|
Posted on Aug 27 2017 11:56AM by Attorney, Jason A. Lee
|
When a Will is executed by someone, and then
they are later divorced, the divorce revokes any benefits that were going to go
to the former spouse under the Will.
This revocation is automatic and by statute that was passed by the
Tennessee legislature. T.C.A. § 32-1-202(a) provides as
follows:
(a) If after
executing a will the testator is divorced or the testator's marriage annulled,
the divorce or annulment revokes any disposition or appointment of property
made by the will to the former spouse, any provision conferring a general or
special power of appointment on the former spouse, and any nomination of the
former spouse as executor, trustee, conservator or guardian, unless the will
expressly provides otherwise.
When individuals remarry after their
divorce, the provisions that were revoked by T.C.A. § 32-1-202, are automatically revived
by the subsequent remarriage.
Additionally, under T.C.A. § 32-1-202(d) a formal separation
(by court order or otherwise) does not terminate the status as husband and wife
and is not considered a divorce for purposes of this section. In other words, a formal legal separation
does nothing to the terms of a Will that benefit a spouse. Only a final divorce changes the terms of the
Will. This section provides:
(d) For purposes of
this section, divorce or annulment means any divorce or annulment that would
exclude the spouse as a surviving spouse within the meaning of § 31-1-102(b). A
decree of separation that does not terminate the status of husband and wife is
not a divorce for purposes of this section.
This statute needs to be
considered anytime there is an individual who dies who has been divorced when
they still have any provision for their ex-spouse in their will. It is important to note that under Tennessee
law there is not an automatic revocation of a life insurance policy that
benefits your spouse after a divorce.
The Tennessee Supreme Court has ruled on this issue previously. I have blogged on this topic and
|
Continue
Reading
|
|
|
|
|
|
|
|
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.
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on May 17 2015 6:34PM by Attorney, Jason A. Lee
|
I
get a lot of interesting questions when I tell people that I practice Probate
law in Tennessee. One of the things that
is most confusing to people is how to know when an actual estate needs to be
opened for their loved one. As a general
rule, Tennessee probate estates only need to be opened when there are
probate assets. Probate assets include bank accounts that are
not joint and do not have any “pay on death” or “transfer on death”
designations. Other probate assets
include real estate when there is no joint, right of survivorship,
co-owner. Probate assets can also
include life insurance policies and retirement accounts that do not have a
beneficiary or that list the estate as the beneficiary. These are the most common probate assets that
can require an estate to be opened in Tennessee.
A
lot of family members who do not receive anything from an estate can be very
confused by these rules. They are often
upset because they never see a will or any probate filings. What I tell them is that if all of the assets
are disposed of by other methods (joint ownership of
real property, beneficiary designations on accounts or joint ownership of
accounts)
then they may never see the will or any details concerning what happened to the
assets. There is no central database
that allows people to find this information out simply by searching (however,
when an estate is opened, it is public record).
Banks, life insurance companies and mutual fund companies will simply
quietly disperse the funds to the beneficiaries pursuant to the wishes of the
decedent assuming the information they are provided matches their records and
policies.
All
of this being said, this does not mean that on occasion, sometimes people
manipulate the system and get access to accounts and assets improperly. If you suspect this, often the only thing you
can do is to try to force the issue by opening an estate and have an
administrator appointed (or be the executor) so that you can investigate and
determine if things were handled correctly.
This costs money but I would highly recommend you hire an attorney to
assist wit...
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Sep 28 2014 4:18PM by Attorney, Jason A. Lee
|
One issue that comes
up on occasion in Tennessee is whether a life insurance policy beneficiary
designation is revoked automatically by a divorce. The short answer to this question is no, a
divorce does not revoke a life insurance beneficiary designation. This is the default rule in Tennessee.
Often life insurance
companies will deny life insurance payouts to ex-spouses on the basis that they
assert a divorce revokes the beneficiary designation. That is not the rule in Tennessee. In fact, there is a Tennessee Supreme Court
case that has addressed this issue. See Bowers
v. Bowers, 637 S.W.2d 456 (Tenn. 1982).
Many life insurance
companies that write policies in Tennessee are actually located outside of the
State of Tennessee. They often have non-Tennessee
attorneys review life insurance policies and the beneficiary status when there
is a divorce. Some of these attorneys do
not know the Tennessee law on this issue.
