Posts filed under ‘Estate Planning’
the hidden costs of a DIY will
I just this moment returned from a court hearing to establish a guardianship. A hearing that occurred for only one reason: my client’s dad used LegalZoom to make a will.
My client’s dad thought he was doing the right thing. I mean, having a will is better than having no will, right?
Wrong. Having a well-drafted will that includes the right language is MUCH better than having no will. (To learn more about why you need a will, go HERE and HERE.)
But having a poorly-drafted will that doesn’t include what it should – or includes the WRONG language – can be much worse than having no will.
In my client’s situation, her dad left some money to her minor son. Which is great! But, because he bought the will from LegalZoom and didn’t get any legal advice, he didn’t structure the bequest in the right way. And because of this, my client had to file a legal action to get the court’s permission to accept this money on her son’s behalf.
So, the cost of using LegalZoom for this family far exceeded the difference in cost between a DIY will and working with an attorney. How much? Many hundreds of dollars, months of time.
FYI – a DIY will has hidden costs. Buyer beware.
a note about email
I welcome email contact from folks who read my blog or visit my website. In fact, I generally invite readers to contact me at the end of each blog post if they would like to speak with me directly.
However, I can’t give legal advice via email. If you have an issue that you would like to discuss, feel free to send me a brief email. We can then schedule a time to talk – by phone, Skype or in person – to discuss your issue and how I may be able to assist. Or, you can access our client extranet by making contact HERE, and we will create an account for you. In the extranet, you can request a legal service or ask a legal question, and I will respond promptly.
Please understand that before I can give legal advice or assist you with a legal matter, we must first form an attorney-client relationship. This cannot be accomplished via email communication, but we can create this relationship via our secure client extranet. Until I can obtain certain information from you, I can’t provide legal advice to you in any format. This is a requirement of the ethics rules that govern the practice of law in Tennessee.
IMPORTANT NOTE: PLEASE do not include detailed information in any email communication to me. Email is NOT a secure method of communication and should not be used to share confidential information with anyone.
The information I offer in this blog is general in nature, and may not apply to your specific situation. So, if you have a legal issue (problem, question, etc.), please contact an attorney for assistance. I’m glad to speak with you, or help you find an attorney in your area.
Many thanks for reading my blog!
and more helpful info for executors in tennessee …
I find this to be a bit ironic. Davidson County, Tennessee Probate Court won’t permit an individual executor to open anything but a “small estate” – attorney representation is mandatory otherwise. However, they offer helpful instructions for executors (personal representatives) on the Court’s website. Go figure.
This is a nice little guide. Check it out.
What does an executor do, exactly?
Most folks I meet with in planning an estate – or probating one – are familiar with the word executor. [An executor carries out (or executes) the wishes of someone who has died leaving a will.] But often, they don’t know exactly what an executor does. So, here is what an executor does, in Tennessee, somewhat exactly:
- Identify and take into your possession the decedent’s assets that were owned solely by the decedent;
- Invest estate assets to produce income for the estate during the administration process;
- Identify and notify each person who is owed money by the decedent, i.e. the creditors;
- If a creditor files a proper claim, then pay the debt owed to the creditor;
- Prepare and file the necessary income, gift and death tax returns due;
- Prepare and file any inventories required;
- After paying all claims from creditors and filing necessary tax returns, distribute the remaining estate assets to those named in decedent’s will, or to those who are to receive decedent’s estate under intestate succession, if decedent died without a will (intestate).
What can the executor NOT do?
- the executor cannot use any of the estate assets to pay personal bills;
- the executor cannot use estate assets to pay any of the beneficiaries’ bills until all estate debts and taxes due have been paid.
An executor has a fiduciary duty to manage the estate assets and take the other actions listed above. Most often the executor will work with an attorney, who assists in preparing the necessary documents, notifying creditors and so forth. If an executor chooses to proceed without an attorney – and this is allowed in most Tennessee counties (Davidson County being a notable exception) – then he or she should at the very least consult with an attorney to understand the detailed actions that accompany all of the obligations I describe above.
