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When you die – rate on a scale of 1 to 10 how simple you would like any administration of your estate to be (one being the most complicated and 10 being super simple). Well, I guess you probably answered 10 and who wants complicated? It makes sense that you would want the simplest option possible.
So… here’s another question. Why then do so many people not have the basic estate planning documents in place needed to help guide administration of their estate after they die?
Did you know more than ½ over 50 percent of people out there have NO estate documents whatsoever – no Last Will and Testament – no Trust – No Powers of Attorney – No directives as to their end-of-life care. I realize that these are not easy topics – but ignoring them won’t make them go away and by ignoring them you are setting your heirs up for a long and possibly complex legal matter that will cost lots of time, money and possibly aggravation. Not to mention the default for doing nothing means the state in which you die will have the last say as to what happens to your stuff. I don’t want that for anybody.
I am going to give you some information that will hopefully help you avoid all that pain and expense. In fact, I want to talk about strategies that will help you to avoid probate all together. That would score a 10 on the simplicity scale – however it requires some time, action and investment right now.
In this episode, I want to talk about what happens when you die without a Will and without any titling or beneficiary designations in Tennessee. In other words, what would happen if all the property I own is in my name alone and if you have no known Will to provide instructions as to who gets my stuff
Any guess?
I hinted at it earlier – most likely if this is your circumstance your estate it going to end up in probate court in the county in which you resided prior to your death. For Chattanooga, Tennessee, that is Hamilton County Chancery Court. We just heard from the Clerk and Master and her staff in a previous episode about the probate process and that was enlightening. It is very specific and has numerous requirements under the law. Those statutory guidelines have timelines attached to them as well. For that reason, not only will have you a court matter – it will most likely take more than a year before any of your surviving family receives any of the assets or other items making up your estate.
That can be very painful – and can involve – financial constraints and even new significant financial burdens for legal and court costs that would have to be advanced not to mention whoever is in charge of your estate would have the fiduciary responsibility to safeguard your assets and that may include continuing to pay for insurance, storage, utilities, and even mortgage payments so that your house doesn’t slip into foreclosure before it can be sold or vested in your survivors. I’ve seen it – these are very real and probable circumstances, if you don’t put some planning in place. And in this episode, all I’m talking about are Wills – there are a lot of other issues that can and often do come up with folks don’t have the right powers of attorney, directives, etc. We can discuss that in future episodes, so stay tuned.
Here’s the other problem– if all your assets are yours when you die, i.e. there are no joint assets and no beneficiary designations – then they are going to require probate. That’s done in Court. If you don’t provide any guidelines or directions, i.e. in a valid and enforceable Will, then the Court will look to Tennessee law for instructions as to how to administer your estate and give away your assets. It’s known as intestacy.
Heirship under the government’s guidelines for intestacy looks kind of like a tree – as it shows the off-shoots of relationships in your family and sometimes in your extended family. It does not take into account blended families, second marriages, or people you consider family who really are not blood relation to you. They all get left out when it comes to intestacy. It also doesn’t take into account any special distributions that may go to minors or people with special needs. The people who are to receive those things would have to deal with that once it happens and that can lead to trouble and expense on the receiving end, including but not limited to ineligibility for special benefits or programs and costs for creation of guardianships or trusts for minors.
If you don’t have any children or surviving immediate family, then guess what – the court is looking outside of your immediate tree to those who may be more remotely related to you and you may have never met any of these folks.
Finally, there are no special scenarios as to percentages of disposition of assets – in intestacy it gets divided in accordance with the tree of distribution and there is a mathematical equation to it. A second spouse may receive a portion – but they will have to share it with your surviving children. I’ve seen that happen and the marital home was sold much to that surviving spouse’s chagrin.
Do the first takeaway should be – take the time to make a Will. AND make sure its is an enforceable and valid Will. Keep the original because if you don’t have that, then your heirs will have to overcome a presumption after you die that you revoked it and that requires court action too.
That’s a look at the problems that can and do come up when you neglect to take the time to make a valid and enforceable will to provide for the instructions of what happens to your assets when you die. This also includes that all of your assets were held individually by you at your death.
Continue to listen to Boomer Time as we tackle what it takes and what can be done to plan to avoid probate all together.
Resources mentioned in this podcast:
Episode 23: The ABCs of Probate
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