If you receive a denial of life insurance as an ex-spouse when you are
still listed as a beneficiary on the life insurance policy, you should hire an
attorney to assist you with obtaining these life insurance benefits. Obviously, every fact situation is different,
but the general rule in Tennessee is that the divorce does not revoke the life
insurance beneficiary designation.
Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Mar 21 2014 12:45PM by Attorney, Jason A. Lee
|
One thing a significant amount of people
do not realize is that a 401K is not necessarily part of someone’s estate in
Tennessee. As a result, almost always
401k assets are not distributed pursuant to the intentions expressed in your
will. Some people believe a 401k passes
pursuant to whatever terms are in their will but this is simply not true. As a general rule, when someone dies, their 401k
proceeds are not distributed under the will.
They are instead distributed based on the beneficiary designations in
the 401k. This is important to remember
when constructing an appropriate estate plan.
It also should cause you to check your beneficiary designations
periodically to make sure they match your intentions.
However, there are some circumstances where
the 401k could be paid to the estate (and therefore pursuant to the will). For instance, if somebody does not list any
beneficiary on the 401k, then the proceeds
would be paid into the estate (unless the 401k plan documents dictate
otherwise). Additionally, people can
list their estate as the beneficiary for the 401k. There are only a very limited number of
circumstances where this would be appropriate.
Due to the tax and other consequences
of such a designation, it is almost always better to list an individual as
the beneficiary of a 401k.
Due to the fact the 401k money is generally
distributed pursuant to the beneficiary designation, the 401k assets are not part of a
probate estate (however, they are still counted for purposes of the Tennessee
Inheritance Tax and Federal
Estate Tax). This is usually a
positive so you can avoid the claims of creditors in a probate estate and so
the money can be distributed to the beneficiaries faster.
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 all of your children, for instance, then make sure
your beneficiary designations on your 401k and life insurance policies reflect
this intention. Sometimes people have
their will
done correctly where it shows that all their assets should be split equally
among their children, but they do not pr...
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Jan 11 2014 5:39PM by Attorney, Jason A. Lee
|
The
answer is almost always no. As long as
the life insurance policy has named beneficiaries (other than the estate) it is
not subject to probate in Tennessee and passes outside of probate. (for a
discussion on other assets that are no probate assets read this article here). Most often, the named beneficiaries simply
need to fill out some forms that the life insurance company has and the money
will be distributed rather quickly. This
payment is not subject to creditors of the person who died (See T.C.A.
§ 56-7-201).
T.C.A.
§ 56-7-201 also provides that even if the estate is listed as a beneficiary
of the life insurance policy, the money is still not subject to the debts of
the decedent unless specifically stated in the will. The entire text of T.C.A.
§ 56-7-201 provides as follows: On the death of an insured, any life insurance
acquired by the insured or the insured's spouse and payable to the intestate
insured's estate benefits the surviving spouse and children and the proceeds
shall be divided between them according to the statutes of distribution without
being in any manner subject to the debts of the decedent. If the proceeds of
the insurance are payable to the estate of a testate decedent or the trustee of
a revocable trust of which the decedent was a settlor, the proceeds shall pass
as part of the estate or trust and under the dispositive provisions of the will
or trust agreement, as ordinary cash, whether or not the will or trust
agreement uses any apt or express words referring to the insurance proceeds,
but the proceeds shall not be subject to the debts of the decedent unless
specifically charged with the debts in the will or trust agreement.
As
a result, even naming the estate as a beneficiary in your life insurance policy
does not have all of the potentially negative baggage for other probate assets.
In fact, there is a good argument that doing
so can be a good decision in certain circumstances. You would need to consult with an experienced
Tennessee estate planning attorney to discuss your specific circumstance
more. For a
listing of assets that are probate assets, read this article here.
Follow me on Twitter at @jasonalee for updates from the
Tennessee Wills and Estates blog.
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Oct 20 2013 10:33PM by Attorney, Jason A. Lee
|
Under T.C.A. § 67-8-306, life insurance policies are
included in the gross estate of the decedent when calculating the size of the
estate of inheritance tax purposes. This
is true whether the policies of insurance are payable to named beneficiaries or
to the decedent’s estates. This is a
general rule and the complete statute is as follows:
(a) If the decedent was a resident of this state, there shall be included
in the gross estate the proceeds of insurance policies payable to named
beneficiaries, or to the decedent's estate, or in such manner as to be subject
to claims against the decedent's estate and to distribution as a part thereof.
