Articles


Paying Expenses Related to Decedent’s Real Property

Aurthur Fowler - 10/9/2018

Can a personal representative pay for expenses related to decedent’s real property that is not part of the decedent’s estate? According to T.C.A. § 30-2-323, if it is not contrary to decedent’s will, a personal representative may pay for utilities and ordinary maintenance for up to 4 months from decedent’s death but not mortgage payments, real estate taxes, major repairs, or extraordinary expenses. This is because real property normally is not part of decedent’s probate estate. This section is a stopgap to prevent damage to decedent’s real property until the new owners are notified of their legal responsibilities. Any payments beyond this 4-month period may be at the personal representative’s peril.

In re Estate of Jesse L. McCants Sr. (Tenn. Ct. App. May 1, 2018)

Disclaimers Become Tricky

Aurthur Fowler - 10/9/2018

Can a disclaimer be effective? According to the Court of Appeals in Estate of Smith it depends.

Decedent died on August 13, 2011, without a will and with no spouse or children. Her sole heir was her mother, Esther Pearson. Decedent’s estate was opened on November 1, 2011. In April 2013, Ms. Pearson received a partial disbursement from the estate. On June 29, 2013, Ms. Pearson signed a Notice of Disclaimer that was prepared by Ms. Pearson’s daughter’s attorney and was filed by someone other than Ms. Pearson on July 1, 2013. Thereafter, Ms. Pearson sought to revoke her disclaimer by alleging that it was not timely filed and did not comply with T.C.A. § 31-1-103.

A disclaimer must be filed with the court within 9 months of the decedent’s death. This requirement is mandatory. The person disclaiming must not have accepted any interest in the estate before disclaiming. And, most interesting, the disclaiming party or the disclaiming party’s representative must file the disclaimer with the court. Further, the appellate court made an interesting reference to who prepared the disclaimer and the fact Ms. Pearson had no input in its preparation. I do not know if the appellate court’s analysis would be different if Ms. Pearson prepared or had input in the disclaimer’s preparation, but I cannot see any other reason why the appellate court would take such care to address these facts. Therefore, if a lawyer prepares the disclaimer for someone else, the lawyer should talk with the person disclaiming and address the ramifications and reasons for the disclaimer.

Estate of Karen Klyce Smtih (Tenn. Ct. App. Sept. 13, 2018)

Wills: You Have to Follow the Law

Aurthur Fowler - 1/29/2016

The Tennessee Court of Appeals in In re Estate of Morris sent a reminder to follow the law when preparing a Last Will and Testament. On October 10, 2008, Bill Morris signed his Last Will and Testament in the presence of two witnesses. Everyone thought the witnesses signed the Will. The problem, as you can see from the picture is that between Mr. Morris’s signature and the witnesses’ signatures is a “self proving affidavit.” Tenn. Code Ann. § 32-1-104 requires two witnesses to sign the Will. The self proving affidavit is allowed under Tenn. Code Ann. § 32-2-110 but is not required. So the question for the Court is whether the self proving affidavit is part of the Will or was a separate document. The Court of Appeals found that the affidavit was a separate and distinct document and the Will ended after Mr. Morris’s signature. Because the witnesses did not sign the Will, the Court of Appeals held the Will invalid and Mr. Morris died intestate.

In re Estate of Morris, 2015 Tenn. App. LEXIS 62 (Tenn. Ct. App. Feb. 9, 2015)

Intro to Probate: How to Open an Estate

Aurthur Fowler - 1/29/2016

Each county has its own method for opening an estate. You should contact the probate court clerk to see how the court would like for you to handle the estate. Some counties require you to prepare numerous documents while others require you to prepare very few. Every county will require you to prepare a petition to open the estate. Pursuant to T.C.A. § 30-1-117, the petition must:

  • Be sworn to.
  • Contain information about the decedent.
  • State whether the decedent had a Will.
  • Provide the names and information regarding the heirs or beneficiaries.
  • Contain an estimate of the fair market value of the assets subject to probate.
  • State whether there is a document waiving inventory, bond, or accountings.
  • If there is a Will, it must contain a statement that there is no document revoking or changing the Will being offered for Probate.​

The petitioner does not have to give notice to anyone of the filing of the petition unless opening the estate in solemn form. After the estate is opened, the personal representative is required to give notice to the beneficiaries of a Testate estate or heirs of an Intestate estate.The Petition to open the estate must be accompanied by an Order opening the Estate and any other documents required by the probate court.

Intro to Probate: Small Estates

Aurthur Fowler - 11/29/2015

Tennessee has a process for Small Estates that avoids the normal probate process. Small Estates can be testate or intestate estates. A small estate is an estate where the value of the decedent’s personal property does not exceed $50,000. Personal property does not include property jointly owned or property that passed to a designated beneficiary. A Small Estate does not address real property. T.C.A. § 30-4-102.

