When someone dies leaving behind any sizeable assets or real estate in their name alone, their estate will generally have to be "probated" in order to transfer the decedent's assets into the names of the heirs or beneficiaries named in the will, or in the absence of a will, under Tennessee law.
Probate is a court-supervised legal process that is often required after someone dies. Probate gives someone such as a spouse or another close family member the legal authority to gather the decedent's assets, to pay debts and taxes and ultimately distribute the remaining assets to those entitled to inherit them. Probate has a well-deserved reputation for being a long, drawn-out process which in Tennessee can average six months to a year and even longer in the case of a will contest or probate litigation.
With probate tying up assets for up to a year, it's no wonder why some people take strategic steps to reduce if not eliminate their probate assets in order to save their loved ones the headache of probate.
Are all assets subject to probate?
No, not all assets pass through probate. Only assets that were owned in the decedent's name alone must go through probate. All other assets transfer automatically to their new owners without the need for probate. Those assets which must pass through probate are called the "probate estate." Below are some examples of types of assets that do NOT pass through probate:
- Property owned in joint tenancy such as a home, bank accounts or other assets held in joint tenancy with another person. When one person dies, the survivor automatically owns the property.
- Owning real estate with one's spouse in tenancy by the entirety, which automatically passes to the surviving spouse.
- Payable-on-death bank accounts which pass to the POD beneficiary upon death.
- Transfer-on-death (TOD) registration for securities which pass directly to the named beneficiary without probate.
- Assets held in a revocable living trust.
- Life insurance proceeds and annuities that specify a beneficiary.
- Retirement account funds don't go through probate when the account holder designates a beneficiary.
In Tennessee smaller estates can go through a simplified probate procedure if the estate is worth less than $25,000 not counting real estate.
Since each estate situation is unique, there is no cookie-cutter approach to estate planning. If you are interested in avoiding probate or at the very least, reducing your probate assets, I urge you to contact me at LaRoche Law Office. As a Murfreesboro estate planning attorney who was named Best Attorney by Murfreesboro Post "Bestie" Awards for 2009-2011, I am well-prepared to assist you!
Contact me today to arrange a free consultation regarding your estate planning matter at (615) 200-9359!