Tennessee Inheritance Laws Explained
An overview of the concepts of "intestacy" and "intestate" are helpful to understanding inheritance. "Intestacy" is the condition of an estate of a deceased person who has not left a valid will or any other form of trust to dispose of his or her property as would a will or other disposition devise. The terms "intestate" or "intestate" refer to the state of a person who passes without leaving a valid will or other mode of disposition designed to transfer estate assets upon death.
The statutes governing the rules of inheritance upon intestacy , what a court called "descent and distribution," were originally enacted in 1801 – the first year of statehood for Tennessee as a state. The Descent and Distribution statute has evolved substantially in the last 200 plus years of our legal history and has been the subject of extensive case law interpreting the statute and determining the resulting rights of heirs. The following articles examine each of the several situations that can arise under the Descent and Distribution statute and provide a general survey of the results in each case.
Intestate Succession in the State of Tennessee
Tennessee inheritance laws provide for what happens to your property if you die without a valid will. In such a case, your estate enters into a process known as intestate succession. As noted above, this is the legal process in Tennessee (and every other state, of course) for dividing up the property and debts of someone who dies without a will. If you die in Tennessee without a valid will, a Simplified Tennessee Small Estate Affidavit only applies for estates with less than $50,000 and 50%- or more owner-occupied real property.
The people entitled to inherit from your estate, for "blood relatives," will either be spouses or relatives (including adopted children) (adoptive parents generally do not receive inheritance benefits). If you have children and die with them surviving you, your spouse (unless they, too, have died), but without spending any time during your marriage together, it is your children who would receive equal shares of your estate. It is important that the family submit a valid and updated list of your children.
If there are no living children surviving you, it is your spouse who will receive the entirety of your estate. In cases where there are children and a spouse, Priority 1 and, under certain circumstances, Priority 2 will not apply. Instead Priority 3 will apply, unless you have a surviving parent (in which case they will receive your estate if no other relevant family members exist or survived you).
If you die without any children, spouse, or any other relative, the estate goes to the State.
Wills & Testate Inheritance in Tennessee
Testate inheritance is that form of inheritance that occurs when an individual has executed a valid will pursuant to Tennessee laws. The will that is valid under Tennessee inheritance laws governs the distribution of a testator’s estate. Essentially, a testator’s will is his or her father’s choice for disposing of his or her property at his or her death.
Pursuant to Tennessee law, no particular form of a valid will is required. However, to dispose of real estate in Tennessee, the validity of a will is affected by very specific requirements. A will that transfers real estate in Tennessee takes effect when it is properly executed under Tennessee inheritance laws. At the time of execution of a will, the testator must meet the following requirements: The requirements above ensure that the testator has full knowledge of the nature of the document that he or she is executing and that the will is the product of the testator’s own volition. The last requirement also ensures that the testator had the opportunity to revoke the previously executed will.
It is important to note that a will may be either formal or holographic. A formal will is that which is executed, signed, and attested in the manner provided by Tennessee inheritance laws. A holographic will is that which is written, dated, and signed by the testator but is not witnessed. Tennessee inheritance laws deem a holographic will to be valid if it is wholly in the handwriting of the testator and signed by the testator. Because of the very strict requirements of a formal will, a holographic will may often be the more realistic choice for the creation of a valid will. It should be noted that a duly executed will, whether formal or holographic, revokes all previously written ones. Therefore, it is possible to have more than one will at the same time. But if two or more wills are found, the most recently executed will expresses the intent of the maker. However, a testator may execute multiple wills, each of which revokes the previously executed one. In this case, the validity of the will that revokes earlier wills depends upon the formal requirements for its execution.
The Process for Probate in Tennessee
Probate in Tennessee is the legal process of administering a deceased person’s estate. If you have recently lost a loved one, you may have heard the term "probate" before but perhaps are not sure what it really means and how it applies to your situation in Tennessee. One thing is for certain: if your loved one had more than just a small amount of property to their name, probate is likely to be part of the picture. In this article, we explain the steps involved and how the probate process works in Tennessee.
When a loved one passes away, their estate must be settled. Settling an estate typically involves describing property for the probate court and distributing that property among legal beneficiaries. All necessary documentation is filed with the court and, if the estate falls under the jurisdiction of the court, probate court decides how assets are distributed and taxes are paid. The term "probate" describes the judicial process, which involves the local probate court.
If the estate is left to a trust rather than to a person directly, probate may not be necessary. A revocable living trust is established while a person is still alive. Upon their death, the assets are turned over to the trust and the trustee handles trust administration.
The following are the typical steps in a Tennessee probate process:
This sometimes lengthy process can take anywhere from a few months to several years, depending on the complexity of the estate, whether or not the property involved is located out of state, and whether any beneficiaries contest the Will (or codicil) itself.
Some probate cases are simple, while others are complex situations that require through attention and legal assistance. If it is expected that probate will be needed, the family should consult a qualified and reputable probate lawyer.
Non Probates in Tennessee
We have already looked at probate and intestate and testate succession in Tennessee. Not all property transfers require a probating process, however. Some property passes outside of a will, either because it has been validly transferred or because the person was clever about naming beneficiaries prior to their passing away. For example, when property is owned jointly with right of survivorship, it will transfer directly to the surviving owner upon the death of the other owner. Similarly, if an individual names a beneficiary on a life insurance policy or in a retirement account, the property will go directly to that named beneficiary upon the death of the individual who named the beneficiary. Since these arrangements are made prior to death and do not necessarily rely on the probate process in order to come to fruition, they are considered nonprobate transfers. Nonprobate transfers fall into two categories: transfers on death or transfers within the donor’s lifetime.
