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In a recent blog, I discussed the 2015 Federal and Tennessee Estate Taxes. A common follow-up question to that discussion sounds something like, “My assets are nowhere near $5,000,000.00 so why do I need any help with planning my estate?”
The answer is two-fold:
1) TAX LAWS ARE NOT WRITTEN IN STONE!
Our laws change constantly and our government is always in flux. I am thankful that we live in a country where we are represented by the people of our choosing, but that means that “the people of our choosing” change every year. We do not know who will be in power or what agendas will become important in the future. We can only live in 2015. That being said, it is not difficult to see how tax laws affecting Tennesseans could change. It could suddenly become the law that all estates are subject to taxes (thankfully, this is not the current trend).
2) ESTATE PLANNING IS MUCH MORE THAN JUST TAXES.
Estate planning is more than tax law. In fact, I would say that with the majority of our clients, other topics are of greater concern. For example, making sure the correct people have control over assets or determining who will be the decision-maker are more important than estate taxes to many people. Also, privacy or creating a process that will be simple for loved ones are both common goals. There are many reasons that an estate planning attorney can be helpful, whether taxes are of concern or not. Just about everyone can benefit from some estate planning.
To learn more about how we can assist you in Estate Planning or if you have any questions about this or any other legal matters Contact Us Here
Every new year brings new taxes. Fortunately, for people in Tennessee, estate tax is likely one they won’t have to worry about. Estate taxes change frequently, and it can be difficult to understand what federal and state there might be for your estate. At Tressler & Associates, our estate planning attorneys can help you understand everything you need to know about estate taxes.
Short History of Estate Tax
In 2015, for residents in Tennessee, an estate could be worth up to $5,430,000 and not be taxed. However, the good news is that since 2016, Tennessee has had no estate tax. This creates a desirable environment for those entertaining the idea of Tennessee as a location in which to retire. The lack of estate tax immediately makes Tennessee a more attractive state to live in compared to other states. In 2022, the federal maximum for a tax-free estate has increased to $12,060,000.
Although these numbers seem unattainably high to most Tennesseans, these amounts are the finale to a long road of decreasing estate taxes. In 1999, for example, an estate over $650,000 was taxed in Tennessee. The state subsequently put a plan in place to slowly phase out this tax, with 2015 being the final year. The federal government continues to give no indication that it intends to demolish this tax. However, the maximum may increase due to inflation. We can only hope that our state and federal government continue these trends.
Contact Us for Help with Your Estate
If you are asking wondering why you need help with estate planning if your estate is nowhere near the federal maximum, we can help! To learn more about how we can assist you in estate planning or if you have any questions about this or any other legal matters, call us at 615-444-2345 or contact us here.
A Healthcare Durable Power of Attorney is an important document for everyone to have. It’s also sometimes called a Healthcare Power of Attorney (HCPOA). The specific reasons for having an HCPOA will change throughout life, but the general idea remains the same. The purpose of an HCPOA is two-fold:
It allows you to name one or more persons to have access to your medical records.
It allows you to give someone or several the power to make medical decisions for you when you are not able.
Scenarios that Require a Healthcare Durable Power of Attorney
Consider these scenarios.
Jared and Mia Part 1: Jared and Mia are engaged. Mia is in a car accident. Mia is alive but unresponsive. The hospital will not be able to give Jared information about Mia’s condition without Mia’s consent. Because Mia is unresponsive, Jared will anxiously wonder what is happening. He won’t be able to do anything until he is able to work through the hospital’s HIPPA requirements. If Mia had an HCPOA naming Jared as her “attorney-in-fact” or “agent,” he would have had access to her medical files. Then the doctors could inform him as to all that is happening. This scenario would be the same with a parent and an adult child.
Jared and Mia Part 2: Now the hospital wants to attempt procedures that could potentially prolong her life, but Jared knows Mia would not want them done. Unfortunately, Jared has no power to make those decisions for her. If Mia had an HCPOA, Jared would have the power to act as her agent. Then he could make decisions for her medical treatment within any guidelines she had set.
