An Overview of Tennessee Probate
Before delving into Tennessee probate laws, it is important to understand the bases of what probate is and what it accomplishes. Probate, generally speaking, is a legal procedure through which your assets are transferred to your heirs upon death, ensuring that any debts that you owe at the time of your death are paid. In essence, probate assets are distributed according to your will. It should be noted that probate is a court process, and generally speaking, it can be expensive and time consuming. Specifically, Tennessee probate laws require that any assets go through probate, regardless of whether or not there is a will, and regardless of whether or not you have life insurance.
The purpose of probate is to validate your will by proving its authenticity and legitimizing its terms. Once your will has been probated , your personal representative will be legally required to distribute your assets according to the terms of your will. If you do not leave a will behind at the time of your passing, Tennessee probate laws provide for a specific formula of who your assets should be distributed to. The laws of Tennessee provide that all of your probate assets must be distributed to your spouse and children if they are still alive, or to your parents and siblings if you do not have a spouse or children at the time of your death. Therefore, if you wish for your assets to be distributed differently upon your death, then you need a valid Tennessee will in place, otherwise Tennessee probate laws will determine who gets what.
The Process of Probate in Tennessee
The first step in Tennessee probate is for the executor to file the necessary paperwork along with a certified copy of the deceased’s death certificate with the appropriate county court. There are typically two ways to file the probate petition. Most probate cases in Tennessee begin with a petition to admit a will. This petition states that the decedent died with a valid will and that the person named in the will is the proper executor. If the decedent did not leave a will, the court will typically appoint the person who files an administration petition, as long as they have priority under state law. The administration petition states that the decedent died without a valid will, that there are no disputes over rights to administer the estate, and it requests that the person filing the petition be appointed as the estate’s personal representative.
After filing the probate petition, the person nominated as personal representative must take an oath to faithfully carry out their duties. This is done at the county court in which the case was filed. The personal representative receives a letter testamentary, which is proof of their authority to settle the estate.
In Tennessee, once the petition for appointment has been granted, the court mails notice of the proceeding to all distributees or heirs and all known creditors of the decedent. Heirs are those people whom the decedent would have died intestate in a Michigan probate proceeding; they are not necessarily those who are named in the decedent’s will if the decedent executed a will. Distributees are those people named in the will who are entitled to receive a devise.
In a formal estate proceeding, the personal representative must then publish a notice that states the estate is being administered, with the date of the first date of publication included. This notice must be published in an appropriate publication at least once a week for three consecutive weeks. After the notice has been published, the personal representative must provide a sworn proof of publication to the court.
The period for creditors to file claims against the estate does not begin until the third day after the first date of publication has passed. In informal estate administration, all time periods for filing claims are calculated from the date of notice.
Under Tennessee law, in most probate cases, the failure of a creditor to file a claim within the three-month time period following the first publication may result in a bar on the creditor filing a claim at a later date. Failure to file a claim timely does not necessarily bar the creditor from filing a claim in court; however, the claim is subject to be barred by any "non-claims" provisions in the will or under state law.
When claims are received, the personal representative collects all necessary documents, resolves any disputes, and pays legitimate claims. The personal representative first pays administrative expenses, such as the cost of making and filing a claim. Next, the personal representative pays funeral expenses and debts of the decedent. Finally, all claims that are due but cannot be paid because of insufficient funds are set aside in a suspense account.
Shortly after the appointment of the personal representative, a hearing is held to hear requests for removal of the personal representative or objections to an individual’s nomination for appointment as representative. If no objections are filed, the court will enter an order establishing the validity of the will.
At the conclusion of administration, the personal representative is required to file a final accounting that lists all disbursements made. The closing of an estate requires the personal representative, or their attorney, to file a petition and a request for discharge. If there are no objections filed to these pleadings, the court will grant the discharge.
Executor’s Obligations and Responsibilities
In Tennessee, a validly probated will requires the appointment of an executor. Depending on the total value of the estate and how the estate was administered before the maker’s death, its executor may be a professional or layperson. Whoever it is, the executor is charged with administering both the personal and real property of the estate including the decedent’s house and apartment complexes.
