The unfortunate passing of "The Queen of Soul", Aretha Franklin, has left her fans grieving, but has left her grieving family to divide her estimated $80 million-dollar estate without the help of an estate plan. Aretha Franklin passed away intestate, in other words, without a will. This means the state in which she is domiciled will determine the distribution of her estate through the state's intestacy laws.
There are many advantages to having a will as opposed to dying intestate. The first, is saving time and money when distributing your assets. The process of probate without a will, can potentially be a lengthy and expensive process, and the costs are typically paid out of the estate. With a will, the Probate Court will more likely have an easier time distributing your assets, because the assets and who they are being distributed to, will be set forth in the will document, helping prevent any potential disputes of who should get what assets. As a result of a speedier probate process, less money will be spent for attorney fees, executor/ administrator fees, accountant fees, and the like, potentially saving your descendants more money by taking less money away from the estate.
Another benefit, perhaps the most important, is that dying with a will gives you more control over how your assets will be divided and distributed after your death. If a person dies without a will, or some other estate plan, like a trust, the intestacy laws of the state in which that person was domiciled along with rulings of the court with jurisdiction over the estate controls the distribution of their assets. A validly executed will provides a greater chance of certainty than no will at all.
In Tennessee, the intestacy laws look at whether you died with a surviving spouse, a child, parents, or other "heirs." Depending on who and how many heirs survive you, effects how much of the intestate estate each person will receive. For example, if your spouse were to survive you and you did not have any children, your spouse would essentially be entitled to receive the entire intestate estate minus any lawful debts. If your spouse survived you and you had children, your spouse would receive one-third of the intestate estate or a child's share of the intestate estate, whichever is greater. This means, assuming you have no children, that if you predeceased your spouse, but wanted to leave other assets that are a part of your intestate estate to other family members, charities, or non-profits, then under intestacy laws in Tennessee your spouse would receive the entirety of your intestate estate and any unrecorded wishes that could have been expressed through a validly executed will would not be given any lawful effect. Essentially if you die without a will you are giving up your control over the distribution of your assets.
Continuing with the example of a spouse that were to survive you, in Tennessee a surviving spouse does have an option of taking what is called an elective share. This means, that a spouse of a person who died intestate or with a will has the right to elect against taking their intestate share, as provided in the intestacy laws, or elect against their share under a will. If they choose to exercise their right to the elective share, they can receive an elective share amount from the decedent's net estate. The amount of the elective share is dependent on how long you and your surviving spouse were married to each other. For instance, a couple who is married for less than 3 years, will leave a surviving spouse only 10% of the net estate. Through the lens of a purely statutory interpretation of Tenn. Code Ann. Section 31-4-101, looking at an elective share, the maximum that a surviving spouse can only get up to 40% of the net estate, regardless of how long the parties were married. This elective share is however effectively dependent on the presence of assets in the estate. If an estate is insolvent, then even a forty percent (40%) elective share often cannot hope to provide for the care of a loved one in the event of their spouses passing. Many other estate planning tools used in conjunction with a validly executed Last Will and Testament like Life Insurance or certain retirement policies, can bypass the probate process all together.
In the management and administration of an estate of any deceased person, there are classifications of expenses that must be paid in a specified priority. First in the stator order of priority is the cost of the administration of an estate. This includes the cost for premiums on fiduciary bonds and reasonable compensation to the personal representative and the personal representative's counsel. Second, is the payment of reasonable funeral expenses. Third, any taxes and assessments imposed by the federal or any state government, such as TennCare. Fourth, all other demands that may be filed as aforementioned within four months after the date of notice to creditors. All of these classifications must be paid by the personal representative of the estate and in this specified order. It is important to remember that the demand of one class will not be paid until the prior classes are paid. If your loved one was prepared and had their Trust or Last Will and Testament (also known as a Will) prepared, then they will also have left you in a position to properly utilize the probate process to ideally identify and resolve debts against the estate. With proper notice to creditors sometimes creditors who have failed to file their claim against an estate within the specified time period can be excluded from that estate, thereby extinguishing their ability to collect against the estate through the probate process.
It is important to point out that all of these advantages of avoiding intestate succession are only available if you have a valid will or other estate planning document. Because of this, it is necessary to avoid "quick fix" and "do it yourself" type legal documents that are found on the internet. Instead, it is best to take the time to sit down with a knowledgeable local attorney to review all of your assets to ensure nothing is left out, how you want those assets to be distributed, and the legal ramifications of your decisions. Hiring a qualified local attorney to draft and prepare your Will is the best way to ensure that you will avoid the risks of intestacy and increasing the probability that the final wishes regarding the distribution of your estate are followed. Finally, remember that each case is different; no article online can replace an in-person consultation with a local attorney. So, call us today at 865-670-8535 and let's get to work protecting your estate by crafting and executing a valid Last Will and Testament, Power of Attorney for General Purposes, Power of Attorney for Health Care Purposes, and an Advanced Care Plan or Living Will.