What Types of Deeds Are Recognized in Kentucky?
A property owner transfers Kentucky real estate during life by creating and recording a written deed.1 Kentucky law assumes that a deed gives the new owner (the grantee) complete ownership of the property—though a deed can expressly provide for a lesser interest.2 If the current owner (the grantor) does not have complete ownership, a Kentucky deed transfers whatever interest the owner legally holds.3
Kentucky recognizes three types of deeds that an owner can use to transfer property during life. The appropriate deed depends on the warranty of title the owner wants to provide. Warranty of title is the current owner’s guarantee that a deed transfers genuine ownership of the property and that there are no undisclosed liens, mortgages, assessments, or other title problems attached to the property.4
Kentucky Quitclaim Deed Form
A Kentucky quitclaim deed form gives the new owner whatever interest and rights the current owner has in the property with no warranty of title.5 The current owner does not promise a valid title or that the property is free of liens and other title problems. The new owner receives whatever interest the current owner has the power to transfer (if any) and assumes the risk of problems with the property’s title.
Property owners generally use quitclaim deeds when the deed involves no consideration—or value provided in return for the deed. For example, a quitclaim deed might transfer ownership to a living trust or add the owner’s spouse to the title to create a right of survivorship.
Kentucky General Warranty Deed Form
A Kentucky general warranty deed form—often shortened to warranty deed—transfers real estate with general warranty.6 A deed with general warranty provides complete warranty of title. The current owner guarantees that the new owner will receive undisputed ownership of the property and that there are no problems with the property’s title. The new owner can sue for breach of warranty if title issues arise.
The current owner who signs a warranty deed bears the risk of title problems like:
- Unpaid liens, assessments, and taxes;
- Errors in prior deeds that make the property difficult to sell; and
- Third-party claims against the property.
Kentucky warranty deeds are commonly used to transfer residential real estate purchased for fair market value.
Kentucky Special Warranty Deed Form
A Kentucky special warranty deed form transfers real estate with limited or special warranty of title. An owner who signs a special warranty deed guarantees a good title. However, the guarantee is limited because it covers only the time while the current owner held title.7 A special warranty deed, then, divides the risk of title problems between the current owner and new owner. A title problem that arose while the current owner owned the property is the current owner’s responsibility. The new owner bears the risk for any other problems—most notably, problems from before the current owner took title.
What Types of Estate Planning Deeds Are Used in Kentucky?
An estate planning deed is a deed specially designed to transfer title to real estate when the owner dies. A major advantage of estate planning deeds is that they allow property to bypass the cost and delay of probate.
Kentucky Transfer-on-Death Deeds
Kentucky has not authorized transfer-on-death (TOD) deeds. Property owners in states that allow TOD deeds can record a TOD deed during life without giving up any rights in the property until the owner’s death.
Kentucky Life Estate Deeds
A life estate deed creates two property interests:
- Life estate. A life estate is the right to own the property until the holder of the life estate (the life tenant) dies.
- Remainder. The remainder gives the interest holder—called the remainderman or remainder beneficiary—the right to own the property after the life tenant’s death.
A Kentucky property owner who creates a life estate deed for an estate plan typically keeps (or reserves) the life estate and names a child or other family member as remainder beneficiary. The life tenant retains possession, and the property avoids probate. However, a life tenant’s rights in the property are limited by the remainder beneficiary’s future interest. For example, a life tenant can transfer the life estate but can no longer transfer complete ownership.8
Kentucky Survivorship Deed
A Kentucky survivorship deed transfers title to two owners as joint tenants with right of survivorship or—if they are spouses—as tenants by the entirety with right of survivorship.9 The right of survivorship gives a surviving co-owner complete title to the property when the other co-owner dies. A Kentucky property owner can keep property out of probate by creating a survivorship deed in favor of the owner and the owner’s child, spouse, or other potential heir.
Kentucky deeds do not ordinarily use Survivorship Deed as a title. A survivorship deed is typically titled Quitclaim Deed, Warranty Deed, or Special Warranty Deed and declares the right of survivorship in the language of the deed.
What Are the Ways in Which Multiple Owners Can Jointly Own Kentucky Real Estate?
Kentucky law recognizes three forms of co-ownership in which two or more persons can hold title to real estate.
Tenancy in Common
Tenancy in common is Kentucky’s default co-ownership form. Two or more co-owners are tenants in common unless the deed that gave them the property declares a different co-ownership form. Tenants in common can have unequal co-ownership interests, and they can transfer their interests separately. A tenant in common’s interest goes through probate and can be transferred by will.10
Joint tenants—sometimes called joint tenants with right of survivorship or JTWROS—mutually hold an undivided right to the property. Their interests must be equal. A joint tenancy ordinarily involves a right of survivorship—which gives a surviving owner the right to a deceased owner’s share without probate.11 Titling property to two individuals as joint tenants with right of survivorship helps keep real estate out of probate.
