If you’re closely related to someone who has recently passed away, it’s likely that you’ll be in line to inherit at least a part of their estate. It can be a complicated process, depending on the circumstances. To make this process easier for you, we’ve outlined some things you need to know as a potential inheritor of a Tennessee estate.
1. Take the time to grieve
If you’ve just lost a loved one, the first thing you need to do is take the time to grieve. This could be overwhelming, especially if you were close to the person who has passed away. You may not even know how to react if you’ve been left a large inheritance. Taking the time to grieve the death of a loved one is important, and you should not be pressured into making decisions. Also, don’t rush through any of the legal processes outlined in this article. There’s no need to hurry to open an estate, and you should make sure that you’re given enough time to make well-thought-out decisions and take care of things properly. All of the necessary information will be available to you once you are ready.
2. Take the time to understand the terms of the will
Another important thing to do is take the time to understand the terms of the will. If there was a will, then you’ll need to know who was named as the executor (aka personal representative) of the estate. You’ll also need to know whether there are any special provisions in the will, like leaving a specific piece of property to a specific person. You’ll want to know where the original will is being kept, as well as the executor’s contact information so you can stay informed about the progress of the estate.
Once the will is probated, there will be a record of it that you can access at any time. You’ll be able to see the contents of the will, as well as the names of everyone who was named as a beneficiary. This is something that you’ll need to keep in mind when communicating with the people who were named in the will.
3. Find out if there is any debt included with your share of the inheritance
Debt follows the person who incurred it, so a person’s debt usually belongs to their estate- not those inheriting from them. However, if your loved one left you anything with a debt tied to it, you may have to figure out how to resolve the debt before accepting the inheritance.
This includes things like car loans, mortgages, or other debts that your loved one may have had when they passed away. Even if you inherit something with debt tied to it, you do not have to inherit debt. You can choose not to accept the item or to sell it and take whatever it is worth after the debt is paid.
It’s important that you know if there is any debt included with your inheritance so that you can plan accordingly. It’s possible that you could get a loan to cover the cost of the debt and then pay it off gradually over time.
In my personal and professional opinion, it usually makes sense to take over a loan on something that will appreciate, such as real estate, but not on any depreciating assets like a vehicle. However, this is something that will have to be decided in consideration of your personal situation.
4. Find out what happens during the probate process
The probate process is the process of opening a probate estate, gathering all assets owned, and distributing the assets from the estate. During the probate process, the executor of the estate will file the will and any other documents that might be necessary with the court and has the responsibility of distributing the assets according to the terms of the will. These documents will become part of the public record. The executor of the estate will open an estate account with the court, and you can check in on it and see what progress is being made as the assets are distributed.
5. Check for Inherited IRA Rules and Taxes
If you inherit retirement accounts from a loved one, you will need to make a decision about how and when to cash out the account.
While spouses can easily “roll” retirement accounts to the surviving spouse, this is not an option for anyone else. As the non-spouse beneficiary of a retirement account, you have two options: (1) take all money out immediately or (2) you can “stretch” the distributions up to ten years.
Because most retirement accounts are “tax deferred” accounts, you will want to explore the tax consequences of any retirement investment accounts that you inherit. If your family member invested into a 401k, IRA, or similar type of account, they did not pay taxes when contributing to their retirement. That means that taxes must be paid when the money is taken out.
The financial institution will usually help you by holding an estimated tax payment but you will still want to make sure you are aware of what you will need to pay at tax time to account for those inheritances, no matter how you took the distribution.
6. Allow time for the Executor to carry out their duties
As soon as you’re named as a beneficiary to a will and the estate has been opened through probate, you can expect that the Executor will begin to take care of things, such as contacting creditors and making arrangements for the sale of any real estate. It’s important that you give them some time to do what they need to do. Expect that it will take about a year for the entire process to run its course. This is a rough estimate and will vary depending on how complicated the estate is, how many assets there are, if any estate tax is due, and whether there are any potential disputes. The Executor will keep you updated on progress and let you know when you can expect to receive the inheritance.
7. Communicate with the Executor
Keep in regular communication with the Executor of the estate. Ask if there is anything you need to do or can do to help. If you have questions, make sure that you ask the Executor and get the answers that you need to the point you understand. You can also ask to speak with the attorney for the estate. If you are having issues with the Executor getting back to you, or you suspect there are difficulties, it may be worth consulting a lawyer on your own.
