This article originally appeared in the Knoxville News Sentinel’s business column on September 30, 2018.
Alright everybody, let’s get around to it. There are all these items on our to-do lists that we keep putting off. Cleaning out the closet, giving away clothes that we haven’t worn in two years, and sorting through that junk drawer that just keeps getting harder and harder to close. But often, we put off things because they are difficult to face, like preparing a Will, naming attorneys-in-fact through Powers of Attorney, and thinking through who you really want to get what. Aretha Franklin died on August 16th. She left an estate worth an estimated $85 million dollars and no Will. Luckily, her heirs appear to be all in agreement, but having a properly executed Will really does make things easier for your heirs.
Upon your death, a Will does not necessarily control every asset you own. Certain accounts may be controlled differently. For example, retirement plans, IRA accounts, life insurance, and annuities have beneficiary designation forms that direct who receives the account assets. If an account is set up as joint with right of survivorship, then the titling of that account controls the disposition—not the Will. Real estate, like certain accounts, may be titled joint with right of survivorship, particularly if you are married. Any jointly-titled asset will pass by operation of law to the survivor. When preparing an estate plan, it is important to consider which documents will control what happens to each of your assets and make sure each document works within your estate plan.
In the state of Tennessee, if you do not have a Will, state law determines who will inherit those assets in your name alone (your probate estate). According to Tennessee’s intestacy law, if someone is survived by a spouse and descendants, the surviving spouse will inherit either one-third of the deceased spouse’s probate estate or a child’s share of the probate estate, whichever is greater. The children will inherit the balance, per stirpes (by the family branches). If the deceased is survived by a spouse and no descendants, then the surviving spouse will inherit the entire probate estate. If the deceased is survived by descendants but no spouse, then the descendants will inherit the entire probate estate per stirpes. If the deceased person is not survived by a spouse or descendants but is survived by one or both parents, then one or both parents will inherit the entire probate estate. If the deceased is not survived by anyone mentioned above but is survived by brothers and/or sisters or descendants of brothers or sisters, then the brothers and sisters (and/or nieces and nephews) would inherit the probate estate per stirpes. If the deceased is not survived by spouse, descendants, parents, brothers, sisters, or descendants of brothers or sisters, then the probate estate is divided in half with one-half going to the paternal family and one-half going to the maternal family. If there are no surviving family members, then SURPRISE, the state of Tennessee inherits.
Drafting a Will really isn’t hard, it is just a matter of figuring out what you want to happen after your death. Your Will communicates your desires for the disposition of your assets after your death. It must be properly signed, witnessed, and notarized. I certainly don’t encourage it, but a handwritten Will (not typed) also qualifies as a legitimate Will in the state of Tennessee. A handwritten Will is referred to as a holographic Will. The estate settlement process is usually much cleaner and less expensive if you have a properly executed Will than if you die without a Will (intestate).
Please take the time while you are healthy and of sound mind to have your Will prepared. And, don’t just have it prepared, be sure to have it signed and properly witnessed. A type-written Will that is just signed and isn’t properly witnessed is not a valid Will in the state of Tennessee.
So now, it is time to get around to it. Cleaning out the drawers AND having your Will prepared.