affidavit as above and filing, shall present it to the judge, and if it appears regular, detailed and particular, the judge will order it recorded in the book of inventories. (T.C.A. 30-2-302) The clerk is under duty of law when the inventory is filed to examine and compare it with the assessment rolls of the county for ascertaining whether any personal property of the estate is subject to back assessment or reassessment within each of three years back and if he/she so finds he/she shall report it to the county trustee. (T.C.A. 67-1-1009) If the clerk fails or refuses to perform this duty, he/she is liable on his/her official bond for the taxes and penalty which might have been recovered plus a penalty of fifteen percent to be recovered on suit by any district attorney or proper agent of the state. (T.C.A. 67-1-1010; Hamilton National Bank vs. Joe Richardson, Trustee, 304 S.W.2d 504, 42 Tenn. App. 486 (1957) 31 CHAPTER EIGHT INSOLVENT ESTATES Initiation of Administration The administration of an insolvent estate shall begin upon the filing of a Petition to Probate or the application for Letters of Administration by the personal representative or a creditor in the Court having probate jurisdiction. (T.C.A. 30-5-101) If the value of all assets of the deceased, including real estate which could be recovered (TCA 30-2-402), is insufficient to pay the debts, expenses and taxes of the decedent, the estate is insolvent. Notice of Insolvency-Filing Copies After the time for filing claims has expired as provided by T.C.A. 30-2-310, if the estate is unable to pay all of its creditors, the personal representative shall file with the clerk a Notice of Insolvency. A copy of the notice shall be sent by certified mail, return receipt requested, to each creditor who has filed a claim. Such notice may be mailed to creditors by the attorney for the estate, the personal representative or, if requested, by the clerk. (T.C.A. 30-5-102) Notice of Insolvency - Contents - Effect of No Objection The notice of insolvency shall contain an accounting of assets which have come into the hands of the personal representative and a proposed plan of distribution in accordance with T.C.A. 30-2-317. Such notice shall bear, in a conspicuous manner, the following language “Objections to this proposed plan of distribution must be filed with the clerk within thirty days from the date of receipt of this notice.” If no objections are filed within the thirty-day period, the personal representative may execute the proposed plan of distribution, and close the estate, relieving personal representative of any further liability to the estate. (T.C.A. 30-5-103) Hearing on Objections to Plan Notice If an objection to the proposed plan of distribution is filed with the clerk within the thirty day waiting period, the clerk shall schedule a hearing no less than fifteen days or more than thirty days from the last day which objections may be filed. 32 The clerk shall give notice of the hearing date to the attorney for the estate, to the personal representative, and to the creditors filing the objection, and to all claiming creditors (T.C.A. 30-5-104) Clerk’s Report After the hearing, the clerk is to report his/her finding to the court within ten days. (T.C.A. 30-5-015) If no exceptions are filed with the clerk, the clerk’s report shall become the judgment of the court. If an exception is filed, the matter shall be determined by the court. Upon final determination of an objection to a plan of distribution, distribution shall be made and the estate closed. (T.C.A. 30-5-105) 33 CHAPTER NINE DEATH TAXES 1. Notice to Commissioner The probate clerk or clerk and master of the county wherein an estate is administered shall forward by mail upon the issuance of letters of administration (or testamentary) the “Notice to Commissioner” on the form provided by the Tennessee Commissioner of Revenue, which includes the name and date of death of the decedent, the decedent’s address at the time of death, the name and address of the executor, administrator, or trustee qualified, together with the executor’s, administrator’s or trustee’s estimate of the gross value of the estate (T.C.A. sec. 67-8- 406(a)). For this service, the clerk shall charge the fee allowable under the statute T.C.A. Sec. 67-8-406(b). Violation of the duty to forward Notice to Commissioner shall be subject to a penalty of between $100 - $500. (T.C.A. Sec. 67-8-406(c)) The clerk may indicate at the foot of the form the name and address of the attorney handling the estate for the use of the department of revenue. Upon receipt of the notice from the clerk of the probate court, the commissioner will furnish the personal representative of the estate all necessary forms for the proper inventorying and return of the property of the estate. T.C.A. Sec. 67-8-409(a) The personal representative, or person(s) in possession of property of the decedent, shall within nine months from the death of the decedent, prepare and file with the commissioner an exact copy of the will, if any, and a tax return for the estate to be executed under penalties of perjury upon the form prescribed by the commissioner. T.C.A 67-8-409(b) If the gross estate of the decedent is less than the maximum single exemption allowed by T.C.A. Sec. 67-8-316, the personal representative or person in possession of property may file a copy of the decedent’s will, if any, and a return of the estate, executed under penalty of perjury, upon a short form prescribed by the commissioner. T.C.A. Sec. 67-8-409(c) Upon receipt of the return, the commissioner shall proceed with the appraisal and investigation of the estate and notify the personal representative of any additional amounts found to be due. Before a final accounting or settlement may be made by the court, a certificate from the Tennessee Department of Revenue must be received by the Clerk showing payment of taxes or showing that the estate is non-taxable. The receipt is to be sent in duplicate to the executor by the 34 Department of Revenue, one of which the executor shall file with the court. T.C.A. Sec. 67-8- 420(a) If the gross estate of a decedent does not exceed $100,000, and if the decedent did not make any gifts in excess of the maximum single exemption allowable free of tax under T.C.A. Sec. 67-8-104, in his/her lifetime, the court may waive the filing of an inheritance tax return upon a statement to such effect by the personal representative under penalty of perjury. T.C.A. Sec. 67-8-409(g)(1) 2. Inventory of Safe Deposit Box There are two statutes governing safety deposit boxes. One statute is found in the inheritance tax chapter (T.C.A. Sec. 67-8-418) of the Code and the other statute is contained in the statutes governing banking institutions. (T.C.A. Sec. 45-2-905) To the extent the two statutes are in conflict, the latter statute controls. Any person having the right of access to a safety deposit box to which the decedent had access shall, before gaining access to the box, notify the financial institution that the decedent has died. T.C.A. Sec. 67-8-418(a) Upon the notification to the banking institution of the death of the sole or last surviving safe deposit box lessee, the institution shall notify the Department of Revenue within 30 days of their knowledge of said death. T.C.A. Sec. 45-2-905(d) No safe deposit box may be opened after the death of any person who, at the time of such person’s death, had the right or privilege of access thereto, either as principal, deputy, agent, cotenant or otherwise, without notice to the Commissioner. T.C.A. Sec. 67-8-418(b) Access to a safe deposit box shall be in accordance with the agreement between a lessor and lessee or lessees. The death of a person authorized access to a safe deposit box by the agreement shall not terminate the access of others so authorized in all cases where there is a surviving lessee, whether the surviving lessee is an individual, trust, corporation or other entity, unless further access is restricted by the agreement or by court order. T.C.A. Sec. 45-2-905(b) T.C.A. Sec. 45-2-905(c)(2) does permit a person named in a court order to search for a last will & testament, writings relating to burial plots or burial instructions, or insurance policy information, or if no person has been named by a court order, the lessee’s spouse, parent, adult sibling or adult descendent, or a person named as executor in a copy of the lessee’s purported will provided to the institution, and such person will be permitted to open the safe deposit box to search for said items with an officer or employee of the institution. A record of items removed from the box shall be made by the institution and the other person. T.C.A. Sec. 45-2-905(c)(2) 35 The duly qualified executor or administrator of the lessee may have access to and remove contents from the safe deposit box, without inventory unless an inventory is required by the institution or by court order. (T.C.A. Sec. 45-2-905(c)(1) 3. Federal Estate Tax The probate clerk is not under a duty to advise the personal representative of the possibility of his liability for federal estate taxes. Nor is the clerk under a duty to check the accounting before final settlement to see whether federal estate taxes are in any way considered. 4. Estimating the Tax for Bond Purposes As stated in Chapter Four, Letters and Bond, the probate court sets a sufficient amount for the personal representative’s bond to cover any inheritance tax due or owing the state. T.C.A. Sec. 67-8-409 36 CHAPTER TEN CLAIMS Notice to Creditors It is the duty of the Clerk of the court in which an estate is being administered, within thirty (30) days after the issuance of letters testamentary or of administration, to give, in the name of the personal representative of the estate, public notice of the personal representative’s qualification as such by two (2) consecutive weekly notices published in some newspaper of the county in which letters testamentary or of administration are granted, or, if no newspaper is published in that county, by written notices posted in three (3) public places in the county, one (1) of which shall be posted at the usual place for posting notices at the courthouse. (T.C.A. Sec.30-2-306(a)) The requirement of notice set forth above shall not apply if the letters testamentary or of administration are issued more than one (1) year from the decedent’s date of death. (T.C.A. Sec. 30-2-306(e)) A sample of the Notice to Creditors can be found in the appendix, which, pursuant to (T.C.A. Sec. 30-2-306(b)), includes the following statement regarding time limitations for filing claims: All persons, resident and nonresident, having claims, matured or unmatured, against the estate are required to file the same with the clerk of the above named court within the earlier of four (4) months from the date of the first publication (or posting, as the case may be) of this notice or twelve (12) months from the decedent’s date of death, otherwise their claims will be forever barred. Duty of Personal Representative to notify Creditors It is also the duty of the personal representative to notify any creditors of whom the personal representative has actual knowledge, or who are reasonably ascertainable, by personally delivering or mailing a copy of the published or posted notice. Affidavit of Publication or Posting Either an affidavit of the publisher of the newspaper in which the notice ran, or an affidavit of the personal representative in the case of public notice, shall be filed with the court evidencing the dates the notice ran in the newspaper, or the date on which the notice was first posted.