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Under Tennessee law can a fraudulent conveyance that is made to defeat the elective share option of the "surviving spouse" be voided?

Posted on Feb 26 2013 10:03AM by Attorney, Jason A. Lee

Under Tennessee law any conveyance by the decedent that is made in a fraudulent manner to children or any other individual in order to defeat the "surviving spouse’s distributive or elective share" is voidable at the option of the surviving spouse.  This situation can arise where an individual knows he or she is going to die soon, and therefore conveys property or other assets to another individual in order to try to remove it from the estate so it would not go to the surviving spouse.  Since the spouse has a right to certain benefits under Tennessee Law including an elective share, such a distribution that is done for a fraudulent purpose can be voided.

 

T.C.A. § 31-1-105 is the Tennessee statute that basically prevents an individual from successfully transferring assets prior to death in order to reduce the value of the estate that is subject to the elective share option under Tennessee law.  T.C.A. § 31-1-105 provides as follows:

 

Any conveyance made fraudulently to children or others, with an intent to defeat the surviving spouse of the surviving spouse's distributive or elective share, is, at the election of the surviving spouse, includable in the decedent's net estate under § 31-4-101(b), and voidable to the extent the other assets in the decedent's net estate are insufficient to fund and pay the elective share amount payable to the surviving spouse under § 31-4-101(c).

 

As a result, if gifts or conveyances are made to children or any other individual, those gifts or conveyances can be voided by the court if requested by the surviving spouse.  This will be done to protect the surviving spouse's entitlement to an elective share.  The elective share of a surviving spouse will be discussed in a subsequent post however, the main part of the statute, T.C.A. § 31-4-101(a) provides as follows:

 

(a)(1) The surviving spouse of an intestate decedent who elects against taking an intestate share, or a surviving spouse who elects against a decedent's will, has a right of election, unless limited by subsection (c), to take an elective-share amount equal to the value of the decedent's net estate as defined in subsection (b), determined by the length of time the surviving spouse and the decedent were married to each other, in accordance with the following schedule:

 

If the decedent and the surviving spouse were married:                       The elective share % is:

Less than 3 years                                                                                   10% of the net estate

3 years but less than 6 years                                                                   20% of the net estate

6 years but less than 9 years                                                                   30% of the net estate

9 years or more                                                                                     40% of the net estate

 

(2) For purposes of determining the total number of years to be applied to the computation provided in subdivision (a)(1), the number of years persons are married to the same person shall be combined. The years do not have to be consecutive, but may be separated by divorce. All years married shall be counted toward the total number of years for purposes of this section


TAGS: Fraudulent Conveyance, Elective Share, Surviving Spouse
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Author

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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