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April Harris Jackson

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Nine Things You Need to Know When You Get an Inheritance

Nine Things You Need to Know When You Get an Inheritance

If you’re closely related to someone who has recently passed away, it’s likely that you’ll be in line to inherit at least a part of their estate. It can be a complicated process, depending on the circumstances.  To make this process easier for you, we’ve outlined some things you need to know as a potential inheritor of a Tennessee estate.

1. Take the time to grieve

If you’ve just lost a loved one, the first thing you need to do is take the time to grieve. This could be overwhelming, especially if you were close to the person who has passed away. You may not even know how to react if you’ve been left a large inheritance. Taking the time to grieve the death of a loved one is important, and you should not be pressured into making decisions. Also, don’t rush through any of the legal processes outlined in this article. There’s no need to hurry to open an estate, and you should make sure that you’re given enough time to make well-thought-out decisions and take care of things properly. All of the necessary information will be available to you once you are ready.

2. Take the time to understand the terms of the will

Another important thing to do is take the time to understand the terms of the will. If there was a will, then you’ll need to know who was named as the executor (aka personal representative) of the estate. You’ll also need to know whether there are any special provisions in the will, like leaving a specific piece of property to a specific person. You’ll want to know where the original will is being kept, as well as the executor’s contact information so you can stay informed about the progress of the estate. 

Once the will is probated, there will be a record of it that you can access at any time. You’ll be able to see the contents of the will, as well as the names of everyone who was named as a beneficiary. This is something that you’ll need to keep in mind when communicating with the people who were named in the will.

3. Find out if there is any debt included with your share of the inheritance

Debt follows the person who incurred it, so a person’s debt usually belongs to their estate- not those inheriting from them. However, if your loved one left you anything with a debt tied to it, you may have to figure out how to resolve the debt before accepting the inheritance. 

This includes things like car loans, mortgages, or other debts that your loved one may have had when they passed away.  Even if you inherit something with debt tied to it, you do not have to inherit debt. You can choose not to accept the item or to sell it and take whatever it is worth after the debt is paid. 

 It’s important that you know if there is any debt included with your inheritance so that you can plan accordingly. It’s possible that you could get a loan to cover the cost of the debt and then pay it off gradually over time. 

In my personal and professional opinion, it usually makes sense to take over a loan on something that will appreciate, such as real estate, but not on any depreciating assets like a vehicle. However, this is something that will have to be decided in consideration of your personal situation.

4. Find out what happens during the probate process

The probate process is the process of opening a probate estate, gathering all assets owned, and distributing the assets from the estate. During the probate process, the executor of the estate will file the will and any other documents that might be necessary with the court and has the responsibility of distributing the assets according to the terms of the will. These documents will become part of the public record. The executor of the estate will open an estate account with the court, and you can check in on it and see what progress is being made as the assets are distributed.

5. Check for Inherited IRA Rules and Taxes

If you inherit retirement accounts from a loved one, you will need to make a decision about how and when to cash out the account. 

While spouses can easily “roll” retirement accounts to the surviving spouse, this is not an option for anyone else. As the non-spouse beneficiary of a retirement account, you have two options:   (1) take all money out immediately or (2) you can “stretch” the distributions up to ten years. 

 Because most retirement accounts are “tax deferred” accounts, you will want to explore the tax consequences of any retirement investment accounts that you inherit. If your family member invested into a 401k, IRA, or similar type of account, they  did not pay taxes when contributing to their retirement. That means that taxes must be paid when the money is taken out. 

The financial institution will usually help you by holding an estimated tax payment  but you will still want to make sure you are aware of what you will need to pay at tax time to account for those inheritances, no matter how you took the distribution.

6. Allow time for the Executor to carry out their duties

As soon as you’re named as a beneficiary to a will and the estate has been opened through probate, you can expect that the Executor will begin to take care of things, such as contacting creditors and making arrangements for the sale of any real estate. It’s important that you give them some time to do what they need to do. Expect that it will take about a year for the entire process to run its course. This is a rough estimate and will vary depending on how complicated the estate is, how many assets there are, if any estate tax is due, and whether there are any potential disputes. The Executor will keep you updated on progress and let you know when you can expect to receive the inheritance.

