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Can an Appointed Executor Contest the Will They Offered For Probate in Tennessee?

Posted on Feb 4 2017 12:23PM by Attorney, Jason A. Lee

A really interesting question was addressed by the Tennessee Court of Appeals recently on whether an executor who submitted a Will for probate and was appointed as executor can subsequently contest the terms of the Will.  The Tennessee Court of Appeals in the case of In Re: Estate of Ellra Donald Bostic, No. E2016-00553-COA-R3-CV, 2016 WL 7105213 (Tenn. Ct. App. 2016) dealt with the specific question of whether an appointed executor can contest the Will that is being probated. 

 

The Court noted that the legal doctrine that applies is “estoppel”.  The reason is because “executors, as fiduciaries, owe a duty of undivided loyalty to the Estate and must deal with the beneficiaries in the utmost good faith.” In re: Estate of Wallace, 829 S.W.2d 696, 705 (Tenn. Ct. App. 1992).  The named executor in a Will has “the duty to both offer the Will for probate and defend the Will against any challenges to its validity” citing Love v. Cave, 622 S.W.2d 52, 57 (Tenn. Ct. App. 1981).  The Court cited the most persuasive treatise on Wills and Probate issues, Pritchard on Wills, which states that “if the executor had knowledge of defects in the Will but nevertheless proceeded to probate it then the executor is estopped from contesting the Will.”  Bostic at 4 (citing Pritchard on Wills § 364).  

 

However, the Tennessee Court of Appeals has also held that an executor is not estopped from challenging a Will after presenting it to probate when “the executor offered the will for probate in good faith and without knowledge of the defects in its execution.”  Bostic at 4 (citing McClure v. Wade, 235 S.W.2d 835, 838 (Tenn. Ct. App. 1950).  When this situation occurs, the executor must resign from her position, and the “trial court should appoint an administrator of pendente lite to take charge of the estate and represent it during the pendency of the probate proceedings”.  Bostic at 4.  The trial court must make a determination as to whether the executor is estopped from challenging a Will based on whether they knew of the defects of the Will at the time the executor was appointed.  This is the initial threshold inquiry and once the Court makes that decision then the Court can determine whether the estoppel doctrine applies. Bostic at 4, 5.  In this particular case (Bostic case), the Court found that the trial court did not perform the proper analysis and, in fact, shifted the burden on this issue inappropriately and therefore the was remanded to the trial court to make a determination based on the Court of Appeals s...

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TAGS: Executor/Executrix, Will Contest, Tennessee Probate Law Comments [0]
  
 

2017 IRS Contribution Limits for 401k, 403(b) and IRA Retirement Accounts

Posted on Jan 2 2017 1:23PM by Attorney, Jason A. Lee

The IRS recently announced the new cost of living adjustments to the annual limits on retirement contributions for 2017.  These limits reflect the amount of money you are able to contribute to certain tax benefited retirement plans.  This can and should affect how you formulate your estate and retirement planning in Tennessee.

 

The new 2016 annual limits for contributions to a 401(k), 403(b), most 457 plans and the federal government Thrift Savings Plan remains the same as the prior year at $18,000.00.  This number has not changed over the past few years.  The annual catchup contribution allowance for these plans, available to those over 50, stands at $6,000.00 for 2017.   As a result, someone over the age of 50 can contribute $24,000.00 annually to their 401k.

 

The limit for contributions to an IRA (Roth or normal IRA) is also unchanged for 2017.  It remains at $5,500.00.  For those who take advantage of the Roth IRA, the AGI (Adjusted Gross Income) phase-out level for the ability to contribute was adjusted up for 2017.  The phase-out now begins at $186,000.00 for married couples filing jointly and $118,000.00 for singles and heads of household.  Once you hit these levels, the ability to contribute begins to phase out – and it is eventually completely eliminated.

 

I highly recommend that you work to update your beneficiary designations on your retirement and other accounts.  In Tennessee, if you have a proper beneficiary designation, these assets can pass outside of probate.  If you do not have any designation or if you name your estate as the beneficiary, then this money will pass through your estate in the probate process.  Many times the beneficiary designations do not math the Will and that is usually unintended.  Life circumstances change and this is an important thing to remember so your beneficiary designations match your intentions that are expressed in your Will.

 

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TAGS: Retirement plans - 401k etc., Tennessee Probate Law Comments [0]
  
 

When is a Surviving Spouse Required to Make Election to Obtain Elective Share Against the Estate in Tennessee?

