Articles Tagged with Nashville probate lawyer

While it seems as though you can be taxed for almost anything these days, there is good news for those who may be worried about potential inheritance taxes in Tennessee. Many states have made a push to eliminate inheritance taxes in an effort to draw new residents and businesses. Tennessee has followed suit. The Tennessee state legislature has enacted legislation to gradually increase the inheritance tax exemption amount before completely eliminating the tax in 2016.

The Tennessee inheritance tax exemption allows for any estate valued under the set amount to be exempt from paying the inheritance tax. Only if the value of the estate rises above the set exemption amount is the estate required to pay the Tennessee inheritance tax. The tax rate ranges from 5.5% at the lower end to upwards of 9.5% at its highest. The exemption amount for a decedent’s estate is currently $2,000,000 for any decedent’s death occurring in 2014. That exemption amount increases to $5,000,000 beginning January 1, 2015. On January 1, 2016, the Tennessee inheritance tax is completely eliminated.

The Tennessee Department of Revenue is the organization tasked with levying the state’s inheritance tax. Although an estate may be well under the exemption amount, the personal representative of an estate is still required to provide the Tennessee Department of Revenue with the value of the estate. If the estate is valued at under $1,000,000, a sworn affidavit can be filed with the probate court attesting to the fact that the estate is indeed under the exemption amount and therefore is not owed. This sworn affidavit is known as the Affidavit Waiving Tennessee Inheritance Tax Return, and it functions to release the estate from any taxes owed. If the estate is valued at more than $1,000,000 but still less than the exemption amount, the personal representative is required to file a Tennessee inheritance tax return with the Department of Revenue outlining the assets comprising the estate. The Tennessee Department of Revenue then grants a release to the personal representative of the estate which is filed with the probate court.

Working as a Nashville probate attorney, I often hear a number of misconceptions that many people have when it comes to probate. When a loved one passes away, many people assume that they will be entitled to a portion of the decedent’s complete estate as provided in the will or the laws of intestacy. However, that may not be the case depending on a number of factors including the amount of debt a decedent had. If you have questions regarding what you may be entitled to in the probate process, contact the Nashville probate lawyers at The Higgins Firm.

Although you may have been named as a beneficiary of an estate, certain requirements must be met by the executor or administrator before any beneficiary recovers any of the assets from the estate. Specifically, there are certain priorities of claims that must be paid out before others receive a portion of the estate. Each class of claims must be paid out in its entirety before the next class of claims may be paid out. The first class of claims that are paid out includes administrative expenses, attorney’s fees and administrator’s fees. The second class of claims that are paid out includes funeral expenses. The third class of claims includes any types of taxes or assessments owed to the federal or state government. The fourth class of claims includes any claims made by creditors. Only after each of these classes of claims are paid out in full can the beneficiaries then receive a portion of the estate. If an estate cannot pay out all of the claims, it is considered to be insolvent and the beneficiaries will not receive any of the assets.

Obviously, the amount of debt that a decedent may have had will play a large part in determining whether or not the beneficiaries will recover from the estate. For the most part, debts are still required to be paid to creditors after someone dies. However, there are different types of debt including secured debt and unsecured debt. An unsecured creditor may be a credit card company or other business that does not have a secured interest in any specific property. The administrator or executor is required to send notice that an estate has been opened to any known or potentially known unsecured creditor of the estate. Unsecured creditors are required to file a claim with the estate in order to recover. Many unsecured creditors will send bills and collection notices to the individual in hopes of getting paid from the estate. However, the personal representative of the estate is not required to pay the unsecured creditor until a claim has been filed.

When an individual passes away, his or her assets may or may not be required to go through the probate process in Tennessee’s probate court. The determination of whether probate is needed is often dependent on what types of assets were left by the decedent.  Often many beneficiaries of an estate may be confused about what is rightfully owed to them. By determining whether certain assets are required to go through probate, you will have a better understanding of what you may be entitled to as a beneficiary of an estate or what is required to probate an estate. This understanding can help to prevent any potential disputes in the probate process.

As mentioned, only certain assets are required to go through the probate process. Assets that were owned solely in the name of the decedent or assets that did not have beneficiary designations will need to go through the probate court in Tennessee. So what exactly does that mean? Here are a few common types of assets that are NOT required to go through the probate court:

  • Any type of 401K, IRA plan or other retirement plan that lists a specific individual as beneficiary. The listed beneficiary will receive the assets within the account without having to go through the probate court. However, if the estate is listed as the beneficiary or if there is no living beneficiary listed, the asset will be a probate asset.

Probate has somewhat undeservingly developed a negative reputation from some over the years. Certain people who have gone through the probate process may negatively talk about the cost or time required to probate an estate. However, for the probate process to work properly, there are certain requirements that must be met in order for an estate to be probated. These requirements allow the court to properly oversee the probate process which benefits both the personal representative and the beneficiaries of the estate. If you have any questions regarding probating an estate in the middle Tennessee area, contact our Nashville probate lawyers.

There are a number of benefits of probating an estate. The main benefit in probating an estate is the court’s oversight of the transfer of any assets owned solely in the name of the decedent. Certain entities like banks or other financial institutions will not allow for the transfer of assets without an order from the probate court. When the probate court issues an order, this signifies that the court has given oversight to the last will and testament or the next of kin to transfer the estate’s assets. This oversight enables a bank or other institution to then transfer the assets without any fear of transferring to the wrong party. In other words, the court is able to verify who should receive what assets according to the will or laws of intestacy.

Probate ensures that the transfer of assets is done in an open and orderly manner. Without a court overseen process, assets could be transferred to the wrong person or they could be transferred in the incorrect amount. In addition, a person could claim to have distributed all of the assets without actually having some way to verify that fact. The probate court allocates authority to the personal representative (person nominated executor in the will or appointed administrator) to pay off any debts that the decedent may have had and to distribute any remaining assets within the estate. The court requires that the personal representative complete certain requirements to ensure that the proper steps have been taken.

Working as a Tennessee probate attorney, I get calls every day from people asking whether or not their loved one’s estate will have to go through probate court. Probate court is the court that oversees the payment of any debts and the transferring of a person’s assets after a person’s death. Like so many things in the legal field, determining whether an estate needs to be probated depends on a number of factors. Each person’s estate is different and is comprised of different types of assets. Thankfully Tennessee offers different options for those estates of varying sizes and types.

Only Certain Assets Are Probate Assets

Only certain assets are required to go through some type of probate administration. Generally, only those assets that the decedent had in his or her name alone are required to go through some probate administration. If the asset has a listed beneficiary, is owned jointly with another person, or has a transferrable on death designation, the asset is not required to go through probate court as it transfers immediately upon a person’s death.