7. Communicate with the Executor

Keep in regular communication with the Executor of the estate. Ask if there is anything you need to do or can do to help. If you have questions, make sure that you ask the Executor and get the answers that you need to the point you understand. You can also ask to speak with the attorney for the estate.  If you are having issues with the Executor getting back to you, or you suspect there are difficulties, it may be worth consulting a lawyer on your own.

8. Decide how you want to handle your share

Before you get a check, decide how you want to spend any money that you receive.  Maybe you and your deceased loved one had already talked through what they hoped would happen with any funds they left you. Many people have a financial goal that their inheritance will help them reach, such as buying a house or investing in their own retirement. Some families use the money to take a trip together and make memories. Having a plan is the best way to make sure that your loved one’s legacy is honored.

9. Update your Plan

One of the most important things to consider is that receiving an inheritance could cause your own estate planning to need to be updated or revised. If you are currently the beneficiary of a trust or other estate planning document, you should contact your estate planning attorney to determine whether or not you need to make any updates. 

If you are looking for a Middle Tennessee probate attorney or to create a Tennessee will, click here to schedule an initial call with us.

Do You Need a Lawyer to Write a Will?

Do You Need a Lawyer to Write a Will?

The reason to create a last will and testament is simple: it provides a way to give the people you have left behind instructions for your assets and belongings after you die. However, how you create that will can be a little more complex. While you aren’t technically required to hire a lawyer to draft a will, failing to do so can lead to costly problems for your family and others.

For Example: the Estate of James M. McKinney

To illustrate an example let me share with you a story about the Estate of James M. McKinney (Tennessee Court of Appeals Opinion dated June 9, 2022). In this case, a man created a will online without consulting an attorney. Unfortunately, the gentleman listed only one of his two daughters in the online form. However, the will had language that left his property to “all of his living children”. Because the language was unclear in the online will form, both daughters have found themselves unsure of their inheritance. 

While the most recent decision has said that both daughters inherit under the online will, there is no clarity on whether that is what their father actually intended. This serves as an important reason why it’s important to hire an attorney in the first place. Both women have already spent two years of their lives, as well as a lot of energy on this case. The cost of an attorney to guide you in preparing your will and estate planning documents is much less expensive than what your family will spend to challenge an inaccurately drafted will in court. We’re guessing that Mr. McKinney wanted one, or both, of his daughters to inherit money from him, instead of their lawyers. Things would have been easier for his family if he used a lawyer to write a Will for him.

Image of a pen on a paper that says "Last Will and Testament". Do i need a lawyer to write a will? Yes! You need a lawyer to write your will!
Holographic Wills must be proven in court with witnesses who can verify the handwriting of the deceased.

Holographic Wills

While the legal requirements of a will vary by state, some allow you to make a handwritten will, called a “holographic” will. However, it is more common for people to type their will. A typed will is easier to read and has a cleaner look. One of the drawbacks of a handwritten will is it often requires handwriting verification in court. While a Tennessee will prepared by an attorney can usually be admitted to probate without the need for any witnesses, a holographic will with the same provisions will require two witnesses who can identify the will-maker’s handwriting to come to court. Keeping in mind how much we type and text these days, we expect it will be more and more difficult to find these types of witnesses as time goes on. 

Online Will software

Many services have popped up that offer do-it-yourself-will software and other legal documents. These services might work fine if you are a single individual and have little or no property. However, the rest of the population should not use these programs. Now we’re not making this statement because we’re in the will-making business. We want you to know that there are risks involved when attempting to create legal documents on your own, whether it’s a will or a business agreement. With a will, you will not be able to make any corrections if there are mistakes since it is a post-death document. Even Consumer Reports concluded that none of the will-writing products was likely to entirely meet a person’s needs unless those needs are extremely simple. In short, using a professional to write a Will is a better option. 