Executors have a variety of legal obligations. He or she must follow the directions provided in the will and applicable state laws while adhering to rules established by the executor’s own department. For example, the estate’s executor must enforce the payment of valid creditor claims. However, tax agencies have priority over valid creditor claims. The executor must also inform creditors of his or her appointment and that payments should be forwarded to the executor.
The handling of estate expenses and administration costs is another duty. Aside from general administrative duties, the individual is responsible for managing and paying estate tax liabilities; as well as farm, real estate rental, and business losses during the period of administration. In essence, the executor has a legal obligation to keep the cash and property assets of the estate separate from his or her personal or business assets.
Another important job of the executor is the collection and distribution of estate assets. While enforcing valid claims and paying estate expenses and liabilities, he or she must also gather together all non-exempt cash and property. After all the valid claims, expenses and liabilities have been paid, the executor is legally obligated to make distribution of the remaining funds according to the rules established by the state legislature and the terms of the will. He or she must account for the assets, debts, and future expenses.
Probate vs. Non-Probate Property
Probate and non-probate assets refer to different types of property that can be passed on to heirs in Tennessee. Learning the difference between the two can help an executor, administrator or trustee learn what property should go through the probate process and what property should not.
Probate assets will go through the Tennessee probate court. The property will be taken out of the estate if there is sufficient proof it is not part of the probate assets. An example of a probate asset is a bank account that was opened in decedent’s name only. Life insurance accounts, retirement accounts and jointly held property may or may not go through probate court.
Non-probate assets do not go through the probate court and should be excluded from probate assets. The property would pass directly to beneficiaries whether that is through a trust, a transfer-on-death account, an annuity or a contract as a joint tenant with right of survivorship. Property that is owned in common under a tenancy by the entirety or tenancy by the entireties with right of survivorship will avoid probate.
Avoiding Probate in Tennessee
An estate planning strategy people frequently pursue is to avoid having assets subject to probate court proceedings after death. There are two primary ways to do this. The first is to have a well-thought out trust, called a revocable living trust, and the second is to have the intended heirs designated as the beneficiary of property or account balances via an alternative to probate mechanism.
If done correctly, a revocable living trust will help keep assets out of probate on death. This is because a revocable living trust operates like any other trust, except it can be revoked by the person who created it. A revocable living trust works best when the property you have that you would like to avoid probate is transferred to the trust you create. Then upon your death, the property owned by the trust will not be subject to probate proceedings, in theory if not practice, thus your desired beneficiaries can collect the property without involving the court .
Any account or property interest that provides for someone else to collect the proceeds upon your death, such as transfer on death, payable on death, trust on death, or such devices that are sanctioned by statute or regulation, is an alternate method of avoiding probate. These are very valuable in avoiding probate.
In many cases, however, having a joint interest with your desired beneficiary can also work as an alternative to probate. With all of these methods the ownership (whether via a trust or another mechanism) will pay the financial institution or real estate company your rights in the asset, if you didn’t get to keep it due to creditor interests and pay tax. This should keep your estate out of probate, as the process of liquidating an estate will be somewhat moot.
Tennessee Inheritance Laws and Entitlements
Tennessee law does not presume an intestate as in many states. In other words, Tennessee does not presume that a child born to married parents after the death of a parent is an intestate heir of said deceased parent.
Except for the homestead rules below, there is no specific distribution formula for an intestate with a surviving spouse and children. The way the property is distributed follows below:
Surviving spouse who is the mother or father of the decedent: 1/2 to surviving spouse, 1/2 to children
Surviving spouse who is not the mother or father of the decedent: 1/3 to surviving spouse, 2/3 to children
If there are no children:
Surviving spouse who is the mother or father of the decedent: 3/4 to surviving spouse, 1/4 to parent
Surviving spouse who is not mother or father of the decedent: 1/2 of estate to surviving spouse, 1/2 to brother or sister
If the decedent leaves no surviving spouse, children, parents, or siblings, the estate passes in the following order:
Grandparents, uncles, and aunts
Great-grandparents and great aunts and uncles
Great-great grandparents and great-great aunts and uncles
The escheat law provides that if an intestate decedent leaves no heirs, the property passes to the State of Tennessee.
