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Tennessee Probate Explained

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When a loved one passes away, their estate may need to go through probate. The probate process simply ensures that the decedent’s assets and estate go to the people who are legally entitled to it. An estate must go through probate regardless of whether or not the deceased left a Will. This process may not be necessary if the testator left their assets in a living trust, rather than relying exclusively on a Will.

Which Assets Are Exempt From Probate?

Certain assets may not have to go through the probate process. These assets include:

  • Certain bank and brokerage accounts if a designation made. Individuals may choose to designate a beneficiary for their bank and brokerage accounts. These are also known as “transfer on death” accounts. When the decedent passes, beneficiaries can claim these assets right away.  This designation may either be combined with the power to sign checks or just a gift to take place upon death. These are separate actions with a financial institution.
  • Accounts and policies with designated beneficiaries. Life insurance policies and retirement accounts should have named beneficiaries. The funds in these accounts are typically exempt from probate and can be claimed immediately if a designation has been made.
  • Real estate with right of survivorship. If the testator was married at the time of death, their spouse automatically takes ownership of some types of real property (and joint bank accounts) if the property was in joint names. 
  • Joint tenancy assets. When two people are named owners of an asset and one passes away, the other takes full ownership without the asset going through probate 

General Probate Process

The probate process in Tennessee is fairly straightforward. Someone must file the decedent’s Will with the county in which they lived attached to a petition for probate with the court. The executor named in the Will will be granted personal representative rights. If there is no Will, the Will doesn’t name a personal representative or the executor names doesn’t want to serve, the court appoints someone.  If there is no will a relative, heir or creditor may file a petition to open an estate as an “intestate” estate. In an intestate estate the petitioner qualifies as an administrator of the estate and has similar responsibilities as an executor.  

Once the petition is received, the executor must notify all heirs and beneficiaries that the estate is going through probate. There will also be a publication in the paper for creditors of the estate and the creditors have four months from the date of publication to file their creditor claims against the estate.  The executor must send notices of the opening of the estate to known creditors. Within 60 days, the personal representative must inventory the decedent’s assets and submit the inventory to the court. Unless specifically waived in the will a bond may be set by the court to ensure proper administration of the estate.  Unless waived in the will or agreed to be waived by the heirs, an accounting must be filed to the probate court of all the assets taken into the estate and all expenditures (along with a description of the expenditure and copies of the checks and statements of the bank account of the estate) made out of those assets on behalf of the estate.  

After all of the debts owed by the estate have been paid (after the four-month period for creditors’ claims has passed) —as well as the testator’s state and federal taxes, if necessary—the executor upon making a final approved accounting to the court can distribute assets to heirs and beneficiaries. 

All in all, this process typically takes at least six months and may take multiple years, depending on the complexity of the estate and the accuracy of the decedent’s records. Do you have to oversee an estate through the probate process? Instead of taking on this task on your own, turn to VKBA&R Law. Contact us today at 615-321-5659 to discuss your legal needs.

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What happens to your partner when you die?

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LIVING TOGETHER AS A COUPLE AND WHAT THAT MEANS WHEN YOU DIE

More United States adults are cohabiting with a partner than in years past. The Pew Research Center reports that as marriage rates have fallen, the number of adults in cohabiting relationships has continued to climb, reaching about 18 million in 2016.
You may be sharing an apartment or a house and co-mingling your other personal property. Which works well until you die. (No one needs to reflect very long on Nashville traffic to know that Nashville traffic fatalities have increased year by year as well). The surviving partner may well be dependent on the now deceased partner’s income as to staying in the shared housing or on continuing the life style the couple maintained. A will leaving property to the surviving partner may help provide that ability to continue in a familiar setting after the loss.
If the deceased does not leave a will it is known as dying intestate. The property of an individual dying intestate in Tennessee is subject to certain laws that govern distribution of their personal property and real property. If unmarried, the entire estate will go the individual’s children. If there are no children (or heirs of children), the estate goes to their parents. If no parents survive then an estate passes to the siblings (or their heirs). If there are no children, no parents and no siblings, the estate passes to more distant relatives. There is no provision in intestate inheritance for an unmarried partner.
The heirs at law can make it very difficult for the surviving partner by demanding property be distributed to them and an accounting made of co-mingled property. Access to the house to get personal property or beginning an eviction is possible. You hope that the heirs of a single decedent would be understanding, but that is not always the case.
A will can specify that your property goes to the surviving partner. It can also specify that the inheritance is only effective “as long as you are cohabiting” at the time of death. The will can also equitably divide an estate between the partner and other heirs. It is often something put off since almost no one likes to go to their lawyer’s office, but it is of great benefit and fairly simple to state in a will.
An older will takes care of being intestate but may no longer express the situation of a decedent if there is an unmarried partner in the picture. Since 2007, the number of cohabiting adults ages 50 and older grew by 75%. This increase is faster than that of other age groups during the same time period and driven in part by the aging of the Baby Boomers. A revised will may set up a trust of funds during the life time of a partner to allow them to have the benefit of funds if needed, but still provide that other heirs will benefit after the death of the partner. A life estate in real property may allow a survivor to live in a house they are used to during the rest of their life. This intentional planning may take the burden of determining what the wishes of the decedent were off the adult children of the deceased. Updating an existing will (and insurance beneficiaries) is also important in a cohabitating situation.