To open a Small Estate, the person (beneficiary, heir, personal representative, creditor) opening the Small Estate must wait 45 days after death before submitting a Small Estate Affidavit to the probate court. The person submitting the Small Estate Affidavit is called the Affiant. The Small Estate Affidavit shall set forth the following facts:

  • If there is a Will, the original shall be presented to the court for examination by the clerk and deposited with the court for safekeeping.
  • A list of unpaid debts left by decedent and the name and address of each creditor and the amount due that creditor.
  • An itemized description and the value of all of decedent’s personal property, the names and addresses of all persons known to have possession of any of decedent’s property, and a schedule of all insurance on decedent’s life payable to the decedent’s estate.
  • The name, age, address, and relationship, if any, of each devisee, legatee or heir entitled to receive any of decedent’s property.
  • Statement, subject to the penalty for perjury, that the affidavit is not false or misleading and that the affiant is mindful of all duties imposed upon the affiant by this chapter.

Bond may be required in a Small Estate unless a waiver applies under T.C.A. § 30-1-201(a)(1).

The probate court clerk will issue certified copies of the Small Estate Affidavit that will take the place of Letters Testamentary or Letters of Administration. T.C.A. § 30-4-104.To complete the Small Estate process, the Affiant can either wait one year from the date the Small Estate Affidavit was filed at which time the probate court will automatically close the Small Estate or file a motion stating that estate taxes have been paid or there are no estate taxes due and an affidavit that each debt of the decedent is paid.

Intro to Probate: Priority

Aurthur Fowler - 11/29/2015

Tennessee law sets out priority of payments from the estate in T.C.A. § 30-2-317 as follows:

  1. Costs of administration, including, but not limited to, premiums on the fiduciary bonds and reasonable compensation to the personal representative and the personal representative’s counsel.
  2. Reasonable funeral expenses.
  3. Taxes and assessments imposed by the federal or any state government or subdivision of the federal or any state government, including claims by the bureau of TennCare pursuant to § 71-5-116 and including city and county governments.
  4. All other demands that may be filed as aforementioned within four (4) months after the date of notice to creditors.

Any funds left over will be paid to the will beneficiaries or to the intestate heirs.

Intro to Probate: Claims & Exceptions

Aurthur Fowler - 11/29/2015

There are two types of claims—small claims and all other claims. Small claims are claims less than $1,000.00 in principal amount. Pursuant to T.C.A. § 30-2-311, the personal representative can pay these claims so long as these claims are valid claims. Any debts over $1,000.00, the personal representative must require the claimant file a claim.

A creditor must file a written claim, in triplicate, with the probate court. An example can be found here. When any claim is evidenced by a written instrument, the instrument or a photocopy of the instrument must be filed. When any claim is based upon a judgment or decree, a copy of the judgment or decree certified by the clerk of the court where rendered must be filed. When the claim is based upon an open account, an itemized statement of the account must be filed. Further, every claim must be verified by affidavit of the creditor before an officer authorized to administer oaths, and the affidavit must state that the claim is a correct, just, and valid obligation of the estate of the decedent, that neither the claimant nor any other person on the claimant’s behalf has received payment of the claim, in whole or in part, except such as is credited on the claim, and that no security for the claim has been received, except as stated in the claim. T.C.A. § 30-2-307.

Exceptions

Once a claim is filed, the probate court will send a notice of the claim to the personal representative. When the personal representative receives notice of the claim, the personal representative must decide whether to except to the claim. Under T.C.A. § 30-2-314, the personal representative and any party interested in the estate, has 30 days from the end of the 4 month notice to creditor period or 60 day extended notice to creditor period, if applicable, to file an exception. The exception must include a reasonably detailed explanation of the ground or grounds upon which the person making such exception intends to rely. Once an exception is filed, the creditor has 30 days from the date the exception is filed or the expiration of the exception period to amend its claim. If a creditor amends its claim, the personal representative or any party interested in the estate has 30 days from the date the amendment was filed or the expiration of the exception period to file an exception to the amended claim.

Intro to Probate: Notice to Creditors

Aurthur Fowler - 11/29/2015

A decedent’s property, except exempt property, is available to use to satisfy decedent’s just debts. In order to assert a claim, a creditor must file a claim against the estate. If the decedent died less than one year before the estate is opened, the personal representative must provide notice to creditors. If the decedent died more than one year after an estate is opened, T.C.A. § 30-2-306(e) waives any notice to creditors.

Notice to creditors is a two-step process. First, within 30 days after the issuance of letters testamentary or of administration, the probate court will have a notice to creditors as set out in T.C.A. § 30-2-306 published in some newspaper of the county in which the estate was opened. If there is no newspaper published in that county, the notice to creditors is accomplished by written notices posted in 3 public places in the county, one of which is the usual place for posting notices at the courthouse.

