Tennessee Estate Law BlogRecently, I appeared on Nashville’s News Channel 5 Talk of the Town Extra to talk about the basics of probate in Tennessee. If you have recently experienced the loss of a loved one, you know how hard things can be during such a trying time. For that reason, our firm is able to assist and advise you throughout the process. Whether you need help transferring a piece of real estate after someone has passed or need assistance with a small estate, The Higgins Firm is here to help you and your family. The following video provides some of the basic information about probate in Tennessee. If you have any further questions regarding probate, contact the Nashville probate lawyers at The Higgins Firm.
Estate Planning New Year’s Resolutions
Having entered the New Year you may have created a list of resolutions that you hope to accomplish sometime during 2015. Some may be looking to exercise more, eat healthier, or even save some more money. Although it may not be one of the first things that you think of in setting your resolutions, estate planning is a goal that can be easily accomplished without spending too much money or time. If you have questions about your estate plan, contact the Nashville estate planning attorneys at The Higgins Firm.
So you may be wondering what exactly an estate plan is. In its most basic form, an estate plan is a set of legal documents that explicitly set forth your decision on a number of issues. One of the fundamental estate planning documents is a last will and testament. Most people think of a last will and testament, more commonly known as a will, as designating where you want your assets to go upon your death. However, a will can also do so much more. A will can also nominate someone to handle the administrative affairs of an individual after he or she has died. This individual is known as the executor of the estate. A will can similarly nominate someone to serve as the guardian of any minor children in the event of a death. Courts often look to a will to determine if the deceased parent had a preference for choosing a guardian.
Another important estate planning document is a power of attorney. This document allocates authority to another individual to act on your behalf. You as the grantor of the power are able to specify in what circumstances the agent is able to act on your behalf. Some may choose to grant a wide range of powers to the agent while others may choose to grant only very specific powers to their agent. Similarly, some may choose to have the document only become effective upon the incapacity of the grantor while other choose to have the document and its powers become effective upon the signing of the document. There are two different types of power of attorney documents. One is a power of attorney for finances which can include the ability to conduct business, write checks, contract, etc. The other is a power of attorney for health care which enables the agent to make health care decisions for a person who may not be able to make decisions regarding his or her own health. A power of attorney can be a useful tool in the event that you are no longer able to make decisions for yourself.
Tennessee Probate Inheritance Taxes
While it seems as though you can be taxed for almost anything these days, there is good news for those who may be worried about potential inheritance taxes in Tennessee. Many states have made a push to eliminate inheritance taxes in an effort to draw new residents and businesses. Tennessee has followed suit. The Tennessee state legislature has enacted legislation to gradually increase the inheritance tax exemption amount before completely eliminating the tax in 2016.
The Tennessee inheritance tax exemption allows for any estate valued under the set amount to be exempt from paying the inheritance tax. Only if the value of the estate rises above the set exemption amount is the estate required to pay the Tennessee inheritance tax. The tax rate ranges from 5.5% at the lower end to upwards of 9.5% at its highest. The exemption amount for a decedent’s estate is currently $2,000,000 for any decedent’s death occurring in 2014. That exemption amount increases to $5,000,000 beginning January 1, 2015. On January 1, 2016, the Tennessee inheritance tax is completely eliminated.
The Tennessee Department of Revenue is the organization tasked with levying the state’s inheritance tax. Although an estate may be well under the exemption amount, the personal representative of an estate is still required to provide the Tennessee Department of Revenue with the value of the estate. If the estate is valued at under $1,000,000, a sworn affidavit can be filed with the probate court attesting to the fact that the estate is indeed under the exemption amount and therefore is not owed. This sworn affidavit is known as the Affidavit Waiving Tennessee Inheritance Tax Return, and it functions to release the estate from any taxes owed. If the estate is valued at more than $1,000,000 but still less than the exemption amount, the personal representative is required to file a Tennessee inheritance tax return with the Department of Revenue outlining the assets comprising the estate. The Tennessee Department of Revenue then grants a release to the personal representative of the estate which is filed with the probate court.
