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Posted on Dec 9 2018 2:37PM by Attorney, Jason A. Lee
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The IRS
recently announced the new cost of living adjustments to the annual limits on
retirement contributions for 2019. These are the limits that outline the amount
of money you can contribute to certain tax benefited retirement plans. This can and should affect how you formulate
your Tennessee estate and retirement planning.
A really good strategy for long term estate planning is to make sure a
significant portion of your assets are in these tax advantaged accounts.
The new 2019 annual limits for contributions
to a 401(k), 403(b), most 457 plans and the federal government Thrift Savings Plan
increases for 2019 to $19,000.00. This is
the first change we have had in a few years and it is certainly good news for
retirement savers. The annual catchup contribution
allowance for these plans, available to those over 50, stands at $6,000.00 for
2019. As a result, someone over the age of 50 can
contribute $25,000.00 annually to their 401k starting in 2019.
The limit for contributions to an IRA (Roth
or normal IRA) also went up in 2019. It is
now a limit of $6,000.00. 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 2019. The phase-out now begins at $193,000.00 for
married couples filing jointly and $122,000.00 for singles and heads of
household. Once you hit these levels, the
ability to contribute begins to phase out until it is eliminated on a gradual
scale.
It is important to work to update your
beneficiary designations on your retirement and other accounts while you review
if any of the above changes can affect you.
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 the beneficiary, then this
money will pass through your estate in the probate process. This will certainly extend the time it will
take to get to the proper beneficiaries.
Sometimes this is necessary or preferred, but it is really important to
make an informed decision on this issue.
Many times, the beneficiary designations do not match the terms in the Will
- and this is usually unintended. Life
circumstances also 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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Posted on Nov 26 2017 3:06PM by Attorney, Jason A. Lee
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The IRS
recently announced the new cost of living adjustments to the annual limits on
retirement contributions for 2018.
These are the limits that identify the amount of money you can
contribute to certain tax benefited retirement plans. This can and should affect how you formulate
your estate and retirement planning in Tennessee. A really good strategy for long term estate
planning is to make sure a significant portion of your assets are in these tax
advantaged accounts.
The new 2018 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 $18,500.00. This is the first change in several years and
it welcome news for retirement savers. The
annual catchup contribution allowance for these plans, available to those over
50, stands at $6,000.00 for 2018. As a result, someone over the age of 50 can
contribute $24,500.00 annually to their 401k starting in 2018.
The limit for contributions to an IRA (Roth
or normal IRA) is unchanged for 2018. 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 2018.
The phase-out now begins at $189,000.00 for married couples filing
jointly and $120,000.00 for singles and heads of household. Once you hit these levels, the ability to contribute
begins to phase out until it is eliminated.
You need to work to update your beneficiary designations
on your retirement and other accounts while you review if any of the above
changes can affect you. 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. This will
certainly extend the time it will take to get to the proper beneficiaries. Many times, the beneficiary designations do
not match the terms in the Will - and this is usually unintended. Life circumstances also 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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Posted on Jan 2 2017 1:23PM by Attorney, Jason A. Lee
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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.
Follow me on Twitter at @jasonalee
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Posted on Jan 22 2016 5:28PM by Attorney, Jason A. Lee
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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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Posted on May 17 2015 6:34PM by Attorney, Jason A. Lee
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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...
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Posted on Nov 2 2014 9:32PM by Attorney, Jason A. Lee
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The IRS
recently announced the new cost of living adjustments to the numerous annual
limits on retirement contributions.
These limits impact the amount of money you can contribute to a
retirement plan. This can have an effect
on how you formulate your estate and retirement planning in Tennessee.
The new 2015 annual limits for contributions
to a 401(k), 403(b), most 457 plans and the federal government Thrift Savings Plan
has increased from $17,500.00 to $18,000.00.
The helpful annual additional catch-up contributions to these plans,
available for those over 50 was also increased from $5,500.00 to $6,000.00.
The limit for contributions to an IRA (Roth
or normal IRA) is not changed for 2015 and 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 2015. The phase-out
now begins at $183,000.00 for married couples filing jointly and $116,000.00
for singles and heads of household.
One other important thing to always remember,
is that you need to update and keep current your beneficiary designations on
your retirement accounts. In Tennessee, if
you have a proper beneficiary designation, these accounts 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.
Follow me on Twitter at @jasonalee for updates from the Tennessee
Wills and Estates blog.
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Posted on Jun 8 2014 9:31PM by Attorney, Jason A. Lee
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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.
Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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Posted on Mar 21 2014 12:45PM by Attorney, Jason A. Lee
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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...
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Posted on Feb 19 2013 10:32AM by Attorney, Jason A. Lee
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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.
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Posted on Feb 18 2013 1:56PM by Attorney, Jason A. Lee
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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.
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