Posted on Nov 13 2016 8:25PM by Attorney, Jason A. Lee

A surviving spouse has the ability to obtain an elective share (see prior post describing the details of an elective share under Tennessee law) of a decedent's property by filing a notice with the court.  The surviving spouse is required to file a petition for an elective share within nine months after the date of the death of their spouse.  T.C.A. § 31-4-102(a)(1) provides as follows:

 

(a)(1) The surviving spouse may elect to take the spouse's elective share in decedent's property by filing in the court and mailing or delivering to the personal representative, if any, a petition for the elective share within nine (9) months after the date of death.

 

Additionally, an extension of the 9-month time period is allowed if there is litigation pending about the title of certain property such that an elective share determination could not be made with sufficient information.  If this type of litigation is going on, then the surviving spouse has an additional year from the date of the probate of the will within which to make the election.  T.C.A. § 31-4-102(a)(2) provides as follows:

 

(2) When the title of the surviving spouse to property devised or bequeathed by the will is involved in litigation pending so that an election to take the elective share cannot be advisedly made, the survivor shall have an additional year from the date of the probate of the will within which to elect; provided, that the court may upon a proper showing further extend the time to meet the exigency of litigation, not concluded, and, that application for allowance of additional time, in either case, be made to the court, for record of its action thereon.

 

The surviving spouse may also withdraw a request for elective share at any time before the entry of a final determination by the court. (See

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TAGS: Probate Process, Statute of Limitations, Elective Share, Tennessee Probate Law Comments [0]
  
 

Inventory Requirement Under Tennessee Probate Law

Posted on Oct 2 2016 6:33PM by Attorney, Jason A. Lee

Tennessee law requires the personal representative of the estate to file a complete inventory of the probate estate within sixty days after being appointed as the personal representative for the estate.  This is a very important responsibility of the person who is appointed by the Court to administer the estate.  T.C.A. § 30-2-301(a) provides as follows:

 

(a) The personal representative, within sixty (60) days after entering on the administration of a testate or intestate estate, shall make a complete and accurate inventory of the probate estate of the deceased, and return the inventory to the clerk of the court exercising probate jurisdiction in the county of the estate, and verify it by the personal representative's oath before the clerk or before any person authorized by law to administer oaths in such cases whether within or without the borders of the state of Tennessee. When the will of the deceased excuses the requirement for making and filing an inventory of the estate, or when excused by all of the residuary distributees or legatees, no inventory shall be required of a solvent estate, unless demanded by any residuary distributee or legatee of the estate.

 

This inventory must be filed under oath with the clerk of the court.  There are some circumstances where no inventory is required, like T.C.A. § 30-2-301, provides that no inventory is required when the will of the deceased specifically excuses the requirement for the filing of an inventory. 

 

In the alternative, when all of the residuary distributees or legatees (commonly referred to as heirs) of an estate agree to waive the requirements of the completion of an inventory, then the inventory requirement can be waived by the probate Court.  Otherwise, the inventory is an important component of the probate of an estate under Tennessee law and must be filed with the court within 60 days.  Often the inventory provides the heirs with the ability to make sure that all appropriate assets of the estate are properly included in the estate.

 

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TAGS: Probate Process, Probate Assets, Tennessee Probate Law Comments [0]
  
 

What Happens When an Insured Under a Life Insurance Policy and a Beneficiary Die Simultaneously in Tennessee?

Posted on Jul 31 2016 4:25PM by Attorney, Jason A. Lee

Sometimes an individual who has a life insurance policy dies at the same time as a beneficiary.  Obviously, this does not happen very often, but it does happen on occasion.  Most often, when this occurs, it is simply just impossible to determine who actually died first.  In Tennessee, we have a statute that addresses this exact situation.  T.C.A. § 31-3-105 provides that when an insured and beneficiary under the policy die simultaneously, then the proceeds of that policy are distributed as if the insured under the policy had actually survived the beneficiary.  The actual language of the statute is as follows:

 

Where the insured and the beneficiary in a policy of life or accident insurance have died and there is no sufficient evidence that they have died otherwise than simultaneously, the proceeds of the policy shall be distributed as if the insured had survived the beneficiary.

 

As a result, the life insurance money does not go to the beneficiary who died at the same time under these circumstances.  Instead, the money is distributed pursuant to alternative means under the life insurance policy (such as contingent beneficiaries or even into the estate of the insured).  As a result, if you are involved with a situation where the life insurance policyholder and a beneficiary die at the same time, you should consult a Tennessee attorney who is experienced in handling life insurance issues.

