Worried the Executor Is Misusing Estate Funds? What Kentucky Beneficiaries Can Do

Months can pass after a loved one’s death with no updates and no answers from the executor or administrator. Over the years, Wolfe & Houlehan has represented many beneficiaries and heirs who came to us with the same quiet worry: Is the person in charge of this estate taking money that isn’t theirs?

Here is what a Kentucky fiduciary owes you and how to get answers, including under Senate Bill 50 (2026 Ky. Acts ch. 134), which took effect July 15, 2026.

At a Glance

• Heirs and beneficiaries are entitled to see the sealed Financial Disclosure and inventory, even though the public cannot.
• You can ask the court to order an accounting, file exceptions to a settlement, and, in the right case, seek removal and recovery of lost funds.
• Wolfe & Houlehan offers a $300 flat-fee Motion for an Accounting (with an optional $200 attorney consultation), other à la carte services, and full-service representation.

Why the Suspicion Arises

In our experience, the suspicion usually starts not with hard evidence but with a lack of voluntary transparency. Calls go unreturned. Questions about bank accounts get vague answers. A house is sold, and no one explains where the money went.

Sometimes the Worry Is Justified

Sometimes a beneficiary’s instincts are exactly right. Over the years, we have handled a number of matters where those suspicions proved well founded. Here are just a couple of examples.

In one, a Kentucky attorney serving as personal representative of our clients’ mother’s estate sold the family farm. Public disciplinary records show he received more than $700,000 for the estate, then filed a false inventory with the probate court and misrepresented where the money was held. By the time the family hired us, the money had been routed through a dozen or so shell companies and was, for all practical purposes, unrecoverable. He pleaded guilty to felony theft, was sentenced to ten years in prison, and was permanently disbarred. That prison sentence was the only justice our clients received, and they told us they wished they had acted on their suspicions sooner.

In another, a church deacon serving as trustee of the trust our clients inherited from their father took millions of dollars of their inheritance and would not provide a real accounting despite repeated requests. He was later sentenced to 20 years in prison on theft and securities-fraud charges.

This doesn’t mean most fiduciaries are dishonest. But matters like these come up often enough that reasonable suspicions deserve prompt attention.

Silence Isn’t Always Theft

Often there is an innocent explanation: an inexperienced, grieving relative, or an estate that simply takes time. Kentucky law generally does not allow a personal representative to distribute the estate until six months after qualifying (KRS 395.190), and creditor claims and taxes must be dealt with first. Still, a fiduciary must account for other people’s money, so silence warrants action.

Warning Signs to Watch For

None of these proves misconduct, but each deserves a closer look:

• No inventory filed within 90 days of appointment.
• Refusal to provide a copy of the inventory when asked.
• The executor using estate property, or selling it to themselves or a relative, or below market value.
• Personal and estate funds mixed in the same account.
• Large or unexplained “expenses.”
• Missed settlement deadlines.
• Pressure to sign a waiver before you have seen any numbers.

What a Kentucky Fiduciary Owes You

An executor (named in a will) or administrator (appointed when there is no will) is a fiduciary who must act for the estate and its beneficiaries, not for themselves.

Loyalty and Good Faith

A fiduciary may not use estate property for personal gain or put their own interests ahead of the beneficiaries’. When applying for appointment in Kentucky, a personal representative must acknowledge in writing that they are subject to removal if they fail to perform their duties, and to “possible civil and criminal penalties for improper conversion of any property” they hold as a fiduciary (KRS 395.015(1)(e)).

Inventory

The personal representative must file an inventory within 90 days after qualifying, and an amended inventory if they find more property or a listed value was wrong (KRS 395.250).

Periodic and Final Settlements

A settlement is an accounting to the court. Under KRS 395.610, a fiduciary must file a periodic settlement two years after appointment and annually after that, until the estate is fully distributed and all debts, costs, fees, and taxes are paid. A settlement must:

• list the estate’s assets, with beginning and current values;
• account for every receipt and disbursement, with supporting documentation; and
• for a final settlement, show how assets were distributed and the fees paid to the fiduciary and their attorney.

Under KRS 395.615, no credit is allowed a fiduciary for disbursements, fees, or services “without legal evidence to justify it.”

How Senate Bill 50 Changed What You Can See

SB 50 made estate finances more private, but not from heirs and beneficiaries. (See our post on Kentucky’s 2026 probate changes under Senate Bill 50.)

• The Financial Disclosure is sealed. The probate petition (AOC-805, Rev. 7-26) no longer lists property values. They now go on a separate Financial Disclosure (AOC-808). Under KRS 395.015(3)(c), it is confidential and may be disclosed only to the personal representative, the personal representative’s attorney, any beneficiary or heir at law, the Department of Revenue, or others by court order on good cause.
• The inventory is sealed, too. The 90-day inventory is filed under seal, but the personal representative must furnish a filed copy to an heir or beneficiary who requests one (KRS 395.250(2)(a)). Settlements must also follow these confidentiality rules (KRS 395.250(6)).
• CourtNet won’t show them. Since July 15, 2026, CourtNet does not display images of Financial Disclosures, Inventories, and Settlements, so you may need to request them from the district court clerk.

