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As a general rule, when someone dies, his or her bank accounts go through probate. Probate is the process Tennessee courts use after someone dies to validate any will and appoints someone to handle the estate. The person appointed as personal representative (such as the executor of your will) has the duty to collect all the probate assets of the person who died, pay the creditors of the decedent, pay any taxes that are due, and then distribute the assets to the heirs.

Not all assets are required to go through probate. Many assets such as a home that is entitled in the names of both spouses is not required to go through probate. Life insurance proceeds are typically paid directly to the named beneficiaries on the insurance policy.

Tennessee does not currently have an inheritance tax. For most Tennessee residents, they don’t have to pay a federal estate income tax either unless they are fairly wealthy. Residents do have to pay their federal and state tax returns through their date of death.

How are the bank accounts titled?

Whether a bank account needs to go through the probate process depends on how the bank account is titled:

  • Titled in just the name of decedent. If Sue Smith owns a checking account with her bank and the account is just in her name, then the funds in the checking account will go through probate.
  • Titled with a payable on death (POD) designation. Here, the owner of the bank account fills out a form that says that on your death it is payable to the named POD beneficiary. The beneficiary then, as long as they can prove their identity, can ask the bank to transfer the funds to them, without the need to go through probate.
  • Jointly owned bank accounts with a right of survivorship. Many married couples have joint bank accounts. In a joint bank account, all the joint owners can make withdraws at any time while they are alive without the need for getting the other owners to sign any forms. Most joint bank accounts also have a “right of survivorship,” if they are held in two names. When the first person dies, the second becomes that automatic owner of the bank account.

In addition to married couples, a parent and child, two roommates, two friends, or any two people can also open a joint account with right of survivorship. The bank records should make clear that the joint owners have a right of survivorship so that the surviving owner is entitled to all the property without the need to go through probate.

  • Joint tenancy. This is a joint bank account without the right of survivorship. When one owner dies, his/her share does need to go through probate. The other half is payable directly to the other joint tenant.
  • Living trust. Some married couples create living trusts so that when one person dies, his or her assets are placed in trust for the surviving husband or wife. This is a technique to avoid the need to go through probate and to possibly reduce any federal estate taxes.

There are other practical alternatives you may also consider.

The decisions about who can be the personal representative of an estate and who the heirs are depends on whether the decedent had a will or died intestate (without a will).

At Wagner & Wagner Attorneys at Law, our Chattanooga probate lawyer helps families and heirs complete the formalities of the probate process. We untangle the knots that often occur during the administration of an Estate. We work to assert your right to your rightful share of the estate of loved one. If a will was drafted through undue influence or when the decedent lacked the capacity to make a will, we help family members contest the will.

For help with probate and any probate disputes, call us at 423-756-7923 or complete our contact form to schedule an appointment. We represent heirs and beneficiaries of decedents in Chattanooga and Cleveland, TN, and in the surrounding areas.