Did you miss our live webinar about co-executors or co-trustees for your estate?
What it’s about
Many people want to appoint two or more people as joint decision-makers for wills and trusts. April and Mollie host a Q&A about when that’s a good decision….and when it isn’t.
Join Attorney April Harris Jackson of Graceful Aging Legal Services, PLLC, and Mollie Lacher of Sunny Care Services for a discussion on the subject of choosing the right executor(s) or trustees… and why it’s so important.
This webinar is free, so please sign up today to learn more!
As a parent, you want your child to lead a happy and fulfilling life and have healthy marriages of their own. However, it is hard to ignore the possibility of divorce. No matter how much you may love your child’s spouse, your interest is always in protecting your child. So when estate planning, how can you ensure that your child’s inheritance will not be split with their spouse in a divorce?
Division of property in a divorce will depend upon whether the property is considered “separate property” or “marital property”.
What is the difference between separate and marital property? Separate property is the property that belonged to an individual before marriage. This can include monetary assets, cars, real estate, and sometimes even pets. Marital property, on the other hand, is the property that was acquired or shared during the marriage. So what happens if your child puts their inheritance into a joint bank account? To answer this, we need to discuss how Tennessee law views inheritance.
How does Tennessee view “inherited” property in a divorce?
In Tennessee, inherited money or property is generally considered to be separate property. This means that whether your child inherits before or during their marriage, the court will treat the inheritance as exclusively belonging to your child. They are not obligated to share it with their spouse. However, have you ever heard a long-married couple say “what’s mine is yours, what’s yours is mine?” Many couples treat property this way, which can work well unless the couple decides to separate. This brings me to a very important point:
If your child puts an inheritance into a joint banking account shared with their spouse, it would become marital property subject to division at divorce.
How can you ensure that your child’s inheritance will be divorce-proof, no matter how your child handles the inheritance?
One way to ensure the safety of your child’s inheritance is to set up a Family Trust. In general, a family trust is an estate planning tool that protects your family and your assets. A family trust is a three-party relationship between you (the Grantor), your child (the Beneficiary), and the person in charge of maintaining and distributing the assets in the trust (the Trustee). Through a Family Trust, you will be able to determine how and when your assets will be distributed by the Trustee to your Beneficiaries after your death.
In the divorce context, a Family Trust is a great option because the property is held by the Trustee. This means that on paper, the property from the Trustee will not technically belong to your child. So in the event of a divorce, a court will not consider the assets from the trust for division. Family Trusts are generally flexible and easy to set up, and they are even cost-effective. Of course, if a Family Trust is not right for you, your estate planning attorney will be able to provide alternate options to achieve the same goal!
Do you need a family trust to protect your children’s inheritance?
Of course, nobody wants to believe that their child’s marriage will end in divorce. However, estate planning is all about considering life’s “what if” questions. In the end, setting up a trust for your family will allow you and your child the confidence that their inheritance is safe.
To learn more about trusts and other estate planning tools that Elder Law Attorneys in Tennessee use, follow us on Facebook or Instagram!
Probate is the legal process of transferring some of a deceased person’s assets to their heirs. Once you or someone you love passes away, there may be questions about what specific assets and property within an estate actually have to go through probate court, and which assets pass directly to beneficiaries. The short answer is that only assets that a person owned that were in their own name, alone, must go through probate.
The Probate Estate
Assets that go through probate make up what’s called the “probate estate.” For example, an individually owned bank account with no named beneficiary or a car titled only in an individual person’s name will pass through probate.
All other assets pass to the named beneficiaries without going through the probate court.
So, what are some specific things that do not pass through probate?
Here are a few examples:
Property held in joint tenancy with a right of survivorship
Any assets or real property held in joint tenancy (with a right of survivorship specified in the deed) by the deceased and one or more other people doesn’t need to go through probate. When one owner dies, the survivor(s) automatically owns the property.
Property held in tenancy by the entirety
If the deceased individual owned real estate with their spouse in tenancy by the entirety, the surviving spouse is automatically the sole owner when the other spouse passes away.
Payable-on-death bank accounts
A payable-on-death bank account is an account that passes to the beneficiary at the death of the account holder, therefore it does not pass through probate. Check with your bank to see whether your bank account(s) have payable-on-death beneficiaries.
Assets registered in transfer-on-death form
Tennessee residents can name transfer-on-death beneficiaries for securities. Assets registered in the transfer-on-death form pass directly to the named beneficiary without needing to go through probate.
Life insurance proceeds
When life insurance policies or annuities specify a beneficiary, the proceeds do not go through probate.
Retirement accounts
The funds in retirement accounts do not go through probate if the account holder designated a beneficiary.