You get what you pay for

If you read the fine print on the DIY will form, you will notice that there is no legal advice. There is no attorney-client relationship! And if you want to talk to an attorney, you are going to pay extra for it. Even if you pay for an attorney from the software company to speak with you, they may not even be licensed in your state!  The saying “buy nice or buy twice” comes to mind here. While you think you’re saving on legal fees by using online software, you may have to pay for an attorney to advise you anyways. And what if the document falls short? You’ll have to pay an attorney to either fix it or start over. In other words, if you are going to do it yourself, be prepared to pay someone to fix it. 

At Graceful Aging Legal Services, even if your needs are simple, we want to help you find a way to make the process easier for your family. This is what most of our families are really looking for.  Our firm can guide you and your family through the process both before and after death. 

Everyone’s situation is unique. If you aren’t well-versed in elder law, why would you chance making a legal document without consulting an attorney? Attorneys are called “counsel” for a reason! It just makes sense to consult an attorney to make sense of your assets in regard to your situation. You’ve worked so hard, why would you take risks with what you’ve built over your lifetime. You need a lawyer to definitively determine whether or not your needs are indeed simple. Here is a sample of the questions to consider:

  • Do you know if your estate is expected to be taxable under state or federal law? 
  • Do you own significant amounts of tax-deferred retirement plans?
  • Do you know how to fund that revocable trust that you created online?
  • Is there anything about your estate that is unusual, such as having children from a previous marriage or a dependent who lives with a disability?

If you have any questions about your estate plan, you need to see a lawyer! 

An attorney makes the process easier

Even if your needs are simple, an estate planning lawyer who practices in probate court could help you find a way to make the process easier on your family. This is what most of our clients and their families are really looking for.  A legal form found online or at the office supply store will not be able to guide you through the process like an attorney can.

The best lawyer to hire to help you create a solid estate plan is someone who can help hold your family together during the probate process.  That’s what we want, it’s what our clients want.  Probate is stressful, but we love helping our estate planning clients ease that stress for their families in advance. 

Not hiring a lawyer to write your will can lead to problems that drag your estate out in a lengthy court process, which is expensive and stressful for your family.  We want your family to benefit from your estate.  Our attorney, April, decided to enter into estate planning practice after the probate of a loved one became contested. You don’t want to put your family through that. You can count on our experiences to guide us in creating a  peaceful plan for you and your family. 

If you are on the fence about having an attorney draft your Will, consider taking our Virtual Estate Plan Challenge. This 7 email series will walk you through the decisions you need to make regarding your assets and property.

Nashville Wills and Trusts Lawyer: How to Handle Underage Beneficiaries

Many grandparents wish to leave a legacy behind for their grandchildren; however, they may run into some issues if those children are underage. A Nashville Wills and Trusts lawyer can help you determine what the best options are for leaving assets to underage beneficiaries, whether those assets are held in a Will or Trust, financial accounts, or as part of a life insurance benefit. 

Underage Beneficiaries in a Will or Trust

As a Nashville Will and Trust lawyer, I always ask my clients if any of their beneficiaries are underage, or even if they would like to keep younger beneficiaries from accessing their full inheritance until they’ve reached a certain age, which is usually 25 or even 30. If the children are underage, an adult guardian must be named since minors are not allowed to own property. If a significant amount of property is left to the minor, a Trust is usually a good idea to manage the property until the child comes of age. In fact, Trusts can be used to ensure the minor only receives their full inheritance once they reach a certain age or milestone, such as graduating from college, while at the same time providing assets to make sure the child can achieve that milestone. I can speak with you about leaving an inheritance to an underage child and will help you choose the best option for administering the distributions.

Underage Beneficiaries of Financial Accounts

Many people choose to make beneficiary designations directly on their financial accounts, such as savings accounts, annuities, and retirement plans.  Nashville Wills and Trusts lawyers urge their clients to carefully examine the details surrounding these beneficiary designations, as minor beneficiaries often cannot directly inherit assets after your passing. It is important to consult with a Nashville Wills and Trusts lawyer to determine the best way for your underage beneficiaries to receive the inheritance you leave for them at a time when they can make informed financial decisions on their own. Directing the assets to Trust is often the best bet in these situations, but consulting with an attorney will give you a much better idea of how this should be done. 

