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As an attorney, often times clients come to us wanting us to fix a situation after the client has tried to take on a legal matter themselves. This is completely understandable since I know that my family has to closely watch our expenditures on a regular basis to keep up with the cost of living these days. However, practicing law without the proper training can cause very expensive problems. One particular instance that we have seen arise time and time again involves the usage of contract forms from the internet. Many of these internet forms have numerous problems and/or are often misused.
One major problem with such forms involves the lack of appropriate legal provisions in the documents to fully protect the client’s interest. Almost all attorneys include an Attorney Fees Provision in any contract they draft. This often times allows the winner in a subsequent dispute between the parties to recover attorney fees and costs. A common attorney fee provision would say something like this: “if it is required for a party to this agreement to hire an attorney to enforce the provisions herein, then the prevailing party is entitled to recover their reasonable attorney’s fees and costs”. This is one of many provisions that are often left out of internet contract forms and the implications can be huge.
When we are hired by a client to fix a problem with an internet form contract it is always after a dispute has arisen between the parties. A great bargaining tool that an attorney can have in such a dispute is the threat (or promise) that if the opposing side does not comply with our demands then we will sue for not only our damages but OUR ATTORNEY FEES and costs. The other side does not want to pay their own attorney let alone your attorney fees. However, if the proper attorney’s fee provision is not in the contract or not allowed by a statute then you cannot legitimately demand attorney fees. If you can’t demand that they pay your attorney fees then they don’t care if your attorney fees quickly add up. Many times, the attorney fees in a major dispute can add up to exponentially more than the relatively small amount that it would have cost the client to have an attorney to draft the document in the beginning.
It may seem rare that your taxes decrease, but as of January 1, 2016, the State of Tennessee will no longer tax your Estate. This has been part of a plan that the State enacted in 2012, gradually increasing the amount of a tax-exempt estate until this year, when the tax was repealed completely.
Practically, this has several impacts.
1. First, this may simplify your estate planning.Because a large part of estate planning can be minimizing taxes, there is no longer a need to strategize in order to minimize Tennessee estate taxes.
2. Second, in most cases, there will be one less step involved in probating an estate or selling the real estate of a decedent.Typically, a clearance letter is required from the Tennessee Department of Revenue stating that the estate did not owe any inheritance tax.We will no longer need to receive that release.This is especially important when selling the real estate of a decedent.Obtaining that release has often been the delay of sales.
3. Third, it should be noted that there is still a Federal estate tax for estates over $5,450,000.00 so planning will be necessary to minimize or eliminate tax implications if your estate may exceed this amount.
It is important to realize that this only applies to decedents who passed away on or after January 1, 2016. This is because an estate is subject to the estate tax laws in place during the year in which the decedent passed away.
Almost every client begins their journey to creating estate documents with an intake meeting. Inevitably, the first questions asked when the meeting is scheduled is, “what should I bring?” The good news is that there is no requirement for you to bring anything to your intake meeting. However, to get the most out of your meeting, it is beneficial to prepare for it. Here are a few key ways to do that:
Review and bring any prior estate documents that you have. This may not be necessary for your circumstances, but it is definitely helpful.
Gather basic information regarding your assets. One of the most important parts of the intake meeting is gathering information on what you own. At this point, we may not need to go into extensive detail, but we will need an outline of sorts. This does includes assets, such as real estate, that may be located in another state.
Think about what you want to happen with your assets and consider what is most important to you about that plan. For example, are you really wanting avoid probate? Do you have a lot of creditors? Are your children minors? At what ages do you want your heirs (or beneficiaries) to receive their distribution?
Come with questions. Another large part of the first meeting involves me teaching clients about the law and various options available. This is usually a great conversation that is only made better if questions are involved. This is your plan that we are building and I want you to be completely comfortable with the options you choose.
If you are interested, use our intake informational sheets. If you would like assistance in thinking through some of the details, our office does have intake forms that can be useful. Please feel free to use these, but they are optional.
