Tennessee Supreme Court Finds That Joint Tenancy With Right of Survivorship is Destroyed by Quitclaim Deed of One Party to Deed

The Tennessee Supreme Court recently decided an important case on an issue that had not yet been decided in Tennessee. The case of Darryl F. Bryant, Sr. v. Darryl F. Bryant, Jr., No. M2014-02379-SC-R11-CV, 2017 WL 1404388 (Tenn. 2017) decided a key issue pertaining to Joint Tenancy with Right of Survivorship. In this case, the owner (Ms. Bryant) of the property in question issued a deed conveying the property to herself and her son as Joint Tenants with Right of Survivorship. This occurred in 2009. Interestingly, a little bit more than one year later on September 2, 2010, the original owner, Ms. Bryant, executed another Quitclaim Deed on the same property. This Quitclaim Deed purported to convey the property to her grandson, Darryl F. Bryant, Jr.  She deeded all of her interests in the property to this grandson in this deed.

Ms. Bryant died in November of 2013 and then a dispute arose between Ms. Bryant’s son, Darryl F. Bryant, Sr. and grandson, Darryl F. Bryant, Jr. The legal issue that governed this situation is whether Joint Tenancy with the Right of Survivorship can be terminated by one party. In other words, Ms. Bryant deeded the property as a Joint Tenancy with Right of Survivorship to herself and her son. She then later deeded her interest in the property to her grandson (essentially her ½ interest in the Joint Tenancy with Right of Survivorship). The question, therefore, was whether the second deed terminated the Right of Survivorship in the first deed, unilaterally, without permission or input by the co-owner, Darryl Bryant, Sr.  If it did not, then Darryl F. Bryant Sr. would own the property outright due to Ms. Bryan’s death.

The Tennessee Supreme Court analyzed several prior Tennessee opinions as well as other states’ assessment of this issue.  Ultimately, the Tennessee Supreme Court found that “joint tenancy with an express right of survivorship may be severed by the unilateral action of one of the joint tenants and that doing so converts the estate into a tenancy in common and destroys the survivorship interests of the original joint tenants.” (Bryant Sr. at p. 15).  In other words, the conveyance by one of the joint tenancy owners, who owns the property with a right of survivorship, essentially converts the holding of the property to tenancy in common when they deed their interest to another party. That is exactly what occurred in this case. The Court then considered this specific case and found that when Ms. Bryant conveyed her interest in the property to the grandson, it severed her joint tenancy with right of survivorship with her son. At that point, the son and grandson became tenant in common owners and the right of survivorship was destroyed at that time.

This case can certainly have implications in estates and real estate transactions. It is an important principle that will apply to all real estate transactions and estates in Tennessee. The fact there is a right of survivorship at the time of an original deed does not mean the right of survivorship can never be modified, as is shown in this case. This is true even without the approval of all of the owners of the pr...

Confusion on When a Tennessee Probate Estate Should be Opened

I get a lot of interesting questions when I tell people that I practice Probate law in Tennessee.  One of the things that is most confusing to people is how to know when an actual estate needs to be opened for their loved one.  As a general rule, Tennessee probate estates only need to be opened when there are probate assets.  Probate assets include bank accounts that are not joint and do not have any “pay on death” or “transfer on death” designations.  Other probate assets include real estate when there is no joint, right of survivorship, co-owner.  Probate assets can also include life insurance policies and retirement accounts that do not have a beneficiary or that list the estate as the beneficiary.  These are the most common probate assets that can require an estate to be opened in Tennessee.

A lot of family members who do not receive anything from an estate can be very confused by these rules.  They are often upset because they never see a will or any probate filings.  What I tell them is that if all of the assets are disposed of by other methods (joint ownership of real property, beneficiary designations on accounts or joint ownership of accounts) then they may never see the will or any details concerning what happened to the assets.  There is no central database that allows people to find this information out simply by searching (however, when an estate is opened, it is public record).  Banks, life insurance companies and mutual fund companies will simply quietly disperse the funds to the beneficiaries pursuant to the wishes of the decedent assuming the information they are provided matches their records and policies.

All of this being said, this does not mean that on occasion, sometimes people manipulate the system and get access to accounts and assets improperly.  If you suspect this, often the only thing you can do is to try to force the issue by opening an estate and have an administrator appointed (or be the executor) so that you can investigate and determine if things were handled correctly.  This costs money but I would highly recommend you hire an attorney to assist wit...

Probate Law - When does Real Property become the Property of the Beneficiaries in Tennessee?

