What are the current Tennessee Estate Taxes?

      Now that is it 2013 the Tennessee inheritance tax exemptions have changed for the better of Tennessee residents. From 2006 through 2012 the estate tax exemption was One-million dollars( $1,000,000.00). In 2013, Tennessee estate tax emption moves up to One-million, two hundred fifty thousand dollars ($1,250,000.00).  That means if a resident of Tennessee dies, $1,250,000 of the person's estate will be transferred to the designees or heirs, without an estate tax.  In 2014, the exemption grows to Two million dollars ($2,000,000.00); in 2015 to five-million dollars ($5,000,000.00); and in 2016 the exemption will be unlimited. 

 

       Now, estate planners must still be wary despite the laxation of taxation for Tennessee residents because federal estate tax will still have to be paid.  Congress was able to act intime to avoid the fiscal cliff consequences for estate planning.  Instead of the $5.12 million exemption being reduced to $1 million the amount remained the same at $5.12 million, but the maximum rate increased from 35% to 40%.  Very importantly, portablility remained intact, so that if one spouse transfers all of his estate to his surviving wife, then the wife may use his and her exemptions when she finally dies, thus being able to have a maximum $10.24 million federal exemption.

 

      Given these changes if you think that your will needs to be redone call your attorney to setup an appointment to specifically talk about your situation.  If you do not have a will, then you should contact an attorney to discuss the legal consequences.

Estate Planning Is For Everyone

      There a giant misconception that estate planning is just for the rich. Growing up, before becoming an attorney I used to have a false belief of estate planning. When I heard “estate planning”, I envisioned some millionaire sitting down with an attorney coming up with ways of how to hide money in Island countries and writing five hundred page trust documents that keep his money out of the hands of the government forever while showering his family with wealth.

      I could not have been more wrong. Estate planning is making sure that not only are your assets distributed in the way you wish when you pass, but that the end of your life wishes are emphatically published to all so that there is no confusion, strife, or bickering among your family.

      The primary instruments that are used for estate planning are: Will, Power of Attorney, Power of Attorney for Health Care, and a Living Will.

       The Powers of Attorney give a person who you appoint the power to take care of your finances and health care decisions if you reach a state of mental incapacity, whether from illness or injury. You can put restrictions on your attorney-in-fact or give him free reign. Usually this power goes to a spouse or other family member.

     The Living Will, also known as an “affirmative directive”, authorizes, or does not authorize, the withholding of artificially provided food, water, or other nourishment or fluids if the patient reaches a terminal state with no reasonable medical expectation of recovery.

       All of these documents are affordable for everyone, but so many people do not have these drawn up either because of the misconception that “Estate Planning” is for the very wealthy, or do not like to dwell on the end of their life. Make the smart decision and call an estate planning to get these documents executed to prevent hassles and inter-family strife at the end of your life.

Nashville Probate Committee Hosts Judge Kennedy

       Today, the Nashville Bar Association Probate Committee had the pleasure to have Davidson County's Probate Judge Randy Kennedy speak at our monthly meeting.  Various topics were discussed including new procedures for his courtroom and advice/tips for petitions to probate wills, specifically lost wills. But the bulk of the discussion involved the Judge discussing the proposed amendments to the State of Tennessee's Conservator and Guardianship laws.  Judge Kennedy summarized many of the changes and possible ramifications.  Overall, his main message was for the Tennessee bar members to read through the legislation and submit any comments, concerns, and questions to the legislature.  

       The Tennessee Bar Association is putting together a committee to research the new proposed amendments and submit a report discussing the positions of the probate bar.  A future article will include a more thorough discussion of the amendments and the specific provisions and their potential ramifications.  If interested, the following are links to the proposed amendments:

http://www.capitol.tn.gov/Bills/107/Bill/SB2519.pdf

http://www.capitol.tn.gov/Bills/107/Bill/SB2398.pdf

http://www.capitol.tn.gov/Bills/107/Bill/HB2456.pdf

Differing Standards of Proof

       One interesting issue that can be found in the Tennessee Probate Court is the fact that two very similar cases have different standards of proof. The primary difference between these cases is that in one case the State of Tennessee is the Plaintiff, whereas in the other, a private party is the plaintiff. The areas of law involved here are Conservatorships (T.C.A. 34-3-101 et seq) and Adult Protection (T.C.A. 71-6-101 et seq). To summarize, a conservator is a person put in charge of another's (the conservatee) finances and even medical decisions if the conservatee is unable to take care of himself. This is different than a Power of Attorney, which is voluntary, where in a Conservatorship, the plaintiff brings an action nominating a Conservator to take care of the Respondent because the Plaintiff believes that the Respondent is unable to take care of himself.