The bottom-line is that we hope to make the intake process pleasant and straight-forward. Even if you feel completely unprepared for the meeting, we will gladly walk you through the process.
Over the course of conversations with many of our estate planning clients, one common theme occurred to us: We spend a significant amount of time with every client explaining the basics of probate and probate assets. As lawyers, we have to make sure our clients are as informed as possible before heading into court. But most of the time, knowing even the basics is helpful.
What is Probate?
Probate is the legal process where the court and beneficiaries settle final claims against the decedent and distribute probate assets. The county in Tennessee where the decedent lived when they died is where the court handles probate. Within that county, a specific court handles probate matters. The name of the court varies slightly from county to county.
Ultimately though, all of the probate courts in Tennessee follow the same Tennessee law, so the process is similar in each court. Every probate will be slightly different because the facts will be different for each decedent. Was there a Will? Was there a Trust? Are any estate recipients minors? Are there any creditors of the estate? There are many variations on what probate can specifically entail.
What Are Probate Assets?
The definition of a “probate asset” is important for our understanding of the probate process. This is because probate only distributes probate assets. In the most basic definition, a probate asset is something that is owned individually by the decedent. However, this definition has quite a few exceptions and additions. It may be easier to define a “probate asset” by focusing on what it is not, or by the “non-probate assets.”
Non-probate assets do not have a legally designated beneficiary. The most common example of this is life insurance. Life insurance usually has a designated beneficiary to whom the money will flow almost immediately upon a person’s death. The probate court does not consider this transfer except to note the amount of the life insurance the recipient receives.
Examples of Non-Probate Assets
One lesser-known example is a payable-on-death (POD) beneficiary for a basic checking or savings account. Most of the time, you can designate a POD beneficiary on the bank accounts you own. This will allow the bank to immediately transfer that account to your beneficiary upon your death, removing the bank account from probate.
Assets that are owned jointly by spouses are also typically non-probate assets. Homes are commonly non-probate assets. A home bought by a married couple will automatically belong to the surviving spouse. A word of caution here if you are a married couple, be sure that both your name and your spouse’s name are on the deed! If the property is only titled in one spouse’s name, this does not apply and the home would be a probate asset.
Contact the Estate Planning Attorneys at Tressler & Associates
Hopefully, this is a helpful explanation of probate and probate assets. Our attorneys would be glad to walk you through the process of discussing what probate would look like for your loved ones and strategize on how to ease that process. Quite a few assets can be removed from your probate estate by simple changes. We would be honored to show you how. For help with planning your estate, contact our estate planning attorney today.
There is a myth in Tennessee about intestacy that I hear often: if you die intestate, your property will naturally be distributed to the right people. By “right people,” they typically mean their family. While the property of an intestate decedent is distributed to your heirs, you cannot end the conversation there. Every state defines “heirs” as it sees fit. The progression of your belongings in Tennessee might not be quite what you would expect.
What Does Intestate Mean?
It’s best that we define a few important terms to begin breaking the Tennessee intestacy myth. When someone dies “testate,” it means that this person passes away with a valid Will. You can probably guess that “intestate” means dying without a valid Will.
How are Assets Distributed?
People usually make incorrect assumptions regarding the split of an estate between spouses and children. Most think that if they pass away intestate, everything will suddenly belong to their spouse. This is simply not true if you have children. If a spouse and no children survive someone who dies intestate, the surviving spouse will inherit everything.
However, if a spouse and at least one child survive someone who dies intestate, the child and the spouse will both inherit some portion of the estate. If there are two surviving children, the spouse and each child will inherit one-third of the estate. If there are more than two surviving children, the spouse will inherit one-third and the children will split the remaining two-thirds of the estate. Bottom line, if your spouse and at least one child survive you, your spouse will not inherit your entire estate unless you create a Will stating so.
Create Your Will with Tressler & Associates Today
To be sure that you distribute your property to the right people, you should have a Will that explicitly outlines your plan for the property. Hopefully, it is now clear that this is important even if you simply want everything to go to your spouse. We would be glad to walk through this process with you.
