KY HB435

Eliminates Kentucky inheritance tax for Class A beneficiaries (parents, surviving spouses, children, stepchildren, adopted children, grandchildren, foster children, and siblings) by removing the graduated tax rates that previously ranged from 2% to 10%

Retains inheritance tax for Class B beneficiaries (nephews, nieces, in-laws, aunts, uncles, great-grandchildren) at graduated rates from 4% to 16%, with a $1,000 exemption

Retains inheritance tax for Class C beneficiaries (non-exempt institutions and all other persons) at graduated rates from 6% to 16%, with a $500 exemption

Adds "foster child" to the list of Class A beneficiaries eligible for full inheritance tax exemption

Applies to estates of decedents who die on or after August 1, 2026