       Now when a private party brings an action to appoint a Conservator for the Respondent the standard of proof for the Plaintiff is by “clear and convincing” evidence (see T.C.A. 34-1-126).  However, when the State of Tennessee, through the Department of Human Services, brings the similar action of Adult Protection, the standard to be used is by a “preponderance of the evidence” (see T.C.A. 71-6-124(5)(A),(B)).  An Adult Protection is where the Department of Human Services brings the action as the plaintiff believing that the Respondent is being abused, neglected (including self-neglect) or exploited because of any mental or physical disabilities.  

       Therefore, if you find yourself involved in either of these cases be sure that you recognize the difference because depending on which standard of proof is being used in your case can make the difference to whether an individual's right to make decisions on his own behalf is taken away or not.

Don't let it happen to you, visit www.TheNevinLawFirm.com

What is Involved in the Probate Process

The death of a spouse, parent or other loved one is a difficult time that involves heightened emotions, complicated paperwork, and a seemingly endless task list. If you've been named as a loved one's executor, then it is wise to hire a probate attorney. Probate is the legal process that takes place after someone dies. It involves determining whether that person had a will, "proving" the will, securing and listing the person's assets, and then settling the person's outstanding financial affairs.

Identifying the Executor

The first step in the probate process is identifying someone to act as the decedent's personal representative. This will be the person responsible for "administering the estate," or handling the affairs of the estate, for the duration of the probate process. If the decedent had a will, he probably named an executor. Unless there is a compelling reason not to, the court will, in most cases, honor the decedent's wishes by allowing the executor to act as his personal representative. If there was not a will, the court is likely to select the deceased individual's spouse, adult child or close family member to act as his personal representative. In the event that no family can be identified, the court may give this responsibility to a bank, trust company or attorney.

Determining the Assets

You are going to have a lot of work ahead of you if you've been named as a loved one's executor. First, you will need to gather and inventory all of the decedent's assets, including bank and brokerage accounts, real estate, and personal property, and determine its value (which sometimes requires an appraisal). You'll also need to file for any life insurance benefits the decedent may have been entitled to and check with his employer to secure any unpaid salary or pension.

Settling the Debts

Once the assets have been gathered and their values determined, you'll begin the process of settling your loved one's outstanding debts. This involves notifying any known creditors of his death and, in most states, placing a notice in the local newspaper to inform any unknown creditors of his death. Creditors may then begin to file claims against the estate. As the executor, your role is to review these claims, determine their validity (or file an exception), and, assuming that assets are available, make payments to cover them.

You will also need to ensure that the estate does not incur any additional costs by closing out all of your loved one's accounts, including credit cards, bank accounts and any subscription services. When all debts have been settled, you'll be responsible for distributing the remaining assets according to your loved one's will or, if he didn't have a will, according to your state's laws of descent and distribution.

Hiring a Probate Attorney

Losing a loved one is one of the hardest things you'll ever have to go through. Spending countless hours handling the affairs of his estate can make the mourning process even longer and more difficult. Therefore, it is a good idea to hire a probate attorney. Like most legal processes, probate is not a simple matter. It involves complex paperwork, deadlines, and serious consequences for missteps.

In fact, there is quite a lot of paperwork to keep track of. When you're already going through a difficult, emotional time, it's easy to become overwhelmed. If you hire a probate attorney, then your attorney will act as an advisor, guiding you through each step of the probate process to ensure that you are 1) aware of your responsibilities and 2) completing all paperwork properly and 3) according to deadlines.

For more information, visit www.TheNevinLawFirm.com