One caution: you may not copy or release sealed information without court authorization, or you risk contempt (KRS 395.250(2)(b)).

Practical Tools for Kentucky Beneficiaries

1. Ask for Information, and File a Demand for Notice

Start with a written request to the personal representative (or their attorney) for the inventory and a status update. You may also file a demand for notice with the court; after that, the court sends you copies of orders in the estate, and related orders cannot be entered until you have received written notice (KRS 395.012).

2. Review the Court File

Check the district court file for what has, and hasn’t, been filed: the appointment order, any bond, the inventory, and settlements.

3. Compel an Inventory or Accounting

If the inventory or a settlement is overdue, the court must set a deadline and, if it is missed, order the fiduciary to show cause why they should not be removed, held in contempt, fined ($100 per day under KRS 395.990), or denied compensation (KRS 395.255).

You also don’t have to wait two years for an accounting. On the motion of any interested person, for good cause shown, the court may order the fiduciary to file a settlement at any time (KRS 395.610(4)).

4. Object: File Exceptions to a Settlement

When a settlement is set for hearing, exceptions must be filed before the hearing (KRS 395.625). If no exceptions are filed, a settlement made according to law will be approved. If exceptions are filed, the court can hear evidence and “reject, confirm, alter, or amend the settlement” (KRS 395.630). A confirmed settlement becomes prima facie evidence between the parties, so silence can make it harder to challenge later.

Be careful with waivers. If asked to sign a waiver so the estate can close with an informal final settlement, you have the right to request an accounting of the estate’s assets before you sign (KRS 395.605(2)(b)).

5. Seek Removal of the Fiduciary

Kentucky law requires removal in specific situations, such as incapacity, insolvency, or moving out of state without designating a process agent (KRS 395.160). A fiduciary who fails to appear at a show-cause hearing on an overdue inventory or settlement is automatically removed (KRS 395.255(4)(b)). Where the problem is serious mismanagement or self-dealing, a beneficiary can ask the court to remove the fiduciary. A removed representative must settle their accounts and turn the estate over to a successor.

6. Bond and Surety Claims

Under SB 50, a personal representative no longer posts a surety bond by default. The court orders one for public administrators and curators, or when it decides a bond is needed to protect the estate (KRS 395.130). Any interested party may ask the court to increase a bond. If a bond was posted, the surety can be a source of recovery: a successor fiduciary may sue the former personal representative and the sureties on the bond for damages caused by maladministration (KRS 395.300).

7. Surcharge and Recovery

If money was misused, the court can disallow improper credits and alter the settlement, holding the fiduciary personally responsible for the loss (often called a “surcharge”). In more complex cases, a beneficiary may bring an action in circuit court to settle the estate, starting six months after the representative qualifies (KRS 395.510).

Why Acting Promptly Matters

Money that has been spent is hard to get back. Deadlines for exceptions can be short, and once a settlement is confirmed or the estate closes, undoing it is much harder. The sooner you look at the records, the more options you are likely to have.

How Wolfe & Houlehan Can Help

Flat-Fee Motion for an Accounting

Asking the court to order an accounting is often the right first step. We offer it as a flat-fee, à la carte service:

• Motion for an Accounting, $300 flat fee: Under limited-scope representation, we prepare the motion from a questionnaire you complete. No attorney consultation is included.
• Optional add-on, $200: Add up to a one-hour consultation with Joe Wolfe, for a total of $500.

Other À La Carte (Limited-Scope) Services

With limited-scope representation, we handle discrete tasks without formally entering an appearance for the whole matter, such as:

• reviewing the court file, including the sealed Financial Disclosure and inventory;
• drafting a demand letter requesting an accounting; and
• drafting exceptions or objections for you to file.

These tasks are priced per task, and we will quote you before work begins.

Full-Service Representation

When a dispute calls for an attorney on the record, such as contested exceptions, removal, or recovering misused funds, Joe formally enters his appearance and represents you. Full-service representation is billed at $300 per hour, reduced to $250 per hour when invoices are paid on time.

Talk With a Kentucky Probate Attorney

Contact Wolfe & Houlehan PLLC to schedule a consultation. Call us at (859) 444-4693 or visit our office at 226 North Upper Street, Lexington, KY 40507.

Sources

• Senate Bill 50, 2026 Regular Session (2026 Ky. Acts ch. 134)
• KRS 395.012, KRS 395.015, KRS 395.130, KRS 395.160, KRS 395.190, KRS 395.250, KRS 395.255, KRS 395.300, KRS 395.510
• KRS 395.605, KRS 395.610, KRS 395.615, KRS 395.625, KRS 395.630, KRS 395.990

This article provides general information about Kentucky law and is not legal advice. Reading it does not create an attorney-client relationship. For advice about your specific situation, consult an attorney.