a minimum, incapacity documents.

Once you turn 18, your parents no longer have the legal right to make medical or financial decisions for you.

• If you are 19 and in a car accident, doctors cannot legally speak to your parents about your condition due of HIPAA (Health Insurance Portability and Accountability Act) privacy rules.
• Without a Healthcare Power of Attorney, your family members would have to go to court and petition to be appointed as your guardian. This is a slow, public, and emotionally devastating process.

For young parents, a plan is even more essential. Your will is the only place you can legally nominate a guardian for your minor children. If you and the other parent pass away without a will, a judge who does not know you or your family will make that decision.

Myth: Putting my house and bank accounts in joint names is a simpler, cheaper substitute.

Fact: Using joint ownership (Joint Tenancy with Right of Survivorship) as a “DIY” estate plan is one of the most dangerous mistakes we see. While it does avoid probate for that specific asset, it is a blunt instrument with significant risks.

• Creditor Risk: If you add your adult son to your bank account, that money is now 100% exposed to his legal problems. If he gets in a car accident, is sued, goes through a divorce, or files for bankruptcy, your money can be taken by his creditors.
• Loss of Control: If you add a child to the deed of your home, you can no longer sell or refinance your home without their written permission. You have given up part of your ownership.
• Unintended Disinheritance: This is a very common tragedy. A widow adds her most “responsible” daughter to her deed and accounts, assuming that daughter will “split it” with her other siblings. Legally, when the mother passes, that daughter owns 100% of those assets. She has no legal obligation to share, and this can permanently destroy a family.

Myth: A “Living Will” is the same as a will.

Fact: These two documents serve entirely different purposes, and the similar names cause a lot of confusion.

• A Last Will and Testament is for your assets after you die.
• A Living Will (also called an Advance Directive in Kentucky) is for your medical care while you are alive but unable to communicate.

A Living Will specifically states your wishes regarding life-sustaining treatment, artificial nutrition, and hydration if you are in a terminal condition or a persistent vegetative state. It works alongside your Healthcare Power of Attorney as part of your incapacity plan.

Myth: I can use a cheap online form; I do not need an attorney.

Fact: Online templates are a “one-size-fits-all” solution for a problem that is deeply personal and governed by specific state laws. The small amount of money saved upfront can cost your family thousands, or even hundreds of thousands, of dollars later.

• Kentucky’s Specific Laws: Does that generic form account for Kentucky’s specific inheritance tax rules? Does it follow the exact execution formalities (KRS 394.040) that require two disinterested witnesses to sign in your presence and in each other’s presence? A small error in the signing ceremony can invalidate the entire will.
• The Plan is Not the Paper: An attorney’s value is not in the documents themselves, but in the counsel. A form cannot ask you follow-up questions or identify potential problems. It cannot advise you on why a trust is a better tool for your situation, or how to protect a child with special needs, or how to plan for a blended family.
• Funding is Not Included: The most common mistake with DIY trusts is that they are never “funded.” The person signs the trust document but fails to re-title their house and accounts into the trust’s name. The result is an empty trust that does nothing, and the family ends up in probate court anyway.

Fixing a DIY estate plan mistake after death is far more expensive and stressful than creating a correct plan from the start.

Myth: Kentucky has an inheritance tax, so my heirs will get a big tax bill.

Fact: This is a uniquely “Kentucky” myth that needs careful explanation. Kentucky does have an inheritance tax, but who it affects is very specific.

First, this is different from the federal estate tax, which only applies to estates worth many millions of dollars. Most Kentuckians will not owe any federal estate tax.

The Kentucky inheritance tax (KRS Chapter 140) is paid by the beneficiary, and the rate depends on their relationship to the person who passed away.

Class A Beneficiaries: This class is 100% exempt from the inheritance tax. This class includes:

• Spouses
• Children (natural, adopted, and step-children)
• Grandchildren
• Parents
• Siblings (full and half)

Who pays? Class B beneficiaries (nieces, nephews, sons-in-law, daughters-in-law) and Class C beneficiaries (aunts, uncles, cousins, friends, or an unmarried partner) do have to pay inheritance tax on what they receive.

This means if your plan is to leave assets to your children and spouse, this tax will not be a concern. But if you plan to leave a gift to a niece, a close friend, or a long-term partner, planning is essential to manage and minimize this tax.

Securing Your Legacy with Clarity

Estate planning is one of the most meaningful steps you can take to protect your family’s future and ensure your wishes are honored. Letting these common myths dictate your choices can, unfortunately, lead to the very outcomes you would want to avoid. A well-crafted plan, tailored to your specific family situation and Kentucky’s laws, provides immense protection and peace of mind. Our legal team is dedicated to helping families throughout Kentucky navigate these important decisions with compassion and skill. We provide the knowledgeable guidance you need to create a robust estate plan that honors your wishes, protects your loved ones, and fulfills your vision. 

Contact us today to schedule a consultation and take a vital step toward securing your family’s future.