The Importance of Estate Planning for Those who are Single
The landscape of the American population is ever changing. In 1970, approximately one-third of Americans age 15 and older were single. In 2013, that number had risen to nearly one-half. With a growing population of single individuals, it is important to recognize the implications on estate planning. While much of the attention on estate planning may focus on those who are married and have families of their own, the reality is that estate planning can be even more important for those who are single. Those included within the singles population may include divorced individuals, those who have never married, and widowed individuals. If you have questions about how estate planning may affect you, contact the Nashville estate planning lawyers at The Higgins Firm.
Each state has enacted laws that determine where a person’s assets should pass without a will or trust in place. These laws, known as the laws of intestacy, are the default rules for asset transfer following a death. Under the laws of intestacy, assets end up passing to the closest relatives in equal shares without exception. Depending on your particular situation, this transfer may not be what you would desire. For example the laws of intestacy in Tennessee do not provide for the transfer of assets to close friends, more distant relatives, domestic partners, or charitable organization no matter how close you may have actually been to the person or organization. For this very reason, it is important to set forth your specific wishes in an estate planning document like a will.
In addition, it is equally as important for single people to explicitly appoint someone to handle financial and medical affairs in the event that he or she was unable to make decisions for him or herself. Often a power of attorney for finances or health care can be utilized to allocate decision making authority to another individual. With married people, that responsibility will naturally lie with the spouse. However, with a single person, that decision may lie potentially with a relative who may not know your desires or even a stranger appointed by the state. Without having a spouse or child to rely upon, choosing the right person to serve in that role can be crucial to ensuring that your needs are met for your finances and health care.
Divorce and its Effect on Estate Planning in Tennessee
Life is full of change. Many of those life changes can reach much farther than people realize. While a large portion of the population has been affected by a divorce, often those individuals do not understand the impact that it may have on their estate planning documents. Exactly what happens to a last will and testament or power of attorney after there has been a divorce? It is important to understand what can happen if your documents are not updated. If you have questions how a major life change may affect your estate plan, contact the Nashville estate planning lawyers at The Higgins Firm.
One of the most basic estate planning documents is the last will and testament. What impact does a divorce have on a will in Tennessee? If a will is executed by an individual who later becomes divorced, Tennessee law eliminates the ability of the former spouse to recover under the will. Similarly, the divorce also revokes any power of appointment or nomination of the former spouse as executor, conservator, or guardian within the will. Should the individual desire to keep the former spouse as a beneficiary of the will or have the former spouse appointed, the will would expressly need to provide that the specific Tennessee statute does not apply. Only a divorce or annulment will result in the automatic revocation. A divorce will have the same effect preventing a former spouse from recovering from an individual who died intestate, or without a will. A formal separation of the spouses will not revoke the ability to recover under the will or under the laws of intestacy. If you have gone through a divorce or separation, it is important to update your will shortly thereafter to ensure that your assets pass to the individuals that you so desire.
However, a divorce will not automatically revoke a former spouse from recovering as a designated beneficiary. A beneficiary designation on any life insurance policy or other death benefits is considered to be a contract between the participant and the company or organization issuing the policy. Because these beneficiary designations are considered to be contractual, the designation can only be changed by complying with the terms of the contract, generally a written beneficiary designation form. In other words, a divorce or drafting a new will cannot automatically revoke a former spouse’s beneficiary designation. It is very important to change these designations shortly following a divorce.
The Higgins Firm Wishes You a Happy Thanksgiving!
This time of year brings families together to enjoy food, fellowship, and maybe even a little football. Whether your Thanksgiving involves a small gathering of close friends or a large get-together with distant relatives, this is a time to be thankful for all of those loved ones in our lives. As you meet with your loved ones, it is a great opportunity to think about your estate plan. Being around your family may help you evaluate who would best serve in certain roles or who may need some extra protection in the future.
While your estate plan may not be your first concern, having an estate plan in place should be a priority. After all, having an estate plan in place can provide you with the peace of mind that your loved ones are cared for. You may be wondering what exactly makes up an estate plan? In its most basic form an estate plan is comprised of legal documents that explain where you want your assets to go or who you want to make decisions on your behalf if you are unable to do so.
A last will and testament is one of the most important parts of an estate plan. In its most basic form, a will documents where a person’s assets should pass upon death. However, a will does much more including the ability to set up a trust, nominate a trustee to manage the trust, nominate a guardian for any minor children, and nominate a potential executor of the estate. Communicating these decisions to any family members can allow for a helpful discussion and can eliminate any surprises down the road.