 

Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates Blog.
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TAGS: Life Insurance Comments [0]
  
 

Tennessee Allows Signatures on Affidavit to Will to Satisfy Statutory Witness Signature Requirement for Wills Executed Prior to July 1, 2016

Posted on Jul 4 2016 5:25PM by Attorney, Jason A. Lee

The 2016 Tennessee legislature passed Public Chapter 843 and it changed Will execution witness requirements for certain Wills executed prior to July 1, 2016.  This statute was passed in order to address a problem that came up due to recent Tennessee Court of Appeals decision.  The Tennessee Court of Appeals decision was In Re: Estate of Bill Morris, 2015 WL 557970 (Tenn. Ct. App. 2015).  I previously blogged on this case here.  In the Morris case, the Tennessee Court of Appeals found that witness signatures on the Affidavit attached to the Will are not the same as having the witnesses actually sign the Will.  As a result, the Court found that a Will is not valid when the witnesses only sign the Affidavit attached to the Will.

 

The Tennessee legislature essentially reversed this case by amending T.C.A. § 32-1-104.  This amendment provides that for any Wills executed prior to July 1, 2016, a witness signature affixed to an Affidavit which meets all of the requirements for witnesses under Tennessee law shall be considered signatures to the Will.  However, this statutory change requires that the signatures are made at the same time the Testator signs the Will and that the Affidavit contains language meeting all of the requirements of T.C.A. § 32-1-104(a).  As a result, T.C.A. § 32-1-104 now reads as follows (the new section that is added is subpart (b)):

 

(a) The execution of a will, other than a holographic or nuncupative will, must be by the signature of the testator and of at least two (2) witnesses as follows:

(1) The testator shall signify to the attesting witnesses that the instrument is the testator's will and either:

(A) The testator sign;

(B) Acknowledge the testator's signature already made; or

(C) At the testator's direction and in the testator's presence have someone else sign the testator's name; and

(D) In any of the above cases the act must be done in the presence of two (2) or more attesting witnesses.

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TAGS: Wills, Witnesses to will, Will Contest, Tennessee Probate Law Comments [0]
  
 

What Happens When Joint Owners of a Bank Account Die Simultaneously in Tennessee?

Posted on May 10 2016 1:10PM by Attorney, Jason A. Lee

Sometimes, two individuals who own a bank account as joint tenants with right of survivorship or tenants by the entirety, die at the same time.  In this situation, the question is, what happens to the money in those accounts?  Normally, joint tenant accounts with Right of Survivorship immediately pass to the surviving individual on the account.  However, if there is a simultaneous death, the ownership of these accounts is often an unresolved issue.  Thankfully, Tennessee adopted the Uniform Simultaneous Death Act long ago.  TCA § 31-3-104 provides as follows: 

 

Where there is no sufficient evidence that two (2) joint tenants or tenants by the entirety have died otherwise than simultaneously, the property so held shall be distributed one-half ( ½ ) as if one had survived and one-half ( ½ ) as if the other had survived. If there are more than two (2) joint tenants and all of them have so died, the property thus distributed shall be in the proportion that one bears to the whole number of joint tenants.

 

As a result, if two or more individuals own an account as joint tenants or tenants by the entirety, then the account is split among the estates of the individuals who died simultaneously.  As a result, usually this means that their portion of the account would pass pursuant to the provisions in their will because the asset would then become part of the estate (since it no longer passed pursuant to the right of survivorship). 

 

Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Probate Assets, Tennessee Probate Law Comments [0]
  
 

Creditor Claim Priority Under Tennessee Estate Law – Who Gets Paid First?

Posted on Mar 20 2016 8:50PM by Attorney, Jason A. Lee

One question that is often asked is how creditor claims are handled if there is insufficient money in the estate to pay all of the claims.  T.C.A. § 30-2-317 provides a list showing the priority for any creditor claim against the estate of a deceased individual in Tennessee.  Claims and demands against an estate are divided into certain categories and the statue provides the order in which the claims or demands are to be paid.  T.C.A. § 30-2-317 provides the priority for claims against the estate as follows:

 

(a) All claims or demands against the estate of any deceased person shall be divided into the following classifications, which shall have priority in the order shown:

(1) First: Costs of administration, including, but not limited to, premiums on the fiduciary bonds and reasonable compensation to the personal representative and the personal representative's counsel;

(2) Second: Reasonable funeral expenses;

(3) Third: Taxes and assessments imposed by the federal or any state government or subdivision of the federal or any state government, including claims by the Bureau of TennCare pursuant to § 71-5-116; and

(4) Fourth: All other demands that may be filed as aforementioned within four (4) months after the date of notice to creditors.