Questions about serving as executor of an estate in Tennessee? Drop me a line anytime: cnm@csquaredlaw.com or 615.595.7776.
Please note that this information is general in nature and is not intended as legal advice. Always consult with an attorney to determine what the needs of your particular situation may be.
probate 101 – a quick overview
I’ve been helping folks with wills and estate planning for many, many years. And over the years I’ve helped a number of families probate the estate of loved ones. It seems that lately I’ve fielded more probate inquiries than ever. People are looking for an initial understanding of the probate process. So I thought I would share some general information for those who are looking for the same.
First, I want to note that in most Tennessee counties, an individual can petition the court to open a probate estate without the assistance of an attorney. In many instances, the probate process isn’t complicated – especially when the estate is relatively small and heirs are few in number. Davidson County (Metropolitan Nashville) is one example of a county in which one MUST hire an attorney to accomplish probate, but it’s the exception and not the rule.
I often work with families as ‘counsel’ in a probate matter, but am not the attorney of record. The individual executor opens probate pro se (without an attorney) and I provide guidance to the invidual. This saves the estate an increased expense in attorneys’ fees, and is a great option for smaller estates that have limited cashflow.
However, there are many instances in which an attorney really is necessary. If there is disagreement among the heirs regarding distribution of the estate – especially if someone contests the will in the probate process – an executor really needs an attorney’s assistance.
So, back to the basics. In Tennessee, if someone has a valid will at the time of death, then this is called a “testate estate.” If someone dies without a will, then it is an “intestate estate.”
A testate estate is probated by filing a petition (along with the original will document) with the Chancery Court Clerk and Master, requesting that the will be admitted to probate and that a particular person be appointed executor over the estate. This person will be responsible for meeting all legal obligations required in the probate process – namely, notifying creditors of the death and heirs of the will’s directives. The executor accomplishes distribution of the estate to the heirs, and also handles any necessary tax filings with the state and US government. Often a certified public account is retained to assist with tax matters.
An intestate probate is handled in much the same fashion, with the exception that the executor is called a “personal representative” and is responsible for distributing the estate according to the laws of intestate succession in Tennessee. Read more about intestate succession HERE.
An intestate estate often requires a bit more work on the representative’s behalf, as an inventory and accountings must be filed with the court except under certain, limited circumstances. Intestate probate also requires that the representative post a bond, except under certain circumstances. All of these requirements can increase the time spent as well as expense of probate – a great reason to have a will!
In both kinds of probate, the court requires that creditors of the deceased by notified so that a creditor may file a claim against the estate. Public notice is provided, which is handled by the clerk and master. The executor or personal representative must also directly notify known creditors – the easiest way to do this is to mail a copy of the public notice via certified mail, return receipt requested. Then, the executor can prove that he/she sent notice to creditors, if a claim is filed past the filing deadline.
In Tennessee, creditors must file a claim against an estate within 12 months of death. Failure to do so forecloses all legal rights of a creditor in seeking a claim.
Also in Tennessee, TennCare (the state’s Medicaid provider) must be notified of the death, and must provide a release showing that nothing is due and owing to TennCare. If the deceased was a recipient of TennCare benefits, then the estate likely will have to reimburse TennCare for the benefits received, out of estate proceeds.
In my next Probate 101 post, I’ll cover the legal obligations of an executor/personal representative. Knowing the ‘rules’ makes the probate process must easier to navigate.
In the meantime, if you’re reading this post and have specific queries, feel free to call or email – 615.595.7776 or cnm@csquaredlaw.com.
‘nest egg’ planning – an important end-of-year goal
The end-of-the-year rush is in full swing. You’re busy shopping for holiday gifts, planning and attending gatherings with family and friends and (hopefully) simply enjoying the magic of the season . . . so why make time in the midst of all this to think about your nest egg?
