Estate Planning Essentials: September 2017
Chambliss Estate Planning Essentials brings you legal developments and other trends of vital interest in the world of estate planning. This post is brought to you by Jennifer Exum and other members of the Estate Planning Practice Group of Chambliss Law Firm.
Legislative Updates Affecting Probate in Tennessee
Every year, some changes in the law come with the fanfare, bells, and whistles of a Las Vegas jackpot win, such as no inheritance tax or no gift tax. Other revisions to the law are less obvious, but a closer look reveals the treasures to be found in their simplicity and substance. The major legislative changes that went into effect July 1, 2017, surrounding probate are of this sort, less glitz but still noteworthy.
The Tennessee 110th General Assembly enacted SB 769, a bill that revises certain provisions of the probate code related to estate administration. These revisions impose additional responsibilities on the estate’s personal representative for the protection and benefit of the beneficiaries. Here are a few of the hidden gems that may affect your estate or a loved one’s:
No Hands in the Cookie Jar
Take the case where a personal representative (an executor or administrator) files a claim against the estate for payment of a debt owed to him or her by the decedent. In the past, the notice of the filing was sent by the probate clerk only to the personal representative and his or her attorney. Now, the personal representative seeking payment must provide the probate clerk with the names and current mailing addresses of all residuary beneficiaries of the estate (whose interests will likely be diminished if the claim were awarded) so they can be notified by the clerk within five days of the filing and given the opportunity to protect their interests. [T.C.A. 30-2-313]
Crime (Still) Doesn’t Pay
The prior version of the “Slayer Statute” prohibited a person from inheriting from an individual that person killed, unless it was an accident or self-defense. The new version, a much more robust and detailed statute, now requires, among other things: the killer has to give up all benefits of the decedent’s estate; it revokes any beneficiary designations for the killer; and it eliminates any interest the killer has in real estate as a joint tenant with the decedent. [T.C.A. 31-1-106]
Who’s Your Daddy?
To inherit from a decedent, a child born out of wedlock must establish his or her paternity at the earlier of four months from the first publication of the notice to creditors, or one year from the father’s date of death. In the case of an amorous decedent, the personal representative can now send a copy of the notice to creditors published in the local newspaper to any purported child and limit the time that child has to establish his or her parent/child relationship with the decedent. If the representative fears that children will come “out of the woodwork” after a decedent’s death, this amendment provides a shortened timeframe in which a purported child must establish paternity, which is a blessing to an estate administration that could otherwise be drawn out in costly litigation. [T.C.A. 31-2-105]
Signin’ My Life Away
Each recipient of a specific bequest under a decedent’s will must sign a receipt that is required to be filed with the probate court by the personal representative in order to close an estate administration. A seemingly innocuous revision now provides that these receipts must be notarized or otherwise sworn under penalty of perjury, where the prior version of the statute only required signatures on receipts for filing with the Court. This is to ensure that the intended recipient of a gift under a will actually receives the gift, although it could be an inconvenience to some beneficiaries. [T.C.A. 30-2-601]
Although the Legislature now requires receipts to be notarized or otherwise sworn under penalty of perjury (see above), they also realize that some beneficiaries simply will not follow directions. In those cases, the personal representative is allowed to close an estate administration if he or she can show to the Court’s satisfaction that diligent efforts have been made to obtain the required acknowledgment from a beneficiary. If the other beneficiaries agree, the estate will not be held hostage by the one recalcitrant beneficiary. [T.C.A. 30-2-601]
If you need to update your estate plan or if you have questions regarding these recent legislative changes, please contact us. Our team has decades of experience advising clients on probate law, drafting tailored estate plans, and administering estates in an efficient and cost-effective manner.