Trust assets
Assets held inside a Trust by a Trustee do not go through probate.
Probate doesn’t have to be complicated
Learn how to prepare for and navigate probate
Overall, knowing which your assets must pass through probate, and which do not pass through probate, can save you a lot of unnecessary stress and confusion. Designating probate vs. non-probate assets is an important part of your overall estate plan strategy. It is important to take the time to talk to an attorney in order to identify your assets, decide who your beneficiaries should be, and determine what the best method is for those beneficiaries to receive their share.
We invite you to participate in our “Estate Planning Challenge,” which is a daily email campaign where you can identify all of the people, assets, and decision-makers that you will need to consider before meeting with an attorney to further discuss your estate plan.
At some point, everybody thinks about creating a Last Will and Testament. However, many never do. Having a conversation about what will happen to your belongings after your death- and then seeing it on paper- is a daunting task.
So, what happens if you never do it? We’ll give you our best lawyer answer- it depends! When a person dies without a will, they die “intestate.” Every state has different intestacy laws that dictate who will inherit a person’s property when they die intestate. So who inherits your things depends largely on what state you live in, and your family composition. Below we detail what will happen to your estate if you die intestate in Tennessee.
What happens when you die intestate in Tennessee?
Are you married with or without children?
Let’s start with the simplest scenario: if you are married with no children, your spouse will inherit your entire probate estate. However, this will change if you do have children. If you are survived by your spouse and one child, each will inherit one-half of your estate. Additionally, if you are survived by your spouse and more than one child, your spouse will inherit one-third of your estate, with the remainder split evenly among your surviving children.
Let’s say you die without a will in Tennessee while unmarried or widowed with children…
If you do not have a spouse or are widowed, your estate passes to your children. All of your biological and/or legally adopted children inherit equally. In some cases, children are able to prove their parentage by DNA testing after a parent has passed in order to claim part of the estate. All children will inherit equally, so it is important to inform your family of all children who may have a right to inherit from you.
What happens in the tragic case of a child dying before a parent? If your child gave you grandchildren before they passed, then their share of inheritance will pass to those grandchildren. Otherwise, their share will be split among your other children.
Or you die while unmarried without children…
Let’s say you are not married and you have no children, but your parents survived you. Your parents will inherit your entire estate. If neither of your parents survived you, your estate would then pass to any siblings you may have.
I don’t have any close heirs. Who gets my assets if I die intestate?
But wait: I am not married, I have no children, I survived my parents, and I have no siblings. What now? In this case, a probate attorney may need to do what is called an “heir search” which is basically creating a family tree to find your closest relative(s). Your closest blood relatives will receive your estate. In the event that they cannot be found or do not respond to the attorney, your estate may be deposited with the Probate Clerk’s office and ultimately turned over to unclaimed property.
Who will inherit your assets?
Create a will if you want control over who inherits your estate
Of course, the easiest way to avoid confusion and know for certain where each piece of your estate will end up is to create a valid estate plan including a Last Will and Testament. Thinking about what will happen after death is a daunting task, but in the end, it will save your surviving family more money and stress.
Do you want to get a head start on your Will or need to update your Will? Take our Virtual Estate Plan Challenge! We created this 7-email series to help our Clients and guests organize their thoughts about their wishes for their estate. You can use this information later on when you create your documents. Give it a try!
Dying without a will is unfortunately very common. If you die without a will, your property will likely go through a court process called probate and will ultimately be distributed according to Tennessee’s intestacy law. Here are some common events that may happen if you die intestate:
Your immediate next of kin, whoever they are, will likely inherit your property first. If you die intestate, everything goes to your next of kin. Your next of kin are the people who have the closest relation to you. Your children are first in line, along with your spouse if you are married at the time of your death. Otherwise, it’s your closest relatives. For example, say you die intestate without a spouse, children, or parents. Your next of kin could be your much younger half-sister or a cousin you’ve never met. Whoever fits the “closest living relative(s)” criteria will inherit everything after the estate pays your debts and taxes.
That son- or daughter-in-law you don’t like will get your property before that niece or nephew you do like. Marital property owned by your children is governed by the laws of the states they live in, not you. If they live in a communal property state, they’re sharing the inheritance, 50/50. While the laws are different in every state, property acquired during marriage by either spouse may be marital property, especially if it was used for the benefit of both spouses.
A little bit of money up for grabs can have a cooling effect on interfamilial relationships. In a perfect world, family members would all get along, never be jealous, and always do right by each other. This isn’t a perfect world. Intestacy law doesn’t take into account the relationships the deceased had with anyone or what the deceased orally promised to someone. Even if widowed Uncle Bob told you he wanted you to have his ’65 Thunderbird, without a will, the car is going to his son…who doesn’t even have a driver’s license. When families start fighting over estates, lawyers get a lot of money and the family gets a lot of heartaches, so it’s best to put your wishes in writing so everyone knows what is expected in advance and the Court has authority to enforce your wishes.
