Last week, Governor Haslam signed several new bills into law. I previously blogged about a bill which updated a number of areas of Trust and Probate law here which has been signed by the Governor.
Three other bills have been signed by the Governor which update several other areas of probate law. Two of these change the amount from $10,000 to $15,000 that may be paid out without probate by a credit union and bank, respectively.
The third act updates accounting procedures in Tennessee probate estates. My reading of third act is to eliminate a court’s discretion to require an accounting if the Will waives it. Instead, a status report detailing issues to be completed before the estate can be closed will be due within fifteen months from the opening of the estate. I also read a new TCA 30-2-601(b)(2) to allow the personal representative to be able to close an estate without an accounting even if all receipts have not been received. In such event, the personal representative would give notice to the beneficiary who has failed to give a receipt. If the beneficiary no-shows at the hearing to close the estate (or appears, but does not participate), the “[f]ailure of a non-compliant distributee to appear and or participate in the hearing shall result in a final order closing the estate.” [emphasis added].
There are also new statutory forms for the receipt and waiver.
A copy of the bill as signed by the Governor can be viewed here: Pub. Ch. 0280.
It should be noted that this bill updating probate accounting procedures became law as soon as it was signed by the Governor last week (as opposed to July 1 when most new laws become effective).
Update: Read Public Chapter No. 290 here.
SA0426 which revises a number of areas of the Wills, Trusts and Probate statutes has cleared the Tennessee Senate and is headed to the Governor’s desk. This bill updates law in the following areas:
Probate… Ugh! Am I right? When discussing probate with clients, I sometimes feel like I’m talking about Memphis to someone back home (I’m from Knoxville). It’s not that bad! I go there on purpose! I like it there! You shouldn’t be afraid of it!
Why Avoid Probate? Although probate is not as bad as you probably think it is, there are still some very good reasons to avoid it:
- Unnecessary Cost. Why pay unnecessarily to accomplish your wishes?
- No Privacy. Your nosey neighbors will know you cut out one of the kids.
- Delays. It simply takes longer to get your stuff to your family.
How to Avoid Probate? So, how do you avoid probate? Methods include: Continue reading How would you like to avoid probate?
Signed into law by Governor Haslam on April 29, 2014, the small estate affidavit procedure will now cover substantially more small estates.
The Small Estate Affidavit is an abbreviated procedure in Tennessee that avoids the necessity of a formal probate administration in certain qualifying estates. The affidavit is a “one and done” probate process—it can be handled in a single court filing and appearance.
The new law qualifies estates that are less than $50,000 for this less costly process. Formerly, only estates with less than $25,000 qualified.
Click here to read the new law. The relevant portion is on page 3 at Sections 8 and 9:
SECTION 8. Tennessee Code Annotated, Section 30-4-102(5), is amended by deleting the language “twenty-five thousand dollars ($25,000)” and substituting the language “fifty thousand dollars ($50,000)”.
SECTION 9. This act shall take effect on becoming law, the public welfare requiring it.
Excellent question. I’m glad you asked.
Broadly speaking, in estate planning there are two types of trusts: revocable and irrevocable. This post will address revocable trusts.
Revocable trusts are also known as living trusts. The short answer is that a revocable trust is a Will substitute. For the most part, after death the same things can be done with revocable trusts as can be done with Wills.
The real difference between a revocable trust and a Will is that to function properly, a revocable trust must actually own your assets (or be named as a beneficiary). In this sense, revocable trusts are like personal holding companies. A good analogy is thinking of a public company such as FedEx. FedEx owns planes and numerous other assets. FedEx has shareholders and a CEO named Fred Smith. During your lifetime, you are the CEO (or trustee) of your trust. You are also the founder (known as either grantor, trustor, or settlor) and the shareholder (or beneficiary).
Continue reading What is a Revocable Living Trust?
I will refer you back to my first post in this series here. Remember that only property in your sole name with no joint owner and no beneficiary designation passes through Probate and is controlled by your Will (if you have one).
I am suddenly reminded of a Frank Sinatra song and a certain character portrayed by Ed O’Neill. Love and Marriage… The Bundy’s provide a useful example.
This entry will discuss what happens to that property if you (Al Bundy) do not have a Will. Al, ever the do-it-yourselfer, did not want to pay an attorney to draft a Will. I mean, whats the worst that can happen… Besides, he’ll be dead!
Although the law is different in each state, you will note a common theme among each of them for married parents-the surviving spouse has to share with the kids.
Another important theme to note is that where the property goes depends entirely on who survives you and their relationship to you.
Although I do not intend to cover this exhaustively, I will cover the most common scenarios. In some cases, I have simplified the law, but only to make it more digestible.
Continue reading What happens if I don’t have a Will?
How better to begin my blog than to discuss the basics of how assets pass at death?
The way assets pass at death can be swept into four categories:
- Survivorship. Assets held as Joint Tenants with Rights of Survivorship (known as Tenancy by the Entirety when the property owners are husband and wife) pass to the survivor automatically. Common assets held as survivorship property include a home owned by spouses and bank accounts.
- Beneficiary Designation. Assets with a beneficiary designation pass upon the death of the owner to the named beneficiary. This includes life insurance, annuities, certificates of deposit, retirement accounts (IRAs, 401(k)’s, 403(b)’s, and etc.) and any number of other types of assets. Sometimes beneficiary designations are called “TOD” or “POD.”
- Trust. This is ripe for the next blog entry and I do not wish to steal my own thunder, but basically a trust is a vehicle for managing assets. The Trustee is the “manager.” The beneficiary is the person who gets the benefit of the trust assets. Anyway, assets held in trust pass according to the terms of the trust.
- Sole name. The fourth and final way that assets pass at death are assets that are in your sole name, without a beneficiary designation, and without a joint owner (no survivorship aspect). These are the only assets that pass through probate and controlled by a Will. One caveat: assets paid by beneficiary designation to your estate (or without a valid beneficiary designation) or your executor or to a trustee named in your Will will be controlled by your Will.
Did you notice that there are not that many types of assets that pass through your Will?
More to come. Stay tuned.