Articles Tagged with Nashville probate lawyer

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.

Working as a Nashville probate attorney, I often hear a number of misconceptions that many people have when it comes to probate. When a loved one passes away, many people assume that they will be entitled to a portion of the decedent’s complete estate as provided in the will or the laws of intestacy. However, that may not be the case depending on a number of factors including the amount of debt a decedent had. If you have questions regarding what you may be entitled to in the probate process, contact the Nashville probate lawyers at The Higgins Firm.

Although you may have been named as a beneficiary of an estate, certain requirements must be met by the executor or administrator before any beneficiary recovers any of the assets from the estate. Specifically, there are certain priorities of claims that must be paid out before others receive a portion of the estate. Each class of claims must be paid out in its entirety before the next class of claims may be paid out. The first class of claims that are paid out includes administrative expenses, attorney’s fees and administrator’s fees. The second class of claims that are paid out includes funeral expenses. The third class of claims includes any types of taxes or assessments owed to the federal or state government. The fourth class of claims includes any claims made by creditors. Only after each of these classes of claims are paid out in full can the beneficiaries then receive a portion of the estate. If an estate cannot pay out all of the claims, it is considered to be insolvent and the beneficiaries will not receive any of the assets.

Obviously, the amount of debt that a decedent may have had will play a large part in determining whether or not the beneficiaries will recover from the estate. For the most part, debts are still required to be paid to creditors after someone dies. However, there are different types of debt including secured debt and unsecured debt. An unsecured creditor may be a credit card company or other business that does not have a secured interest in any specific property. The administrator or executor is required to send notice that an estate has been opened to any known or potentially known unsecured creditor of the estate. Unsecured creditors are required to file a claim with the estate in order to recover. Many unsecured creditors will send bills and collection notices to the individual in hopes of getting paid from the estate. However, the personal representative of the estate is not required to pay the unsecured creditor until a claim has been filed.

When an individual passes away, his or her assets may or may not be required to go through the probate process in Tennessee’s probate court. The determination of whether probate is needed is often dependent on what types of assets were left by the decedent.  Often many beneficiaries of an estate may be confused about what is rightfully owed to them. By determining whether certain assets are required to go through probate, you will have a better understanding of what you may be entitled to as a beneficiary of an estate or what is required to probate an estate. This understanding can help to prevent any potential disputes in the probate process.

As mentioned, only certain assets are required to go through the probate process. Assets that were owned solely in the name of the decedent or assets that did not have beneficiary designations will need to go through the probate court in Tennessee. So what exactly does that mean? Here are a few common types of assets that are NOT required to go through the probate court:

• Any type of 401K, IRA plan or other retirement plan that lists a specific individual as beneficiary. The listed beneficiary will receive the assets within the account without having to go through the probate court. However, if the estate is listed as the beneficiary or if there is no living beneficiary listed, the asset will be a probate asset.