Second, the personal representative must mail or deliver by other means a copy of the notice to creditors that was published or posted to all creditors of the decedent of whom the personal representative has actual knowledge or who are reasonably ascertainable by the personal representative. In other words, if the personal representative knows of any creditors, either through personal knowledge or through inspecting the decedent’s mail, checkbook, or important papers, the personal representative must send these known creditors a copy of the notice to creditors that was published in the paper or posted. Although it is an additional cost, sending these notices through certified mail, return receipt is a good practice.

The notice to creditors is important because it triggers the time in which a creditor can file a claim. A creditor has 4 months from the date of the first publication or posting of the notice to file a claim under T.C.A. § 30-2-307 unless the creditor falls under an exception. Once notice to creditors is published, it is difficult for a creditor to claim that its claim is not barred after the 4 months expires under an exception. T.C.A. § 30-2-307(b) provides that “the burden of proof on any issue as to whether a creditor was known to or reasonably ascertainable by the personal representative, or as to whether actual notice was properly sent in accordance with § 30-2-306, shall be upon the creditor claiming entitlement to actual notice. In such cases, the distributees of the estate shall be personally liable on a pro rata basis if the court finds the claim is proper and the creditor did not receive the appropriate notice.”

Intro to Probate: Powers and Duties of a Personal Representative

Aurthur Fowler - 11/29/2015

Once the estate is open, the probate court issues either Letters Testamentary (if there is a Will) or Letters of Administration (if there is not a Will). A court can also issue Letters Testamentary, C.T.A. The abbreviation C.T.A. is short for cum testamentio annexio, which translates to with Will attached. Letters Testamentary, C.T.A. is issued when someone other than the individual identified in the Will is serving as personal representative.

The Letters Testamentary or Letters of Administration authorize and empower the personal representative to take possession and control of all of the decedent’s assets that become part of the estate, to collect all debts, to pay all just demands and debts owed, to settle the business of the estate according to law, and to perform all duties the personal representative is required to do by law. Letters Testamentary and Letters of Administration impose a fiduciary duty upon the personal representative to act in the best interest of the estate and deal with the estate and each beneficiary or heir in good faith. A personal representative is required to exercise the same degree of diligence and caution that reasonably prudent business persons would employ in the management of affairs. Mason v. Pearson, 668 S.W.2d 656, 663 (Tenn. Ct. App. 1984). The law favors the prompt administration of estates by marshalling, collecting, and disbursing the estate’s assets within a timely manner and close the estate as quickly as possible. Campbell v. Miller, 562 S.W.2d 827, 832 (Tenn. Ct. App. 1977). If the personal representative is also an heir or beneficiary, the personal representative has to be careful not to place personal interest ahead of the estate’s interest.

Keeping Your Old Original Will May Not be a Good Idea

Aurthur Fowler - 6/4/2014

If you have two original Wills, what happens when you only destroy the newer one? Does the old one become effective again? Is it revived?

All Wills have a sentence stating that this new Will revokes and replaces all old Wills. But what does that really mean? In re Estate of John Tyler McKelvey, the Tennessee Court of Appeals addressed this question. John McKelvey executed Wills in 2005 and 2011. When he died in 2016, no one could find the original 2011 Will, but they did find the original 2005 Will in the bottom of his filing cabinet underneath some papers. Mr. McKelvey’s children testified that he kept his important papers in his safe and not his filing cabinet. There was testimony that Mr. McKelvey was dissatisfied with the 2005 Will and that he intended to make a new Will after the 2011 Will. Witnesses also testified that they told Mr. McKelvey to destroy the 2005 Will. Because the original 2011 Will was not found and there was no evidence it was misplaced, the trial court applied the presumption that Mr. McKelvey destroyed the original 2011 Will.

A later Will containing a clause revoking all prior Wills does not always render an earlier will null and void as the terms of a Will are not enforceable until the person dies. Such a clause is irrelevant to whether the revocation of a later Will automatically revives an earlier one. To revive the earlier Will, the person seeking revival must demonstrate by a preponderance of the evidence that the decedent intended to revive the earlier will when revoking the later one. Keeping an original earlier Will creates a “bare presumption” of the intent to revive it. But, this “bare presumption” disappears when the decedent intended to make a third Will.

In this case, the appellate court held that Mr. McKelvey revived the 2005 Will. He kept the original 2005 Will. There was no evidence he took steps to prepare a Will after 2011. The testimony at trial was clear that Mr. McKelvey’s desired division of his estate after his death was consistent with the 2005 Will and inconsistent with intestate distribution.

There are two lessons to learn from this case: First, if you like your Will, make sure you keep the original Will in a safe place and tell your personal representative where it is. At Fowler & Fowler, we provide our clients with a letter when we give them their original Will. In that letter we confirm where the Will is being kept. Second, if you prepare a new Will, destroy your old Will. Get rid of it. Throw it away. Shred it. Do something with it other than keeping it as this case would have been different if Mr. McKelvey did not keep the original 2005 Will.