Planning your estate can help prevent future difficulties for your family. Read more about our estate planning services.
When your parents pass away, life is difficult enough. The last thing you want is to be stuck paying the mortgage on their house or risk foreclosure. It is quite common to want to sell the home as soon as possible. However, as many have found out the hard way, it’s not exactly as simple as signing a contract.
From time to time I will see a real estate contract that the children of a deceased parent have signed to sell that parent’s home. Those children can often either point to a Will showing that they are inheriting the home or the Tennessee intestacy laws state that they are inheriting the home. Either way, it seems clear that those children should have the power to sell the home. Unfortunately, it’s not that easy.
The best case scenario is that probate on the decedent’s estate is complete and those who have inherited the house can sell it. But I’m not talking about that situation. I’m talking about the situation when probate has not been started or when probate is not complete. Although the process for selling a home in those situations is not always identical, there are some common patterns. For instance, it is quite likely that you will need to get court approval to sell the home if probate has begun. Or, if you have not begun probate, you will probably have to open probate and then get approval from the court to sell. You can almost guarantee that we will need consent from the Tennessee Department of Revenue to sell the home and a release of potential claims from the Bureau of TennCare. If probate has not been completed, the best case scenario is that you can close on the home during the four month creditor’s period in probate and closing agent will hold your proceeds in escrow until the completion of the creditor’s period.
As you’re probably realizing, this can quickly become a complicated process. Also, I would not be doing my job if I did not mention that a Trust can avoid this. If your property is held in a Trust, even a Revocable Living Trust, it will pass outside of probate because it does not belong to the decedent, it belongs to the Trust. This simplifies the selling process immensely. However, whether you have a Trust, a Will, or no Will at all, we are equipped to walk you through this process.
Think about a married couple. When the first spouse dies, often the vast majority of assets are titled in both of their names. Therefore, everything passes to the surviving spouse without probate. However, what if the deceased spouse owned a piece of land the other spouse never had any involvement with? What if the only thing probate court needs to distribute in a decedent’s estate is real estate? Do you have to go through the entire probate process for real estate alone? Can you just sign some type of Deed?
The short answer to those questions: no and no. Thankfully, in Tennessee, we have a procedure that is specifically designed to deal with transferring real estate from a decedent’s name into the correct beneficiary’s name. This probate process for real estate is Probate for Muniment of Title. This type of limited probate process is basically three steps, but there are some important keys to remember.
What is Probate for Muniment of Title?
Probate of any type is much simpler when there is an original will. Therefore, you would start by locating the original will and an original death certificate. Once you have located those and determine that the only asset to be distributed is real estate, you would need an attorney to take you through the Muniment of Title procedures.
We would start the process by filing a Petition for Muniment of Title with the Probate Court’s office and a hearing would be set. A notice is then sent to all beneficiaries and heirs-at-law that this hearing is occurring. Assuming all goes according to plan, the judge will sign the Order at the hearing. Once the court signs the Order, it will be recorded in the Register of Deeds. This recording will serve as evidence of the transfer of title.
Going Through Probate for Real Estate Property? Contact Tressler & Associates
Although probate in Tennessee is a relatively streamlined process, we are thankful that there is an even more streamlined process for real estate. Should you need assistance in transferring real estate out of a decedent’s name, please contact the estate planning attorney at Tressler & Associates. We’ll be glad to help.
I doubt that any client has ever asked me about who will handle their non-financial online accounts after they pass away. However, it is a real question and concern. Wouldn’t you like to designate now who will be able to manage your social media accounts after you die? Facebook led the charge in this endeavor a couple of months ago. As you’ll see, their approach is not perfect, but it’s a start.
A legacy contact will not have the ability to access, delete, or add to your account in any way in which they choose. In fact, there are very limited allowances for a Legacy Contact. First, before a Legacy Contact is allowed to do anything, your account must be memorialized, which will freeze all actions on your account except what the Legacy Contact has the ability to do.
