New 2014 Tennessee Statute Increases Number of Estates that Are Not Required to File Inheritance Tax Return

Posted on Jul 28 2014 10:17PM by Attorney, Jason A. Lee

The Tennessee Legislature in the 2014 Tennessee Legislative Session passed Public Chapter No. 808 which greatly increases the number of Tennessee estates that do not need to file any kind of inheritance tax return.  This new bill amended T.C.A. § 67-8-409.  Prior to this amendment, estates where an individual died before January 1, 2014 were exempt from filing a Short Form Inheritance Tax Return if the gross value of the decedent’s estate did not exceed $100,000.00 and the trial court waived the requirement.  With this new amendment, estates where the deceased died on January 1, 2014 or after, no Short Form Inheritance Tax Return is required as long as the gross value of the estate is $1,000,000.00 or less (and the Court provides a waiver in the Order).  For those who die in 2015, the amount estates can be valued before the requirement to file an inheritance tax return will be $2,000,000.00.  The court can simply waive the filing of the Inheritance Tax Return upon a statement of the gross amount of the estate (this is generally done as a matter of course in Tennessee).


As I have previously discussed the Tennessee Inheritance Tax will be abolished effective January 1, 2016.  This new amendment to Tennessee law further attempts to eliminate the necessity of filing Inheritance Tax Returns with the Tennessee Department of Revenue. 


Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Tennessee Inheritance Tax, Taxes Comments [0]

Can a Non-Resident of Tennessee Serve as a Trustee of a Tennessee Trust?

Posted on Jul 13 2014 7:22PM by Attorney, Jason A. Lee

In most circumstances the answer to this question is, Yes.  T.C.A. § 35-50-107 addresses this issue specifically and provides in subsection (a)(2)(D) as follows:


(2) The following nonresident persons or corporations may serve as fiduciaries, whether the appointment is by will, deed, trust agreement, court order or decree or otherwise:


(D) Any person may serve as trustee of a trust, regardless of the residence of the trustee;


As a result any resident or non-resident may serve as a trustee of a Trust even if the trustee does not actually live in Tennessee.  This statutes applies when there is an actual person who is serving as a trustee as opposed to a corporate entity of some kind (although there are rules that can allow this as well).  Further, there are specific requirements for non-resident trustee’s to comply with but with the help of a Tennessee attorney, these rules are not too difficult to follow. 


Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Tennessee Probate Law Comments [0]

Tennessee Raises Amount Allowed For “Small Estate” Probate to $50,000.00 From Prior $25,000.00 Maximum

Posted on Jul 6 2014 9:40PM by Attorney, Jason A. Lee

The Tennessee Legislature in the 2014 legislative session passed Public Chapter 829 which raised the amount eligible for the small estate process in Tennessee from $25,000.00 to $50,000.00.  This statute went into effect immediately upon signing on April 29, 2014.  This bill also made other various technical changes to probate law but the most important change for most people was the change to the small estate monetary amount. 


As a result, a Tennessee small estate can now be opened under T.C.A. § 30-4-101 et al as long as the estate totals $50,000.00 or less.  The Small Estates Act” of Tennessee was passed in 1972 and has provided a way for individuals to pursue an easier, shorter and more efficient probate estate when the amount of value in the estate is minimal.  Prior to this new statute small estates could only be opened up when the value of the property of decedent did not exceed $25,000.00.  I still recommend that you have an attorney involved to assist you with the small estate process although the attorney fees for a small estate should be much less than for a full probate estate in Tennessee. 


Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Probate Process, Probate Assets, Tennessee Probate Law Comments [0]

In Tennessee Should You Add Your Children to Your Bank Accounts When You Need Assistance Later in Life?

Posted on Jun 29 2014 10:06PM by Attorney, Jason A. Lee

A troubling amount of elderly individuals in Tennessee add one or more of their children to their bank accounts as joint owners with right of survivorship in order to have them assist in paying bills and taking care of other matters late in life.  This is certainly a tempting option because it can be a simple way to allow someone to help an elderly individual late in life so their financial matters are taken care of by someone.  However doing this is fraught with danger.


When an individual is added to a bank account with right of survivorship, then upon the elderly individuals passing, the entire account passes to them pursuant to the right of survivorship terms.  This can cause an unequal distribution of assets among children for instance (even if the will clearly states that everything should be split between your children equally, this money in the account passes outside of that requirement). 


