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WHAT THE TRUST?!?
ESTATE PLANNING, AND PROBATE
A Simple Summary of Trusts, Estate Planning Documents,
and Probate in Tenne...
PRESENTERS
Fowler & Fowler, PLLC
130 East Market Street
Johnson City, TN 37604
(423) 929-3000, ext. 3
amf@fowlerlawfirm.co...
TRUST OR WILL
 Applies during life
 Affects only property
transferred to the Trust
 Cannot appoint guardian
for childre...
HOW IT WORKS
What John & Betty Own
Assets
House (H&W) Liquid Accounts (H&W)
Car (H) Personalty (H&W)
Car (W) Condo (Trust)...
JOHN DIES
What Happens to The Assets When John
Dies
BETTY
1. Sole owner of house
2. Sole owner of Household Furnishings
3....
FIRST CHOICE IS WHETHER TO HAVE
A WILL
Do you want
to control
where your
assets go
after you die?
FIRST CHOICE IS WHETHER TO HAVE
A WILL
No Will (Intestate)
 Split between heirs
 Spouse, children (Spouse gets at least ...
FIRST CHOICE IS WHETHER TO HAVE
A WILL
Statistics
50% of Americans with children do not have a
Will
41% of Baby Boomers do...
LAST WILL & TESTAMENT
A Last Will & Testament is a
written legal statement by a
person, (Testator) naming a
person to disb...
LAST WILL & TESTAMENT
 Will (Testate)
 Will tells how to divide your property
 Can disinherit children
 Cannot disinhe...
GENERIC WILL KITS & FORMS
 Is inexpensive
 Complete at your pace
and at your time
 Simplistic
 Do not have to answer
p...
WILL ISSUES
 Blended families
 Impact when left to spouse
 Holographic
 Whole Will must be in testator’s handwriting (...
WILL ISSUES
 Execution
 Everyone (witnesses & Testator) watches everyone sign
 Problem can occur with Will Kit executio...
DEATH
There is
generally no
time limit to
probate a Will.
It is important
to allow time
for family to
grieve.
SMALL ESTATE PROBATE PROCESS
 Small Estates
 Assets less than $50,000 & does not include real
property, jointly owned pr...
REGULAR PROBATE PROCESS
 Court filings
 Documents to open the Estate
 Notice to creditors & TennCare
 Documents to clo...
REGULAR PROBATE PROCESS
 Inheritance taxes
 2015 is $5,000,000 for Tennessee & $5,430,000 for
Federal
 2016 and after n...
MISCELLANEOUS
 Muniment of Title/Affidavit of Heirship
 Creditors
 TennCare
 Bank account under $10,000
 Safety Depos...
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What the Trust?!? Estate Planning and Probate

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A simple summary of Trusts, Estate Planning Documents and Probate in Tennessee.

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What the Trust?!? Estate Planning and Probate

