When an Individual Dies Without a Will (Intestate) what County Handles the Probate of the Estate in Tennessee?

Analysis:  When an individual dies without a will (this is called “intestate”) then the probate court of the county where the intestate individual had usual residence at the time of death is the appropriate jurisdiction for the probate of the estate.  Specifically, T.C.A. § 30-1-102 provides as follows:

Letters of administration shall be granted by the probate court of the county where the intestate had usual residence at the time of the intestate's death, or, in case the intestate had fixed places of residence in more than one county, the probate court of either county may grant letters of administration upon the intestate's estate.

As a result when an individual dies without a will and the estate needs to be probated under Tennessee law, the appropriate jurisdiction is the county where the deceased had a usual residence.  If the individual had multiple places of residence, then the probate court of any of these counties can grant letters of administration for probate. 

Tennessee Inheritance Tax – Are Life Insurance Policies Included in the Estate of the Decedent for Tennessee Inheritance Tax Purposes?

Under T.C.A. § 67-8-306, life insurance policies are included in the gross estate of the decedent when calculating the size of the estate of inheritance tax purposes.  This is true whether the policies of insurance are payable to named beneficiaries or to the decedent’s estates.  This is a general rule and the complete statute is as follows:

(a) If the decedent was a resident of this state, there shall be included in the gross estate the proceeds of insurance policies payable to named beneficiaries, or to the decedent's estate, or in such manner as to be subject to claims against the decedent's estate and to distribution as a part thereof.

(b) This section shall include the proceeds of insurance policies commonly known as “paid-up contracts” or “investment contracts” or “annuity contracts” or similar types or forms of policies, the surrender value of which was subject to the control of the decedent prior to death.

(c) Where life insurance, the proceeds of which are under the control of the decedent, is left by the decedent in such manner that the proceeds thereof cannot be subjected to the payment of the decedent's debts and where the proceeds of such insurance are received by beneficiaries thereof and are not subjected to the debts of the decedent, the fact that the decedent may have been insolvent and that a portion of the decedent's debts may remain unpaid shall not affect the liability for inheritance tax upon such insurance.

A lot of people forget to consider life insurance policies when making a determination of potential estate tax liability.  This must be taken into consideration in Tennessee.

Is an accounting required during the probate of an estate for receipts, disbursements, and distributions?

T.C.A. § 30-2-601 provides a requirement that the personal representative of an estate must file an accounting with the clerk of the Probate Court within fifteen months from the date of qualification as the personal representative.  This accounting includes a written report of all receipts, disbursements and distributions of any kind from the estate (as well as identify the remaining assets in the estate).  T.C.A. § 30-2-601(a) provides as follows:

(a) Within fifteen (15) months from the date of qualification, the personal representative shall make an accounting with the clerk of the court exercising probate jurisdiction in the county of the estate. After the first accounting and until the estate is fully administered, the personal representative shall make further accountings annually from the date of the first accounting. The accountings shall state all receipts, disbursements and distributions of principal and income for the accounting period and the remaining assets held in the estate and shall be verified by the oath of the personal representative before the clerk or any person authorized by law to administer oaths in such cases. The final accounting shall state the personal representative has mailed or delivered notice of the requirement to file claims required by § 30-2-306(d) to the creditors of the decedent who were known to or reasonably ascertainable by the personal representative. For good cause shown to the court, it may extend the time for filing the accountings. However, detailed accountings of solvent estates may be waived if:

It is important to note that the accounting required in T.C.A. § 30-2-601 can be waived in two specific circumstances.  Under the statute an accounting of an estate can be waived if:

Does a power of attorney create a fiduciary relationship between the grantor and the attorney-in-fact?

Under Tennessee law a power of attorney document is available to provide an individual with great powers to handle many aspects of the grantor’s life.  Specifically, T.C.A. § 34-6-109 outlines the powers of a power of attorney under Tennessee law.  Usually this is used when an individual becomes incompetent and lacks mental capacity to make decision for themselves.

The recent Tennessee Court of Appeals decision of Tamala Teague v. Garnette Kidd, No. E2011-02363-COA-R3-CV, 2012 WL 5869637 (Tenn.Ct.App. 2012) discussed the relationship between the grantor of a power of attorney and the attorney-in-fact.  The Tennessee Court of Appeals found:

The execution and exercise of a power of attorney establishes a fiduciary relationship between the attorney in-fact and the grantor of the power.  The fiduciary is obligated to deal with the property of his (or her) principle in the utmost good faith.  The duties of loyalty and honesty are also a part of a fiduciaries obligation.  In Tennessee, a presumption of undue influence arises when the dominate party in a fiduciary relationship receives a benefit from the other party.  This presumption may be rebutted only by clear and convincing evidence of the fairness of the transaction."

Teague at 7.  (Citations omitted).  As a result, when someone is the "attorney-in-fact" as established in a power of attorney document by a grantor, it is very important to consider the fiduciary responsibilities in this relationship.  This is especially true when there is any transaction between the two that benefits the attorney-in-fact.  Tennessee law creates a presumption that in this circumstance when the dominant party (the attorney-in-fact) receives a benefit from the granting party then such a transaction is presumed to be the result of undue influence.  If this occurs, this can be considered a breach of the fiduciary relationship.