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For the average person who has recently inherited property, Tennessee law may be tough to navigate without some guidance. Particularly if you’ve recently experienced the death of a family member, you’re not likely to want to spend your time parsing Tennessee statutes.
Accurate information is paramount when working through inheritance laws. Many cases may require special legal services or a strong attorney-client relationship, but in terms of the basics, the same inheritance rights and responsibilities apply to almost any estate.
Estate or Inheritance Taxes Under Tennessee Law
One of the primary questions many people have about Tennessee’s laws is whether or not there are inheritance or estate taxes. The short answer is no: Tennessee does not have inheritance or estate tax as such.
Inheritance Tax
In Tennessee, if the property is worth over $1 million, the estate’s executor may have to file taxes prior to passing the estate on to the named beneficiaries. However, as this tax is not paid by the beneficiaries, it isn’t always considered an inheritance tax.
Federal Estate Taxes
Federal estate tax may be levied in certain instances, but it isn’t likely to be a concern for the average Tennessee inheritor. The federal estate tax is only required if the real estate value exceeds $12.06 million.
Tax Returns
Even if no estate or inheritance tax is owed, the executor may be responsible for filing tax returns. State income tax returns likely have to be filed and property taxes must be kept up until the estate is disbursed or sold.
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The Will and Probate
Generally, probate is required by Tennessee inheritance laws, unless the estate plan puts the entire estate into a living trust that allows beneficiaries to avoid probate. The probate process doesn’t have to be overwhelming, though, and doesn’t always require a visit to probate court.
Probate is the process by which the estate is distributed, including the real property and other assets. The executor is the person responsible for overseeing this process, whether there is a valid will or not. An executor may be assigned by a valid will if the person dies with an estate plan, or if one is unavailable after the death, the court will appoint the executor.
Types of Wills
It is often considered good practice to have an attorney draw up your will to comply with inheritance laws. However, a lawyer is not required for a valid will in Tennessee.
Handwritten wills can be acceptable, as can oral wills under certain circumstances. An oral will is only valid under Tennessee law if the person speaking is at risk of imminent death from a specific source and does, in fact, die from that cause.
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Assets and Property in an Estate
Which assets are required to go to probate and which aren’t? Usually, assets that the decedent owned in their name solely require probate.
Bank accounts, retirement accounts, or other assets that constitute investments in only the decedent’s name require probate. A joint bank account would not.
Real property/real estate the decedent owns alone require probate, but if they are joint tenants with someone who has a right under the rights of survivorship, it would pass to that person.
Personal property like furniture, appliances, clothing, or jewelry or separate property like vehicles or RVs requires probate unless it has been added to a living or revocable trust. Only assets that automatically transfer to another owner can avoid probate.
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Family Eligible to Inherit
If a person dies intestate, meaning that the death occurred without a valid will signed by two witnesses as required by state law, the Tennessee intestate succession goes as follows:
The surviving spouse inherits everything if there are no children. Note that legally-adopted children qualify for inheritance in the same way biological children do for the purposes of intestate succession, but foster children who have not been through the legal adoption process are not necessarily entitled to anything under inheritance laws.
Children, including adopted children, receive everything if the decedent’s spouse predeceased them. Posthumous children — children born after the death of the person in question — do have inheritance rights.
Intestate succession laws state that parents have the same rights to inheritance if no spouse or descendants are eligible to inherit. Siblings, including a half-sibling, can inherit property and assets under inheritance laws if no parents, spouse, children, or grandchildren are able to inherit.
If one spouse and one or more children survive, Tennessee law states that the property will be split evenly. However, the share allotted to the spouse can’t be less than one third, so if more than two children are set to inherit, the spouse would receive one third and the children would have the remainder split evenly amongst them.
Under Tennessee intestate succession guidelines, relatives, including half-relatives, can inherit property after the death of a family member regardless of their immigration status. Even if they have not earned citizenship, and whether or not they are legal residents of the USA, they still have inheritance rights.
Note that Tennessee is not a community-property state, so assets or real estate that are part of an inheritance do not automatically become joint property with the beneficiary’s spouse.
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Finding Help
One good way to be sure to be in compliance with inheritance law and to have the best chance to avoid probate is to find a trustworthy attorney advertising estate planning and probate services. As in Davidson County, Tennessee, law firms may offer a free consultation or free evaluation, but a paid service may be worth it to avoid the time and stress involved with complex property and estate regulations.
An attorney can provide a confidential relationship to work through your questions and concerns about an estate. Whether it’s an estate and property for which you’re drawing up your own will, or an estate you’ve recently inherited, a lawyer may be able to help you navigate Tennessee regulations. For most people, careful estate planning has paid off in time, money, and peace of mind. If you’re dealing with an estate and need some help, it’s not difficult to find.