Underage Beneficiaries on Life Insurance

Many parents and grandparents name their children or grandchildren as beneficiaries on their life insurance policies. As with the cases above though, an adult guardian or a Trust must be named in order to hold the life insurance proceeds until the minors come of age. It is generally not advised to name minors as beneficiaries to life insurance policies, as courts will often appoint an adult to look after the proceeds until the child comes of age – and that adult may not be someone you would have wanted to be appointed to such a role. Speaking with a Nashville Wills and Trusts lawyer may help you determine the best way to handle your life insurance beneficiary designations.

If you have any questions about the best ways to leave an inheritance to underage beneficiaries, please contact us at 615-846-6201 to set up a consultation.

Will the Government Take Your Assets if You Do Not Have a Will in Place?

Will the Government Take Your Assets if You Do Not Have a Will in Place?

One concern I frequently hear is a worry that the government will take assets from a loved one or take assets from an estate instead of family members inheriting it. These are valid concerns because there are specific instances where this can happen, but as a general rule, the government DOES NOT take assets unless they have a legal reason for doing so.

The State of Tennessee will not take your assets

There are a few instances where the government will take your assets if you die without a will. For example, if someone received Medicaid (TennCare) to pay for long-term care, if they owed back taxes, or if no family members can be located. But, as a general rule, the State of Tennessee is not going to take your assets.

Tennessee will find your closest heirs

The State of Tennessee has a statute that lays out how your assets will pass if you die without a will. Your assets will pass to what we call your heirs at law. Those are really the people that you probably think of as your closest relatives: your spouse, your children, your grandchildren, your parents, your siblings, your nieces and nephews, your cousins, and farther out. But it’s the close relatives that the state will seek out.

Generally, the government is going to look for anyone related to you before they get any money. I hope that sharing this information with you has given you a sense of relief if you were told inaccurate information elsewhere.

If you have other questions about your estate or that of a loved one, click here to schedule a call with us.

How to Disinherit Someone in a Will

How to Disinherit Someone in a Will

Is there someone you have considered leaving out of your Will? There are plenty of reasons for wanting to exclude someone, a group of people, or everyone you know from inheriting from you. Maybe you’ve had a falling out, maybe they haven’t kept in touch like you hoped, or maybe you just like animals better.

image of a pitbull dog wearing a batman costume. Attorney April Harris Jackson jokes about leaving everything to her dogs in her will. So, how do you disinherit someone in a will?
Personally, my dog is probably getting everything before I die. Look at this cute face

People who know me are probably tired of hearing me say it, but I believe that no one is entitled to an inheritance. Whatever you want to do with your earthly possessions is entirely up to you. There’s no wrong decision- whether you want to leave everything to your children, your church, or your dog. It’s just a personal decision, like your hairstyle (although a bit more permanent decision).

If you don’t have a Will, the law in Tennessee leaves your estate to your closest relatives. By making a Will, you can leave your assets to anyone you like. The only exception to this is that you cannot disinherit your spouse or minor children.

If you don’t want your spouse or kids to inherit because you don’t like them, I hope you will consider counseling. However, that’s another personal decision. So is divorce, which is the only way to remove your spouse’s right to inherit from you. If you don’t like your kids, you have to wait until they turn eighteen to disinherit them.

If you want to disinherit someone, I encourage you to make it clear in your Will. If your Will goes through the probate process, the Court will look at what your intentions were. Leaving a nominal sum like $10 means that the person is not truly disinherited- they inherited $10. We like to acknowledge that the person has been disinherited and, depending on the situation, a brief statement about why. We are kind but firm to reduce any confusion or potential for a contest in the future.

And remember, relationships change and so do Wills.

If you would like help creating your estate plan, click here to schedule a call with us.