( T.C.A. Sec. 30-2-306(c)) 37 Time Limitations on Filing of Claims All claims and demands against the estate arising from a debt of the decedent shall be barred unless filed within the period prescribed in the notice published or posted as described above in accordance with T.C.A. 30-2-306(b). Claims must be filed with the clerk within the earlier of four (4) months from the date of the first publication (or of the posting, as the case may be) of said notice or twelve (12) months from the decedent’s date of death. This notice however, is not sufficient when a creditor is known or is reasonably ascertainable, and the personal representative is required to give actual notice in person or by mail to any creditor whose address is known or reasonably ascertainable. However, pursuant to T.C.A. 302-2-307(a)(1)(A) & (B): (1) If a creditor receives actual notice less than sixty (60) days before the expiration of the period prescribed in T.C.A. 30-2-306(b) or after the expiration of the period prescribed in T.C.A. 30-2-306(b) and more than sixty days before the date which is twelve months from the decedent’s date of death, such creditor’s claim shall be barred unless filed within sixty days from the date of receipt of actual notice; or (2) If a creditor receives actual notice less than sixty days before the date which is twelve months from the decedent’s date of death or receives no notice, such creditor's claim shall be barred unless filed within twelve months from the decedent’s date of death. Requirements of filed claims The clerk shall file all claims which are filed not later than twelve (12) months from the decedent’s date of death. The clerk shall return any claim submitted before the appointment of a personal representative or received more than twelve (12) months from the decedent’s date of death. The filing of a claim by the clerk shall not create an inference as to whether the claim was timely filed. T.C.A. 30-2-307(d) All claims filed with the clerk must be submitted in triplicate. The second and third copies do not need to be verified. T.C.A. 30-2-307(c) Each claim must include: T.C.A. 30-2-307(b) a. An affidavit of the creditor, verified before an officer authorized to administer oaths, which states that the claim is a correct, just and valid obligation of the estate of the decedent, that neither the claimant nor any other person on the claimant’s behalf has received payment of the claim, in whole or in part, except such as is credited thereon, and that no security for the claim has been received, except as thereon stated; b. If claim is evidenced by a written instrument, a photocopy of the instrument shall be filed; 38 c. If claim is due by a judgment of decree, a copy of the judgment or decree, certified by the clerk of the court where rendered shall be filed; d. If claim is due by an open account, an itemized statement of the account shall be filed; The fees authorized by T.C.A. 8-21-402(c)(1)(A) shall be paid to the clerk by the claimant at the time the claim is filed. T.C.A. 30-2-312 Entry of claim by clerk Each claim filed with the clerk shall be entered in a well-bound book, (or entered in the computer) in which the following information shall be set forth: T.C.A. 30-2-312 a. Title of the estate; b. Name and address of the creditor (as reflected by the claim filed); c. Nature and amount of the claim; and d. Date of filing. Triplicate copies of the first pleading filed in original actions against a personal representative shall be filed with the clerk of the court where the administration originated, to be noted by the clerk in the record of claims as are other claims filed. T.C.A. Sec. 30-2-308 All actions pending against any person at the time of his death, which by law may survive against the personal representative, shall be considered demands legally filed against such estate at the time of the filing with the clerk of the court in which the estate is being administered of a copy in duplicate of the order or revivor, one of which copies shall be certified or attested, a notation of which shall be entered by the clerk in the record of claims, as in the case of other claims filed. Pending actions not so revived against the personal representative within the period prescribed in T.C.A. 30-2-307(a) shall abate. (T.C.A. 30-2-320) Clerk’s Notice to Personal Representative Within five (5) days of clerk entering claim, the clerk shall notify the personal representative and the attorney of record by mailing each a true and correct copy of the claim. T.C.A. Sec. 30-2-313(a) 39 Exceptions to claim Until thirty days after the expiration of four months from the date of the notice to creditors given as provided in T.C.A. 30-2-306(b), the personal representative, or any party interested in the estate either as creditor, distributee, heir or otherwise, may except to such claim by filing written exceptions in triplicate with the clerk of the court in which the estate is being administered. T.C.A. Sec. 30-2-314(a) However, if the filing of the claim as permitted by T.C.A. 30-2-307(a), occurs after the date which is four months from the date of the notice to creditors, the personal representative, or interested party may except to any such claim by filing written exceptions in triplicate with the clerk of the court in which the estate is being administered; provided that such exception is filed no later than thirty days from the date the personal representative receives notice from the clerk of the filing of the claim. Each exception shall include a reasonably detailed explanation of the ground or grounds upon which the person making such exceptions intends to rely. T.C.A. 30-2-314(a) Within five days after the filing of exceptions to a claim the clerk shall notify the claimant of the exception by mailing the claimant a copy of the exception. T.C.A. 30-2- 314(a) Trial of Disputed Claims- Jury Demanded Should the claimant or party excepting desire a trial by jury, it shall be demanded by that party in the first claim or exception filed. However, a claimant who has not demanded a jury in the claimant’s claim may do so within five days after receipt of notice of the filing of exceptions to the claim by filing a written demand for a jury with the probate court clerk. T.C.A. 30-2-313(c) Should no exception be taken to a claim in which a jury trial has been demanded, the claim shall not be certified to the circuit court. T.C.A. Sec. 30-2-314(b)(2) Both the circuit and the probate court, if it is a chancery or other court of record, have jurisdiction to conduct a trial by jury on claims and exceptions and shall be conducted all in the same manner and to the same extent as prescribed in T.C.A. 30-2-314. T.C.A. 30- 2-314(e) If the probate court is not a court of record, the clerk shall certify the claim and the exception to the circuit court for trial by jury. T.C.A. 30-2-314(b)(1) Within five days after an issue triable by jury has been made, the probate clerk is required 40 to certify to the circuit court all papers on file relating to that claim. It is the duty of the clerk to give written notice to the claimant, the excepting party and the personal representative and to file with the circuit court a statement that such notice has been given. T.C.A. 30-2-314(c) On motion of the personal representative or the excepting party, the claimant may be required by the court to make a cost bond, or in lieu thereof, file an affidavit of indigency. T.C.A. 30-2-314(d)(2) Trial of Disputed Claims- No Jury Demand Unless a trial by jury is demanded, the claim is always disposed of in the probate court. Within ten days after the filing of the exception to the claim, the clerk shall set a date for the hearing of the exception to the claim, and mail notice of hearing to the personal representative, the claimant, and the party filing the exception. The hearing date shall not be less than fifteen days after the date of mailing the notice of hearing, nor more than eight months after the date of the notice to creditors. T.C.A. 30-2-315(a)(1) The probate judge or clerk & master shall hear all the issues arising upon such exceptions when no jury is demanded. No other pleadings are required, and the testimony may be taken orally or by deposition. The court shall assess the cost accruing in consequence of the exceptions in accordance with its discretion, and all charges against the personal representative are proper charges against the estate. T.C.A. 30-2-315(a)(2)-(4) A judgment upon the findings of the court shall be entered in the court and from the same an appeal may be perfected within thirty days from the date of entry of the judgment, to the Court of Appeals or the Supreme Court, as the case may be. The procedure on appeal shall be governed by the Tennessee Rules of Appellate Procedure. A copy of the order, determining the claim to be valid or invalid, should be sent to the claimant as well as the personal representative. Notwithstanding the provisions of T.C.A. 30-2-306 – 30-2-314, whenever there shall be instituted in any other court of competent jurisdiction an independent suit against a personal representative involving liability of the estate, a claim founded on the same cause of action shall have been or shall be filed against the estate in the manner provided in T.C.A. 30-2-307 and 30-2-308, which claim has not been adjudicated by the court wherein the administration is pending, the court wherein the administration is pending shall hold in abeyance any action on such claim until the final determination of the independent suit, whereupon, the filing of a certified copy of such final judgment or decree with the clerk of the court wherein the administration is pending, such court is authorized to enter judgment accordingly. It is not intended hereby to deprive the 41 judgment creditor of any other remedy provided by law for the enforcement of the final judgment or decree rendered in such independent suit. (T.C.A. 30-2-315) A claim shall not become a final judgment against the estate until the expiration of the exception period prescribed in T.C.A. 30-2-314(a). Judgment on claim when no exception filed After the lapse of ninety days from and after the expiration of the time for entering exceptions to claims filed against the estate, the court may, upon the written application of any creditor, having a matured claim on which no independent suit is pending, to whose duly filed claim no exception has been filed, enter judgment for the creditor against the estate, provided that not less than five days’ prior written notice of intention to file an application shall be given to the personal representative, stating the time at which the application is to be presented to the court. T.C.A.30-2-316 Priority of claims The year’s support is an expense of administration. (Hyder v. Hyder, 66 S.W.2d 235, 16 Tenn. App. 64 (1932) It is made irrespective of the condition of the estate as to its solvency or insolvency. (Graham v. Stull, 22 S.W. 738, 92 Tenn. 673, (1893) The right of a surviving spouse to an elective share is superior to the rights of general creditors. Homestead is not exempt from public taxes on it, vendor’s liens for the property, or mechanics or materialman’s liens for the improvements on it. (T.C.A. 26-2-306) For other exemptions and allowances see Chapter Five, Elective Share and Allowances. Note that under the state inheritance tax some property will be subject to taxes which will not, however, be subject to claims or demands and may not be part of the probate proceedings in the probate court where the property is never in the hands of the personal representative. The estate may have property taxes (T.C.A. 67-5-502) and state income taxes (T.C.A. 67- 2-110) which the personal representative shall pay as directed by the will or trust or otherwise from the assets of the estate. All claims or demands against the estate of any deceased person shall be divided into the 42 following classifications, which shall have priority in the order shown: T.C.A. 30-2- 317(a) a. Costs of administration, including but not limited to, premiums on the fiduciary bonds and reasonable compensation to the personal representative and the personal representative’s counsel; b. Reasonable funeral expenses; c. Taxes and assessments imposed by the federal or any state government or subdivision of the federal or any state government, including claims by the bureau of TennCare pursuant to T.C.A. 71-5-116; and d. All other demands that may be filed as aforementioned within four (4) months after the date of notice to creditors. The personal representative shall pay all demands against the estate in the order in which they are classified, and no claim shall be paid until the prior classes are satisfied. If there are not sufficient funds to pay all the claims in a class, the claims in that class shall be paid pro rata. T.C.A. 30-2-317(b) Debts due upon bills single, bonds, bills of exchange and promissory notes, whether with or without seal, and upon settled and liquidated accounts by the debtor, are of equal dignity, unless otherwise provided, and are to be paid accordingly. T.C.A. 30-2-317(c) The personal representative shall hold aside sufficient funds or other assets to pay each contested or unmatured claim (or the proper ratable portion thereof, as the case may be) with interest (if the claim be one bearing interest), until it is determined whether or not such claim is to be paid, or until such unmatured claim has reached maturity, also sufficient assets to meet the expenses of pending litigation and cost of court and any unpaid taxes. T.C.A. 30-2-317(d) At any time prior to the expiration of the period fixed for the payment of claims, the personal representative may pay the preferred claims for which the estate may be liable, and upon order of the court may pay any debt of the decedent for which security may have been given which is in danger of being sold by way of foreclosure to the detriment of the estate. (T.C.A. 30-2-318(a)) If the executor or administrator knows or is willing to undertake that an estate is solvent, he/she may pay debts, but if he/she pays any debts other than those specified in T.C.A. 30-2-318(a) above prior to the expiration of the time fixed for the payment of claims and the estate proves insolvent, he/she and his/her