Meeting with a Tennessee Probate Attorney
Recently, attorney Jim Higgins stopped by Nashville’s NewsChannel 5 Talk of the Town Extra to discuss some steps to take when meeting with a Tennessee probate attorney after a death. When a person passes away, you may not exactly know where to turn next. If you have been nominated as an executor of an estate, you understandably may feel overwhelmed with so much to do. Often an estate will need to go through the probate court to ensure that creditors are paid and assets are distributed. A Tennessee probate attorney can help you through the probate process. The video below discusses what steps should be taken when meeting with a Tennessee probate attorney after a death. If you have any further questions regarding the probate process in Tennessee, contact the Nashville probate lawyers at The Higgins Firm.
National Estate Planning Awareness Week
You have probably been told before that a day signified a certain nationwide event like National Donut Day or National Hot Dog Day. Often these days are used to celebrate and bring awareness to certain areas in life. The same goes for estate planning. October 20-26 marks this year’s National Estate Planning Awareness Week. While National Estate Planning Awareness Week does not sound like as much fun as National Donut Day, it does seem to hold much more importance. With upwards of 120 million Americans who are lacking an up-to-date estate plan to protect themselves or their families in the event of untimely sickness, accidents, or even death, obviously this week emphasizes the value of having an updated estate plan in place.
So why is having an estate plan so important? An estate plan can ensure that your loved ones are provided for if you were to pass away or that a loved one is able to make a decision on your behalf if you were unable to do so. In a general sense, an estate plan is typically comprised of legal documents that designate your specific decisions to a number of choices thereby eliminating any potential uncertainty.
One of the most basic estate planning documents is a last will and testament. This document primarily directs where you would want your assets to pass in the event of your death. Without a will, state statutes will determine where your assets would pass upon your death. A will can also direct who should be appointed as a guardian for any minor children. A will can also direct who you want to act as the executor of your estate. It is important for adults of any age to have a last will and testament in place.
Fast Facts about Tennessee Probate
While the word “probate” encompasses a number of definitions, it is typically used to define the court process of transferring a decedent’s assets. Probate has seemingly gained a bad reputation in a number of states due to certain factors like the length of time and expense of a case. However, that reputation may be undeserving here in Tennessee. Every state has established different probate laws and procedures. The great thing about Tennessee is that often probate does not require the time or expense that it would require within other states. In in an effort to shorten the proceedings and cut down on costs, Tennessee has established expedited probate procedures that can be utilized in certain situations depending on the type or size of assets within an estate. For instance, a small estate may be utilized for personal property totaling under $50,000. In addition, probating a will for muniment of title can provide for the transfer of real estate to a beneficiary more easily. And in some cases, probate may not be needed at all. If a decedent left behind assets that were jointly owned or that had beneficiary designations, you may not even have to utilize the probate court to transfer those assets. Even if an estate needs to be fully probated, Tennessee is known for its relatively easy probate process. If you have questions about your options in probating an estate, contact the Nashville probate lawyers at The Higgins Firm. Our probate attorneys would be happy to guide you through the Tennessee probate process.
Preventing Family Feuds with Tennessee Estate Planning
In dealing with a tough family situation, many times stress and turmoil can become magnified causing even the closest of families to disagree on a number of issues. Whether it is disagreeing about the way an estate should be administered or who should be put in charge to handle a loved one’s finances, unfortunately these disagreements can have a lasting impact within a family. Parents may simply assume that any beneficiaries would get along and be on the same page if anything were to ever happen. However, any potential rifts can be prevented with proper estate planning. The following provides some easy ways to prevent any potential feuds or disputes when a stressful situation arises.
Having a Health Care Directive and Power of Attorney
If a parent becomes seriously ill and is unable to make decisions for him or herself, many seemingly simple decisions can become complicated. The parent may not be able to handle his or her finances. If one of the children attempts to take over the financial matters, there is obviously the potential for issues between the children. One child may think that he is more apt to handle the finances while another child may think that she is better suited. Having a power of attorney allows the parent to choose who her or she thinks is best suited to handle the finances if a situation arises. There is much less room for a dispute knowing that the parent has made the decision. Similarly, having a health care directive like a living will can ensure that the parent has his or her decisions written down rather than assuming that mom or dad would have wanted or not wanted certain treatment in a situation.