When Can Someone Use HCPOA?
Keep in mind that an HCPOA only comes into play when you cannot make the decisions for yourself. These people will only have these powers if you become incapacitated or unresponsive. As long as you are able to consent or deny informed consent, you will choose what is done medically for yourself. However, should you become incapacitated, this is an extremely useful document.
Contact Tressler & Associates for Help
Remember to update your HCPOA regularly so that the best person is named as your agent. Although we dread to think of the times when this document would be used, in a world of few promises, it is best to be prepared. To learn more about how our attorney can assist you in estate planning, contact us for help.
In my prior two blogs, I discussed the witness requirements in Tennessee for a traditional, typed out will, and a nuncupative will. Now, let us turn our attention to holographic wills.
Holographic wills are wills that are handwritten. Tennessee does recognize holographic wills that meet the statutory requirements (not all states recognize them). The statute governing the requirements for a holographic will in Tennessee is very short. T.C.A. § 32-1-105 states the following: “No witness to a holographic will is necessary, but the signature and all its material provisions must be in the handwriting of the testator and the testator’s handwriting must be provided by two (2) witnesses.” In sum, to have a valid holographic will, the testator must sign the will and all material provisions must be in the handwriting of the testator. When the will is probated, the probate attorney will then have to obtain the sworn statement of two witnesses who can verify that the handwriting is that of the testator. There are two areas where I often see an attempt at a holographic will fail to meet the statutory requirements. First, all material provisions are not in the handwriting of the testator. This happens a lot with “fill in the blank” type of wills. If most of the will is in the testator’s handwriting but a certain material provision is typed, that is not a valid holographic will. Second, the testator didn’t sign the will. Family members will sometimes bring in a handwritten list that their loved one had made stating things like, “I leave my diamond ring to my daughter,” but unless that list is signed it has no chance of being a holographic will.
Based on this blog and the previous two, you can probably see it is not a good idea to try to distribute your assets without the aid of an attorney. I am truly saddened for the family when I see an attempt at a will that is simply not valid in Tennessee. In those situations, the way that the property must be passed under Tennessee law is often obviously not how the deceased person wished it be distributed.
We would love to have a commitment-free conversation with you to discuss how we might be able to serve you in our estate planning practice. Whether you could benefit from a simple Will, powers of attorney, or some type of trust, we are here to walk you through the process.
In a prior post, we discussed the witness requirements in Tennessee for a traditional, typed-out will. Now we will discuss the requirements for nuncupative, also known as oral wills, and holographic wills.
What are Nuncupative Wills?
A nuncupative will is an oral will made by someone in “imminent peril of death;” these wills “shall be valid only if the testator died as a result of the impending peril.” (See T.C.A. § 32-1-106.) This is common among people who find themselves close to passing away without a will or with an outdated will.
When someone has a will they consider outdated, they may try to update it with a nuncupative will. This doesn’t always work because of the court’s inability to trust the dying’s state of mind.
What are the Requirements for a Valid Nuncupative Will?
Now, we know what you’re thinking: “Oral wills are valid?” Yes, under certain circumstances. T.C.A. § 32-1-106 explains that it is only valid if:
The testator makes the declaration before two disinterested witnesses.
The wishes are reduced to writing under the direction of one of the witnesses within thirty days of the declaration.
The will is “submitted for probate within six months after the death of the testator.”
However, even if all of these requirements are met, “a nuncupative will is only valid to dispense of personal property and only valid for personal property not exceeding one thousand dollars in the aggregate.” The only exception to this is when the dollar amount is increased to ten thousand dollars if used by a person in active military service in a time of war.
Should You Use a Nuncupative Will?
As you can guess, it is not a good idea to count on using oral statements to distribute your assets. Usually, they are invalid and your estate would pass according to Tennessee’s laws of intestacy.
Intestacy is the law that applies when someone dies without a will. Nuncupative wills rarely make it through the probate process and if they do, they usually distribute only a small portion of a person’s estate.