sureties shall be liable to each and every creditor for his ratable share of the insolvent estate. (T.C.A. 30-2-318(b)) The primary responsibility for the payment of federal estate and Tennessee inheritance taxes is on the personal representative who must pay these taxes out of assets in his/her 43 hands prior to the payment of the debts of the estate. Except in a case where the testator directs otherwise in the will, federal estate taxes are to be prorated equitably among beneficiaries and persons interested in the estate. (T.C.A. 30-2-614(b)) Personal Representative Fees Case law provides that executors and administrators shall be allowed by the court a reasonable compensation for their services to be approved prior to or at the time of the final accounting. However, if the will states a certain amount as compensation for the executor, or no compensation, the executor is bound to the terms of the will if he/she accepts the appointment. (Perlberg vs Jahn, cite as 773 S.W. 2d 925 (Tenn. App. 1989)) When an attorney serves as personal representative of an estate he/she may either employ other counsel or furnish his/her own professional services. When he/she furnishes his/her own services and saves the estate counsel fees by diligent and official legal services he/she should be allowed a greater compensation than ordinarily granted to a personal representative employing other counsel, but he/she can be paid only in his/her capacity as personal representative and not in both capacities. Clerk’s Fees and Court Costs The clerks of the various courts administering estates, guardianships, conservatorships, and other probate matters are entitled to demand and shall receive for their services fees as set out in T.C.A. 8-21-401(b). Time for Payment of Claims All uncontested claims and all contested claims that have been finally adjudged and allowed shall be paid by the personal representative as soon as practicable, not in any event to exceed ninety (90) days after the expiration of five (5) months after the date of the notice to creditors, if the estate is solvent and the claims are paid according to classification as set forth above. T.C.A. 30-2-319 44 CHAPTER ELEVEN DISTRIBUTION Time for Payment of Claims All uncontested claims and all contested claims which have been finally adjudged and allowed shall be paid by the personal representative as soon as practicable, (but not in any event to exceed ninety days after the expiration of five months after the date of notice to creditors) if, after having segregated sufficient assets to meet the contingent liabilities referred to in T.C.A. 30-2-317, adequate assets are in his hands for this purpose, payment being made according to the classification of claims.(T.C.A 30-2-319) Distribution of Balance – Final Settlement Upon the payment of all uncontested claims and upon provision being made for expenses of administration, obligations on account of taxes and assessments which have not been settled, claims not due and undetermined contested claims, together with costs and expenses of litigation, the personal representative shall pay any balance to the distributees or legatees entitled thereto, unless granted additional time by the court, or by the terms of the instrument under which the personal representative is acting, and thereafter. When all legal liabilities have been paid, the balance remaining has been delivered to those entitled thereto or paid to the state to be handled in accordance with the provisions of T.C.A. 66- 29-1, relating to unclaimed property or administered as in T.C.A. 30-2-402; provided that in the event of insolvency, the personal representative shall make and file with the court a final settlement of the estate. Distributees Who Cannot Be Located, Infants, Persons Under Other Disabilities- Procedure for Payment of Shares Whenever the personal representative of the estate of any deceased person in this state is ready to make his final report and settlement, and is prevented or precluded from making final settlement, because there is no personal representative of the estate of a deceased distributee to receive the share due such distributee or one or more payees or distributees cannot be located or for any reason refuse to receive the share due such distributee, such personal representative shall pay or deliver the share due any such distributee to the state treasurer, to be handled in accordance with the provisions of T.C.A. 66-29-1, relating to unclaimed property, and show such in his report. This share can be recovered later. In cases involving payees or distributees who are infants or lunatics and without guardian 45 authorized to receive the property, the personal representative, before making final settlement, shall file a petition in the court in which the estate is being administered setting out this fact and pray for the appointment of a guardian, unless petition is made pursuant to T.C.A. 34-1-107. The court shall appoint a guardian, if practicable, or if impracticable, order the property belonging to such person paid or delivered into the state treasury, unless distribution is ordered pursuant to T.C.A. 34-1-107. Such payment or delivery shall be shown in the report and settlement of the personal representative, exhibiting the receipt of the guardian or state treasurer, as the case may be. If the personal representative of the estate of a deceased person is unable to locate a distribute and such distributee’s share of the estate is either personal property of nominal value or monetary legacy of nominal value, the personal representative may request instructions from the court concerning the amount, if any, which should be spent in locating the distributee and whether the amount spent in locating the distributee should be a general expense of the estate or a charge against the lost distributee’s share and the disposition of the property if the distributee cannot be found, which disposition may include the authority to sell any tangible personal property. (T.C.A. 30-2-702) Shares Placed in State Treasury – Application and Claim for Share Shares so placed in the state treasury shall not become the property of the state, but shall be and remain trust property demandable at any time by the owner or by the guardian of any owner, distributee or by the personal representative of the deceased owner. Any person lawfully entitled to receive any money paid into the state treasury pursuant to T.C.A. 30-2-702, may claim the amount due in accordance with the provisions of T.C.A. 66-29-1, governing the disposition of unclaimed property, and the state treasurer shall pay the amount, as in other cases, out of any money in the treasury; provided, the state shall not be liable for interest on any fund or funds paid into the state treasury under this law. Property delivered to the treasurer pursuant to T.C.A. 30-2-702, may be claimed in accordance with the provisions of T.C.A. 66-29-1, governing the disposition of unclaimed property. (T.C.A. 30-2-703) Refunding Bonds Every legatee and distributee, or other person representing him, who applies for payment of his portion of the decedent’s estate, or any part thereof, prior to the time provided therefore by law, shall, before receiving the same, give bond with two or more sufficient, or one corporate surety, in double the amount so to be paid, payable to the state, conditioned that if any debt or debts truly owing by the deceased shall be afterwards sued for and recovered or be otherwise duly made to appear, the legatee or distributee shall refund and pay his ratable part of such debt or debts out of the share or part so allotted to him. (T.C.A. 30-2-704) 46 Recording, Filing, and Verity of Bond The executor or administrator shall bring said bond into the proper court at the next session after its date, it shall be spread on the minutes, the origin shall be lodged in the _________________________________ STATE OF TENNESSEE COUNTY OF ______________ I, __________________________, being duly sworn, do hereby make oath and state that I am the Affiant in the forgoing Affidavit, and that the facts stated herein are true to the best of my knowledge, information and belief. ___________________________________ Sworn on and subscribed to before me this the ______ day of _________, 20_____. ___________________________________ Notary Public My Commission Expires: _______________ IN RE: The estate of NO P TO: NOTICE Please take notice, pursuant to T.C.A. 30-2-602, that on the____day of ___________, 2012, at 9:00 am, in the Chancery Courtroom of_________County, Tennessee, you are required to appear and settle the above referenced estate. This the______ day of_________, 2012. ___________________________________ CLERK AND MASTER CERTIFICATE OF SERVICE I do hereby certify that a true and exact copy of the foregoing Notice has been forwarded by U.S. Mail postage, or hand delivery to This_________day of _________, 2012. _________________________________ Clerk and Master IN THE CHANCERY/PROBATE COURT OF _________________________ COUNTY, TENNESSEE IN THE MATTER REGARDING: THE ESTATE OF _______________________ PROBATE NO. ________________ NOTICE AND ORDER CLOSING ESTATE This matter is before the Court on the Court’s own motion. It appears to the Court that no action has been taken in the above-captioned Estate since ________________, and it appears that the Estate should be closed. Unless anyone can show good cause why the court should not do so within 30 days from the date of this Order, the Court will close this Estate and terminate the _______________________ appointment without further accounting, notice, report, hearing or order. Neither the _____________________ nor any other person is discharged from any liability to this Estate. So Order on this the ______ day of _______________________, 20____. _________________________ Chancellor CERTIFICATE OF SERVICE I do hereby certify that a true and exact copy of the foregoing Order Closing Estate has been forwarded either by hand delivery or by U.S. Mail postage prepaid to ______________________________________. This ______ day of June, 2012. ____________________________________ Clerk and Master IN THE CHANCERY COURT OF __________________ COUNTY, TENNESSEE: IN RE: ______________________________, DECEASED NO P ORDER CLOSING ESTATE This cause came before the court on a sworn Affidavit as to a Small Estate. It appears that all business associated with this small estate affidavit has been concluded and the affiants desire that this estate be closed. It is therefore ordered that this estate be closed. This____ day of_________ Are Transfer on Death Deeds (aka Beneficiary Deeds) Legal in Tennessee? No. My parent passed away in another state but owns property in Tennessee? How do I get it transferred to me? You can open an ancillary probate in Tennessee or, in some cases, we can record an exemplified copy of the will (after being accepted by the probate court) as a Muniment of Title. If your parent did not have a will, recording an Affidavit of Heirship might work, but that is not the best choice if you plan to sell within six years. Who inherits if I die without a will? This is called dying "intestate", and there are laws that specify who inherits. The persons that inherit are called "heirs at law". For a chart showing how intestate heirs are determined in Tennessee, click here. Is there such a thing as a "land trust" in Tennessee? No, but the same results can be achieved using other estate planning devices. For more information, click here. What is the deadline for filing a creditor's claim against a decedent's estate in Tennessee? Unexpired claims against a decedent's estate must be filed in probate court the earlier of (1) four (4) months from the date of the first publication (or posting, as the case may be) of the Notice to Creditors if the creditor received an actual copy of this notice to creditors at least sixty (60) days before the date that is four (4) months from the date of the first publication (or posting) [or sixty (60) days from the date the creditor received an actual copy of the notice to creditors if the creditor received the copy of the notice less than sixty (60) days prior to the date that is four (4) months from the date of first publication (or posting)], or (2) twelve (12) months from the decedent's date of death. However, these limitations periods do not apply to Tenncare claims for reimbursement and claims for state taxes. If I can go online to get a will form, why do I need to pay an attorney? What are the grounds for contesting a will? Does Tennessee allow me to establish a land trust? What is power of attorney? If I can go online to get a will form, why do I need to pay an attorney? You can create a valid will with an online form, but you cannot get the benefit of sound legal advice. You should not only want to create a will that survives challenges in probate court; you should want to create a will that accomplishes what you intend in