Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
When you serve as a personal representative (also known as an executor or administrator) of a Kentucky estate, you handle all the decedent’s assets. Opening a dedicated estate account ensures you keep estate funds separate from your personal finances. Kentucky law requires fiduciaries to safeguard estate assets. Mixing personal and estate funds can lead to accounting errors, personal liability, or court sanctions.
Why an Estate Account Is Necessary
- Maintains clear records for receipts and disbursements.
- Protects you from personal liability for improper use of estate funds.
- Simplifies filing the fiduciary’s final accounting with the probate court.
Kentucky Law Requirements
Under KRS § 394.150, a personal representative must deposit estate funds in a financial institution and obtain any required bonds or security. The court may order that the funds be kept in an interest-bearing account for the benefit of heirs and beneficiaries (KRS § 394.150).
KRS § 394.153 requires fiduciaries to file detailed accountings showing all estate receipts and disbursements in court before closing the estate (KRS § 394.153).
Steps to Open an Estate Account
- Obtain your Letters of Administration or Letters Testamentary from the probate clerk.
- Visit a bank or credit union with the court-issued documents.
- Open an account titled “Estate of [Decedent Name], by [Your Name], Personal Representative.”
- Provide the institution with any bond or security proof if required by the court.
- Keep all statements and transaction records for your final accounting.
Helpful Hints
- Open the account within 30 days of appointment to avoid court inquiries.
- Use a separate checkbook and debit card exclusively for estate transactions.
- Consider an interest-bearing account if the estate will remain open for more than a year.
- Track fees and expenses carefully to include in your final settlement.
- Consult an attorney if you anticipate disputes among heirs or complex assets.