KRS 140.080: Exemptions of inheritable interests.

(1) The following exemptions chargeable against the lowest bracket or brackets of

inheritable interests shall be free from any tax under the preceding provisions of

this chapter:

(a) Surviving spouse, total inheritable interest. Effective as to decedents dying

after August 1, 1985, notwithstanding anything in this chapter to the contrary,

if the decedent's personal representative (or trustee or transferee, absent a

personal representative) shall so elect, the spouse's inheritable interest shall

include the enti re value of any trust or life estate which is in a form that

qualifies for the federal estate tax marital deductions under 26 U.S.C. sec.

2056(b)(5) or (7), as amended through December 31, 1984, regardless of

whether or not the federal estate tax marital d eduction is elected by the

decedent's personal representative. To be valid, the election referred to in the

sentence immediately preceding must be made in the form prescribed by the

Department of Revenue and must be filed on or before the due date of the t ax

return, including extensions, or with the first tax return filed, whichever last

occurs;

(b) Class A beneficiaries, as defined in KRS 140.070, total inheritable interest;

(c) All persons of Class B, under KRS 140.070, $1,000; and

(d) All persons of Class C, under KRS 140.070, $500.

(2) If the decedent was not a resident of this state, the exemption shall be the same

proportion of the allowable exemption in the case of residents that the property

taxable by this state bears to the whole property transferred by the decedent.