the manner that is most beneficial to your heirs. There is greater upfront cost to consulting an attorney, but it’s worth the investment if it means you can transfer your assets more cost-effectively. What are the grounds for contesting a will? A person with standing can contest a will on the following grounds: The decedent was not of sound mind when signing the will A beneficiary unduly influenced the will The decedent did not sign the will The will was not legally witnessed A knowledgeable estate planning attorney can evaluate a will and the circumstances that went into creating it to determine if there are grounds for contesting it. Does Tennessee allow me to establish a land trust? A land trust is a legal entity that allows one person, a trustee, to hold land for use by another party, usually the grantor of the trust and the grantor’s heirs. Tennessee law does not recognize land trusts. An experienced wills and trusts lawyer can advise you on a number of trusts that Tennessee does recognize. What is power of attorney? Power of attorney is the legal authority to make decisions for the health and welfare of another. Power of attorney can be limited to finances or health matters. Seniors who begin to experience the infirmity of age should consider granting power of attorney to their responsible and loving adult children. What does the word “probate” mean? Probate is the act of proving a will. However, over time, it’s come to have a more general meaning of the process of administering the estate of a decedent (the deceased). What are some of the terms used in the probate process? Some of the terms used in estate planning are unfamiliar, so here’s a quick primer: Decedent: The person who has passed away. Testate estate: When a person has passed away with a valid will. Intestate estate: When a person has passed away without a will. Executor: The person appointed by the court in a testate estate to be the agent for the estate. This person is responsible for carrying out the terms of the will. Administrator: The person appointed by the court in an intestate estate to be the agent for the estate. This person is responsible for administering the estate according to the intestate laws for the state. Personal representative: A general term for both executors and administrators. It basically identifies the person responsible for administering the estate either under the terms of the will or the laws of intestacy. Is probate public? Yes. When a decedent’s estate has to go through the probate process, then all court filings associated with that process are public record. With some families, this is a scary prospect if they have controversy or some sort of scandal within the family that they’d rather keep private. However, depending on the terms of the will (if there is one), the requirement to file an inventory of assets could be waived. What kind of fees are involved? If approved by the court, attorney and personal representative fees may be paid from the estate. How long does the probate process take? Estate administration takes several months. There are waiting periods, like allowing time for creditors to file claims. There’s also time necessary to identify all the assets, dealing with creditors and taxes, and other paperwork. Many estates are resolved around six months. Complicated estates can linger in probate for years. However, remember that only an experienced attorney can give you a more detailed estimate about your unique situation. If you have any other questions about the probate process or probate litigation, talk to the probate litigation attorney at Burdette Law. Our skilled legal team can work with you to ensure the process goes as smoothly as possible. Executors and administrators are both known as personal representatives. They have the duty to probate valid wills, and to then manage and distribute the estate assets. The key difference between an executor and administrator is how they are appointed. Executors are chosen by the testator (the person who prepares the will). The executor is identified by name in the will and given powers to administer the estate. It’s good practice to speak with the person you want to be the executor before designating them in the will. Testators should appoint alternate executors in case the appointed executor can’t act or dies first. If the testator does not appoint an executor, then somebody still needs to step forward and request to be approved as the estate administrator. In Tennessee, the state statutes determine who can be appointed the administrator. Generally, the closest relative such as a spouse is given preference by the court. The duties of the executor and administrator The key duties of both types of personal representatives include: If there is a will, submitting the will and death certificate for probate approval. Providing notice of the decedent’s death to any known creditors. Advertising that the decedent died in local newspapers. Giving notice to all the heirs and beneficiaries that they have been appointed executor or administrator. Collecting and keeping the probate assets. Typically, the personal representative will obtain formal documents so he or she can collect these assets. He or she can also open an estate checking account. Filing inventories and accountings. Both executor and administrator provide summaries and details that show what assets belong to whom, what bills are being paid, and other financial matters. Preparing the income tax, fiduciary tax, and estate tax returns. Identifying all known creditors and the amounts that are due to each creditor. Requesting approval to distribute the assets to the heirs and beneficiaries. Often property must be sold. This includes real property, stocks, cars, and other assets. The personal representative either needs to have the authority to sell through the will or through the appointment by the court. Executors and administrators should get an appraisal of the property to verify its value. Who can be an executor? Executors don’t need to be individuals. They can be organizations and corporations. Many times, a bank is appointed the executor. (Tennessee generally does not allow someone who is in prison or has a criminal record to be an executor.) Many times, a person’ spouse is named the executor. Adult children are often named as successor executors. If multiple executors are appointed, it’s practical to appoint an odd number of executors so there won’t be any ties if there are disputes. Many times, the personal representatives are also the beneficiaries. For example, most seniors trust their spouses or children to handle their estates, while leaving some of their assets for them, too. Potential contests Anyone who is not named as a beneficiary in a will may claim that the will is invalid. The executor will need to defend that type of claim. Often heirs and beneficiaries complain that the they aren’t getting the right value for their share or that they’re not getting their funds fast enough. Executors and administrators need to manage these complaints. Wills can be contested for many reasons. Usually, contests are brought by relatives who were left out of a will. Anyone who thinks they should have gotten more than a will directs is likely to search for reasons to contest a will. Wills are usually contested on the following grounds: There was a later valid will. The will that is being probated isn’t valid. If there is no will, then Tennessee law directs how the assets are divided. The person who died did not have testamentary capacity to make his/her will. The will was changed from expected distributions by someone who unduly influenced the testator. The testator is the person who died. If there is no will, there still can be contests based on whether a spouse was divorced or there was another spouse – or for other reasons. Estate planning can help reduce the risk of a will contest but planning can’t eliminate the risk of a contest. Even those who can afford the best estate planning lawyers aren’t immune. Many estates of highly successful people have been contested. Wills and estates of those who have a lot of money are more likely to be disputed than that of the Average Joe because of the money is at stake. Some notable estates fights of the rich and famous You don’t need to be famous to contest a will, but celebrities do seem to make the news a lot for exactly this reason. Think Advisor, a financial publication, profiled a number of high-asset celebrity contests. We chose a few to highlight common reasons we see for contests, proving the rich and famous have the same troubles as everyone else: Gary Coleman, the former star of Diffr’nt Strokes, died in 2010 at 42 years of age. His assets were mainly a home and some royalties. Coleman wrote three wills including a handwritten codicil. A codicil is an amendment to the will. The codicil left everything to his wife. A dispute arose because Coleman had divorced his wife. She claimed they had a common-law marriage, but the judge ruled there was no valid marriage. Ultimately, the assets were awarded to a former business partner of Coleman’s. The soul singer James Brown died in 2006. His widow and children started a contest when the singer directed that his assets, nearly $50 million, were left to charities. Questions arose about the legitimacy of the marriage and whether he was the father of one of the children claiming an inheritance. A settlement was reached but was not approved by the court. Most people don’t know the name J. Howard Marshall II. Many do know his wife Anna Nicole Smith, who was a Playboy playmate and 62 years younger than Mr. Marshall. When he died, Marshall’s estate was worth $1.6 billion. His will left the assets to his stepson – leaving out Ms. Smith and his son, Howard Marshall. Both Ms. Smith and the son contested the will. They both died before final decisions were made. As of 2013, a final ruling hadn’t been made though the son appears to be the winner. Singer Aretha Franklin recently died without a will. Her children may contest the distribution in some fashion if they think they are not getting the share they deserve. How Does Intestate Succession Work in Tennessee? How Does Intestate Succession Work in Tennessee?Wills are legal documents that direct how the Estate property of someone who died should be handled. Many assets, such as jointly held property, life insurance proceeds, and property that belongs to a trust, may not pass through the decedent’s Estate at all. Wills pertain to both the property that does pass through the Estate and that which technically passes outside the estate like real estate which is willed to certain heirs. They may dictate which family members, friends, and others should get specific items of property. Intestate succession is the term used to describe the process of how the assets of an estate will pass when there is no will to be found. Intestate is a fancy way of saying the testator (person who died) didn’t have a will). The best course of action for anyone who wants to provide for family and loved ones after they die is to prepare a will and other legal estate planning documents with an experienced lawyer. Which family members get which assets if there is no will The intestate laws for Tennessee determine who gets Estate assets as follows: Spouse, no children. This is the easiest case. If you’re married and you have no children, then your spouse inherits all your assets. Children, no spouse. If you have children (any age) but you have no spouse, then the children get your assets in equal shares. Property for minors is normally handled by a guardian or trustee. Spouse and descendants. If you were married when you die, and you had descendants (children, grandchildren, great-grandchildren), then your spouse and the descendants divide the property equally with one exception. The exception is that your spouse may be entitled to 1/3 of the Estate. Please keep in mind that if the house was titled in your name and your spouse’s, the house does not get divided because it automatically goes to your spouse. For example, Joseph and Susan are married. They have four children. Joseph has $150,000 in Estate assets. Susan will inherit up to 1/3, or $50,000 depending on the length of the marriage. The four children will each get ¼ of what’s left – or $25,000 apiece. Who qualifies for intestate succession in Tennessee The intestate succession laws also resolve many common but non-traditional family law issues. Divorced spouses. They do not inherit, unless their names are on other documents – for example, on a pension fund or if their name is left on your will after a divorce. Adopted children. Legally adopted children may be entitled to a child’s intestate share. The adopted child inherits through the adoptive parents and not the natural parents. If the spouse of a natural parent adopts a child, the child inherits through that natural parent and the adopting spouse. Stepchildren and foster