Another major problem is if the “co-owner” on your account obtains a judgment against them by a creditor then the creditor can often collect against your account.  This is a significant risk.  For instance, if one of your children gets into an automobile accident and unfortunately severely injures someone but they have insufficient insurance coverage to pay for the damages, then the injured party could obtain a judgment against them and execute against your account to pay the judgment. 


Additionally, the account will be considered part of your child’s assets for purposes of bankruptcy or other purposes.  As a result, there is a tremendous risk in adding even responsible, financially stable individuals as owners of your bank account.  I recommend doing this in almost all circumstances because the downside consequences are so significant.  There are other options like having a properly completed Power of Attorney completed that will allow your children to assist you with your finances later in life.  Also, if you are trying to avoid probate for those accounts, then you can list them as a P...

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TAGS: Wills, Power of Attorney Comments [0]

Are Bank Accounts with a “Right of Survivorship”, “Pay on Death” or “Transfer on Death” Designation Part of a Probate Estate in Tennessee?

Posted on Jun 8 2014 9:31PM by Attorney, Jason A. Lee

Bank accounts with a ”right of survivorship”, “pay on death” or “transfer on death” designation are generally not part of your probate estate in Tennessee.  These accounts pass pursuant to the specific contract terms for the account.  This is very important to remember when constructing a comprehensive estate plan.  Sometimes people add one or two of their children to their bank accounts late in life in order to help with paying the bills.  This can have a very significant unintended consequence.  If the children were actually added as joint owners on the account with right of survivorship, then the money in that account will pass directly to them upon death.  It will not pass pursuant to the terms in your will.  This could certainly conflict with your intentions to split things equally among your children.    

As a result, when planning how your assets will be distributed to your heirs or children, it is important to keep this information in mind.  If you desire to have your assets split equally among your children, for instance, then make sure the bank accounts do not unintentionally pass a significant amount of money to one of your children simply because they have been added to the account.  People sometimes have their will drafted correctly where it shows all of their assets should be split equally among their children.  However, they do not take into consideration how their bank accounts are listed or owned.  This can cause an unintentionally uneven distribution of assets after your death (this can also happen with 401k assets and Life Insurance policies).  This is why it is important to have a comprehensive discussion with a Tennessee estate planning attorney about your assets and how you want your assets to be passed to your loved ones upon your death.

Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.

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TAGS: Retirement plans - 401k etc., Probate Assets, Tennessee Probate Law Comments [0]

Can a Nonresident of Tennessee Serve as an Executor of a Tennessee Estate?

Posted on Jun 1 2014 7:00PM by Attorney, Jason A. Lee

The short answer to this question is yes, in most circumstances.  T.C.A. § 30-1-116 provides as follows:


No nonresident person, bank or trust company may be appointed as the personal representative of an estate of a decedent, except as provided in § 35-50-107.


As a result, we need to look at T.C.A. § 35-50-107 to determine the answer to this question.  This statute in subsection (a)(2)(B) provides as follows:


(2) The following nonresident persons or corporations may serve as fiduciaries, whether the appointment is by will, deed, trust agreement, court order or decree or otherwise:

 (B) Any resident or nonresident person may serve as a personal representative of the estate of a decedent;


As a result, any nonresident person can serve as the personal representative (executor, executrix or administrator) of an estate of a decedent.  This applies as long as the personal representative is an actual person and not a corporate entity...

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TAGS: Probate Process, Executor/Executrix, Tennessee Probate Law Comments [0]

What is the Statute of Limitations for a Tennessee Probate Estate to be Opened to Prosecute a Claim Against the United States Government?

Posted on May 19 2014 9:37PM by Attorney, Jason A. Lee

Tennessee has a specific statute that provides there is no statute of limitations for opening up an estate in Tennessee in order to prosecute a claim against the United States Government.  Specifically, T.C.A. § 30-1-110(3) provides as follows:


The time within which administration may be granted shall be as follows:

(3) Prosecuting Claims against Government. A special administration may be granted for the purpose of prosecuting any claim against the government of the United States, without any limitation of time.


As a result, if an estate needs to be opened in Tennessee for the purpose of prosecuting a claim against the United States Government, this can be done at any time after the decedent’s death.  Obviously, there may still be an underlying statute of limitations for the claim against the United States Government, but there is no limitation of time for the actual opening of the estate under Tennessee law.  An example of a claim that has been brought against the United States Government to which this statute would apply would be the “Black Farmers Discrimination Litigation”.  In order to get a paid out settlement in the Black Farmers Discrimination Litigation case in Tennessee (or elsewhere) for a deceased person, an estate must be opened up in Tennessee.


Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Statute of Limitations, Tennessee Probate Law Comments [0]

Do Tennessee Courts Recognize Handwritten Wills?

Posted on May 11 2014 10:28PM by Attorney, Jason A. Lee

The short answer to this questions is simply yes, you can have a handwritten Will in Tennessee.  That is as long as it complies with the requirements for a holographic Will under Tennessee law.  The requirements for a holographic Will are found in T.C.A. § 32-1-105 which states,


No witness to a holographic will is necessary, but the signature and all its material provisions must be in the handwriting of the testator and the testator's handwriting must be proved by two (2) witnesses.


Therefore, if someone is going to have a handwritten Will in Tennessee, the important or “material” provisions in the Will must be entirely in the testator’s handwriting.  Additionally, the individual who made the Will must actually sign the Will.  Ultimately, the handwriting of the person who made the Will must be proved in Court by two witnesses.  If all these requirements are met, then a handwritten Will can be deemed valid in Tennessee.


Now I need to get on my soapbox.  Just because you can do your own handwritten will does not mean that this should be done.  I do not recommend that anyone prepare their own handwritten Will.  There are simply too many mistakes that can happen in this process.  There are many unintended consequences when people try to “save money” and do their own handwritten Will.  Tennessee law is filled with examples of significant mistakes that were unintentionally made by people who try to draft their own wills.  Unfortunately, at the point these mistakes are discovered, it is too late to correct the mistakes.  As a result, I recommend that everybody in Tennessee should have a Will done by a competent Tennessee Wills attorney.  It is not that...

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TAGS: Holographic Will, Wills, Will Contest Comments [0]

In Tennessee How Does Someone get Access to a Safety Deposit Box After a Person Dies to See if they had a Will?

Posted on May 6 2014 9:49PM by Attorney, Jason A. Lee

A question that is often asked is how someone can get access to a safety deposit box of a person who died in Tennessee.  Another important question is who is entitled to this access in this circumstance.  This usually comes up when family members are trying to locate a will or determine if there are any valuables in a safety deposit box.  Thankfully, we have a statute in Tennessee that addresses this specific issue and the protocol to obtain access to the safety deposit box.


T.C.A. § 45-2-905 is the statute that addresses this issue but it has several other provisions related to safety deposit boxes.  The key portion for our purpose is found in subsection (c) as follows:


(c) Upon the death of the sole or last surviving lessee of a safe deposit box, access is authorized as follows:

(1) The duly qualified executor or administrator of the lessee may have access to and remove contents from the safe deposit box, without inventory unless an inventory is required by the lessor or by court order;

(2) In order to search for and remove any written instrument purporting to be the lessee's last will and testament, or any writing relating to a burial plot or burial instructions, or any writing purporting to be an insurance policy on the life of the lessee, a lessor shall permit a person named in a court order for that purpose, or if no order has been served upon the lessor, the lessee's spouse, parent, adult sibling or adult descendant, or a person named as executor in a copy of the lessee's purported will provided to the lessor, or any person with a right of access to the safe deposit box immediately prior to the death of the lessee, to open the safe deposit box with an officer or employee of the lessor and remove the documents. A record of items removed from the box by the person authorized entry shall be made by the lessor and the other person. If a purported will is found that does not name as executor the person conducting the will search with the lessor's representative, the lessor may make a copy thereof and mail or deliver it to the executor named therein, or to the court having jurisdiction of the decedent's estate according to the decedent's domicile as declared...

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TAGS: Wills, Probate Assets Comments [0]

What is Exempt Property in a Tennessee Estate for a Surviving Spouse or Minor Children?

Posted on Apr 27 2014 10:44PM by Attorney, Jason A. Lee

Analysis:  T.C.A. § 30-2-101 provides that a surviving spouse of a person who died without a will (intestate decedent) or a surviving spouse who elects against their spouse’s will (this is called an elective share under T.C.A. § 31-4-101) is entitled to receive certain exempt property from the estate.  Specifically, the surviving spouse can receive exempt property having a fair market value that does not exceed $50,000.00 as stated in T.C.A. § 30-2-101 as follows:


(a) The surviving spouse of an intestate decedent, or a spouse who elects against a decedent's will, is entitled to receive from the decedent's estate the following exempt property having a fair-market value (in excess of any indebtedness and other amounts secured by any security interests in the property) that does not exceed fifty thousand dollars ($50,000):

(1) Tangible personal property normally located in, or used in or about, the principal residence of the decedent and not used primarily in a trade or business or for investment purposes, and

(2) A motor vehicle or vehicles not used primarily in a trade or business. If there is no surviving spouse, the decedent's unmarried minor children are entitled as tenants in common only to exempt property as described in subdivision (a)(1). Rights to this exempt property are in addition to any benefit or share passing to the surviving spouse or unmarried minor children by intestate succession, elective share, homestead or year's support allowance.


