I was recently speaking with some wonderful families following an educational event where I was presenting the topic of estate settlement and Medicaid planning. One of the families asked me, "Are you so sure that probate is as difficult as you say, when my dad died, I didn't have to go through probate."
This question comes up very often in my law practice. For the most part, many people just do not understand what probate is and what it entails. Unfortunately, sometimes people do not go through probate because they don't think they need to, and when the surviving spouse finally passes away, it creates an even bigger headache for the surviving family.
First, what is probate? Well, probate is the process of transferring the assets that you own to your heirs as designated in your will (or according to Tennessee law if you do not have a will) after the payment of all of your valid debts, expenses, and taxes after your death. Now, with that definition, you would think that probate is a simple process. Unfortunately, today, probate is anything but a simple process. Probate is filled with court filings, court hearings, attorneys, judges, and thousands of dollars in costs.
If you have a valid last will and testament, it must be admitted to probate under Tennessee law. Next, any assets that you own in your own name must be detailed with the probate court. In addition, all of your valid debts must be listed with the court. If your loved ones hired an attorney, the law firm must be listed, as well as what the attorney is being paid by your heirs. Also, every one of your heirs, and what they are receiving from your estate becomes subject to public record. Unfortunately, this can lead to disagreements, fighting (sometimes in court), and damaged family relationships.
In addition, there is a four month time period (sometimes it can be as long as 6 months or 1 year depending upon the type of creditor) in which a creditor can file a claim against the estate requesting to be paid out of the proceeds of the estate. Also, a document called a TennCare release must be obtained. Anyone who received Medicaid (TennCare as it is called in Tennessee) during their lifetime, after death, Medicaid has the right and obligation to pursue reimbursement of every penny paid out during the person's lifetime on behalf of TennCare. If there is real estate that is part of the estate that your loved ones are trying to sell, the title company will not produce an opinion that there is clear title (allowing the sale to proceed to closing) without that TennCare release in hand.
During this period time, the assets that were titled in the person's name who passed away are frozen and cannot be accessed without a court order (called Letters of Testementary by attorneys and judges). In addition, if your loved ones who are acting as executor or administrator of your estate, can be subjected to personal liability if they misbehave during the probate process or simply making a mistake regarding the probate administration. A common mistake is selling the home for less than what it should have been sold (the executor can be held responsible for personal liability in this case).
Finally, at anytime over the next two years, the probate estate can be reopened by anyone who has a reason to contest the will (usually by an heir that was disinherited or received less from the probate estate than what he or she was expecting).
As you can tell, probate is a very time consuming process, and regardless, everyone who has a last will and testament and/or holds assets in their own name, must have their estate administered through the probate process.
If you have questions about the probate administration process, please download our free report below: What To Do When a Loved One Dies. I am certain that you will find the free report very informative and valuable.
If you have any questions about the probate process or if you are going through the probate process currently, please contact our office at (615) 472-2482. As always, we are here to help!
Daniel A. Perry