Because it’s the *ideal* time to focus on the simple steps to take to properly preserve and protect your nest egg. You can chart a course, follow it (at whatever pace YOU choose) and in the process check off some very important items from your to-do list. The bottom line: the greatest gift you can give your family is to put an organized and thoughtful estate plan into place – one that protects your nest egg.
We’ll go through the steps incrementally, starting out with the first seven estate planning items on the checklist. (My next post will cover insurance planning, which ties in directly to a thoughtful estate plan for most people.)
- Make (or update) your will document. If you don’t already have a will document, now is the time to put one in place. This isn’t a complicated or expensive task. I’ve written previously about why everyone should have a will – check out these posts for more information HERE and HERE. And if you already have a will, you should review it on an annual basis to make sure that it continues to carry out your wishes. Obviously, if you’ve had a change in life circumstances in 2010 – marriage, divorce, new child, etc. – then a review of your will is imperative.
- Create (or update) your powers of attorney and living will. Everyone should have two powers of attorney in place, if you reside in Tennessee: a general durable power of attorney and a power of attorney for healthcare. With these two documents, your family will be able to manage your affairs in the event you’re disabled. Without these documents, a conservatorship may be necessary – go here to read my article on this topic. And as with your will documents, the powers of attorney should be reviewed annually – make sure that the people you’ve designated are still appropriate for this position. As well, terms for the documents do change, so check with your estate planning attorney to see if your documents require substantive revision. A living will sets out your end-of-life health care preferences and is important information for health care providers and your family.
- Create a letter of instruction. This letter goes hand-in-hand with your will and powers of attorney documents. In this letter, you provide invaluable information to your heirs: where important documents are located, where your financial accounts are located, special burial wishes, and the like. I’ve written before about compiling this information for your heirs – you can read this article here.
- Calculate (or review) your net worth. The amount of your estate – e.g. the value of all of your assets – determines in large part what kind of estate planning you can/should do to protect your nest egg for your heirs. You should review your net worth annually and consult with your tax and/or estate planning advisors to determine if your plan requires any substantive changes in order to achieve your goals.
- Consider creation of a trust. Your annual review of net worth may lead to a recommendation that you establish a trust – either living (created and funded in the present) or testamentary (created and funded following your death). A trust often can be an effective vehicle for transferring wealth and protecting assets.
- Consider funeral pre-planning. This is a simple step to take, and can save cost and time for your family. It’s as simple as contacting local funeral homes and requesting pre-planning information.
- Arrange for the orderly transfer of business assets. If you are a small business owner, planning for the smooth operation (or sale) of your business in your absence requires more than a simple reference in your will document. Your entity documents (or legal agreements with business partners) should address what happens to the business upon death, and should be reviewed annually to confirm that the plan continues to meet such goals. As well, you should consider the purchase of life insurance as a vehicle for funding the transfer of business assets at death.
Take the above steps, one-at-a-time and at your own pace. But just do it. In my next post, I’ll add a few more to-do items to the list. And in the meantime, feel free to call (615.595.7776) or email (cnm@csquaredlaw.com) if you have question about your year-end planning.
As I write this post, my satellite weather station reports the temperature at 19 degrees, with a ‘feels like’ temperature of six degrees. I hope you’re staying warm and enjoying this holiday season!
With *warm* regards,
Caitlin Moon
Conservatorships in Tennessee: a brief primer
Conservatorship – families often encounter this word for the first time in moments of great emotional stress. A conservatorship describes the legal process required in order to gain legal control over many aspects of another person’s life. Why would this process be necessary?
In my practice, I’ve worked with many families throughout the conservatorship process, both as an attorney for the petitioner (the person who seeks to be appointed a conservator) and as a guardian ad litem (the person who investigates the situation on behalf of the disabled person who is the subject of the action). The reasons have been many and varied, but the focus is always on the individual who simply can’t care for him- or herself, thus prompting a family member or caregiver to take action to assume legal control over the disabled person’s life.