children. Unless they are formally adopted, they do not receive an intestate share. Children born out of wedlock. They inherit through their natural mother. If paternity is established, the children inherit through the paternal father. Children can also inherit through a male if he participates in a marriage ceremony (before or after birth) with the natural mother. Grandchildren receive through their parents. For example, let’s suppose Joseph and Susan are married and have four children Tom, Sally, James, and Martha. James is deceased but has two children, Alice and Fred, who are alive. Joseph dies leaving Estate assets worth $150,000. If Susan gets 1/3 or $50,000. Tom, Sally, and Martha each get ¼ or $25,000. Alice and Fred split James’ share – so, they each get $12,500. Children born after you die. Posthumous children inherit if they were conceived by the decedent, are born with 10 months of your death, and survive for at least 120 hours after they are born: Half-relatives. These relatives get a whole share through their parents. Example: Joseph and Susan are married. Joseph has a child, Samantha, from a prior marriage. Nancy is the child of Joseph and Susan. If Joseph and Susan die in a car accident, Samantha and Nancy each get ½ of Joseph’s Estate. Only Nancy inherits from Susan’s Estate. How Does Intestate Succession Work in Tennessee? By ---- | June 12, 2018 How Does Intestate Succession Work in Tennessee?Wills are legal documents that direct how the Estate property of someone who died should be handled. Many assets, such as jointly held property, life insurance proceeds, and property that belongs to a trust, may not pass through the decedent’s Estate at all. Wills pertain to both the property that does pass through the Estate and that which technically passes outside the estate like real estate which is willed to certain heirs. They may dictate which family members, friends, and others should get specific items of property. Intestate succession is the term used to describe the process of how the assets of an estate will pass when there is no will to be found. Intestate is a fancy way of saying the testator (person who died) didn’t have a will). The best course of action for anyone who wants to provide for family and loved ones after they die is to prepare a will and other legal estate planning documents with an experienced lawyer. Which family members get which assets if there is no will The intestate laws for Tennessee determine who gets Estate assets as follows: Spouse, no children. This is the easiest case. If you’re married and you have no children, then your spouse inherits all your assets. Children, no spouse. If you have children (any age) but you have no spouse, then the children get your assets in equal shares. Property for minors is normally handled by a guardian or trustee. Spouse and descendants. If you were married when you die, and you had descendants (children, grandchildren, great-grandchildren), then your spouse and the descendants divide the property equally with one exception. The exception is that your spouse may be entitled to 1/3 of the Estate. Please keep in mind that if the house was titled in your name and your spouse’s, the house does not get divided because it automatically goes to your spouse. For example, Joseph and Susan are married. They have four children. Joseph has $150,000 in Estate assets. Susan will inherit up to 1/3, or $50,000 depending on the length of the marriage. The four children will each get ¼ of what’s left – or $25,000 apiece. Who qualifies for intestate succession in Tennessee The intestate succession laws also resolve many common but non-traditional family law issues. Divorced spouses. They do not inherit, unless their names are on other documents – for example, on a pension fund or if their name is left on your will after a divorce. Adopted children. Legally adopted children may be entitled to a child’s intestate share. The adopted child inherits through the adoptive parents and not the natural parents. If the spouse of a natural parent adopts a child, the child inherits through that natural parent and the adopting spouse. Stepchildren and foster children. Unless they are formally adopted, they do not receive an intestate share. Children born out of wedlock. They inherit through their natural mother. If paternity is established, the children inherit through the paternal father. Children can also inherit through a male if he participates in a marriage ceremony (before or after birth) with the natural mother. Grandchildren receive through their parents. For example, let’s suppose Joseph and Susan are married and have four children Tom, Sally, James, and Martha. James is deceased but has two children, Alice and Fred, who are alive. Joseph dies leaving Estate assets worth $150,000. If Susan gets 1/3 or $50,000. Tom, Sally, and Martha each get ¼ or $25,000. Alice and Fred split James’ share – so, they each get $12,500. Children born after you die. Posthumous children inherit if they were conceived by the decedent, are born with 10 months of your death, and survive for at least 120 hours after they are born: Half-relatives. These relatives get a whole share through their parents. Example: Joseph and Susan are married. Joseph has a child, Samantha, from a prior marriage. Nancy is the child of Joseph and Susan. If Joseph and Susan die in a car accident, Samantha and Nancy each get ½ of Joseph’s Estate. Only Nancy inherits from Susan’s Estate. When are wills offered for probate in common form? Wills are most often offered to probate in common form. This form of probate is used when it is not anticipated that the will will be contested. This form of probate is more simplified however the probate can be set aside at a later time for reasons such as fraud, proof of incapacity of the testator to make the will, proof of undue influence against the maker of the will or proof the will was revoked. The procedure for offering a will to probate in common form is to file a petition, produce the will, and offer testimony of the witnesses to the will. At Silva Law, we assist clients with probating wills in common form. When are wills offered for probate in solemn form? Wills are offered for probate in solemn form when a will contest is anticipated. This type of probate requires that all interested parties be given notice of the hearing. If all persons are notified and the will is probated, it means that there can can be no further will contests. If you need assistance with probating the estate of your loved one, please contact Silva Law at 615-258-5541. What are the simplified probate procedures for small estates? Tennessee has a simplified probate process for small estates if the value of the property, not counting property held jointly with right of survivorship or real estate, does not exceed a certain amount. An executor files an affidavit with the probate court asking to use the simplified procedure and the court may authorize the executor to distribute the assets without having to go through regular probate. See Tenn. Code Ann. § § 30-4-102 What are the requirements for a validy executed will? For a will to be validly executed, the testator must be at least 18 years old, the will must be signed by the testator, and the will must be signed by two witnesses in the presence of each other and in the presence of the testator. Are holographic or handwritten wills valid in Tennessee? Yes. In order for a holographic or handwritten will to be valid, it must be signed by the testator, all material provisions of the will must be in the handwriting of the testator and the testator's handwriting must be proved by two witnesses. How do I revoke a will in Tennessee? A will can be revoked by: 1) documentation of the revocation of the will that meets the execution formalities of a will; 2) by a subesequent will that revokes the prior will in whole or part or is inconsistent with the prior will; 3) By being burned, torn, cancelled, obliterated or destroyed with the intent to revoke the prior will; or 4) By a marriage of the testator after the will was made or by the birth of a child after the will was made. The national debate about charging federal estate taxes has revealed some misconceptions about Tennessee’s laws. Many Tennesseans are surprised to hear that the state does have an inheritance tax. Here are the frequently asked questions about Tennessee’s inheritance tax. 1. How do inheritances get assessed for tax purposes? Tennessee will require the executor of an estate to review every asset, i.e. real estate, securities, business interests, etc. that person owned on the date of death. Depending on the size of the estate, the person may want to engage the services of a real estate appraiser to assess the market value of the property. 2. Who has to file? Inheritance tax is paid at the estate level before inheritance is distributed, so once someone receives an inheritance they do not need to pay additional taxes. 3. How does a return get filed? The Tennessee Department of Revenue has two forms – one for estates that are less than $1 million and one for estates that are greater than $1 million. If you pass away in Tennessee with an estate less than $1 million, there is no inheritance tax. The executor will determine which form is necessary and go from there. Appraisals and other relevant documents will need to be attached. The deadline for filing is nine months after someone has passed away. 4. What about tax on property? Tennessee looks at different types of property – tangible and intangible. Both factor into determining what your inheritance tax is. Joint property also is included in the assessment. The executor will determine what interest the deceased had in that property. 5. How can I reduce my tax burden? Tennesseans can make systematic gifts during their life to reduce inheritance taxes, but rules dictate how much someone can give away during a calendar year. A husband and wife can move assets to each other without any issue, but gift taxes come into play if one of them gives more than $13,000 to a child or anyone else during a calendar year. If you have a taxable estate, you can establish trusts that would go into effect after your death and reduce or even eliminate the tax completely. What You Need to Know About Tennessee Will Laws / March 2, 2021 Jump to a Topic When a person dies, their assets must be dispersed and ownership transferred to the new heirs. Debts must be paid and the estate closed out. All this must happen while you are still grieving the loss of your loved one. The legal term for the process is called probate. Probate must go through the courts to ensure the decedent’s wishes as outlined in their will are carried out. Anyone involved with an estate should understand the basics about probate in Tennessee. Last Will and Testament guides the probate process Does Tennessee Law Require Probate? Yes, probate is a requirement for estates in Tennessee. This is the method used to distribute the assets to the heirs and ensure the will is followed. In some cases, it is possible to avoid probate, especially if you utilize estate planning. What Happens if You Die Without a Will in Tennessee When you die without a will, it is called dying intestate. Under state law, assets that do not have listed beneficiaries will pass to their closest relative. If the decedent is married and has children, their assets will be divided among the spouse and children equally, with the spouse getting no less than one-third. If the decedent has no spouse or descendants but has parents and siblings, the assets would be distributed equally among the parents and siblings. Adopted children will receive the same share as biological children, though foster and stepchildren will not. Typically, the decedent’s grandchildren will receive a share if their parents (the decedent’s children) have died. How Do You Avoid Probate in Tennessee with Estate Planning The best way to avoid going through probate with an estate is to plan before the owner dies. A revocable living trust with the entire estate will mean probate isn’t needed. The beneficiary who is named to the trust will be the new owner, and the court doesn’t need to get involved. When you plan your estate, even if the estate must go through probate, not all assets will need to be included. Bank accounts, investment accounts, and retirement accounts won’t be part of probate if they have named beneficiaries. The same is true of life insurance policies. If an asset was jointly owned, it would go to the new owner. There would be no reason to include it with the assets for probate. Can an Executor of an Estate in Tennessee be Compensated? The law in Tennessee allows for the executor of an estate to be compensated. They are paid for their time and for any expenses that they have from working on the estate. How Many Witnesses Must Sign a Will to Make it Valid in Tennessee Tennessee requires that a person is of sound mind