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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 [3]

Jason A. Lee is a Member of Burrow Lee, PLLC. Contact Jason at 615-540-1004 or jlee@burrowlee.com for an initial consultation on wills estate planning and probate issues.

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Tennessee Wills and Estates Blog
Jason A. Lee, Member of Burrow Lee, PLLC
611 Commerce Street, Suite 2603
Nashville, TN 37203
Phone: 615-540-1004
E-mail: jlee@burrowlee.com