Disability can happen at any time. We commonly think of an elderly person who becomes too ill or frail to manage her own affairs – if she doesn’t have the proper powers of attorney (for both general and health care purposes), then a conservatorship action must be initiated in order to legally manage both her general and medical decisions. However, disability also happens to younger people. A serious accident or illness can leave anyone – even a young and previously healthy person – disabled.
Another common reason families seek conservatorships is to care for a family member born disabled. When a disabled person reaches the age of 18, his parents can no longer exercise legal control over his affairs. Thus, in order to maintain control of medical care, for instance, the parents of a disabled child 18 years or older must establish a conservatorship for their child’s care.
What does this mean in Tennessee? If you’re caring for a disabled individual and this person hasn’t executed a durable power of attorney for health care, then you must establish a conservatorship in order to have access to the disabled person’s medical records or make any health care decisions for the person. Additionally, a person born with certain disabilities may not have the capacity to execute a power of attorney, thus making a conservatorship the only option for family members or caregivers.
The conservatorship process in Tennessee is set out in Tennessee Code Title 34 : Guardianship. (This section also address guardianships, which apply to persons under the age of 18.) The process requires very specific information be presented to the Court, before an individual’s legal rights will be removed and placed with another person as the conservator.
In a nutshell, the petitioner (the person who seeks to be appointed conservator) must include the following in a petition for conservatorship:
- the basis for the petition – e.g. why the disabled person is unable to care for him/herself
- a doctor’s sworn statement, based upon a physical examination within 90 days of the filing date of the petition, setting out the disabled person’s specific disability(ies) along with a statement that a conservator is recommended for the disabled person’s care
- a complete listing of the disabled person’s property
- a complete listing of the disabled person’s income
- a complete listing of the disabled person’s living expenses
- a proposed property management plan, explaining how the conservator will manage the disabled person’s property and income in order to meet the living expenses obligation
After the petition is filed, the Court will appoint a guardian ad litem, whose duties are set out in Tennessee Code Section 34-1-107. Generally, the Guardian must interview the disabled person, present him or her with the petition, and investigate the facts set forth in the petition. The Guardian then files a report with the Court, expressing the Guardian’s findings and his or her opinion as to whether the conservator should be appointed.
After the conservator is appointed, this person has a continuing obligation to the Court to file accountings on an annual basis. The accounting reports all income and expenses of the disabled person, and should reflect the property management plan approved by the Court during the conservatorship proceeding.
A couple of things to keep in mind:
- In a conservatorship, the Court maintains oversight of all financial matters, for as long as the conservatorship is in place. The purpose is to insure that the disabled person’s income is being used properly – for the disabled person – and is not be used in inappropriate manners.
- In a conservatorship, the Court maintains control over many of the Conservator’s actions. For example, the sale of certain types of property belonging to the disabled person must first be approved by the Court.
In most instances that require a conservatorship, the action could have been avoided if proper planning been done at the right time. Why does this matter?
On a practical level, if your mother becomes disabled without having powers of attorney in place and you’re appointed conservator through a legal action, you now have to account to the Court for every dime you spend on her behalf. For most families I work with, this is not the ideal outcome, as it imposes restrictions on the actions of the person serving as conservator and inserts the Court into a situation that otherwise would not require such keen oversight.
Of course, not every instance can be addressed through the use of powers of attorney – but such a plan often is a simple and inexpensive way to avoid the expense and emotional toll that a conservatorship action can exact.
If you have any questions about conservatorships in Tennessee, including how to put a plan in place that renders a conservatorship action unnecessary, I’m glad to talk with you. Please contact me – 615.656.4044 or cnm@csquaredlaw.com – to schedule a no-cost, no-obligation consultation.
Even more reasons to have a last will + testament . . .
In my last post, I reviewed the law in Tennessee on intestate succession – e.g., what happens to your estate (your stuff) when you die without a will. This ‘default’ plan for distributing your estate likely is reason enough to create a last will and testament.
But there are more reasons, just in case you were wondering . . .
