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By: Arnett, Draper & Hagood, LLP

We routinely receive inquiries from prospective clients who have suffered the loss of a loved one. Often times the first question concerns whether a probate proceeding should be instituted for the decedent's Will or, if the decedent had no Will, for the decedent's Estate. This is a valid question because there are instances where there is no need to probate a Will or pursue the administration of an Estate of a person dying without a Will. This article will attempt to address the items that need to be considered prior to probating a decedent's Estate.

To determine whether an Estate should be probated, one must first understand the fundamental rule regarding what assets pass pursuant to the probate process. The process known as "Probate" is the legal proceeding whereby the assets of the decedent are passed either pursuant to the disposition made in the decedent's Will or pursuant to Tennessee law regarding intestate succession. Probate only controls the disposition of assets owned by the decedent in the decedent's own name that are not owned jointly with another person or entity with right of survivorship and are not payable on death to a person or entity at the decedent's death by contract. Please note that regardless of whether an estate or Will must be probated does not indicate whether Estate and Inheritance Tax Returns must be filed for a decedent's estate.

For example, a bank account, or a stock account or bond account, as well as individually certificated stocks or bonds, owned jointly with another with right of survivorship pass to the surviving owner absent probate. Lawyers refer to this process as "passing by operation of law." Accordingly, assets which are jointly owned with right of survivorship (often identified with the acronym "JTWROS") are not subject to the probate process. Upon the decedent's death, the surviving joint owner takes the asset free of probate, usually by producing a certified copy of the decedent's death certificate and identification for the surviving joint owner to the depository institution or the company where the decedent held the asset jointly with right of survivorship at the time of the decedent's death.

An asset which commonly passes by operation of law outside of Probate is a life insurance policy or a retirement plan asset whereby the decedent, during his or her lifetime, designated with the depository institution or company a beneficiary designation naming a specific beneficiary to take the property at the owner's death. Often times a claim form for the beneficial interest as well as the production of a certified copy of the death certificate and identification for the beneficiary is all that is needed in order to pass the asset to the beneficiary outside of the probate process.

Real estate can be somewhat trickier to determine whether it is subject to Probate. Real estate owned jointly by husband and wife where the deed creating the ownership interest names the spouses as husband and wife without any other designation is considered owned as tenants by the entirety. Tenants by the entirety is the way that married persons own real estate jointly with right of survivorship. Upon the death of the first spouse, the other spouse automatically owns the whole property without the necessity to do anything further. Real property owned jointly by non-married persons is typically known as tenants in common ownership, and unless the parties, at the time they take title to the property or at some subsequent time when all joint owners are alive, retitle the property to designate such ownership as being with right of survivorship, said ownership is deemed as undivided joint interests as tenants in common. The fractional share of a deceased joint tenant in common is subject to Probate. However, some deeds reflect that the owners of the property take the property as tenants in common with right of survivorship, in which case no probate process is necessary to pass the ownership of the deceased person to the other joint owner.

Other types of personal property assets can be owned with right of survivorship if the titling document designates that the owners are joint with right of survivorship. Such ownership can be accomplished by designating between the names of the owners the word "or", thus implying that upon the death of one owner the other owns the property outright and free of the probate process. These assets typically take the form of automobiles for which the title of the vehicle designates "him or her" or designates "him and her with right of survivorship". Other assets that bear similar ownership include vehicles subject to titling by the state authority such as a piece of heavy equipment, a motorcycle, a boat or other water craft, a mobile home, a trailer or camper, and any other type of personal property which may be titled through the state agency for vehicle registration.

With regard to personal property assets such as bank accounts or savings accounts, the documentation which usually verifies whether the asset was in the decedent's own name or in joint names with right of survivorship is the account signature card. It is rarely safe to rely upon an account statement received on a monthly or quarterly basis from a depository institution to determine how the property is titled. With most depository institutions, it is safer to obtain a photocopy of the signature card whereby the designation of whether the property is jointly owned with or without right of survivorship is made.

In assisting clients to determine whether they should probate a Will of a deceased loved one, we generally recommend that an inventory be taken of all the assets the decedent could have possibly owned at the time of his or her death. The inventory should include information for in identifying the name of each depository institution or company in which the assets are invested, vehicle registration, title to real property, beneficiaries for retirement plans, beneficiaries for life insurance contracts, etc., providing with each asset either the contract number, policy number or account number. Once the inventory is completed further research is recommended with each company or institution in which the assets are invested to determine whether the property is jointly owned with right of survivorship and/or a death beneficiary is designated.

For each bank account or security account with a brokerage firm, including certificated stocks and bonds held by the decedent at the time of the decedent's death, a copy of the titling document (often the signature card at the bank or brokerage house, or similar documentation maintained by the company in which the decedent owned stock or bonds) needs to be requested in writing to verify the ownership of each asset. With regard to real estate it is often advisable to review the public records in the Register of Deeds in the County in which each parcel of real property is located to determine the ownership of each parcel of real property. Once verification is made for each asset in the inventory as to the titled ownership of the property, then and only then can a reasoned and informed decision be made as to whether probate of the decedent's Will (or the Estate of a decedent dying with a Will) should proceed.

Sometimes it is difficult to determine whether or not a probate should be initiated to pass title to personal property which does not have titling documentation. Such property includes the decedent's personal jewelry, household furnishings, coin collections, art collections, collectibles, china, crystal, silverware, etc. However, documentation can be prepared during the decedent's lifetime to indicate the ownership of each such type asset so as to clarify the ownership of assets of this nature.

Furthermore, postmortem planning opportunities are available through the use of disclaimers in some instances. However, there are certain time limitations and other restrictions upon the validity of a qualified disclaimer, and you should seek qualified legal advice when considering postmortem planning of this nature.

Only after making a determination of whether the decedent owned assets subject to probate should the decision be made to proceed with filing with the Probate Court for the administration of the Estate. Please note that if a determination is made not to probate the Will of a deceased person, Tennessee law (T.C.A. §32-1-113) provides certain requirements upon the person in possession of the decedent's Last Will and Testament to tender the decedent's Will to the person named in the Will as the personal representative or, if the person nominated as personal representative does not desire to appear and qualify as the personal representative, to the Probate Court in the County of residence of the decedent at the time of the decedent's death. Please also note that Tennessee law (T.C.A. §39-14-131) classifies the destruction or concealment of the Will of a decedent as a Class E Felony. Accordingly, often times as a safe guard it is recommended that the Will be tendered to the Probate Court in the county of residence of the decedent even if the person named as personal representative does not desire to probate the Will in light of the fact that there are no assets subject to probate jurisdiction over the assets of the decedent at his or her death.