Estate Planning in Tennessee

You can save a lot of money, potential chaos and hard feelings between those closest to you by preplanning how you want your assets managed when you are incapacitated and how your property will be divided at your death.

Powers of Attorney

In Tennessee, you can sign a durable power of attorney to appoint someone to handle your assets if you become incapacitated. At a minimum, a power of attorney should include the power to:

• Manage and transfer all assets
• Deal with the IRS
• Make gifts on your behalf
• Create and amend any trusts you set up

You don't need to transfer any assets at the time you sign a power of attorney, but it's a good idea to keep the person you've chosen informed about your ongoing financial matters.

You can also sign a durable power of attorney for health care to appoint someone to make health care decisions for you when you're unable to do so yourself. This person can provide informed consent for treatment or even refuse treatment for you.

Dying Without A Will

If you die without a will (known as dying "intestate") in Tennessee, your assets will be divided amongst your immediate family. If you do not have children, your spouse will get your entire estate. If you do have children, your spouse will get one-third or a child's share of your estate, whichever is greater, and the remainder will go to your children. If you do not have a spouse but you have children, your entire estate will go to them. If you do not have a spouse or children, your entire estate will go to your parents.

Alternatives To A Will

Wills eventually become public after your death, with the details of what you owned and how much it was worth available to anyone curious enough to read the court file. So many people look for more private ways to transfer their assets.

In Tennessee, alternatives to making a will include:

• Life insurance policies or trusts
• Gifting cash or other assets before your death
• "Transfer On Death" ("TOD") or "Payable On Death" ("POD") bank accounts
• Holding assets by joint tenancy with right of survivorship ("JTROS"), with the assets transferring automatically to the other joint tenant at the time of death
• Holding assets through a tenancy in common, with each tenant having a divided interest in the property which can be independently sold
• Retirement plans and Individual Retirement Accounts ("IRAs")
• "Revocable living trusts" (sometimes called "grantor trusts"), giving all your assets to a trustee for management before your death

Making A Will

In Tennessee, you can make a valid will if you are at least 18 years old and of sound mind. The will must be signed by you or signed in your name by another at your direction and in your presence. At least two witnesses must witness your signature, acknowledge your signature already on the will or acknowledge another's signature in your name that was at your direction in your presence. The attesting witnesses must sign in your presence and in the presence of each other.

A Tennessee lawyer who does a lot of estate planning can explain the consequences of some of the most basic choices you must make, such as whether property you want to leave to your minor children should be put into a trust at your death. For that reason, it makes sense to consult with a Tennessee estate planning lawyer and have him or her draft your will so that you don't make costly mistakes or accidentally fail to accomplish what you intended.

Providing For Young Children

There are many kinds of trusts, but the most common is one you would set up for your minor children or incapacitated adult relatives for their care after you are gone and until they are old enough or well enough to take care of themselves. A parent can name a trustee to be in control of the finances, to decide whether to sell or keep property and to manage assets such as real estate. The trustee, usually a family member or trusted friend, can be paid an hourly rate or a set monthly amount for their services out of the trust assets.

You will probably also want to name a guardian for your children, someone who would have physical custody of and take care of your children on a daily basis should you or your spouse be unable to do so.

Probate

"Probate" is the public process of:

• Filing and validating a will in court
• Paying all the debts and taxes of the deceased person
• Dividing up the assets according to the will or Tennessee law

If you have no debts and no "titled property," such as real estate or vehicles to pass along to heirs, there may be no need for probate.

Probate lawyers generally charge by the hour, and they make sure everything gets processed according to the law.

Related Web Links:

- Tennessee Health Care Forms

- Estates, Wills and Probate Message Board for more help