This exempt property is in addition to other benefits (including the elective share, homestead or year’s support allowance) the surviving spouse or minor child would receive as specifically stated in subsection (a)(2).  If there is no surviving spouse then unmarried minor children are entitled to own the exempt property as tenants in common with each other.  Keep in mind that exempt property doe...

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TAGS: Intestate, Exempt Property, Elective Share, Minor Children Comments [0]

In Tennessee can a Will Submitted to Probate in Solemn Form be Challenged by a Later Filed Will Contest?

Posted on Apr 20 2014 10:12PM by Attorney, Jason A. Lee

The Tennessee Court of Appeals decision of In re: Estate of John Leonard Burke, No. M2012-01735-COA-R3-CV, 2013 WL 2258045 (Tenn. Ct. App. 2013) dealt with a situation where a will was submitted to probate in solemn form on December 19, 2011.  The trial court noted at that time that all potential beneficiaries had been served with notice of the hearing and that no objection was filed to the probate of the will.  On June 8, 2012, the deceased’s stepson filed a challenge to the will alleging that the will was “procured by the fraudulent inducement” of the deceased’s wife.  As a result, the question was whether this challenge, instituted approximately six months after the will was probated in solemn form, could be brought at that point. 


The Tennessee Court of Appeals ultimately held that when a will is submitted in solemn form under T.C.A. § 30-1-117(b) “a will contest must be initiated, if at all, prior to the entry of the final order admitting the will to probate in solemn form, not prior to the final order closing the estate.” Burke at 5.  Due to the fact the stepson in this case did not challenge the will until after the entry of the order entering the will in solemn form, the will contest was dismissed as untimely. 


Submitting a will in “solemn form” can be beneficial in certain circumstances although it is not necessarily justified in every case.  It can be beneficial if there is concern that one of the beneficiaries may want to contest the will at some point.  This can be a good strategy to force them to act rather quickly on the front end or forever lose the opportunity to contest the will. 


On the other side of things, if a party...

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TAGS: Solemn Form Probate, Probate Process, Wills, Will Contest, Tennessee Probate Law Comments [0]

In Tennessee How Does a Court Determine if the Intentions Stated in a Will are Clear Enough to Enforce?

Posted on Apr 13 2014 9:13PM by Attorney, Jason A. Lee

A recent Tennessee Court of Appeals decision, Donna Perdue v. Estate of Daniel Jackson, No. W2012-02710-COA-R3-CV, 2013 WL 2644670 (Tenn. Ct. App. 2013) discussed how clear a will must be in order to be enforceable.  The will in this case was a holographic will (which simply means that the will was in the handwriting of the deceased person).  One party asserted the will was not clear enough to enforce in Tennessee probate court.  This case was ultimately appealed to the Tennessee Court of Appeals and the Court provided a helpful discussion about how Tennessee courts should determine if a will is clear enough to enforce. 


The Tennessee Court of Appeals discussed that the “purpose of a suit to construe a will is to ascertain and give effect to the testator's intention.” Perdue at 3.  The court noted that “it is the absolute right of the testator to direct the disposition of his property and the Court's [sic] are limited to the ascertainment and enforcement of his directions.”  Perdue at 3.  (citing Daugherty v. Daugherty, 784 S.W.2d 650, 653 (Tenn. 1990).


In discussing how to determine the intent of the testator, the Court provided an excellent description of the specific considerations of the Court when determining how to evaluate the language in the will.  The Court stated:


The cardinal rule in construction of all wills is that the court shall seek to discover the intention of the testator and give effect to it unless it contravenes some rule of law or public policy.  In seeking out the testator's intent, we have several rules of construction to aid us in that effort.  However, all rules of construction are merely aids in ascertaining the intent of the testator.


In gleaning the testator's intent, we look to the entire will, including any codicil.  The testator's intent is to be determined from the particular words used in the will itself, and not from what it is supposed the testator intended.  Where the will to be construed was drafted by the testator himself who was not versed in the law and without legal assistance the court in arriving at the intention of the testator should construe the language of the will with liberality to effectuate what appears to be the testamentary purpose.  We are also guided by an additional principle of construction; when a decedent undertakes to make a will, we must presume that the decedent intended to di...

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TAGS: Holographic Will, Wills Comments [0]
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