Probate is the way in which the assets of someone who dies are passed to his/her spouse, children, and other designees, and how creditors are paid. Probate requires that a personal representative be appointed (either by a Will or by the court) to collect, account for, and distribute the decedent’s assets. Typical assets include bank accounts, homes, cars, and retirement benefits.
You can avoid the need for probate, minimize you tax consequences, and reduce the ability of creditors to take the assets. Three ways to do that include:
- Using joint tenancy with a right of survivorship or tenants by the entirety. In Tennessee, if property is titled in just one person’s name, then only that person has the right to control the property including how it is handled at death. A home titled only in the name of John Smith passes through probate. Property that is held jointly by a husband and wife is called “tenants by the entirety.” On the death of one spouse, the property passes directly to the other spouse without going through probate. Property held jointly with right of survivorship by non-married owners also goes directly to the other joint tenant(s) on death without the need for probate.
- Using a living trust. This is a document that transfers your assets to a trust when you create the trust. A trustee is appointed to manage the trust assets for the benefit of the beneficiaries and to distribute the assets in the trust at a specific designated time. Trust assets do not need to pass through probate.
- Naming beneficiaries directly on various accounts. People who are planning their estates need to properly document their retirement accounts, bank accounts, life insurance policies, and other assets. These documents should clearly designate a beneficiary. If a beneficiary is not named, the asset is payable to the decedent’s estate and passes through probate. If a beneficiary is named, then the asset is payable to the beneficiary and does not pass through probate. An experienced lawyer will identify all your assets including stocks, bonds, pension plans, checking accounts, saving accounts, IRAs, 401ks, to make sure each document correctly names a beneficiary.
There are many other probate avoidance strategies that are more complicated, such as pour-over trusts. We can help you decide which of them are right for you.
At Shepherd and Associates, P.C., our Maryville lawyers understand the broad range of practical issues involved with estate planning. We review your concerns about who should get which assets, who should manage them, and when they should get them. We balance your desire to avoid taxes, have your loved ones get your assets instead of creditors, control your assets while you are alive, avoid probate litigation, and many other issues. Please call 865.225.9655 or fill out our contact form to learn how we can help.