8. Decide how you want to handle your share
Before you get a check, decide how you want to spend any money that you receive. Maybe you and your deceased loved one had already talked through what they hoped would happen with any funds they left you. Many people have a financial goal that their inheritance will help them reach, such as buying a house or investing in their own retirement. Some families use the money to take a trip together and make memories. Having a plan is the best way to make sure that your loved one’s legacy is honored.
9. Update your Plan
One of the most important things to consider is that receiving an inheritance could cause your own estate planning to need to be updated or revised. If you are currently the beneficiary of a trust or other estate planning document, you should contact your estate planning attorney to determine whether or not you need to make any updates.
If you are looking for a Middle Tennessee probate attorney or to create a Tennessee will, click here to schedule an initial call with us.
Probate is the name for the legal process of distributing assets after someone passes away. These assets can include bank accounts, real estate, vehicles, retirement accounts, life insurance, and financial investments. Before the assets can be distributed, however, they must first be gathered and used to pay creditors.
After that, the heirs can finally receive their distribution of the estate. However, even then, there are several factors that can still delay the distribution process. In our practice, it is common for probate to last about nine months. In more complex cases, probate can easily last several more months or even years. These delays ultimately mean less money and more headache for the surviving family.
Let’s go through the factors that cause delays in probate, and discuss what steps can be taken to minimize the delay.
1. Passing away without an Estate Plan
If you pass away without an estate plan, your loved ones will have to go to probate court. The court will appoint someone among them to be the “Personal Representative.” The Personal Representative will be responsible for contacting all of the financial institutions about your death. They will also be responsible for using your funds to pay creditors and ultimately make distributions to your heirs.
When there is no estate plan, the process for appointing a Personal Representative can be seriously delayed. The family will have to come to a consensus on who the Personal Representative will be before they present their choice to the court. Moreover, whoever is selected as Personal Representative is often not prepared for the role, as they had not been told to expect it. The process of going through all of your finances and contacting all of your financial institutions might be overwhelming for them, especially if they did not know your finances very well. Moreover, they will be responsible for mediating tension between the family, which is made even more difficult if members of the family do not think you explicitly wanted them to serve as Personal Representative.
Having an estate plan would minimize all of these consequences and delays. By having an estate plan, your family will already know who you want to represent your estate, which will make the process for appointing a representative much smoother. The person you select to represent your estate will also be better prepared for the role, as they are aware that they will one day need to fulfill the role.
The best way to minimize delays in probate is thus to have a clear estate plan in place, and to let your family and loved ones know about your intentions.
2. Family Tension
Even with an estate plan, family dynamics can still play a major role in probate. For example, if the only major asset that you have at the time of your death is your house, and one of your heirs would like to live in it while the other heirs would rather sell it and keep the sale value, tension will ensue and attorneys may need to get involved. All of this will ultimately lead to a delay of the probate process, and may ultimately divide the family in an irreparable way.
Feuds such as the one described happen even in the most loving of families. To avoid these feuds, it is important to not only have an estate plan, but to have one drafted by an experienced estate planning attorney. An experienced estate planning attorney will be familiar with cases such as the one described and will be able to help you think through exactly what you would want to happen if these cases occur. Your estate plan will thus be better able to help your family navigate your precise wishes for your assets, ultimately easing tension and expediting the probate process.
Hiring an estate planning attorney to draft your estate plan is one of the most important steps you can take to minimize probate delays.
3. Financial Complications
If you keep your finances private, it will be difficult for your intended heirs to know what to expect after you pass away. They may not even know where you bank and what financial investments you have. The more difficult it is for them to know your finances, the more difficult it will be for them to notify your financial institutions of your death and gather accounts.
Furthermore, if you are in debt or are not paying your taxes, your Personal Representative will be responsible for using your assets to pay your creditors and the IRS. This can cause serious delays to the probate process, especially if the Personal Representative was unaware. Creditors will ensure they receive their payments by filing claims against the estate through probate court. These claims ultimately slow down the probate process as each claim requires a hearing before a judge.
To save your family time, headache, and grief after your death, it is important that you keep your finances in order. Pay off debt when you can, and keep a clear record of it. File your yearly taxes appropriately. Let your loved ones (especially your Personal Representative) know of your finances and how to contact each financial institution in case something happens.
Even in the best of cases, probate takes a while. To minimize delays, we recommend having an experienced estate planning attorney draft your estate plan, clearly telling your loved ones of your intentions, and keeping your finances in order as much as possible. Your loved ones will already be filled with grief after your death. The best gift you can give them is preparation.
