With the elimination of the inheritance tax in Tennessee, 2016 was already set to be a notable year for estate planning and probate law. But the 2016 legislative session also produced several significant changes to laws governing estate planning, probate administration, and conservatorships/guardianships. Here are five new pieces of legislation of which every practitioner should be aware:
1. Personal Representatives now have clear authority over digital assets
Effective July 1, 2016, personal representatives in Tennessee have more clearly defined authority to manage a decedent’s “digital assets,” such as emails, social media accounts, or text messages. For example, if a person were to die, his or her personal representative could recover family photos, videos, or emails from services such as Facebook, iCloud, Gmail, etc. This matches a trend in both legislatures and online service providers around the country that have updated both statutes and terms of service to allow a personal representative or next of kin to access and recover digital assets. Prior to this amendment, Tennessee law provided no such explicit authorization, although it has become more common for attorneys to include such provisions in estate planning documents. This is a welcome change that recognizes the fact that people increasingly live part of their lives online.
2. Waivers must be notarized or made under penalty of perjury
Waivers of bond, inventory, or accounting are frequently employed to reduce administration costs. As of April 14, 2016, all such waivers must now be executed in the presence of a notary or under penalty of perjury, unless they are waived in the will. This includes beneficiary or distributee statements in which the distributee waives final accounting or final hearing. Prior to the enactment of Public Chapter 809, it was common for distributee statements to be executed without the requirement of a notary or being made under penalty of perjury. When the act took effect immediately on April 14, it took some probate attorneys and personal representatives by surprise, and more than one estate has had to issue new distributee statements to the distributees that comply with the requirement that the statement be sworn or made under penalty of perjury. Probate attorneys should make sure their forms are up-to-date and comply with the new requirements of the statute.
3. Amount banks may pay out to creditors or next of kin increased
Under Tenn. Code Ann. § 45-2-708, a bank or credit union may pay out bank account or safe deposit box contents to a known personal representative, to a creditor for funeral expenses, to a creditor for expenses related to a last illness, the surviving spouse, or the next of kin under certain circumstances. With the enactment of Public Chapter 804, as of April 14, 2016, the maximum amount a bank could pay out without a personal representative being appointed was increased from $10,000 to $15,000. Similarly, the amount of a check written to a decedent that a bank can negotiate after his or her death under certain circumstances was increased from $2,500 to $10,000. It is worth noting, however, that many financial institutions are wary of such distributions or transactions, and neither the prior statute nor the current one actually requires the bank to do so.
4. Wills with signatures of witnesses made on an attached affidavit can still be valid
In two recent cases, Estate of Chastain, 401 S.W.3d 612 (Tenn. 2012) and Estate of Bill Morris, 2015 WL 557970 (Tenn. Ct. App. Feb. 9, 2015), there was a finding that the affidavit proving a will pursuant to Tenn. Code. Ann. § 32-2-110 is a separate legal document. In both cases that meant that wills on which the testator or witnesses only signed the affidavit were invalid, even though the affidavit was intended to be part of the will. Obviously, good practice has always been to require the witnesses to sign both the will and the self-proving affidavit, but probate attorneys don’t always have the luxury of drafting the wills they later have to probate. The legislature addressed this harsh result in Public Chapter 843, effective April 19, 2016, which specified that witness signatures made on a self-proving affidavit attesting a will are to be considered signatures to the will if necessary to prove the will’s execution, as long as all other requirements are met. The new law only applies to witness signatures and does not alter the requirement for the testator’s signature. The newly updated Tenn. Code Ann. § 32-2-110 will apply to all wills executed after April 19, 2016, and wills executed prior to that date that have not undergone final settlement.
5. Conservators can no longer restrict communications with a respondent unless good cause shown
The area of conservatorships and guardianships has undergone considerable scrutiny and change over the past several years, and the legislature once again has altered some of the restrictions that may be placed on a person in a conservatorship or guardianship. Public Chapter 1062, which took effect May 17, 2016, prevents a conservator from restricting a respondent’s communication with others, including phone calls and communications by mail. Such restrictions may be obtained via a court order if good cause is shown. Good cause includes prior protective orders, a showing of a likelihood of abuse, neglect, or financial exploitation by the person seeking to contact the respondent, or the documented wishes of the respondent.