and age 18 years or older before making a will, as it is considered a binding, legal document. The state accepts oral wills under certain conditions, and holographic wills (written by hand). However, the state requires that at least two witnesses must sign the will to make it valid. The two witnesses must sign the will in the presence of each other and the testator. Witness signature on will How Much Does an Executor in Tennessee Get Paid? Compensation is mentioned in the Tennessee Code Chapter 30, Section 1-407. This section states that the court will approve compensation for the executor when the accounting is made or when the executor is appointed. How Long Does Probate of the Last Will and Testament Take in Tennessee? The timeline for probate varies, based on the size of the estate and how much work needs to be done. Expect it to take between six months and a year. If there are people contesting the will or other delays, the process will take even longer. It’s not uncommon for large estates to be in probate for several years before being settled. Creditors have four months from the time of notice to submit claims, which means the estate must be open at least that long. Do All Estates Have to Go Through Probate in Tennessee? Most estates will go through probate in Tennessee. With the few exceptions mentioned, estates will need probate to distribute the assets. However, there are variations of probate, which you may need to be aware of. Small estates don’t have to go through the long process of probate. Instead, they may use a simpler procedure as long as the estate is worth no more than $50,000 and there is no real estate. Man reviewing will Does a Will Have to Be Probated in Tennessee? A will must be filed with the court in the county where the decedent lived. This record must be on file even if the estate doesn’t need to go through probate. It allows the court to verify the validity of the will if anyone contests it. Settling an Estate in Tennessee Succession Process To settle an estate in Tennessee requires following specific guidelines. It is important to meet the deadlines and complete all the steps in the process. Step 1 File a petition with the court to open probate. Step 2 The court appoints an Executor of Estate of Personal Representative. Step 3 The Executor of the Estate notifies the heirs and publishes notice of probate for creditors. Step 4 The Executor takes inventory of all assets of the estate and appraises their value. Step 5 The Executor pays the debts of the estate, including any money owed to creditors who file a claim against the estate. If assets must be sold to pay the debts, the executor will need to get approval from the court for the sale. Step 6 The final tax returns are filed and any taxes are paid from the estate. Step 7 The assets of the estate are distributed to the heirs and succession is closed. Tennessee settles an estate much the same way as in other states. The basic process is the same even though the details will change. A petition is filed with the court to have probate opened. The court approves the executor or personal representative. The executor notifies the heirs and publishes notice for any creditors. The executor must take inventory of the estate and secure all assets. They may need to hire an appraiser for some assets. Taxes must be filed and paid and other creditors paid. The executor may have to sell some assets if there isn’t enough money to pay the debts. Once all other debts are paid, the executor will distribute the remaining assets to the heirs and transfer ownership as necessary. In large estates, this process can take some time and become quite complicated. Even though Tennessee doesn’t require an attorney for probate, it can be helpful to seek legal counsel from an estate attorney. The exception to this rule is in Davidson County, which is Nashville. All filings must be done by a licensed attorney for probate. How Long Do You Have to File After a Death in Tennessee? Tennessee doesn’t give a deadline for when probate must be filed after someone dies. There is no penalty for holding onto a will, which means they may come forward at any time. However, most estates will file quickly if the heirs are anxious to have the process settled. Probate Court in Tennessee Probate is handled in the Trial Courts of Tennessee. Probate courts have the power of administration of estates and probating wills. They are divided by district with the state having 31 judicial districts. Each district has circuit courts and chancery courts. Within these two courts may be a separate probate court. Otherwise, it is handled in the chancery court. You can find the name of the clerk and the location and contact information of the court on the Tennessee Courts website: When a parent or someone close to you passes away, it can be a trying experience. In addition to dealing with natural feelings of grief, there are a number of practical matters that need attention: funeral arrangements, obtaining death certificates, reading the will, probate, distributing assets, and so forth. This Guide explains key responsibilities and tasks associated with the death of a loved one, with an emphasis on the duties of the estate executor (also known as the personal representative). You are currently viewing the Executor's Guide for TN.  EThe TN Basics Fundamentally, it is the executor's responsibility to manage and wind down the deceased person's estate, resolving any debts, distributing assets to heirs, and filing legal paperwork. A somewhat simplified view of the overall estate settlement process consists of the following overlapping steps: Arrange Funeral — Request burial or cremation, organize memorial, order death certificates, etc. Take Inventory — Find and organize all estate assets and debts Become Executor — Get appointed by the court (if going through probate) Send Notifications — Notify friends and family, social security, banks, credit cards, etc. Manage Estate — Maintain and care for assets; plan asset disposition Resolve Debts — Pay off debts in full, or arrange for debt forgiveness File Taxes — Submit relevant tax returns: decedent income, estate income, inheritance, etc. Make Distributions — Distribute net assets to heirs Wrap It Up — Finalize the estate settlement, including probate final accounting (if applicable) At multiple stages along the way you may have to file legal and tax paperwork, and while EstateExec will supply relevant information, it may be helpful to work together with a lawyer (see Do I Need a Lawyer?). While many estates must go through probate, which is the court-supervised version of estate settlement, the diagram below illustrates the steps that generally apply to every estate, whether or not probate is involved: Infographic about the executor process and requirements Like so many things in life, being an executor can become an all-consuming activity if you let it. While individual circumstances sometimes require significant effort, it is EstateExec's job to try to minimize that effort, to help you through the basic process, and to organize the relevant information to make it easier for you and everyone involved. Duties by Time Period Click links in the table below, or in the table of contents (see top left of page), to learn about various tasks. If you are using EstateExec™ it will customize an interactive checklist for you, incorporate TN-specific requirements, calculate due dates, and more (see Sample Estate: Tasks tab). In Advance Get contacts, obtain copies of important documents, etc. First Week Notify close friends and family, arrange funeral, order death certificates, etc. First Month Notify social security, decide whether to hire a lawyer, etc. First 3 Months Notify insurance companies, open estate account, begin probate, etc. Calendar Year File annual property and income tax returns General Tasks Pay off debts, pay estate taxes, plan asset distributions, etc. Final Tasks Make distributions, finalize probate, close estate account, etc. Some tasks can be performed by anyone, such as notifying next of kin, while others have strict legal requirements. For example, some states require that an estate executor (or personal representative, or administrator) reside in the decedent's state, although many jurisdictions allow you to get around that posting an executor bond or by hiring an inexpensive local agent. If you are using EstateExec, it will indicate the rules that apply to your situation. The Estate An estate consists of a person's assets (e.g., house, bank account) and debts (e.g., mortgage, credit card balance). It can be helpful to think of an estate as the sum of: Assets Subject to Automatic Transfer: Certain assets, such as life insurance policies and IRAs, transfer automatically upon death to named beneficiaries. As an executor, you have no control over such transfers, but you may be still be helpful in the process, and such assets are considered part of the estate for tax purposes. If no beneficiaries have been named, then the assets end up transferring to the estate itself, and must be settled by the executor along with the rest of the estate. Trusts: An executor also has no control over trusts the decedent previously established (unless you also happen to be named a trustee of the trust). In general, living trusts are considered part of the estate for tax purposes, while bypass trusts are not. See also Trusts. Other Items: Everything else is your responsibility, and must usually be settled via probate or a small-estate settlement procedure (see next section). If the will requires you to establish a new trust (i.e., a testamentary trust), the assets intended for the trust must first go through such a settlement procedure. You can track and manage all such aspects of an estate using EstateExec (although you may want to establish a separate EstateExec "estate" for handling the inner workings of a complex trust). Probate Probate is the court-supervised process of administering and settling a decedent's estate. Not all estates need court involvement, and EstateExec can help you figure out the requirements for your estate (see Is Probate Required?). In general, an estate will have to go through probate unless it contains only assets that automatically transfer to named beneficiaries (such as IRAs), or if the estate qualifies to use one of the state-specific small estate procedures. Regardless of whether or not probate is required, settling an estate requires a fair amount of effort, and EstateExec can help guide you throughout the process. In Tennessee, probate is normally handled by the Clerk and Master of the applicable Chancery Court (Tennessee's 95 counties are divided into 31 judicial districts, each with its own Chancery Court). If you are using EstateExec and you enter the decedent's county of legal residence on the Decedent tab, you will see a link to the appropriate court here. Distribution Priorities Priority chart of estate allocation When distributing estate proceeds, you must be sure to satisfy its obligations in a defined priority order (see diagram). Certain transfers (such as to IRA beneficiaries) happen automatically outside the control of the estate, and the estate itself must then ensure it has enough funds to pay all taxes, then to pay estate administration costs, then any family entitlements, then any general debts, and with anything left over, fulfill any bequests, and finally distribute the residuary estate. If the estate runs out of money handling one priority, then subsequent priorities are left with nothing. Note that state law determines which debts have priority over other debts, and some debts (such as funeral expenses) often have priority over family entitlements, but these specifics really only matter if the estate cannot pay all its bills (see Insolvent Estates for more details). Key Topics You can click the links below, or in the table of contents to the left, to learn more about key aspects of the estate executor process. Aside from a number of checklist items, perhaps the central aspect of serving as an estate executor is resolving estate obligations and distributing net assets to the heirs. Duties Probate Do I Need a Lawyer? Common Mistakes Estate Financials Taking Inventory Managing Assets Resolving Debts Paying Taxes Making Distributions Executor Compensation Record-Keeping It's important to keep good records during this process, as you may need to account for your actions to the court or to other heirs. EstateExec makes estate administration easy, in essence providing a powerful spreadsheet custom-built for handling the estate settlement process, including automatic integration between the various tabs and activities so everything tracks automatically and minimizes errors. Moreover, EstateExec can then use these records to calculate things such as cost basis, executor fees, and more. EstateExec may also be able to optionally download transactions directly from your bank, reducing