Estate Planning & Probate
Estate planning is an important topic that is ignored and neglected by almost all people. There is a common belief that estate planning is only for the very wealthy and the so-called “one percent,” which is simply untrue. While an estate plan may help minimize estate taxes and other transfer taxes, having an estate plan is important even if your total worth is under the federal estate tax exemption ($11.4 million as of 2019). Tennessee eliminated the state estate tax in 2016.
If you own property, assets, and / or have loved ones dependent on you, you should have an estate plan in place. Although it may be an uncomfortable discussion – after all, no one likes talking about death, let alone their own death – it is essential that you create and discuss an estate plan with yourself, your loved ones, and your attorney. If you fail to plan your estate, then the default rules of law will apply and that may result in many things occurring after your death that are against your will.First Things First – What is an Estate Plan?
An estate plan is a collection of documents specifying how you want your money and other assets distributed upon your death. Additionally, an estate plan identifies individual(s) to make financial and health care decisions for you if you become incapacitated. Your estate plan may also instruct others on your preferred end-of-life care, including whether you would like to donate all or some of your organs.
Factors that govern estate planning vary from person to person and take into account the approximate value of your assets, who you want to name as heirs, what tax benefits or consequences there will be for your beneficiaries, how to protect your assets from unforeseen creditors, consideration of future or impending disability, and any other issues that are unique to your personal or family situation.
Even if you already have an estate plan in place, this plan should be reviewed regularly and updated as your circumstances and financial situation evolve, to be sure that your estate plan continues to accurately reflect your wishes.Who Can Benefit from Having an Estate Plan?
Whether your estate is large or small, you do need an estate plan in order to avoid probate, reduce an inheritance tax bill, prevent costly court proceedings, and preclude the chaos of potential family conflict. Individuals of all ages and in all types of situations can benefit from the advice of a qualified estate planning attorney. These include:
- Traditional families with minor children who will require provisions for support or who may need protection from outside influences that could deplete financial resources.
- Blended families who might be conflicted regarding the disposition of assets.
- Anyone who must consider the disability or impending disability of themselves, a child, or a loved one.
- Seniors who wish to preserve their assets and provide for retirement.
- Any person who is in an unwed committed relationship and wants to provide for his/her non-marital partner.
- Individuals who are recently divorced and need to reassess their financial situation in terms of their property settlement agreement.
- Single parents who want to provide for and protect their child(ren).
- Persons who must now consider the disposition of assets once inherited from a deceased spouse.
- Individuals who have no immediate family but want to designate the division of their assets rather than allow the intestacy laws of their state to govern the disposition.
Don't procrastinate when it comes to protecting your assets and providing for those you love. Call 615-490-6020 today to schedule an appointment with a Nashville attorney who focuses on estate planning. We are dedicated to serving you personally and efficiently.The Probate Process
Probate is the legal process of opening an estate under the control of the probate court. If the decedent left a valid last will and testament, the probate process allows the court to legally recognize such a will, appoint an individual(s) and/or entity(ies) as the executor(s) responsible for the administration of the estate, and distribute the decedent’s assets to the intended beneficiaries (this is known as “testate administration”). If the decedent did not leave a valid last will and testament, then, during probate, the court will appoint an individual(s) and/or entity(ies) as personal representative of the estate responsible for the administration of the estate and distribute the decedent’s assets to his or her heirs-at-law (this is known as “intestate administration”). Under Tennessee law, an intestate decedent’s probate assets pass to his or her heirs-at-law. Depending upon your status at death (e.g. married, single, children, etc.), your heirs-at-law will be your family, for example your spouse, your children, your parents, or your siblings.
All assets do not pass through the probate process. Probate assets are the assets that you own at your death that are subject to probate administration in order to effectuate a transfer of ownership to a beneficiary. Assuming that you die testate (with a will), your will governs how a probate asset will be distributed. For example, if you are the sole owner of a piece of jewelry, then that jewelry will be subject to probate upon your death and will pass to the beneficiary named in your will. Non-probate assets bypass probate and are distributed directly to the beneficiary. An example of a non-probate asset is a life insurance policy where your spouse is named as the primary beneficiary; upon your death, the proceeds of the life insurance policy are immediately payable to your spouse and he/she does not need to involve the court to receive this benefit.Key Steps in the Probate Process
The following are some (but not all) of the key steps in the probate process:
- The Petition. File a petition with the court requesting that a decedent’s estate be opened and that legal notice be given to any heirs and beneficiaries. You ask in the petition that a decedent’s will be recognized by the court and that the named executor be appointed by the court. If the decedent did not leave a will, then the petition will ask the court to open an intestate estate and appoint a personal representative. There will be a court hearing to consider the petition. When the court appoints the executor/personal representative, it also issues Letters Testamentary (for testate estates) or Letters of Administration (for intestate estates); these Letters are official documents which show that the executor/personal representative has the authority to act on behalf of the estate.
- Administration of the Estate. Once given Court authority, the executor or administrator will often open a checking account for the estate with the funds from the decedent’s account and will use the funds in that account to pay estate expenses. The personal representative should obtain a taxpayer identification number from the IRS prior to opening the account.
- Proving the Validity of the Will. If there is a will, the validity must be proven in Court. Should it be a holographic will, this includes showing that the will is in the authentic handwriting of the deceased. If the Will is typed, it must be proven that the will was signed in the presence of two witnesses. These requirements are detailed in T.C.A. § 32-1-101 et seq.
- The Creditor Notice. One of an executor/personal representative’s duties is to gather the decedent’s assets and settle the decedent’s debts. During the probate process, the executor/personal representative may have to make an inventory of the decedent’s probate property. The executor/personal representative will also have to notify creditors of the decedent’s death and the opening of the estate. Upon receiving this “notice to creditors,” the creditors have to file a claim in probate court within a certain amount of time in order to collect on any debts left by the decedent. The executor/personal representative will then determine if this is a valid claim and if there are sufficient assets to satisfy all the debts, and will pay all legitimate debts and bills out of the estate.
- Final Distribution of Estate Assets and Property. Once the creditor period has expired, the executor/personal representative is tasked with paying all legitimate debts and bills of the estate. This will include any estate administration costs, funeral expenses, and taxes and debts. At this point, the remaining balance of the estate will be distributed to your beneficiaries (known as the “residual beneficiaries”). Please note that a specific bequest, which is a gift of a specific item of property that can be easily identified and distinguished from all other property in the estate, will generally be distributed to the beneficiary named in the will prior to final distribution. As assets are distributed, it is always a good idea to have the recipient sign and date a receipt of such property. Once the distribution of the estate is completed, and all taxes and other liabilities have been met, the estate can be closed and probate will come to an end.
The Estate Planning and Probate process can be complicated, paperwork-intensive, and time-consuming. It can also be emotionally draining and challenging. If you need to discuss planning your Estate, Cole Law Group is ready to assist you in helping you plan for the future. If you are the executor or personal representative of a loved one’s estate, Cole Law Group would be pleased to help you navigate probate court proceedings and the estate administration process.
Please call our office today at (615) 490-6020 or send a contact message via our website to schedule a consultation so that we can discuss your issues and how we can create a comprehensive plan centered around your needs.