By: Chad Roberts
While having a conversation about estate planning and one’s own mortality can be a difficult and unwelcoming one, it’s an essential conversation for providing a less painful transition for ones’ family and to ensure the intended result.
If one dies without a will, the Tennessee intestate succession statutes provide a specific beneficiary scheme and determine who will handle a person’s affairs after death. This scheme may not be what one wants. There are numerous ways in which one’s intent is thwarted without proper planning. One common situation is where a parent dies without a will. For example, if Dave and Sally are married with two minor children and Sally dies without a will, Dave will receive one-third of the estate and each of their children will receive one-third of Sally’s assets. Since their children are minors, the probate court will oversee the administration of the assets until the children are of age. This outcome is perhaps not what Sally would have wanted.
Sally could have avoided this situation if she had a will. The will could have provided for all of her assets to pass to her husband, in which case the children would not have received two-thirds of her estate. The outcome could also change if Sally owned property jointly with her husband or had completed beneficiary designations. To the extent that Sally and Dave owned the property as tenants-by-the-entirety, Sally’s interest will pass to Dave as the survivor. If Sally owned an investment account or life insurance and named Dave as the sole beneficiary, then Dave would receive the entire balance of the account. Clearly, estate planning goes beyond drafting a will. Beneficiary designations and survivorship rights must be addressed as well.
Moreover, while Tennessee’s probate process is not particularly onerous, living trusts provide an option to protect privacy and help with incapacity issues and other benefits that a will cannot provide. Living trusts, however, come with some negatives, including the burden of transferring and having a trust own your assets while you are alive.
Estate planning conversations are not easy or simple, but they are essential to providing for loved ones and carrying out one’s legacy properly. Estate planning is further complicated by tax issues, asset protection issues, business succession issues, charitable giving issues, and guardianship issues, among others. Thus, it is vital that individuals seek the advice and counsel of knowledgeable and experienced estate planning attorneys.
If you’re in need of legal guidance regarding estate planning, please contact Harris Shelton today.