Tenancy by the Entirety
Kentucky’s third co-ownership form—tenancy by the entirety or tenancy in the entirety—is very similar to joint tenancy except that it is possible only for married spouses. When spouses co-own real estate as tenants by the entirety with survivorship, a deceased spouse’s interest vests in the surviving spouse and cannot pass under the deceased spouse’s will.12
A deed that transfers Kentucky real estate to spouses must declare a right of survivorship to create a tenancy by the entirety.13 A tenancy by the entirety is destroyed—or severed—and ceases to be a tenancy by the entirety if the co-owner spouses divorce.14
Real Estate Ownership through Trusts
A revocable living trust can allow two or more persons to jointly possess and control Kentucky real estate without formally holding title. The trust legally owns the property through the trustee named in the document that created the trust. The trust’s beneficiaries enjoy the benefits of ownership—such as by living in the property or receiving rental proceeds.
Kentucky trust law allows two or more individuals to be a trust’s co-trustees and beneficiaries at the same time. However, one person cannot be a trust’s sole trustee and sole beneficiary.15
What Are the Rules for Spousal Ownership of Kentucky Real Estate?
Like other states, Kentucky has special rules governing property ownership rights of married individuals. Married owners should account for the rules below when creating deeds and other real estate documents and when planning their estates.
Kentucky Dower and Curtesy Rights
Dower and curtesy—often just dower when discussed together—are traditional rules that give spouses rights in each other’s property. Kentucky is one of the few states that still recognizes dower and curtesy.
When a married property owner dies without a will, Kentucky’s dower law gives the surviving spouse a right to one-half of the real estate the deceased spouse owned at the time of death.16 The surviving spouse also has a one-third interest in real estate the deceased spouse owned during the marriage but already transferred before death—unless the spouse released his or her interest in the property.17 The dower interest also includes a one-half interest in the deceased spouse’s personal property.
A spouse can release dower rights in transferred property by joining in the deed that transfers it. For that reason, a deed transferring real estate a married person owns individually should usually include the non-owner spouse’s signature.
Kentucky Homestead Rules
Kentucky law gives a surviving spouse the right to continue to occupy the deceased spouse’s homestead—or principal residence—for as long as the surviving spouse chooses to live there.18
Many states require a non-owner spouse to sign a deed that transfers a homestead solely owned by the other spouse. Kentucky does not specifically have that requirement, but Kentucky’s dower law usually necessitates a non-owner spouse’s signature on a homestead deed to release dower rights.
Spousal Intestate Share
Property of an individual who dies intestate—or with no will—passes to heirs under state law. A surviving spouse’s intestate share in Kentucky is essentially the spouse’s dower interest—half of the real estate and personal property in the estate.19 The surviving spouse receives the entire estate if the deceased spouse leaves no surviving children or other close relatives.20 Kentucky also gives a surviving spouse a priority claim to up to $30,000.00 of the deceased spouse’s personal property or funds on deposit with a financial institution.21
Spousal Elective Share
A surviving spouse’s elective share is the portion of the deceased spouse’s estate the surviving spouse can claim instead of the share provided by the will. A spouse’s elective share in Kentucky is the dower interest—except that the spouse’s elective share of the deceased spouse’s real estate is reduced to one-third (rather than one-half).22
Where Are Deeds Filed in Kentucky?
Every Kentucky county has an elected county court clerk—usually just called the county clerk—responsible for maintaining the county’s land records.23 Kentucky deeds must be recorded with the county clerk of the county where the property is located.24 An unrecorded deed is not binding on a later purchaser or creditor who has no actual notice of the deed.25
Does Kentucky Allow Electronic Recording?
Kentucky has adopted the Uniform Real Property Electronic Recording Act.26 An electronically signed deed in a digital format that complies with Kentucky’s electronic deed standards and general rules for deeds is an original signed deed that can be recorded.27 County recorder offices that accept electronic deeds must also continue accepting deeds in paper form.28
What Is the Cost to File a Kentucky Deed?
Kentucky’s base recording fee for deeds is $33.00 for the deed’s initial five pages and $3.00 per page for each additional page.29 A deed that requires more indexing references incurs an extra fee of $4.00 for each additional reference. Kentucky law authorizes other deed-related fees that increase the actual fee the county clerk charges to record a deed.30 The total fee can vary among deeds and counties but is usually $50.00 for five pages, plus $3.00 for each extra page.
Does Kentucky Charge a Transfer Tax for Real Estate Transfers?