In discussing with clients why they want to create a well-thought-out will document, I universally get agreement with the proposition that a properly-drafted will should both save the time and effort of the person/people who are dealing with the estate’s probate process AND it should eliminate as much probate-related expense as possible. Both of these are worthy goals, and are easy to achieve. But planning is necessary!
In Tennesssee, there are a lot of ‘hoops’ one must jump through when administering an estate that didn’t plan properly for probate – whether an intestate estate (no will at all) or an estate of someone who simply had a poorly-drafted will document.
One of the hoops – that can require significant time on the part of the executor, or significant expense on the part of the estate if professionals must be hired to complete this requirement: an accounting of the estate’s contents. The personal representative has to file a statement of all receipts, disbursements and distributions of principal and income for the accounting period and the remaining assets held in the estate – both initially, when the estate is opened, and annually until the estate is closed. See Tennessee Code 30-2-601 et seq.
The accounting can be effectively waived in a properly-drafted will, thus saving your executor a great deal of time and your estate the expense.
Another hoop is the estate inventory. Unless properly waived in a will, then the personal representative has to make a “complete and accurate inventory of the probate estate of the deceased.” This is then filed with the probate court clerk. See Tennessee Code 30-2-301 et seq.
Again, this hoop requires a significant expenditure of time on the part of the personal representative – and/or expense if professionals must be paid to complete this work.
I once worked on behalf of a family whose matriarch had died rather unexpectedly. Her will was drafted decades earlier, and didn’t waive inventory. It turned out that she had thousands of antique items – she’d been an avid collector for years. The family was ready to simply divvy everything up and sell what no one wanted, and had even reached agreement on these points. But a full inventory was still required, which took a LONG time to document. The cost was real in terms of time, but also in terms of emotional involvement. The family members weren’t well-served by dealing with this administrative task while in the midst of mourning their loss.
Creating an effective will document, whether your circumstances are simple or complicated, can be a fast and easy process. Just do it.
Exactly WHY do I need a will?
I offer no-cost consultations with anyone interested in planning his/her estate – and while I’ve been talking with folks about their wills and related documents for more than 12 years now, it still amazes me how many people have no idea what happens to their ‘stuff’ when they die without a will.
I practice in Tennessee, so what I’m about to say only applies in this state. Each state has its own laws, but they all do have ‘rules’ about where stuff goes at death if a person doesn’t make other plans through a will.
So where does my stuff go if I die in Tennessee without a will? This is a multi-level question, and depends upon a lot of factors. The formal term for this is ‘intestate succession’ and details are set out in TCA § 31-2-101 through 110.
So where to begin? Pick the description of your situation:
Married with no children: your entire estate goes to your spouse
Married with children: your spouse receives 1/3rd or a child’s share, whichever is greater (e.g. if you are married and have one child, then your spouse receives half and your child receives half; if you are married with three children, your spouse receives 1/3rd and your children each receive 1/3rd of the remaining 2/3rds, which equals 2/9ths; in any of these instances, if a child is deceased, then his/her share goes to his/her living children if any (your grandchildren) or if none, then your remaining children share equally)
Unmarried with children: your children each receive an equal share
Unmarried with no children: to your parent(s), if living; if only one living parent, then he/she takes all
If parents aren’t living: to your brothers and sisters equally (or to a sibling’s children if a sibling is deceased but has children – the children then share equally in the deceased parent’s share)
If no siblings, nieces or nephews: one-half to paternal grandparents (if living) and one-half to maternal grandparents (if living) – the children/grandchildren (whomever is the closest in kinship still living) take the share of a deceased grandparent; example: if your paternal grandmother is living but your paternal grandfather is deceased, then your paternal grand-mother receives ½ of your estate and the rest is shared between your maternal grandparents if both are still living – but if both maternal grandparents are deceased, then their ½ is shared equally by all of their living children (your cousins) or if they have no living children but do have living grandchildren, then the grandchildren receive the grandparents’ share
*However – if there are no living relatives on one side, then the other side receives your full estate; for example, if your paternal grandparents are deceased and have no living children,grandchildren, etc., then your entire estate passes to your maternal grandparents or their closest living relatives if they are deceased
There are yet more twists and turns if you die without any living relatives whatsoever. But that is a subject for another day.
