I would have to say that the most common question that I receive in my law practice surrounds whether it is necessary to go through probate. A lot of my clients will come into the office and be under the impression that because they own everything jointly with their spouse, they will not have to go through probate. Unfortunately, this is simply not true.
So, let me tell you a story about a client that was under this assumption. James and Elizabeth lived in Nashville their entire lives. They had three children together who all were grown and had families of their own. James and Elizabeth had a home worth about $250,000 and about $500,000 in bank accounts, investments, and other assets that they had saved up over their lifetime. However, James and Elizabeth did not believe they needed any estate planning because they were told by several neighbors and friends that they wouldn’t have to go through probate. All they needed to do was put beneficiaries on all of their financial accounts, and since they own their home jointly, this will not be a problem.
As it would happen, James died first. However, before James died, and all of his financial accounts named Elizabeth as the beneficiary. Also, their friends and neighbors were right, they did not have that hard of a time after James died settling his estate. However, they were wrong about one thing, James did have to go through probate as he died with property in his name and had a Last Will and Testament written.
But, the big problem came for the family when Elizabeth passed away about 7 years later. You see, 2 years after James died, Elizabeth got remarried to Ted. It was also a second marriage for Ted as his wife had passed away several years prior. Ted also had three children. Ted and Elizabeth decided that they were going to write their wills and leave everything to their respective children. Ted and Elizabeth decided that since they both had their own assets they should both write their wills in this way.
However, when Elizabeth passed away, her three children were served with a notice from the probate court. It turned out that Ted had hired a lawyer and was exercising his elective share rights. In Tennessee, you are not allowed to disinherit your spouse. A surviving spouse is entitled to certain rights in Tennessee, and one of those rights is elective share. Under the Tennessee elective share law, the surviving spouse is allowed to take a percentage of the estate, depending upon the length of the marriage, regardless of what the will said.
Due to the fact that Ted and Elizabeth had been married for 5 years before she died, Ted was entitled to 20% of the estate under Tennessee law. Unfortunately, this turned into a long, public, and costly court battle. Elizabeth’s three children spent over $50,000 in legal fees, costs, and expenses during the process, and at the end, Ted received his 20% share of Elizabeth’s estate.
The story I shared with you above is far too common. All a family wants to do is to make things simple for their surviving family and so they take the steps to do just that. The family believes that by simply writing a will and designating beneficiaries, that this will keep things simple for the surviving family. Unfortunately, all too often that is not the case. Many Tennessee families end up in probate court because time was not taken in the beginning to make sure that all the estate legal affairs were in order.
That is why we owe it to ourselves, and more so, to our family, to take care of these estate legal affairs so that everything is as simple as possible for our surviving family members when we are gone.
If you have questions about estate planning in Tennessee or how you can set up your legal affairs so that your assets are protected and you provide a smooth transition to your loved ones, then I encourage you to attend one of our live free educational events scheduled this month. At these events you will hear a lot of real life stories about families that paid thousands of dollars in unnecessary expenses, families that were able to avoid unnecessary expenses, and families that enjoyed zero government intrusion into their families’ private lives.
I look forward to speaking with you at one of our upcoming live educational events!