Kentucky charges a real estate transfer tax for recording a deed that transfers real estate. The transfer tax rate is $0.50 per $500.00 of the property’s value.31 The value when calculating transfer tax is the full actual consideration paid for the property, including the amount of any liens.32 The value if the deed transfers real estate as a gift or for nominal or no consideration is the property’s fair market value—the price a buyer would pay for the property in an arms-length sale.33
A Kentucky deed must declare the transferred property’s value within the deed.34 The parties to the deed must certify in the deed that the consideration or market value listed in the deed is accurate.35 The county clerk uses the declared value to calculate and collect the transfer tax due at the time of recording.36 The clerk then stamps the amount paid and payment date on the recorded deed.37
Which Deeds Are Exempt from Kentucky’s Transfer Tax?
Kentucky law exempts numerous types of deeds from Kentucky’s transfer tax.38 Common exempt deeds include:
- Deeds that transfer property as a gift for nominal consideration;
- Deeds that confirm or correct a previously recorded deed;
- Deeds between married spouses or between former spouses as part of a divorce case;
- Deeds for nominal consideration between parent and child or between grandparent and grandchild;
- Deeds partitioning real estate;
- Deeds relating to mergers, consolidations, or conversions of business entities;
- Deeds connected to foreclosure and deeds in lieu of foreclosure;
- Deeds that transfer property to a business entity in proportion to the transferor’s interest in the entity, if the transfer is for nominal consideration;
- Deeds from a business entity involved in dissolution proceedings to an owner of the entity in proportion to the owner’s interest in the entity;
- Deeds from an LLC to any of its members; and
- Deeds from a trustee to a successor trustee.
Certain deeds involving trusts are also exempt from Kentucky’s transfer tax.39 A deed that transfers property to a trustee or from a trustee to a beneficiary is exempt in any of the following scenarios:
- The person who transfers property is the trust’s sole beneficiary.
- The person who transfers property is a trust beneficiary, and a transfer directly from the person who created the trust to all of the trust’s beneficiaries would be exempt under another rule.
- A transfer directly from the person who created the trust to all of the trust’s individual beneficiaries would be exempt.
Does Kentucky Require Any Additional Forms When Recording a Deed?
Kentucky law does not require the parties to a deed to complete a transfer tax return or other informational form when recording a deed. The parties may choose to complete a consideration certificate to certify the deed’s consideration or the property’s fair market value for transfer tax.40 A consideration certificate is a notarized statement signed by the current owner and new owner. It states that the consideration stated in the deed is the full amount paid for the property or states that the transfer is a gift and lists the property’s value.
A consideration certificate is an alternative to certifying consideration or value within the text of the deed. When used, the certificate is attached to and filed with the deed. It becomes part of the deed and is recorded with the deed.
- Ky. Rev. Stat. § 382.010.
- Ky. Rev. Stat. § 381.060.
- Ky. Rev. Stat. §§ 381.060; 381.150.
- Ky. Rev. Stat. § 382.030.
- Brown v. Harvey Coal Corp., 49 F.2d 434 (E.D. Ky. 1931).
- Ky. Rev. Stat. § 382.030.
- Ky. Rev. Stat. § 382.040.
- Ky. Rev. Stat. § 381.110.
- See Ky. Rev. Stat. §§ 381.130(1); 381.050.
- Sanderson v. Saxon, 834 S.W.2d 676 (Ky. 1992).
- Ky. Rev. Stat. § 381.130(1).
- Ky. Rev. Stat. § 381.050(2).
- Ky. Rev. Stat. § 381.050(1).
- See Cowan v. Pleasant, 263 S.W.2d 494 (Ct. App. Ky. 1953).
- Ky. Rev. Stat. § 386B.4-020(1)(e).
- Ky. Rev. Stat. § 392-020.
- Ky. Rev. Stat. § 392-020.
- Ky. Rev. Stat. § 427-070.
- Ky. Rev. Stat. § 392.020.
- Ky. Rev. Stat. § 391.010.
- Ky. Rev. Stat. § 391-030(1)(c).
- Ky. Rev. Stat. § 392-080.
- Ky. Const. § 99.
- Ky. Rev. Stat. § 382.110(1).
- Ky. Rev. Stat. § 382.080.
- Ky. Rev. Stat. § 382.075.
- Ky. Rev. Stat. §§ 382.075(1)-(3).
- Ky. Rev. Stat. § 382.075(4)(c).
- Ky. Rev. Stat. § 64.012(1)(a)(1).
- See, e.g., Ky. Rev. Stat. § 142.010(1).
- Ky. Rev. Stat. § 142.050(2).
- Ky. Rev. Stat. § 142.050(1)(b)(1).
- Ky. Rev. Stat. § 142.050(1)(b)(2).
- Ky. Rev. Stat. § 142.050(3)(b).
- Ky. Rev. Stat. §§ 382.135(1)(e)(1)-(1)(e)(2).
- Ky. Rev. Stat. § 142.050(3)(a).
- Ky. Rev. Stat. § 142.050(4).
- Ky. Rev. Stat. §§ 142.050(7)(a)-(7)(o).
- Ky. Rev. Stat. § 142.050(8).
- Ky. Rev. Stat. § 382.135(1)(e).