Under Tennessee law, real property of an intestate decedent (an individual who dies without a will) vests immediately in the heirs upon death.  Additionally, the real property of a testate decedent (an individual who dies with a will) vests immediately in the beneficiaries named in the will unless the will gives directions to administer the real property through the estate.  T.C.A. § 31-2-103 provides in totality as follows:

The real property of an intestate decedent shall vest immediately upon death of the decedent in the heirs as provided in § 31-2-104. The real property of a testate decedent vests immediately upon death in the beneficiaries named in the will, unless the will contains a specific provision directing the real property to be administered as part of the estate subject to the control of the personal representative. Upon qualifying, the personal representative shall be vested with the personal property of the decedent for the purpose of first paying administration expenses, taxes, and funeral expenses and then for the payment of all other debts or obligations of the decedent as provided in § 30-2-317. If the decedent's personal property is insufficient for the discharge or payment of a decedent's obligations, the personal representative may utilize the decedent's real property in accordance with title 30, chapter 2, part 4. After payment of debts and charges against the estate, the personal representative shall distribute the personal property of an intestate decedent to the decedent's heirs as prescribed in § 31-2-104, and the property of a testate decedent to the distributees as prescribed in decedent's will.

This statute does not mean that real property cannot be used to pay any debts or obligations of the decedent.  This statute specifically provides that if the decedent's personal property is insufficient to discharge all of the decedent's obligations then the real property can be sold to satisfy those obligations.  It is important to have an experienced Tennessee probate attorney to assist you when dealing with real estate property in the context of an estate.

Is There any Statute of Limitations for a “Life Estate” Holder to Enforce Her Rights to Property in Tennessee?

A recent Tennessee Court of Appeals decision of Alma Long v. Raymond Creekmore, No. E2012-01453-COA-R3-CV, 2013 WL 1320515 (Tenn. Ct. App. 2013) discussed whether there is a statute of limitations that is applicable to a life estate holder for a piece of real estate property in Tennessee.  In this case a dispute arose between mother (who held the life estate interest in the property) and her son.  A life estate interest is where an individual has a right to occupy and use a piece of property during their life.  It terminates upon their death.  The son received a conveyance of the property from the mother subject to her life estate interest in the property.  Various disputes arose between the mother and son over who should be able to live on and use the property.  Finally, in 2008 the mother filed suit to enforce her right to possession of the property during her life.  The son asserted a statute of limitations and laches defense to his mother’s claim (basically arguing it was too late for her to assert this claim).  The trial court dismissed the lawsuit by the mother and asserted it violated a ten year statute of limitations applicable to this type of action.

The Tennessee Court of Appeals disagreed with the trial court.  The court found that a claim possessed by a life tenant against someone who exceeded her permission on the property is not subject to a statute of limitations.  The court specifically found, that “mother merely needed to assert her right as a life tenant and obtain a declaratory judgment when Son's use of the property exceeded her permission. Such a claim is not subject to a statute of limitations because a life tenant holds the property for the duration of his or her life.  Long at 4.  The court acknowledged the son may be able to prove he has a superior right to the property pursuant to other doctrines like the doctrine of adverse possession, however, the statute of limitations does not bar this claim.  Simply, there is no statute of limitations for this type of claim according to this case. 

Can a Guardian or Conservator Sell Property of a Minor or Disabled Person Without Permission of the Court in Tennessee?

Under Tennessee law, a guardian or conservator must obtain prior approval of the court in order to sell certain property of a minor or disabled person under the guardianship or conservatorship.  T.C.A. § 34-1-116 provides as follows:

(a) Except as provided in subsections (b) and (d), no property of a minor or person with a disability may be sold without prior approval of the court that appointed the fiduciary.

(b) Unless the fiduciary is holding tangible property for the benefit of a minor or person with a disability pursuant to the terms of a will, trust or other written document, the fiduciary has the authority to sell each item of tangible property with a fair market value of less than one thousand dollars ($1,000) or a motor vehicle without specific court approval…

(d) This section shall not apply to any fiduciary who is not required to file a property management plan or who has had its investment plans approved as part of its property management plan.

There is an exception for any item of tangible property that has a fair market value of less than $1,000.00 or for any motor vehicle.  Sales of these items can be completed without specific court approval unless it is being held pursuant to the terms of a will, trust, or other written document.

If you are a guardian or conservator in Tennessee, this is a very important statute to remember.  Just because you have the powers provided to you by the court does not mean that the powers ar...

Tennessee Inheritance Tax – Is jointly held property considered part of the decedent’s taxable estate under Tennessee law?

Under Tennessee law, jointly held property can be considered part of the deceased individual’s taxable estate.  T.C.A. § 67-8-305 discusses property transfers that occur upon someone’s death by right of survivorship (often under tenants by the entirety or tenancy by the entirety) or any payable on death accounts including joint accounts held in multiple people’s names.  Under T.C.A. § 67-8-305, if such transfers occur between husband and wife at the death of the decedent then only one half of the value of the account or property is considered a taxable transfer.  However, if the accounts or property are owned jointly by individuals who are not husband and wife then the “entire value of any such property shall be deemed to have been transferred from the decedent to the survivor” and therefore is subject to the Tennessee inheritance tax. 