Contact Our Estate Planning Attorneys
Plan ahead and have one of our attorneys discuss your estate planning wishes so that we can put them in a binding, legal document and secure your peace of mind about the future. Planning your estate can help prevent future difficulties for your family. Contact us today for help or call us at 615-444-2345.
One of the main issues that I see with a Last Will and Testament people can create online or not in front of an attorney is that they don’t meet the witness requirements of Tennessee law. In Tennessee, if you don’t meet the witness requirements for your will, your will is not valid.
This can mean that all the work you’ve put into this document can become meaningless in the long run. If you were to pass away before fixing this, your estate would fall under the laws of intestacy, the laws that apply to an estate when someone dies without a will. Even if the handwritten will is accurate to your best wishes, the court cannot use or accept its terms. This is definitely something I want you to avoid.
What are Tennessee’s Witness Requirements?
So what are these witness requirements? T.C.A. § 32-1-104 provides that a will, other than a holographic or nuncupative will, must be signed by the testator (the person making the will) and two witnesses. There are specific requirements within the code that spell out what the testator must signify to the witnesses in this process.
T.C.A. § 32-1-103 further clarifies that the witnesses cannot be “interested” persons. This pertains to anyone with an interest in the testator’s estate. This keeps most family members and friends from being testators. Not only must the witnesses and testator sign the will, but they must all do so in the presence of each other. If one signs the will without the other being present, the will cannot be accepted. Tennessee requires strict compliance with these rules. If you do not meet any of these requirements, the will is invalid.
The Tennessee legislature recently amended the witness laws to allow signatures on a specific type of affidavit that is often attached to the will to count as the witness signature requirement. However, this is a very minor exception because the following must be true about that particular will and affidavit:
The affidavit meets the witness requirements listed before.
The will was executed prior to July 1, 2016.
As you can tell, this minor exception does not apply to most wills. This will not apply to any new wills created on July 2, 2016, or afterward.
Follow Tressler & Associates to Make Sure Your Will is Legal
It is important to remember that these requirements apply only to traditional, type-written wills. Stay tuned for more blog posts from Tressler & Associates where we will discuss all of the requirements involved for making a nuncupative or holographic will valid.
The last thing anyone wants is to believe that an estate plan isn’t secure. Sadly, a will that you create on your own can be invalid due to one technical detail that you didn’t anticipate. Should Tressler & Associates, PLLC, have the opportunity to prepare your will, we will take care to ensure that it meets all witness requirements and even provide witnesses for you at the signing.
There are many misconceptions among people regarding estate planning. For example, your spouse with whom you share children does not automatically inherit your entire estate if you pass away. This is an awfully big surprise to get after your partner passes away. Surely, you can see why that is a huge reason in itself to have an estate plan that has all your beneficiaries settled.
What are the Two Types of Beneficiaries?
Another common misunderstanding is in regards to the order of priority for named beneficiaries and the beneficiaries listed in a Will. Let us explain the difference between the two types of beneficiaries.
By “named beneficiary,” we are referring to someone that you explicitly place as a beneficiary on a specific asset. For example, a beneficiary on a life insurance policy or an IRA is a named beneficiary. Whereas, more generically, a beneficiary in a Will is exactly what it sounds like. It is a person named in your Will to inherit a specific asset or assets.
Where Wills Can Go Wrong
So here’s the issue: What happens when you have the named beneficiary listed as one person and the beneficiary in your Will for that same asset is listed as someone else? In short: named beneficiaries trump wills. For example, the named beneficiary you list on your life insurance policy will trump the person you leave your life insurance policy to in your Will.
It’s easy to see why this is incredibly important. You can obtain a false sense of security when you feel your Will is perfect, but your named beneficiaries are not actually accurate. At Tressler & Associates, we want to make sure that your entire estate transfers exactly as you intend and this is an example of a common mistake that we work to prevent in your plan.
Contact the Estate Planning Attorneys at Tressler & Associates
Plan your estate with an experienced attorney so that you can help prevent future difficulties for your family. Contact us or call at 615.444.2345.