(b) This section shall include the proceeds of insurance policies
commonly known as “paid-up contracts” or “investment contracts” or “annuity
contracts” or similar types or forms of policies, the surrender value of which
was subject to the control of the decedent prior to death.
(c) Where life insurance, the proceeds of which are under the control of
the decedent, is left by the decedent in such manner that the proceeds thereof
cannot be subjected to the payment of the decedent's debts and where the
proceeds of such insurance are received by beneficiaries thereof and are not
subjected to the debts of the decedent, the fact that the decedent may have been
insolvent and that a portion of the decedent's debts may remain unpaid shall
not affect the liability for inheritance tax upon such insurance.
A lot of people
forget to consider life insurance policies when making a determination of
potential estate tax liability. This
must be taken into consideration in Tennessee.
Follow me on Twitter at @jasonalee <...
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Jul 21 2013 3:25PM by Attorney, Jason A. Lee
|
Tennessee has a statute which governs
whether an individual can inherit any property or recover any life insurance
from a deceased individual if they were responsible for killing that deceased
individual. T.C.A. §
31-1-106 provides as follows:
Any person who
kills, or conspires with another to kill, or procures to be killed, any other
person from whom the first named person would inherit the property, either real
or personal, or any part of the property, belonging to the deceased person at
the time of the deceased person's death, or who would take the property, or any
part of the property, by will, deed, or otherwise, at the death of the
deceased, shall forfeit all right in the property, and the property shall go as
it would have gone under § 31-2-104, or by will, deed or other conveyance, as
the case may be; provided, that this section shall not apply to any killing
done by accident or in self-defense.
It is important to note that this statute
does not apply to any killing that was done by accident or in
self-defense. However, any killing
beyond “accident” or “self-defense” prevents an individual from inheriting from
the deceased. It also prevents that
person from basically obtaining any benefit as a result of the deceased
individual's death as provided in this statute.
This would include obtaining property by Right of Survivorship in a joint
ownership situation.
Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Feb 19 2013 10:32AM by Attorney, Jason A. Lee
|
It is important to determine what assets are probate assets and what assets are not probate assets to determine whether an estate needs to be probated under Tennessee Law. It is important to plan ahead in order to keep as many assets out of the probate process if possible. Assets that do not pass through the probate process include the following:
1. Any 401k plan, IRA plan or any other type of retirement plan that designates a specific beneficiary (other than where the beneficiary is designated as the decedent's estate).
2. Any asset including bank accounts, real estate, automobiles or other assets that are titled in the name of the deceased individual and another individual as joint tenants or tenants by the entirety with right of survivorship. These assets pass immediately upon death to the other individual.
3. Any asset of any kind that are titled in the decedent's name with a "transfer on death" or "pay on death" designation for a specific beneficiary other than the decedent's estate.
4. Any life insurance policy which has a specific beneficiary designated other than the estate of the deceased individual.
It is important to determine what assets are probate assets and what assets are not probate assets in order to determine whether a will needs to be probated under Tennessee law. A Tennessee probate attorney should be consulted to determine how to make this decision after an individual dies. Additionally certain decisions can be made before death in order to reduce or eliminate what assets pass through the probate process.
|
Continue
Reading
|
|
|
|
|
|
|
|
Posted on Feb 18 2013 1:56PM by Attorney, Jason A. Lee
|
One of the most important questions when considering how to handle a deceased person's estate is whether a formal court monitored probate process is required. T.C.A. § 30-1-101 provides that "no person shall presume to enter upon the administration of any deceased person's estate until the person has obtained letters of administration or letters testamentary." Essentially, this statute prohibits the administration of an estate outside of the formal court probate process for someone who died who had assets that are commonly referred to as "probate assets".
The next question therefore is what "probate assets" would likely require the formal probate administration process that is required under Tennessee law. Examples of key "probate assets" are as follows:
1. Any 401k, IRA, or any other kind of retirement plan that designates the estate of the decedent as a beneficiary.
2. Any life insurance policy of the decedent that lists the estate as a beneficiary.
3. Any asset that is titled in the decedent's name without any designation of a beneficiary or without joint ownership with another individual.
4. Any asset that is titled in the decedent's name that has anther individual listed on the title as "tenants in common".
It is very important when someone dies to carefully evaluate whether the court administrated probate process is required under Tennessee law in order to properly distribute the assets of the deceased. This is where the advice of a probate attorney is very valuable to handle your specific situation. Contact me if you want to discuss this or any other issue involving the probate of an estate.
|
Continue
Reading
|
|
|
|
|
|
|
|