 

Category number four basically provides the last layer of priority and is designed to account for all other possible categories of creditors.  This statute also provides specific instructions to the personal representative of the estate on how to pay the claims according to the priority found in this statute.  T.C.A. § 30-2-317(b) provides as follows:

 

(b) All demands against the estate shall be paid by the personal representative in the order in which they are classed, and no demand of one class shall be paid until the claims of all prior classes are satisfied or provided for; and if there are not sufficient assets to pay the whole of any one class, the claims in that class shall be paid pro rata.

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TAGS: Executor/Executrix, Creditor claims, Tennessee Probate Law Comments [0]
  
 

New 2016 IRS Contribution Limits for 401k, 403(b) and IRA Retirement Accounts

Posted on Jan 22 2016 5:28PM by Attorney, Jason A. Lee

The IRS recently announced the new cost of living adjustments to the annual limits on retirement contributions.  These limits impact the amount of money you can contribute to specific retirement plans.  This can have an effect on how you formulate your estate and retirement planning in Tennessee.

 

The new 2016 annual limits for contributions to a 401(k), 403(b), most 457 plans and the federal government Thrift Savings Plan remains the same as the prior year at $18,000.00.  The helpful annual catchup contribution to these plans, available for those over 50, stands at $6,000.00 for 2016. 

 

The limit for contributions to an IRA (Roth or normal IRA) is not changed for 2016.  It remains at the $5,500.00 level.  For those that take advantage of the Roth IRA, the AGI (Adjusted Gross Income) phase-out level for the ability to contribute was adjusted up for 2016.  The phase-out now begins at $184,000.00 for married couples filing jointly and $117,000.00 for singles and heads of household.  Once you hit this level, your ability to contribute starts to phase out.

 

The beginning of a new year is always a great time to update your beneficiary designations on your retirement accounts.  In Tennessee, if you have a proper beneficiary designation, these accounts can pass outside of probate.  If you do not have any designation or if you name your estate as the beneficiary, then this money will pass through your estate in the probate process.  Life circumstances sometimes change and this is an important thing to remember so your beneficiary designations match up with your intentions that are expressed in your Will.

 

Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Retirement plans - 401k etc. Comments [0]
  
 

New IRS 2016 Limits for Federal Estate and Gift Tax Exemptions; Tennessee Inheritance Tax Abolished in 2016

Posted on Jan 3 2016 4:35PM by Attorney, Jason A. Lee

The IRS recently introduced new cost of living adjustments to the lifetime federal estate and gift tax exemption.  The new federal estate and gift tax exemption will be $5.45 million dollars in 2016.  This is an increase from the prior exemption of $5.43 million for 2015.  This is therefore an increase of $20,000.00 that can be passed on by gift or in your estate, tax free starting in 2015. 

 

Unfortunately, the annual tax free gift exclusion amount stays at the same level at a total of $14,000.00.  This is the annual amount of gifts that can be given to an individual without counting toward the lifetime consolidated exemption of $5.45 million for 2016.  As a result, each year you can give up to $14,000.00 to an individual using the annual gift tax exclusion.  These gifts will not count towards your lifetime exemption amount.

 

As I have stated before on this blog, estate taxes are becoming less relevant to the vast majority of Americans due to the “permanent” fix that was provided by the federal government a few years ago.  The estate tax simply does not come into play for most people.  Additionally, the Tennessee inheritance tax is now abolished in Tennessee for any person who dies in 2016 or later.  It simply does not exist any longer. 

 

Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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TAGS: Tennessee Inheritance Tax, Taxes, Federal Estate Tax Comments [0]
  
 
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Jason A. Lee is a Member of Burrow Lee, PLLC. Contact Jason at 615-540-1004 or jlee@burrowlee.com for an initial consultation on wills estate planning and probate issues.

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Tennessee Wills and Estates Blog
Jason A. Lee, Member of Burrow Lee, PLLC
611 Commerce Street, Suite 2603
Nashville, TN 37203
Phone: 615-540-1004
E-mail: jlee@burrowlee.com

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