Payable on death accounts transfer on death, either at transfer or upon the death of the donor. For example, if you are the sole owner of a bank account, you can designate in writing a beneficiary to receive the funds in that bank account after your death. If you are the beneficiary of a payable on death account, the ability to attach creditors to the account is limited, even if a judgment is entered against the decedent prior to his or her death.
Similarly, a transfer of real estate can be made for a future date under Tennessee law. These transfers are sometimes called conveyances in trust or future interests. The essential elements of these documents are the parties, the property, the purpose of the conveyance, consideration (if any) and the future date upon which the conveyance becomes effective.
Spousal & Child Rights to Inherit Property in TN
The rights of the surviving spouse and children in Tennessee matters greatly to those drafting wills, or those who have been appointed estate representatives (personal representatives) in probate proceedings. Tennessee law provides for a defined "elective share" not only for the surviving spouse but also a provision for disinheriting a spouse or child. Particularly in blended families, this is a critical topic for Tennessee residents to understand.
Elective Share
Tennessee laws provide for an "elective share" for surviving spouses in the probate process. T.C.A. § 31-2-101. In cases where the deceased did not have a will, and equivalently when fiduciary or estate representatives have not filed a will in probate proceedings, Tennessee laws entitle surviving spouses to a share of the estate. Adultery or Divorce There are some protections and rules in Tennessee that future spouses ought to be aware of . If a spouse had been tricked into marriage or there are premarital agreements in place that include signed waivers by the surviving spouse, those conditions may vary the elective share or eliminate it entirely. T.C.A. § 31-4-103. Child’s Claim Against Father’s Estate There are jurisdictional differences in Tennessee when it comes to claims on the part of a child to contest disinheritance. Parents Generally Lose Rights If Not Exercised In Tennessee, parents who have not exercised their parental rights by the time of their death, whether they have had contact with the child during their lifetime doesn’t matter. On the flipside of this, children who have been disinherited generally cannot make claims against their parent’s estate. Children of Fully Deceased Ancestors A child or his heirs may bring a claim against his father’s estate, if the child can prove to have been dependant on the deceased father. T.C.A. § 30-1-104.
Inheritance Tax Exemptions
In the Volunteer State, your beneficiaries will be pleased to learn that no inheritance tax is imposed on any assets you leave them. Put simply, Tennessee does not have an inheritance tax.
Nor does it have one of the many other kinds of death/inheritance taxes found in other states. Only eight states charge an estate or inheritance tax. It doesn’t even have an estate tax—which is imposed by the federal government, but may disappear as the federal exemption limit rises over the next few years.
This means that every single dollar you leave to your beneficiaries will pass free and clear, except for any debts owed by your estate and taxes on income generated by the estate after your death and before the assets are distributed—but those taxes are paid by the estate, not your heirs.
(Although Tennessee has no estate tax, the U.S. Federal Estate Tax still applies if you have a taxable estate over the current threshold amount—$5.43 million in 2014.)
As noted, Tennessee does not collect estate taxes or inheritance taxes, so an heir or beneficiary who receives money or property from an intestate decedent (a person who died without a will) will not need to pay any additional taxes to the state because he or she has inherited the property.
Of course, as mentioned above, most estate and inheritance tax matters are now handled at the federal level, rather than at the state level. You may still have to pay income tax on the income generated by the inherited property, but since state taxes are levied on a broad range of individual taxable income sources, which include capital gains, this is not a double burden.
Disputing a Will in the State of Tennessee
Contesting a will in Tennessee requires planning, time and money. After all, a will contest is really a trial because you are asking a judge to decide who owns property.
Traditionally, a will could be contested based on one of three grounds: Lack of testamentary capacity, undue influence and fraud. Testamentary capacity means that the person who executed the will did not understand the properties that he or she was giving away. For example, if Grandma owned 25 units in an apartment complex, but failed to recall that she owned the apartments, she lacked capacity to devise them in her will. Undue influence is a fact specific inquiry where the intent is to determine whether someone else manipulated a person so that he or she changed a will to favor the other person. Fraud consists of errors or misrepresentations about the nature of the transaction itself.
An heir may contest a will within two years of the grant of letters testamentary. In other words, the clock may begin running as soon as a personal representative applies for letters testamentary, and it can run while the estate is still open. The burden of proof to set aside a will is on the party challenging it.
If you are an heir who is thinking about challenging a will, consider the alternatives first. A will contest is generally expensive and especially if the case is hard-fought, it is often a fight to the death. There can be a significant emotional cost when family members turn against each other to face a will contest. Will contests often result in expensive attorney fees and occasionally in punitive damages. The assets in question may erode, making the outcome less desirable. Consider all of the costs before deciding to engage in a will contest. Sometimes, these disputes are better resolved out of court if at all possible.
Help With Inheritance Issues
While the information in this guide offers a solid introduction to Tennessee inheritance laws, the truth is these laws are often extremely difficult to navigate for those who have no legal training. The best way to ensure the process goes smoothly is to work with a Tennessee estate planning lawyer who can analyze your case and provide recommendations on the best course of action. Legal guidance can help you to determine whether you will need to go through probate, how long the process might take and what you’ll need to do to ensure you receive the inheritance you deserve. The attorneys at The Hitchcock Law Firm are experienced in Tennessee inheritance laws , and our team has been practicing for many years. We are thorough in our approach to in all of our cases, as we strongly believe in upholding the law and protecting the rights of our clients. Having an experienced, knowledgeable attorney on your side could be the difference between losing a significant amount of money or receiving everything you deserve. Whether you are dealing with a complicated situation involving a trust fund or a straightforward division of assets among several inheritors, it is important to get a handle on the specifics of your circumstances and what to expect as a result.