If you’ve recently lost a loved one who did not have a will and have questions about their estate’s administration, you should speak to a probate attorney for guidance. If you need assistance, we invite you to contact us to schedule a consultation.
Every family is different and has different needs. The family unit can be as simple as a married couple or as complex as a blended family with committed partners. Regardless of who makes up your family, you need to ensure that you have adequate legal protection for your partner and any children. This week we will discuss why legal documents like wills, trusts, and powers of attorney are appropriate for unmarried couples and why these documents are important to make sure your family comes first.
How do you plan to care for your life partner in Tennessee?
*One caveat before we discuss what you can do, let me say what you cannot do. You cannot disinherit your spouse. So if you are in a new relationship but still legally married to someone else, your options will be limited. To read more about this topic, click here.
Tennessee does not recognize common law marriage
Many people believe that even without a marriage certificate, couples who live together for a certain number of years and hold themselves out as spouses to the community become “common law married.” Only about ten U.S. states allow common law marriage, and if you meet the requirements for common law marriage in one of those states before moving to Tennessee then you may qualify to inherit from your partner as a spouse, but it would be an uphill battle if anyone challenged your right to inherit as a spouse. The better (and less expensive) option is to create an estate plan.
Siri: Contact a qualified estate planning attorney near me
Make it as official as you can
While there are some rights and privileges that you cannot achieve without the formality of marriage, we can re-create many spousal rights through an estate plan. An estate plan requires evaluating your family situation, your assets, and your wishes to develop legally binding documents that will meet your goals for decision-making during your lifetime and asset transfer upon death.
Most people don’t like to think about their own death or their partner’s, but this is essential to having a solid plan in place. Estate planning is a big part of my Nashville law practice, and here is what I recommend for families choosing to forgo the traditional contract of marriage:
Create appropriate Powers of Attorney in Tennessee
If you are in a committed relationship and trust your partner to make decisions for you, you should both create the appropriate powers of attorney. A Power of Attorney will allow your partner to have decision-making authority in an emergency situation if you are unable to do so. This can include medical and financial powers of attorney. Depending on your personal comfort level, your partner may also be authorized to act on your behalf and at your direction even if there is not an emergency, for example, if you were out of town for something that had to be done in person like a real estate closing.
Create a Will
When you die, your family of origin may feel entitled to an inheritance in favor of your life partner. Without a Will, Tennessee law is on their side. In order to protect the family you have created with your partner, you will need a properly executed Will. A Trust may also be appropriate depending on your situation.
Consider what will be important to your family of origin when you are gone. Will they be upset if you pass family heirlooms to your partner or children who are not legally related to them by blood? Are there significant assets that they expect will “stay in the family?” If so, and assuming it is safe to do so, I encourage you to discuss your wishes with your family of origin and see what provisions can be made for them. It is often easier for your loved ones to accept your wishes if they heard them directly from you, rather than reading them on paper when you are gone.
In order to make sure that your companion receives any inheritance that you would like them to have, you will need to have a Will and make them a beneficiary of whatever share you would like them to receive. I encourage you to speak to your loved one about your resources and how they would be passed in three scenarios- (1) if you die first, (2) if they die first, (3) if you die together in a common accident. Particularly if you have kept your finances separate, think about how you would gain access to each other’s accounts, how long it would take, and how the family would support itself in the meantime.
POD accounts are an excellent way to pass on assets to your unmarried partner.
Add Beneficiary Designations to your accounts
Many types of accounts allow you to add beneficiary designations to them. The most familiar type is life insurance, but there are many others. If you have retirement accounts like IRAs and/or 401k accounts, look at adding your partner as the beneficiary to those funds when you pass. The same can be done with brokerage accounts and bank deposit accounts.
Rather than going through your “estate” as laid out in a Will, the financial institutions holding money for you will essentially cut a check to your beneficiary when they learn that you have died.
And finally….
Think about who depends on you?
You need to consider what might happen to your partner when you pass away. Similarly, how would you care for the family if they were to die or become disabled? How can you ensure that any serious long-term disruption to your family life is a bump in the road (at least financially speaking) and not a train going off the rails?
Whether you make significant earnings at your career or you make valuable contributions within the home or both, your family would be lost without you. That’s why it’s important to have a plan in place. If you are a Tennessee resident committed to helping your family, whether married or not, schedule a call with us to talk about how you can protect your family when they need it the most.