Suffice it to say, most folks would make plans other than the path Tennessee provides when you die without a will. If you are married and have two very young children, do you intend for your children to inherit as much as one-half of your estate? Most often, the answer to this question is no. You likely want your spouse to inherit everything, and have full legal authority to use your entire estate in a manner that is best for your family.
There are many, many scenarios that can be painted, all of questionable desirability, when following the intestate succession flow chart through to many possible conclusions. Controlling the ultimate destiny of your estate is not a complicated process. It involves education and thoughtful consideration. Rely on a knowledgeable estate planning attorney to obtain the education. You will then be prepared for the thoughtful consideration!
Generally the estate planning process takes about two weeks with my clients, from start to finish, and depending on the client’s schedule. Next week’s blog entry will discuss the steps involved in the estate planning process – knowing what to expect can help you make the most of the process and work through it as thoughtfully and efficiently as possible.
In the meantime, feel free to contact me with any questions about this or any other estate planning topic – 615.656.4044 or cnm@csquaredlaw.com.
Announcing Our VIRTUAL LAW OFFICE – C2LAWonline.com
EXTRA! EXTRA! Today we have launched a new part of C²Law – it is our virtual law office (VLO), called C2LAWonline.com.
Through C2LAWonline.com, we offer residents across the state of Tennessee instant access to our legal services in the following areas:
•estate planning (wills , powers of attorney and related documents)
• business services (creation of LLCs and other entities, contracts, employment agreements and other business documents)
•general property matters ( deeds, leases and other documents related to real property)
In addition to creating documents, we can also answer legal questions and review legal documents through the VLO.
What is a Virtual Law Office (VLO)? A VLO is a law office that provides services to clients via the internet. Clients are able to REQUEST A LEGAL SERVICE directly through the VLO. Through this secure, online process, we provide a cost quote for the requested service. Clients can retain us, pay us online, and then receive legal counseling and delivery of the final legal product (such as a document), all via the internet.
This process gives clients 24 hour access to their legal matter, through a secure online CLIENT EXTRANET. Each client has access to his or her unique client extranet, which is secure and confidential. All written communications and document sharing takes place via the client extranet.
Perhaps most importantly, the cost for obtaining our legal services via C2LAWonline.com generally is half the expense of hiring a lawyer in the conventional way. You receive personal legal counsel and advice, but pay far less because your contact takes place online.
And there are many other advantages:
•you save time (in addition to money) because you don’t have to travel to a physical office – you can complete all aspects of your legal representation from the comfort of your own home (or office, or wherever it is most convenient for you to do so!)
•you don’t have to schedule an office or telephone meeting, coordinating your time with an attorney’s
•all written communication and documents related to your legal matter exist in a single, secure online source that you can access 24 hours a day, seven days a week
•you have access to an attorney licensed to practice in Tennessee, who guides you through your legal matter and provides legal counsel tailored specifically to your needs and goals.
It is *important* to note that through our VLO, we offer a much wider breadth of service than one can obtain through a legal ‘forms’ website such as LegalZoom. We are attorneys, and when you hire us through C2LAWonline.com, you receive legal counsel and advice as part of the process. We evaluate your needs and goals, and offer advice and tailored legal services. Legal ‘form’ websites CANNOT provide legal advice. You get a form, and that’s it – no legal advice, and no way of knowing whether a form is appropriate and adequate to meet your needs.
We are incredibly excited about the launch of our new VLO. At C²Law, we always have been committed to providing cost-effective legal counsel. Our VLO gives prospective clients increased access to our services, at lower costs and in a very convenient, user-friendly format.
We welcome your contact and hope that you will visit C2LAWonline.com to learn more about our VLO and all the services and benefits it offers.