Under Tennessee law, the surviving spouse’s homestead right is limited to a $25,000 value. The surviving spouse may also have a homestead allowance in addition to the family allowance above. The family allowance is generally $1,500 per month ($18,000 per year). This money is paid by the executor or administrator immediately from the estate.
A $3,500 allowance for clothing is also available. A court may alter the amount and dispose of it to benefit a different heir or for debts and expenses.
Disputing a Will in Tennessee
The process of contesting a will in Tennessee requires a valid legal basis for doing so. Within the state of Tennessee, there are several recognized grounds for doing so. The following are the primary grounds that may be relied upon as the basis for contesting a will:
In order for a will to be valid, the person executing the will must have capacity to do so. This means that the testator must be at least 18 years of age and of sound mind at the time of the creation of the document. This means that the testator must fully understand the nature and extent of his or her property and the consequences that will arise from the execution of a will.
Under Tennessee law, unsoundness of the mind means that the testator lacks sufficient mental capacity to understand the nature of his or her property and the disposition of property through the will. It is also important for the testator to understand all of the elements that have gone into making the will.
Another recognized ground for challenging a will in the State of Tennessee is due to the fact that the will was brought about through undue influence. This is when one person uses his or her relationship with the testator to supersede the free will of the testator. The result is the execution of a will that does not reflect the true wishes of the testator. In order to show undue influence, the challenger must prove the following:
In this case, the burden of proof will be placed on the challenger to show that the decedent did not possess the necessary testamentary intent at the time of the execution of the document.
Another basis for contesting a will in Tennessee is upon the grounds of lack of capacity. This is when the decedent lacked the requisite mental capacity at the time the will was created. There are two types of capacity that are required for a will. This includes the following:
If you believe that you have some basis to contest a will, it is always best to start the inquiry with an experienced trusts and estates lawyer. In doing so, you can expect to walk away with a complete understanding of any potential legal challenges to a will, as well as all of the options that may be available to you. The following is a brief description of the process that typically occurs when contesting a will:
Once a will has been duly probated, a challenge to the will must be raised within four months of the original probate. If the challenge is not filed within that time, the original execution of the will becomes final. It is important to adhere to the four-month window because if you fail to file within the time frame, your grounds for challenging the will will be barred. This is critical because an official challenge to the will may not be possible once the window has closed.
Commonly Asked Questions about Tennessee Probate
We understand that families often have questions about the Tennessee probate process. The following FAQs offer information about common concerns. If you still have questions about Tennessee probate laws, an experienced Nashville probate lawyer can explain your rights and responsibilities.
How long does the probate process take?
A simple estate that was not challenged as a will contest can take nine months to a year to finalize. The process may take longer if an estate is very large or complicated.
What taxes can an estate expect to pay?
How taxes are assessed depends on the situation. Federal estate tax law assesses a tax when the estate itself is worth more than $5.43 million. If the estate is less than that amount, it is not taxed. For estate property worth more than $5.43 million, the tax rate is between 18 to 40 percent.
State inheritance tax Louis payable to the state of Tennessee is assessed on estates worth at least $2,000. The tax rate varies based on the size of the estate . No inheritance tax is charged for estates worth less than that amount. For large estates, the tax rate can be as high as 16 percent.
An estate could also incur income tax. The executor is responsible for filing a decedent’s final individual income tax return if the decedent received earnings up to the date of death. If the estate were too large, the estate would be required to take over filing a corporate income tax return.
Does an estate have to go through probate?
Certain assets can pass outside of the probate process without having to go through probate administration. Examples include:
Other states have similar laws. For example, estates without more than a nominal value of property (varying from $10,000 to several hundred thousand dollars) may qualify for the simplified procedures. Additionally, small estates of people who died before 2016 do not have to submit inheritance tax returns. You may want to seek help from an experienced Nashville probate attorney to determine whether you can avoid probate.