drudgery and further minimizing the chance for error. And with EstateExec, you can access your records from anywhere, save them in PDF format, print them out, or even import the results into other programs. Example first page of Final Accounting report for estate probate settlement If you die without a will in Tennessee, your assets will go to your closest relatives under state "intestate succession" laws. Here are some details about how intestate succession works in Tennessee. Which Assets Pass by Intestate Succession Only assets that pass through probate are affected by intestate succession laws. Many valuable assets don't go through probate, and therefore aren't affected by intestate succession laws. Here are some examples: property you've transferred to a living trust life insurance proceeds with a named beneficiary funds in an IRA, 401(k), or other retirement account with a named beneficiary securities held in a transfer-on-death account real estate for which you have a transfer on death deed vehicles for which you have a transfer on death registration payable-on-death bank accounts, or property you own with someone else in joint tenancy or tenancy by the entirety. These assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will. However, if you don't have a will and none of the named beneficiaries are alive to take the property, then the property could end up being transferred according to intestate succession. To learn more about these types of assets, go to the How to Avoid Probate section of Nolo.com or read about Avoiding Probate in Tennessee. Who Gets What in Tennessee? Under intestate succession, who gets what depends on whether or not you have living children, parents, or other close relatives when you die. Here's a quick overview: If you die with: here's what happens: children but no spouse children inherit everything spouse but no descendants spouse inherits everything spouse and descendants spouse and descendants equally share the intestate property, but the spouse's share may not be less than 1/3 parents but no spouse or descendants parents inherit everything siblings but no spouse, descendants, or parents siblings inherit everything The Spouse's Share in Tennessee In Tennessee, if you are married and you die without a will, what your spouse gets depends on whether or not you have living descendants -- children, grandchildren, or great-grandchildren. If you don't, then your spouse inherits all of your intestate property. If you do, they and your spouse will share your intestate property equally, except that your spouse's share cannot be less than 1/3. Example 1: Bill is married to Karen, and they have three grown children. Bill and Karen own a house in joint tenancy, and Karen is also the named beneficiary of Bill's retirement account. When Bill dies, Karen automatically inherits the house and any remaining retirement funds; those things are not intestate property. Bill also owns $300,000 worth of other property that would have passed under a will, so Karen inherits $100,000 worth -- that is, 1/3 -- of that property. The three children split the remaining $200,000 worth of Bill's intestate property. Example 2: Barrett is married to Jed and also has a 12-year-old daughter from a previous marriage. Barrett owns a house in joint tenancy with Jed, plus $200,000 worth of additional, separate property that would have passed under a will if Barrett had made one. When Barrett dies, Jed inherits the house outright -- it isn't intestate property. Jed also inherits $100,000 worth of Barrett's property. Barrett's daughter inherits the remaining $100,000 share of Barrett's property. Example 3: Jill is married to Kevin, and they have four grown children. Jill and Kevin own a large bank account in joint tenancy, and Jill took out a life insurance policy naming Kevin as the beneficiary. When Jill dies, Kevin receives the life insurance policy proceeds and inherits the bank account outright. Jill also owns $600,000 worth of property that would have passed under a will, so Kevin inherits $200,000 worth – that is, 1/3 – of that property. The four children split the remaining $400,000 worth of Jill's intestate property, receiving $100,000 each. Children's Shares in Tennessee If you die without a will in Tennessee, your children will receive an "intestate share" of your property. The size of each child's share depends on how many children you have and whether or not you are married. (See the table above.) For children to inherit from you under the laws of intestacy, Tennessee must consider them your children, legally. For many families, this is not a confusing issue. But it's not always clear. Here are some things to keep in mind. Adopted children. Children you legally adopted will receive an intestate share, just as your biological children do. (Tennessee Code Ann. § 31-2-105.) Foster children and stepchildren. Foster children and stepchildren you never legally adopted will not automatically receive a share. Children placed for adoption. Children you placed for adoption and who were legally adopted by another family will not receive a share. However, if your biological children were adopted by your spouse, that won't affect their intestate inheritance. (Tennessee Code Ann. § 31-2-105.) Posthumous children. Children conceived by you but not born before your death will receive a share, provided they survived at least 120 hours after birth. (Tennessee Code Ann. § 31-2-108.) Children born outside of marriage. If you were not married to your children's mother when she gave birth to them, they will receive a share of your estate if (1) you participated in a marriage ceremony that later turned out to be void, or (2) your paternity is established before or after your death according to procedures established by Tennessee law. (Tennessee Code Ann. § 31-2-105.) Grandchildren. A grandchild will receive a share only if that grandchild's parent (your son or daughter) is not alive to receive his or her share. (Tennessee Code Ann. § 31-2-106.) This can be a tricky area of the law, so if you have questions about your relationship to your parent or child, get help from an experienced attorney. If you want to read the laws themselves, you'll find a link to the Tennessee Statutes at the end of this article. Will the State Get Your Property? If you die without a will and don't have any family, your property will "escheat" into the state's coffers. However, this very rarely happens because the laws are designed to get your property to anyone who was even remotely related to you. For example, your property won't go to the state if you leave a spouse, children, grandchildren, parents, grandparents, siblings, nieces, nephews, aunts, uncles, or cousins. Other Tennessee Intestate Succession Rules Here are a few other things to know about Tennessee's intestacy laws. Survivorship period. To inherit under Tennessee's intestate succession statutes, a person must outlive you by 120 hours. So, if you and your brother are in a car accident and he dies a few hours after you do, his estate would not receive any of your property. (Tennessee Code Ann. § 31-3-120.) Half-relatives. "Half" relatives inherit as if they were "whole." That is, your sister with whom you share a father, but not a mother, has the same right to your property as she would if you had both parents in common. (Tennessee Code Ann. § 31-2-107.) Posthumous relatives. Relatives conceived before -- but born after -- you die inherit as if they had been born while you were alive. (Tennessee Code Ann. § 31-2-108.) Immigration status. Relatives entitled to an intestate share of your property will inherit whether or not they are citizens or legally in the United States. Advancements. If you give a relative property during your lifetime, the value of the property is subtracted from your relative's share only if you or your relative states this in writing. (Tennessee Code Ann. § 31-5-101.) Child support arrearages. If you are behind on your child support payments and your child dies, you will not be allowed to inherit from your child until all of your overdue payments and accumulated interest are paid in full to the other parent. (Tennessee Code Ann. § 31-2-105.) "Killer" rule. Someone who feloniously and intentionally kills you will not receive a share of your property. (Tennessee Code Ann. § 31-1-106.) Learn More To learn more about intestate succession, read How an Estate Is Settled If There's No Will. You can find Tennessee's intestate succession laws in Sections 31-2-101 to 31-2-110 of the Tennessee Code. When you become ill or incapacitated—whether from a short stint in the hospital or a long-term illness—someone must step in and handle bill-paying, investment decisions, and other financial matters. Here's how to give that authority to someone you choose—and not leave it up to a court. f you want someone to be able to deposit your checks at your bank, file your taxes, or even sell or mortgage your home, you can create a handy document called a power of attorney. A POA is a simple document that grants specific powers to someone you trust—called an "agent" or "attorney-in-fact"—to handle certain matters for you. In most estate plans, these POAs are what are known as "durable" POAs, which means that they retain their effectiveness even after you're incapacitated. It's a good idea for most people to create these two documents, as they help plan for the unexpected. To learn about other types of POAs, including non-durable (limited) and springing POAs, see What Is a Power of Attorney. Below, learn how to create a durable financial POA that is valid in Tennessee. What Are the Legal Requirements of a Financial POA in Tennessee? For your POA to be valid in Tennessee, it must meet certain requirements. Mental Capacity for Creating a POA The person making a power of attorney must be of sound mind. The exact contours of this mental capacity requirement are open to interpretation by Tennessee courts. If you're helping someone make a POA and you're not sure if they meet the mental capacity requirement, you should consult a lawyer. Notarization Requirement While Tennessee's power of attorney laws are technically silent on the subject of notarization, you should sign your POA in the presence of a notary public. Many financial institutions will not want to rely on a POA unless it has been notarized—a process that helps to authenticate the document. Steps for Making a Financial Power of Attorney in Tennessee 1. Create the POA Using a Form, Software or an Attorney Some private companies offer forms or templates with blanks that you can fill out to create your POA. For a more user-friendly experience, try WillMaker, which guides you through a series of questions to arrive at a POA (and an estate plan) that meets your specific aims and is valid in your state. You can also hire a Tennessee lawyer to create a POA for you. Many lawyers will include durable POAs as part of a more comprehensive estate plan alongside a will or living trust. Whatever method you choose, the process of making the POA will likely include either granting your agent comprehensive powers or selecting, from a list, the specific powers you want your agent to have. For example, you might choose to grant your agent the power to engage in: real estate transactions banking and financial transactions retirement plan transactions stock, bond, and other securities transactions operations of a business or entity government benefits tax matters personal and family maintenance. In Tennessee, your POA is not durable by default. To make the POA effective even after your incapacitation, Tennessee laws require an explicit statement. The law suggests wording such as: ""This power of attorney shall not be affected by subsequent disability or incapacity of the principal." (Tenn. Code § 34-6-102.) 2. Sign the POA in the Presence of a Notary Public As mentioned above, you should have your POA notarized. 3. Store the Original POA in a Safe Place Once you have completed the POA, store the original in a safe place that your loved ones can easily access, and let them know where to find it. (It won't do much good locked away in a safe that no one can get into.) If you become incapacitated, your attorney-in-fact might need the original POA to act on your behalf. 4. Give a Copy to Your Agent or Attorney-in-Fact You should also give a copy of the power of attorney to your agent so that your agent is familiar with the contents of the document. 