Here at Graceful Aging Legal Services, we offer software that can help our clients keep their estate in order. Contact us at 615-846-6201 or hello@galsnashville.com if interested.
Becoming an executor can be both an honor and a daunting responsibility. When a loved one names you as the executor of their will, it signifies a deep trust in your ability to manage their estate after their passing. However, the role comes with numerous tasks and legal obligations that can be overwhelming, especially during a time of grief. This guide will walk you through the steps of serving as an executor, from initial family discussions to closing the probate estate, with a focus on Nashville, Tennessee.
Understanding Your Role as Executor
As an executor, your primary responsibility is to ensure that the deceased’s estate is managed and distributed according to their wishes as outlined in their will. This involves gathering assets, paying debts, and distributing the remaining estate to beneficiaries. It’s essential to approach this role with a clear understanding of the legal and financial responsibilities involved. Start by reviewing the will thoroughly to understand its directions and any potential complexities.
Communicating with Family Members
Before proceeding with any legal steps, it’s usually a good idea to communicate with family members and other beneficiaries. Discuss your role and ensure that everyone involved understands the process. This is also an opportunity to identify any potential disputes or misunderstandings. I once worked with a person whose mother had nominated two adult children to serve as co-executors in her will. The parent knew that the children did not get along, but was hoping that they would be able to work together through probate. As you can imagine, this did not go over well. In the event that your family is in disagreement over who should serve, it may be beneficial to discuss alternatives with a probate attorney before speaking with your family.
Finding a Probate Attorney
Navigating probate law can be complex, especially if you are unfamiliar with the legal system. Hiring a knowledgeable probate attorney in Nashville, Tennessee, can be invaluable. Look for an attorney with experience in estate planning and probate, someone who communicates clearly and understands the specifics of Tennessee law. A good attorney will guide you through the process, help you complete necessary paperwork, and represent you in court if needed. Hiring an experienced attorney will save you time and money when it comes to knowing how to proceed with probate.
Handling Court Paperwork and Letters Testamentary
One of the first legal steps as an executor is to file the will with the probate court clerk and obtain letters testamentary. These documents officially recognize you as the executor and grant you the authority to manage the estate. The Tennessee probate process involves submitting the will, the death certificate, and other required forms to the court. Some Tennessee probate courts require a hearing in front of the Judge to open a probate estate and others do not. Your attorney can assist with these filings and any court appearances to ensure accuracy and compliance with Tennessee probate law.
Gathering and Managing Assets
Once you have been granted letters testamentary, your next task is to gather the deceased’s assets. This includes accessing bank accounts, selling vehicles, and managing any other personal property. Keep detailed records of all assets and transactions, as you will need to provide an accounting to the court and/or the beneficiaries.
Your attorney will help you know what assets are in the probate estate and what passes outside of probate. In most cases, anything with a beneficiary designation or joint owner – like a life insurance policy or retirement account- is a non-probate asset. Real estate, such as the home, is typically not part of the probate estate unless specifically mentioned in the will.
Managing Debts and Expenses
As executor, you are responsible for settling the deceased’s debts and expenses. This includes paying funeral costs, storage or mailing fees, attorney fees, court costs, and any valid bills. It’s important to prioritize these payments and ensure that all debts are settled before distributing the estate to beneficiaries. Collecting the deceased’s mail can help you identify any outstanding bills or subscriptions that need to be addressed.
Keep in mind that you are not required to pay debts out of your own money in most Tennessee cases. Your probate attorney will help you determine which expenses should be paid out of the estate and how to handle any bills sent by creditors.
Handling Taxes
Another critical aspect of managing an estate is handling taxes. You will need to file the deceased’s final income tax return and ensure that any taxes owed are paid. While most estates do not owe federal estate taxes, it’s essential to verify this based on the estate’s value and current tax laws. Consulting with a tax professional can provide clarity and ensure compliance with tax obligations.
Distributing the Estate to Beneficiaries
Once all debts and taxes have been settled, you can distribute the remaining estate to the beneficiaries as directed by the will. This step requires careful documentation and communication with all parties involved. Ensure that each beneficiary receives their entitled share and keep records of these distributions for court reporting purposes.