A LEGACY CONTACT CAN DO:
Write a “pinned post” for your profile. This would share a final message and/or funeral information.
Respond to pending friend requests.
Update your profile picture and/or cover picture.
Like I said, the powers of a Legacy Contact are limited, but useful. Your Legacy Contact cannot delete those embarrassing pictures so you still need to be careful what is posted. Here is a list that Facebook supplies of what
A LEGACY CONTACT CANNOT DO:
Log into your account
Read messages you’ve sent to other friends
Remove any of your friends.
Remove or change past posts, photos and other things shared on your Timeline
Another important note is that you must be an adult (at least 18 years old) to designate a Legacy Contact under Facebook’s current policies. To See Facebook’s Instructions on Legacy Contacts Click Here
We have yet to see if other social media outlets (Twitter, Instagram, etc.) will accept similar policies. Even though Instagram is owned by Facebook, it also does not seem as though this policy applies to Instagram. Currently, Instagram and Twitter have relatively cumbersome processes to prove the death of an account user in order to delete the account. However, the process is purposefully cumbersome to prevent account tampering.
Although we do not know what other social media sites will do, it is quite likely that Facebook has set a trend in this direction.
There are many considerations for Planning Your Estate and new digital issues such as these are just another layer. Taking care of legal issues can ensure your wishes are met after your death and will help your loved ones tremendously during those difficult times. Our team can guide you through the process and help secure your peace of mind.
Revising your will or other estate documents might not be at the top of your to-do list, but maybe it should be. If you don’t review your will regularly, your assets may be in trouble. If you’re not sure when you should review your will, we have a few suggestions. Here is a quick guide to five times when you should review your estate documents:
When Should You Review Your Will?
#1. When You Move
It may go without saying, but laws change from state to state. You can’t assume that your will in the state, or even the town you live in, applies in the new place you moved to. An estate planning attorney can review your old will, suggest updates so it matches your preferences, and put those updates in writing for you.
#2. When You Have a New Member of the Family
If you or a family member has a baby, you need to take a look at your estate documents. Even if they won’t affect your plans, you should mention that they aren’t one of the recipients of your will. For example, if you have a new grandchild, you want to be sure your documents still describe exactly how you want your estate to be distributed.
Tennessee law makes provisions for children who are born after their parents execute a will. A pretermitted child is one born just before or after the death of the testator. However, there is a good chance that those provisions are not exactly in line with your wishes.
#3. When Someone Dies
It’s just as important to review your will and other estate documents when someone is born as it is when someone passes away. Most documents have “contingent beneficiaries” of some kind, which makes provisions for what will happen if someone dies. Although, as soon as one of those beneficiaries passes away, there is no longer a contingent beneficiary and you probably need a new one, so having multiple redundancies is a good idea.
#4. When Someone Gets Married or Divorced
There are indeed provisions in Tennessee law to prevent an ex-spouse from obtaining all assets when one ex-spouse passes away, but that law does not apply to all estate documents. For example, you may have a trust set up in case any minor grandchildren were to inherit assets from you. But what if your child gets divorced? Will his or her ex-spouse still be involved in your estate plan? The same is true in marriage. You want to be sure that the right people are involved in your estate plan.
#5. When There is a Change in Assets
Whether you gain or lose assets, your will should reflect this change. This is especially true for specific bequests. If you leave your ’75 Chevy to your friend Steve, but you did not own a ’75 Chevy at the time of your death, Steve will not get anything.
Contact Tressler & Associates for Help Reviewing Your Will
This list is just the beginning. We can think of many other circumstances after when you should review your estate documents, but here are five we can start with.
To learn more about how we can assist you in estate planning or if you have any questions about your estate planning, contact us online or call us at 615-444-2345.
It may seem rare that your taxes decrease, but as of January 1, 2016, the State of Tennessee will no longer tax your Estate. This has been part of a plan that the State enacted in 2012, gradually increasing the amount of a tax-exempt estate until this year, when the tax was repealed completely.