Legal Question in Elder Law in Tennessee

In short, my late mother established a trust fund (Tennessee) for her grandchildren. Her elder lawyer talked her and the family into setting up this trust with the bulk of her estate, in lieu of a will. Trusting the attorney, we complied. Now two years after her death, the bank holding the account that is the trust, says that they do not have any paperwork about said trust and claim that they do not recall meeting with the family. Legal counsel has refused to be present at these meetings, claiming other commitments. Now we learn that legal counsel didn't know about the "missing paperwork" has advised that this trust might go to probate. We trusted this attorney's advice so that we could AVOID probate. Now the state could get a part of our mother's inheritance to her grandchildren? This is an outrage. What can we do? Ticked in Tennessee


Asked on 9/30/10, 2:36 pm

2 Answers from Attorneys

Caitlin Moon C2Law

You should consult an attorney in your area with experience in estate and probate matters - this person can give you specific advice about your situation. However, following is some general information - this may or may not apply in your situation, but I share for your general reference:

First, you should understand that in Tennessee, the probate process does not allow the state to "take" part of anyone's estate. In the probate process, the court oversees the distribution of an estate according the deceased's will (if there is one) or according to intestate succession (if there is no will). Intestate succession is simply the set of rules stating which heirs receive the property if there is no will. You can view the law on intestate succession in Tennessee here:

http://www.michie.com/tennessee/lpext.dll?f=templates&fn=main-h.htm&cp=tncode

The law is found in Title 31 Descent, Chapter 2 Intestate Succession.

If the property in question is over a certain value, then estate taxes may be due. Currently, Tennessee estate property over $1,000,000 is taxed, meaning that anything under this amount passes to heirs tax-free.

If your mother passed away in 2008, then the federal estate tax exemption was $2,000,000 per person - this means that up to $2,000,000 of her estate would pass to her heirs tax-free.

Other than taxes, the costs associated with probate are minimal. There are court fees and attorneys' fees if you hire an attorney, but, as I said above, the state doesn't "get" any part of a probate estate unless the state (or federal government) is collecting inheritance tax for large estates.

Finally, regarding the trust - keep in mind that transfers into a trust can be deemed "gifts" that are taxed by both the state and federal government. If the trust was not effectively created and funded, and the property in question is instead part of your mother's probate estate, you could actually be saving the gift tax.

Again, I urge you to speak with an attorney in your area so that you can obtain advice that is specific to your situation - with the limited facts you share, it's not possible for me to provide further advice.

I wish you the best.

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Answered on 10/05/10, 3:11 pm
Marshall Snyder Law Office Of Marshall Snyder

Either there is or there is not a living trust that your mother set up. If there is such a trust and the assets were placed in the trust prior to her death, probate can be avoided because all the assets are in the trust. If there is no trust,and there is no Will, then your mother's estate needs to be probated. You need to ask the lawyer for a copy of the trust if he in fact did prepare such a document.

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Answered on 10/05/10, 8:30 pm


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