Closing the Probate Estate
The final step in your role as executor is to work with your attorney to close the probate estate. This often involves submitting a final accounting to the court, detailing all transactions, including costs and beneficiary distributions. Ultimately, you should have an estate account balance with zero dollars. Once the court approves this accounting or the beneficiaries waive the filing of an accounting, you can formally close the estate, completing your duties as executor.
Need guidance on managing a loved one’s estate? Schedule a free initial call with our team at Graceful Aging Legal Services to discuss your specific needs and how we can assist you through the probate process.
Serving as an executor is a significant responsibility that requires organization, communication, and attention to detail. By understanding your role, seeking professional guidance, and following the legal steps outlined in this guide, you can honor your loved one’s wishes and navigate the probate process with confidence. Remember, you are not alone—resources and support are available to help you through this journey.
As far as we know, we only live once – and we never know when it’s going to end. It’s important to plan so you can prepare.
You can start 2024 off strong by getting your affairs in order.
1. Create an Estate Plan
First, decide whether you want a will, a trust, or both. Some people opt for a will and a living trust, but it’s up to you what you choose. If you want an attorney to talk over your options, we’d be happy to do that!
You can also decide whether you want a durable power of attorney for finances (in case you’re not able to make financial decisions).
2. Plan for Your Healthcare
You can also consider whether you want to create an advance directive for your care. Most advance directives have a living will and durable power of attorney for healthcare.
The living will tells doctors what kind of care you wish to accept or reject when it comes to emergency treatment, and durable power of attorney lists the person you trust for your care should you become unable to communicate.
3. Organize Your Important Documents
Once you’ve prepared all of your important papers, organize them and put them all in one place.
Here are some examples of papers that you should keep together.
Personal Information
Personal info is needed for identification purposes and is best kept together so your family can be prepared when they need it.
Social security number
Date and place of birth
Names and addresses of spouse and children
Location of important legal certificates (birth/death, marriage/divorce, citizenship, adoption)
Employers and dates of employment
Education and military records
Names and phone numbers of religious contacts
Group memberships, awards
Names and numbers of close friends, relatives, doctors, lawyers, advisors
Health Information
Emergencies happen – and when you’re not prepared, your family has to scramble to find what your medications are, etc. Keep them all in the same place and be sure that your loved ones know where to look.
List of any ongoing conditions and treating doctors’ names
Current prescriptions (keep this list up-to-date)
Durable power of attorney for healthcare
Advance directive
Health insurance info, policy and phone number
Financial Information
Your finances will help family members better understand what financial resources they can draw from to help you with your care, should you need it.
Sources of income/assets
Social security benefits information
Insurance info (car, home, life, long-term care) with policies and phone numbers
Bank and account information
Investment income
Copy of the most recent income tax return
Location of most up-to-date will with original signatures
Liabilities, including what’s owned and when payment is due
Mortgages/debts, how and when they’re paid
Original deed of trust for home
Car title and registration
Credit and debit card numbers and names
Safe deposit box and key number
If you’re looking for a place to keep all of these, let us know. We’re happy to offer LawSafe memberships for a reasonable rate to help keep track of all the not-so-little things that your loved ones may need if there is an emergency or end-of-life event.
4. Talk with Your Loved Ones
Once you have everything in one place, tell your loved one where to find your information. Be sure to also tell your loved ones about your plans – you don’t want your family to find out after the fact that you’ve selected someone they don’t know as your Personal Representative!
You can also let your doctor know about advance care plans, and, if applicable, give your doctor permission to discuss your care with your family.
5. Review Plans Regularly and Update
Once you’ve done all the hard work (it takes time getting all that paperwork together), be sure to review your plans annually. If you’ve had a major change happen, you should consider revisiting your plans as well, to make any necessary updates.
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It takes time to get your affairs in order, but it is such a relief to your loved ones when they don’t have to worry about what your wishes are. In fact, this could be your masterpiece! If you’d like to get updates like this one on a regular basis, sign up for our newsletter!
If you’re reading this, you might be facing the loss of a loved one and the process of trying to figure out what happens or what to do with their belongings. It’s a journey I’ve been through myself, and while it can feel overwhelming, I’m here to walk you through it step by step. This guide will help you understand if probate is necessary, how it unfolds in Tennessee, and what to consider when hiring a probate attorney. Let’s tackle this together.
What is Probate?
Probate is essentially a legal roadmap for transferring property that belongs to a deceased person into the name of a living person, often a relative, through the court system. While many people can avoid probate by using estate planning tools, it’s not always possible. Under very specific circumstances, it is a good idea to go through probate!