Additionally, under subsection (a)(2) if the survivor who inherits from the decedent who had a joint account or owned joint property with the decedent actually contributed money towards the account or purchase, then that amount is deducted from the value that is considered to be part of the taxable estate.  In other words, if the survivor deposited money in the bank account or paid for part of the property that was jointly held, then that amount will reduce the taxable estate of the decedent.

T.C.A. § 67-8-305 provides in its entirety as follows:

(a) Whenever any property was held jointly by the decedent and one (1) or more persons as tenants by the entirety or otherwise, or was deposited in banks or other depositories or institutions in the joint names of the decedent and one (1) or more other persons and was payable to one (1) or more, or to the survivor or survivors, so that, upon the death of the decedent, the survivor or survivors became entitled to the immediate possession, ownership or enjoyment of such property, the entire value of any such property shall be deemed to have been transferred from the decedent to the survivor or survivors, and such transfer shall be subject to the inheritance tax imposed by parts 3-5 of this chapter, except:

Tennessee law prevents people from inheriting any property or life insurance from a person if they were responsible for their death.

Tennessee has a statute which governs whether an individual can inherit any property or recover any life insurance from a deceased individual if they were responsible for killing that deceased individual.  T.C.A. § 31-1-106 provides as follows:

Any person who kills, or conspires with another to kill, or procures to be killed, any other person from whom the first named person would inherit the property, either real or personal, or any part of the property, belonging to the deceased person at the time of the deceased person's death, or who would take the property, or any part of the property, by will, deed, or otherwise, at the death of the deceased, shall forfeit all right in the property, and the property shall go as it would have gone under § 31-2-104, or by will, deed or other conveyance, as the case may be; provided, that this section shall not apply to any killing done by accident or in self-defense.

It is important to note that this statute does not apply to any killing that was done by accident or in self-defense.  However, any killing beyond “accident” or “self-defense” prevents an individual from inheriting from the deceased.  It also prevents that person from basically obtaining any benefit as a result of the deceased individual's death as provided in this statute.  This would include obtaining property by Right of Survivorship in a joint ownership situation.

What types of assets are not probate assets in Tennessee?

It is important to determine what assets are probate assets and what assets are not probate assets to determine whether an estate needs to be probated under Tennessee Law.  It is important to plan ahead in order to keep as many assets out of the probate process if possible.  Assets that do not pass through the probate process include the following:

1.         Any 401k plan, IRA plan or any other type of retirement plan that designates a specific beneficiary (other than where the beneficiary is designated as the decedent's estate).

2.         Any asset including bank accounts, real estate, automobiles or other assets that are titled in the name of the deceased individual and another individual as joint tenants or tenants by the entirety with right of survivorship.  These assets pass immediately upon death to the other individual.

3.         Any asset of any kind that are titled in the decedent's name with a "transfer on death" or "pay on death" designation for a specific beneficiary other than the decedent's estate.

4.         Any life insurance policy which has a specific beneficiary designated other than the estate of the deceased individual.

It is important to determine what assets are probate assets and what assets are not probate assets in order to determine whether a will needs to be probated under Tennessee law.  A Tennessee probate attorney should be consulted to determine how to make this decision after an individual dies.  Additionally certain decisions can be made before death in order to reduce or eliminate what assets pass through the probate process.

In Tennessee when are you required to go through a court supervised probate process to handle an estate?

One of the most important questions when considering how to handle a deceased person's estate is whether a formal court monitored probate process is required.  T.C.A. § 30-1-101 provides that "no person shall presume to enter upon the administration of any deceased person's estate until the person has obtained letters of administration or letters testamentary."  Essentially, this statute prohibits the administration of an estate outside of the formal court probate process for someone who died who had assets that are commonly referred to as "probate assets". 

The next question therefore is what "probate assets" would likely require the formal probate administration process that is required under Tennessee law.  Examples of key "probate assets" are as follows:

1.         Any 401k, IRA, or any other kind of retirement plan that designates the estate of the decedent as a beneficiary.

2.         Any life insurance policy of the decedent that lists the estate as a beneficiary.

3.         Any asset that is titled in the decedent's name without any designation of a beneficiary or without joint ownership with another individual.

4.         Any asset that is titled in the decedent's name that has anther individual listed on the title as "tenants in common".

It is very important when someone dies to carefully evaluate whether the court administrated probate process is required under Tennessee law in order to properly distribute the assets of the deceased.  This is where the advice of a probate attorney is very valuable to handle your specific situation.  Contact me if you want to discuss this or any other issue involving the probate of an estate.