Are Bank Accounts with a “Right of Survivorship”, “Pay on Death” or “Transfer on Death” Designation Part of a Probate Estate in Tennessee?

Bank accounts with a ”right of survivorship”, “pay on death” or “transfer on death” designation are generally not part of your probate estate in Tennessee.  These accounts pass pursuant to the specific contract terms for the account.  This is very important to remember when constructing a comprehensive estate plan.  Sometimes people add one or two of their children to their bank accounts late in life in order to help with paying the bills.  This can have a very significant unintended consequence.  If the children were actually added as joint owners on the account with right of survivorship, then the money in that account will pass directly to them upon death.  It will not pass pursuant to the terms in your will.  This could certainly conflict with your intentions to split things equally among your children.    

As a result, when planning how your assets will be distributed to your heirs or children, it is important to keep this information in mind.  If you desire to have your assets split equally among your children, for instance, then make sure the bank accounts do not unintentionally pass a significant amount of money to one of your children simply because they have been added to the account.  People sometimes have their will drafted correctly where it shows all of their assets should be split equally among their children.  However, they do not take into consideration how their bank accounts are listed or owned.  This can cause an unintentionally uneven distribution of assets after your death (this can also happen with 401k assets and Life Insurance policies).  This is why it is important to have a comprehensive discussion with a Tennessee estate planning attorney about your assets and how you want your assets to be passed to your loved ones upon your death.

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