Does My Loved One’s Estate Require Probate?
Not every estate needs to go through probate. If your loved one had a funded living trust, or if their assets were held in joint tenancy or had designated beneficiaries, you might be able to bypass probate. However, if they owned assets solely in their name without a beneficiary designation, probate will likely be necessary. It’s a good idea to review the asset structure your loved one had in place to determine the best course of action.
If you aren’t sure what your loved one owned at the time of their death, it is a good idea to reach out to an attorney. Our attorneys at Graceful Aging Legal Services, PLLC can run a search to find out where assets might be held and if there are any likely outstanding bills. In the meantime, you will want to collect any mail that comes to the deceased to see if you can locate any assets.
The Probate Process in Tennessee
In Tennessee, the probate process begins by filing a petition with the county court where your loved one lived. The court will appoint a Personal Representative (often named as executor if there is a will) to oversee the estate. The Personal Representative plays a crucial role in ensuring that each step is completed accurately and in compliance with state laws.
We like to explain it the Personal Representative’s job as a three-step process:
Gather assets. This includes anything that is owned individually by the deceased person, including personal property from their residence, money in bank accounts, vehicles, and more. The Personal Representative (also called an “Executor”) will make an inventory of what your loved one owned so that everyone can be aware of what is in the estate. It’s important to remember that even if you are listed as the executor in a Will, you do not have any authority until the court officially appoints you. The Personal Representative will open an estate account with an FDIC insured financial institution in order to deposit assets as they are collected or proceeds from things that are sold.
Pay costs and creditors. In Tennessee, there is a specific formula for how probate estate funds are applied to expenses and debts. First, the costs of administration are paid. This includes all court costs, attorney fees, and other fees like storage or shipping. Second, funeral expenses can be paid. Third, any taxes or government claims are paid, including TennCare. Last, any debts that are filed against the estate and validated by the court are payable to those creditors. These are usually things like final medical expenses or credit cards.
Distribute to inheritors. Once all of the deceased’s assets are gathered and costs and creditors are paid, the Personal Representative will know what the final balance of the estate account is. In some cases, there isn’t enough money in the estate to pay all of the bills, and that should be discussed with the estate attorney. Otherwise, it’s time for what everyone has been waiting for- getting their money! The Personal Representative will divide the remaining balance into shares based on the Will or the law and distribute those amounts to those who inherit. The estate attorney will work with the Personal Representative and inheritors to collect statements that everyone has received their share, or if that cannot be done, to complete an accounting of the estate. Once all the paperwork is completed by the Personal Representative and inheritors, the estate attorney will ask the Court to close the probate estate.
Duration and Costs of Probate in Tennessee
The timeline for probate can vary widely, typically ranging from six months to over a year, depending on the estate’s complexity and any disputes that might arise. As for costs, these can include court fees, attorney fees, and executor fees, all of which depend on the size and intricacy of the estate. It’s important to budget for these expenses as they can add up quickly.
In most counties, just filing probate is $300-500. So if you can avoid probate while getting your loved one’s assets distributed appropriately, it’s a good idea. Most attorneys charge hourly for probate work, which can add up quickly. However, the estate attorney should have efficient processes to keep the costs as low as they reasonably can.
You can help the estate attorney by turning in all of your paperwork on time, replying to their questions, and helping to get documents signed by any other inheritors. We like to say that the more families delay or fight, the more money probate lawyers make. While differences are normal in families, remember that the more time an attorney spends dealing with disputes, the more money they make and less money is available to the inheritors.
Choosing a Probate Attorney in Tennessee
Finding the right probate attorney is like choosing a trusted partner for this journey. You’ll want someone experienced, transparent about their fee structure, and communicative. It’s essential that they’re approachable and willing to provide regular updates. If you have friends or family who have been through the process, ask them for recommendations. Check out google reviews and check the Board of Professional Responsibility’s attorney search to make sure an attorney is licensed and in good standing before you sign an agreement for them to handle your case.
Conclusion:
Probate can feel daunting, but with the right knowledge and support, you can manage your loved one’s estate with confidence and care. Remember, you’re not alone in this process. With a reliable attorney and a clear understanding of the steps involved, you can honor your loved one’s wishes and ensure their estate is handled with the respect it deserves.
If you have questions about transferring the assets of your deceased loved one, we’re here to help. Feel free to reach out to us for more information about your specific situation.
