Probate is the official way an estate gets settled, which may be required after a person dies. Probate gives someone, typically the surviving spouse or child, the legal authority to gather the deceased person’s belongings, pay debts and taxes, and transfer assets to those who have inherited them. Probate typically takes 6 months to a year, depending on whether or not there are situations such as unusual assets or debts which may complicate the process. The purpose of probate is to prevent fraud following someone’s death. It’s a way to freeze the estate until proper determinations have been made.
When probate is necessary
Not all estates need to go through probate. First, if an estate falls below a certain threshold, it is considered a “small estate” and does not require court supervision to be settled. Second, not all assets are subject to probate. Some assets transfer automatically at the death of the owner.
These are common assets which do not require a probate process:
Joint Tenancy: When one joint tenant dies, the surviving tenant becomes the owner of the entire asset, without the need of a court order.
Beneficiary Designations: Retirement accounts and life insurance policies require beneficiaries to be named. Upon death of the account or policy holder, these beneficiaries are entitled to the assets in the account or the proceeds in the policy.
Payable on Death Accounts: Bank and brokerage accounts can have designated beneficiaries as well. A POD account passes, without probate, to the beneficiary at the death of the account holder.
Tenancy by the Entirety: There are forms of property ownership that function like joint tenancy, but are only available to married couples. If the deceased person owned real estate in entirety with his or her spouse, the surviving spouse is automatically the owner.
Living Trust Assets: If the decedent has created a Living Trust to hold his or her’s largest assets, that estate won’t go through probate, unless the assets outside the trust exceed Tennessee’s small estate limit.
The Tennessee Probate Court Process
If the deceased person left a will, probate is begun when the person named as executor in the will deposits the original, signed will in the county clerk’s probate office in the county in which the decedent lived. A petition for probate must be filed with the probate court as well. If there is no will, the court will appoint someone to serve as the personal representative for the estate. Typically, the executor or personal representative opens a checking account for the estate, deposits the money from the deceased person’s accounts, and uses the funds to pay estate expenses. A taxpayer identification number must be obtained from the IRS, before an account can be opened.
If there is a will, the validity must be proven in court. If the will was signed in front of two witnesses, one of them must either be present in court, or provide a sworn statement confirming the validity of the document. If there are no witnesses, but it is signed in the handwriting of the decedent, it is referred to as a holographic will. To prove its validity, two witnesses must testify to the authenticity of the will.
Publication of probate must take place where the decedent lived. Creditors have from four to twelve months after the date of publication to make a claim. Within 60 days of being appointed, the executor or personal representative for the estate must turn in an inventory of the assets of the deceased person that must go through probate. In addition, they must notify everyone who stands to inherit under the will or state law. When debts or taxes are paid, the personal representative can pay what’s left of the probate estate to those entitled to inherit it.
It’s the executor’s responsibility to file final state and federal income tax returns for the deceased. These are generally due on April 15th, following the year of death. A federal estate tax return will be required only if the decedent’s estate was very large. For deaths in 2018, more than $11.2 million.
Alternatives to Probate for Small Estates
Small estate laws were enacted in order to enable heirs to obtain property of the deceased without probate. You can use the simplified small estate process in Tennessee if the assets of the decedent’s estate consist only of personal property, having a value not exceeding $50,000. If at least 45 days have passed since the decedent’s death without any formal estate being opened in probate court, one or more of the decedent’s heirs, or the largest creditor of the estate may file an affidavit seeking to administer the estate as a small estate under the Tennessee Small Estates Act. Small estates can be administered with less time and cost.
Every decedent’s estate is unique and should be examined individually to determine whether or not a probate alternative may be utilized and, if so, whether the use of such alternative is the best approach in dealing with the assets of the estate.