  1. 1. WHAT THE TRUST?!? ESTATE PLANNING, AND PROBATE A Simple Summary of Trusts, Estate Planning Documents, and Probate in Tennessee By Arthur M. Fowler, III & Christy McInturff Huret
  2. 2. PRESENTERS Fowler & Fowler, PLLC 130 East Market Street Johnson City, TN 37604 (423) 929-3000, ext. 3 amf@fowlerlawfirm.com McInturff & McInturff PLLC 801 Sunset Drive, E-2 Johnson City, TN 37604-3033 (423) 282-6000 christy@mcinturfflaw.com Arthur M. Fowler, III Christy McInturff Huret
  3. 3. TRUST OR WILL  Applies during life  Affects only property transferred to the Trust  Cannot appoint guardian for children  May not have to probate  More expensive  Only applies after death  Affects only property in your name  Can appoint guardian for children  May have to probate  Less expensive but may have probate cost Trust Will
  4. 4. HOW IT WORKS What John & Betty Own Assets House (H&W) Liquid Accounts (H&W) Car (H) Personalty (H&W) Car (W) Condo (Trust) Life Insurance Retirement Account
  5. 5. JOHN DIES What Happens to The Assets When John Dies BETTY 1. Sole owner of house 2. Sole owner of Household Furnishings 3. Still owns her car 4. Sole owner of Bank & Savings Accounts 5. Life insurance TRUST 1. Condo PROBATE 1. Retirement account because no beneficiary 2. John’s car* *Can transfer the car without going through Probate.
  6. 6. FIRST CHOICE IS WHETHER TO HAVE A WILL Do you want to control where your assets go after you die?
  7. 7. FIRST CHOICE IS WHETHER TO HAVE A WILL No Will (Intestate)  Split between heirs  Spouse, children (Spouse gets at least 1/3 of estate)  No spouse & no children, then to immediate family  DOES NOT go to State of Tennessee  Law sets preferences for person to handle probate process (Personal Representative)  Personal Representative will have to post bond, file inventory, and file accountings unless all heirs waive
  8. 8. FIRST CHOICE IS WHETHER TO HAVE A WILL Statistics 50% of Americans with children do not have a Will 41% of Baby Boomers do not have a Will Scherzer, Lisa, The Exchange, Yahoo Finance, May 6, 2012
  9. 9. LAST WILL & TESTAMENT A Last Will & Testament is a written legal statement by a person, (Testator) naming a person to disburse the Testator’s assets (Personal Representative) after the testator’s death per the instruction in the Will. Considerations  Personal representative & backup  Who will receive assets  Anyone you do not want to receive assets  Anyone to receive assets is a minor or have any issues  Who will take care of children & backup  Trustee & backup
  10. 10. LAST WILL & TESTAMENT  Will (Testate)  Will tells how to divide your property  Can disinherit children  Cannot disinherit spouse (Elective Share)  Can give gifts to charities and non-family members  Designates person to handle the Probate Process  Designates who raises your minor children  Can put assets in trust after death  Can establish a special needs trust for disabled children  Generally must have original Will to probate
  11. 11. GENERIC WILL KITS & FORMS  Is inexpensive  Complete at your pace and at your time  Simplistic  Do not have to answer personal questions  Lack of conversation with an attorney to spot issues  May not completely understand and miss something  May be too simplistic for your situation  Laws change  Might not comply with Tennessee law PROS CONS
  12. 12. WILL ISSUES  Blended families  Impact when left to spouse  Holographic  Whole Will must be in testator’s handwriting (every word)  Cannot be typed unless meets all requirements under Tennessee law  Interlineation (handwritten changes) can create problems  Destroying  If no Will, then Intestate  Write “Cancel” or “Void” in big letters across face of Will & tear into two pieces  Keep cancelled Will until you do a new Will
  13. 13. WILL ISSUES  Execution  Everyone (witnesses & Testator) watches everyone sign  Problem can occur with Will Kit execution  Specific language  Leave $50,000 to my grandchildren  Daughter gets house so long as she lives in it  Pour over trusts  Minors  Beneficiaries with disabilities
  14. 14. DEATH There is generally no time limit to probate a Will. It is important to allow time for family to grieve.
  15. 15. SMALL ESTATE PROBATE PROCESS  Small Estates  Assets less than $50,000 & does not include real property, jointly owned property, or beneficiary designated property  Inexpensive  Can use when you have a Will  Simple process  Small Estate Affidavit  Order Opening Estate  You collect assets, pay bills, & disburse to heirs  Automatically closes after one year  Be careful of creditors
  16. 16. REGULAR PROBATE PROCESS  Court filings  Documents to open the Estate  Notice to creditors & TennCare  Documents to close the Estate  Time  If required to give notice to creditors, have to wait 4 months from first publication of notice to creditors before Estate can be closed  Simple Estate can generally close within 6 months of opening the Estate.  If probate, you can sell real estate 61 days after death, but if you don't probate, may have to wait 1 year
  17. 17. REGULAR PROBATE PROCESS  Inheritance taxes  2015 is $5,000,000 for Tennessee & $5,430,000 for Federal  2016 and after no inheritance tax for Tennessee but $5,430,000+ for Federal  Portability  Costs  Depends upon complexity of Estate, family dynamics, and claims  Simple Estate (open/close only) approximately $2,500, plus court costs of approximately $400
  18. 18. MISCELLANEOUS  Muniment of Title/Affidavit of Heirship  Creditors  TennCare  Bank account under $10,000  Safety Deposit Boxes  Powers of Attorney & Living Wills

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