Beneficiaries and Probate

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Beneficiaries and Probate

Are items designated to beneficiaries subject to probate in TN? Is there a 6% Probate fee in TN?If only healthy adult children are survivors, do we need a trust?

Asked on June 23, 2009 under Estate Planning, Tennessee


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Items designated to beneficiaries are not subject to probate.  For example, proceeds from a life insurance policy. 

Additionally, in Tennessee, you can add a “payable-on-death” (POD) designation to bank accounts such as savings accounts or certificates of deposit.  You still control all the money in the account -- your POD beneficiary has no rights to the money, and you can spend it all if you want.  At your death, the beneficiary can claim the money directly from the bank, without probate court proceedings. 

Also, Tennessee lets you register stocks and bonds in transfer-on-death (TOD) form. People commonly hold brokerage accounts this way.  If you register an account in TOD (also called beneficiary) form, the beneficiary you name will inherit the account automatically at your death.  No probate court proceedings will be necessary; the beneficiary will deal directly with the brokerage company to transfer the account.

As for a trust, whether minors or adults are the survivors, in Tennessee you can make a living trust to avoid probate for virtually any asset you own -- real estate, bank accounts, vehicles, and so on.  You need to create a trust document (it’s similar to a will), naming someone to take over as trustee after your death (called a successor trustee).  Then -- and this is crucial -- you must transfer ownership of your property to yourself as the trustee of the trust.  Once all that’s done, the property will be controlled by the terms of the trust.  At your death, your successor trustee will be able to transfer it to the trust beneficiaries without probate court proceedings.

If you own property jointly with someone else, and this ownership includes the “right of survivorship,” then the surviving owner automatically owns the property when the other owner dies;  no probate will be necessary to transfer the property.

Finally, as to any other remaining assets, your estate may qualify for Tennessee's simplified "small estate" probate procedures.  This will be quicker an less expensive.

As for the costs of a more traditional probate, probate court charges for filing various documents are usually posted or provided to individuals by the probate court clerk. Attorney fees which are incurred in addition to the court costs, are usually negotiated with the attorney handling the estate prior to the estate being opened.  As a safety valve, the local probate court rules provide a guideline for attorney and executor/administrator fees.  If the executors, beneficiaries and/or heirs do not agree with the attorney fees or executor fees requested, then the attorney and/or executor are required to petition the court for establishment of the fees.

Finally, you don't need an attorney at all, but one is recommended unless you are using the simplified small estate procedures.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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