5. File a Copy With the Register of Deeds If you gave your agent the power to conduct transactions with real estate, you should also file a copy of your POA in the land records office (called the register of deeds in Tennessee) in the county or counties where you own real estate. This will allow the register of deeds to recognize your agent's authority if your agent ever needs to sell, mortgage, or transfer real estate for you. 6. Consider Giving a Copy to Financial Institutions You can also give copies of your durable financial POA to banks or other institutions that your agent might need to deal with in the future. This step might eliminate some hassles for your agent if your agent ever needs to use the POA. Banks can sometimes be finicky about accepting POAs; see Can Banks Refuse a Power of Attorney? for more details. Who Can Be Named an Agent or Attorney-in-Fact in Tennessee? Legally speaking, you can name any competent adult to serve as your agent. But you'll want to take into account certain practical considerations, such as the person's trustworthiness and geographical location. For more on choosing agents, see What Is a Power of Attorney. Tennessee allows you to appoint co-agents who are authorized to act at the same time, but it's usually advisable to stick to just one agent to minimize potential conflicts. However, naming a "successor" agent—an alternate who will become your agent if your first choice is unavailable for any reason—is always a good idea, as it creates a backup plan. When Does My Durable Financial POA Take Effect? Your POA is effective immediately unless it explicitly states that it takes effect at a future date. It's possible to create a condition that must be satisfied before the POA becomes effective—such as a doctor declaring that you are incapacitated—but there are many reasons why this type of "springing" power of attorney is not usually advised. When Does My Financial Power of Attorney End? Any power of attorney automatically ends at your death. A durable POA also ends if: You revoke it. As long as you are mentally competent, you can revoke your document at any time. No agent is available. To reduce the likelihood of this happening, you can name a successor (alternate) agent in your document. A court invalidates your document. It's rare, but a court may declare your document invalid if it concludes that you were not mentally competent when you signed it, or that you were the victim of fraud or undue influence. You've likely heard that a good estate plan includes a power of attorney (POA) for finances—a document that authorizes someone (called your agent or attorney-in-fact) to handle your financial matters if you ever become incapacitated. But sometimes creating a POA isn't quite enough. Though the nearly universal recommendation to create a POA as part of your estate plan may make the document seem airtight, in practice your agent might run into some resistance when presenting a perfectly valid POA to a bank or other financial institution. Here's what you can do about it. Can a Bank Refuse Access to Your Bank Account If Your Agent Has a Valid POA? "Banks might stop short of outright refusing to recognize a POA, but their reluctance can take the form of equally inconvenient tactics …" Assuming you created a power of attorney that's valid in your state, can a financial institution still refuse to accept it? Some state laws do allow financial institutions to require additional documentation, such as an affidavit (sworn statement) by your agent. But generally, banks must, by law, accept a POA that is validly made. A few exceptions do exist. For example, if the bank believes in good faith that your agent doesn't have the authority to perform the act requested, or if the bank is aware of a report that your agent might be exploiting or abusing you, the bank doesn't have to accept the document. Otherwise, banks can face consequences if they don't accept a valid power of attorney. In some states, they're liable for attorney's costs and other costs incurred in the event that you or your agent pursues legal action. All that said, the reality sometimes looks quite different. Banks are wary of identity theft, scams, and elder abuse, and this wariness can take the form of roadblocks when your agent tries to use your POA to access your accounts. Banks might also stop short of outright refusing to recognize a POA, but their reluctance can take the form of equally inconvenient tactics—like requiring several rounds of internal reviews, during which your agent's hands are tied. What to Do If a Bank Won't Accept Your Power of Attorney If a bank won't accept a POA, the first step is to find out why. If the POA was not validly made in the first place—for example, it's not notarized, as required by most states, or witnessed, as required by some states—the simple solution is to make a new POA, if possible. Common Reasons Why Banks Won't Accept a Power of Attorney A financial institution might raise objections such as these: Your POA isn't durable. If the person who made the POA is now incapacitated, the agent can't use the POA unless it's durable—that is, made to last even during incapacitation. In some states, POAs are durable by default, but in other states, the document must include an explicit statement. If the POA isn't durable, and you're an agent trying to help someone who's incapacitated, unfortunately you won't be able to use that POA. You can consult an attorney to explore other options. Your POA is "springing" but you haven't demonstrated incapacitation. Some POAs are made to be "springing"—meaning that they don't take effect until In this case, the POA usually sets out the procedure for proving that the POA maker is now incapacitated. For example, someone, usually a doctor, might need to certify that you're no longer able to make your own financial decisions. Third parties like financial institutions will take these procedures very seriously, with good reason. But the potential for logistical problems is high. For this reason, a springing power of attorney is not usually recommended. Your POA is old, or is not on the bank's POA form. Banks might also have less defendable reasons for rejecting your POA. You might occasionally hear that the POA was made too long ago, or does not conform to the bank's own POA form. Your Options If the Person Who Made the POA is Incapacitated If the person who made the POA still has the mental capacity to understand what they're doing when they sign a POA, and the consequences of giving authority to someone else, then they can simply make a new POA that resolves any issues raised by the bank. But if the person is now incapacitated, the options at this stage are much more limited. First, try to make the bank officer pinpoint the exact reason for denying or holding up approval of the POA. Familiarize yourself with your state's power of attorney laws and cite specific sections. For example, some state laws have built-in timelines (such as a bank having to accept a valid POA within a certain number of days), and pointing to relevant laws might be enough to jumpstart or speed up the approval. Escalate the issue to supervisors as needed. If this back-and-forth doesn't pan out, you can seek out the help of a lawyer, which unfortunately means spending more time and money. Short of taking legal action, there isn't much you can do if you face blatant refusal to accommodate your valid POA. For this reason, if you have the ability and foresight to plan ahead, it's best to circumvent future problems by putting a little extra research in at the time when you or your loved one is making a power of attorney. How to Avoid Issues With Banks by Planning Ahead "Up-front work with financial institutions can save your agent a great deal of time and grief." Simply being aware that banks can be reluctant or slow to allow your agent to access your account—despite a valid POA—is a good start. To pave as smooth a road as possible for your bank to recognize your agent's authority to act, take these steps: Make a list of the financial institutions where you have accounts. This might include the places where you have checking accounts, saving accounts, safety deposit boxes, credit cards, retirement accounts, and investment accounts. Research each financial institution's process for reviewing and accepting POAs. If or when your agent must access your bank account, what will your agent need to do? Some banks might require a notarized affidavit from your agent in addition to the certified copy of the POA, while require different identification documents from your agent and special cover sheets. Every bank has its own process. Once you've created a POA, submit the document to the bank for approval before you ever need to use it. In other words, if you're making a durable power of attorney, file it with your financial institutions before you become incapacitated, so that it's already in the system and ready to be used if or when the time comes. For added assurance, you could also ask your agent to try using the POA to make a small transaction. You can also consider creating a POA on a bank's own power of attorney form, but this process can quickly feel overwhelming if you have assets or accounts at many different institutions. Another option is to combine accounts—for example, rolling over retirement accounts so that you only have one—so that you have fewer forms and procedures to navigate. However you choose to proceed, up-front work with financial institutions can save your agent a great deal of time and grief. You may have heard of "springing" powers of attorney – that is, powers of attorney that "spring" into effect when you become incapacitated. Many people like the idea of these documents, because cause they're uncomfortable with making their power of attorney effective while they can still manage their own affairs. However, in practice, using a springing power of attorney can cause more problems than it solves. For example: Delay. Instead of being able to use the power of attorney as soon as the need arises, the agent must get a "determination" of your incapacity before using the document. In other words, someone – usually a doctor – must certify that you can no longer make your own decisions. This could take days or weeks and disrupt the handling of your finances. HIPAA/Privacy issues. State and federal laws, including the Health Insurance and Portability Act (HIPAA), protect your right to keep medical information private. This means that doctors can release information about your medical condition only under very limited conditions. To certify your incapacity, your agent will need to provide proof that the doctor may legally release information about you to your agent. You may be able to resolve this issue by completing a release form before you become incapacitated. However your agent could still run into problems caused by bureaucracy or by the doctor's confusion about what is legally required. Navigating these issues could cause serious headaches and delays for your agent. Definition of incapacity. To state the obvious, if your power of attorney requires you to be incapacitated, then you'll have to be incapacitated before your agent can help you manage your finances. But what does "incapacity" mean, and to whom? If you make a springing power of attorney, your document will have to define incapacity. Then, when it comes time for the determination, your doctor will have to agree that you meet that definition. But how do you know now what health changes will cause you to need help managing your finances? What if you want help before you become incapacitated as defined by your document? What if you have some good days and some bad days? What if your agent or your lawyer believes you no longer have capacity, but your doctor disagrees? These gray areas may make it difficult, if not impossible, for your agent to help you when you need it. You can avoid all of these problems by making a durable power of attorney that takes effect as soon as you sign it. Just make sure your agent understands exactly when and how you want the document to be used. This degree of trust is a basic requirement for naming an agent. If you don't trust your agent to handle the power of attorney exactly as you intend, you should choose someone else to handle your finances.If you still feel that you want a springing power, see a lawyer for help. An experienced lawyer can draft a power of attorney that is more closely tailored to your specific situation and concerns. Question: I have a durable power of attorney for my mother-in-law. I want to open a bank account in my town to deposit her checks. She has senile dementia, so she can't sign her own checks. Can I write "For Deposit Only" on them? Also, when I pay her bills, do I sign her name -- and should the account be in her name? Answer: The best thing to do is take the power of attorney document to the bank with which you want to do business and ask a bank representative each of your questions. Banks being banks, most have their own rules and will be happy to explain them to you. Chances are, you'll be instructed to open the account in your mother-in-law's name and asked to sign checks with her name followed by your own, including words such as "under power of attorney" and the date of the document or simply, "POA." But the bank will tell you exactly what you need to do to open and manage a bank account on your mother's behalf.