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Conservatorships for Elderly or Mentally Challenged Individuals

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In this era of scattered families, the people who are mentally marginalized due to age, substance abuse or mental disabilities are often left in a vulnerable position to be taken advantage of by third parties of unscrupulous family members. It is common for a young family member to be living with a grandparent to be taking money from the elder, using their credit card or having a parade of their friends in the house who may take advantage of the senior or mentally disabled individual. As one social worker put it “these people may as well have a target drawn on their backs.”

Fortunately, the state of Tennessee has laws that can protect such individuals. The conservatorship laws are quite specific and do an effective job of protecting the financial and healthcare interests of people with diminished capacity. It is not a matter of just getting one individual appointed to look after the ward, but the court will actually oversee what is going on in the individual ward’s financial life through appointing a third party attorney to review the individual’s financial and home situation when a guardianship petition is filed, monitoring the expenses paid on behalf of the ward each year and having laws in place that make the appointed conservator go back for court approval when expenditures on behalf of the ward are made in excess of $1,000.00. 

A conservatorship is initiated by filing a petition with the probate court of the county where the ward lives stating that the person is an individual who is in need of assistance with their financial and healthcare needs (or it may be that they are only in need of assistance with one or the other). An affidavit of the personal physician or a physician who has examined the ward within the last ninety days is normally attached to the petition stating that due to certain conditions the subject of the petition is in need of the court’s oversight. If the situation is one of an urgent nature, the court can usually hear the petition on an emergency basis within a few days. The petitioner (the individual who filed the petition) will usually be appointed the temporary conservator if they want to so serve and can qualify for a bond. 

The petitioner doesn’t have to serve as the conservator. There are non-profit agencies which can be appointed to serve as the conservator (Fifty Forward offers such a service in Nashville, as does Guardianship and Trust). These agencies will charge an hourly fee to manage the finances and healthcare needs of the ward. In some cases it is best to have a third party manage the needs of the ward due to family conflicts or parent/child dynamics. If there is no one else to assist the ward, in Nashville, the public conservator (who is an attorney) can be appointed as the conservator. Annual reports must be made to the court and an annual accounting (like a check register with the copies of check attached), must be approved by the Court’s Clerk and Master. If a house has to be sold, the court must approve the sale and the changing over of assets from one form (investments) to another (liquid funds).

The reporting requirements are not onerous and in this age of banking on line and low cost telephonic (or video) communications, it is not hard for a remote relative to be able to take care of their relative’s needs from a far location. It may be more desirable to have someone who can see the ward more than a few times a year, but someone removed from the situation can often be the best evaluator of needs from a slightly detached perspective. 

This process is not inexpensive, the initial filing will be about $300.00. The attorney’s fees for drafting the petition and meeting with the petitioner will be on an hourly basis. A guardian ad litem (also usually an attorney) will ordinarily be appointed to inform the court of the situation of the ward and to recommend whether a conservator should be appointed. Tennessee law provides that these fees may be reimbursed from the ward’s funds if a conservator is ultimately appointed. If the ward wants representation that attorney’s fees will also be charged to the ward’s funds. These expenses can add up pretty quickly to thousands of dollars. 

It is best to get everyone in the family on board with the process in order to minimize the expenses. If old unresolved family issues are going to encumber the process, the family may want to consider a mediation prior to going forward with the conservatorship in order to avoid an interfamily battle. The process can go forward even if someone else holds the power of attorney for the individual if the fiduciary is not acting in the best interests of the ward. 

An individual can best be served sometimes only by a conservatorship which is overseen by the court. The conservatorship can be brought by interested non-family members as well as family.

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