Real Property transfer upon death
 

I came across an issue while administering my father's estate. Crazy Tennessee law makes real property vest at death with the beneficiaries and it DOES NOT become part of the estate unless there is 'magic language' in the will. The statute does not define what the magic language must contain so vagueness is your enemy I guess.

I am not licensed in Tennessee and where I maintain law license, this is not the law. Seems to me that it creates chaos and likely takes the main asset out of the estate.

Anyone ever heard of this? Or have war stories?

We have found a work around but it really is a sticking point for title company underwriter.

Not a clue on Tennessee law, but things like this are why Cindy & I just set up a trust. We went to a contract lawyer we know. He impressed me years ago, when setting up the contract on my commercial property sale. He said; "I don't go to court. I write contracts so there is no need to go to court."

Life Estate issues?

I did Generation Skipping with my father's estate to both endow my children and protect their assets from potential greedy ex-wife. Took a codicil in father's will and a disclaimer from me.

That was a good move.

Is a Beneficiary Deed (Transfer on Death) valid in Tennessee?
Apparently they are in AZ.
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"These one- or two-page documents, called beneficiary deeds, are fairly simple to prepare. They can be revoked later and replaced with another deed if your situation changes. The deeds don't transfer ownership of a property until death, meaning an owner can sell a property, refinance it or take other actions while still living. The deeds aren't as versatile as living trusts but are less expensive. For many Arizona homeowners, a beneficiary deed might be all they need."
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Probate-free beneficiary deeds must follow Arizona law

Before anyone did any bucket kicking or flower pushing put me, my brother, and my mother all on the deed of her house. That way whomever was left tossing the last shovel of dirt owned it with no issues or transfers to mess with. And if anyone wanted to sell it, they had to have either the other living owners to sign the papers, or death certificates to represent them.

Do you pay tax on your increase in wealth when a sibling passes on?

by adding names to a home pre-death you are 'gifting' the home at that time. thus potentially requiring the filing of a gift tax return and very efficiently losing the wonderful step up in basis to FMV at DOD that would have occurred if the home/asset were kept by the deceased until passing.

a note to all please consult your own atty/cpa on issues like this. no one scenario works for everyone.

there are also estate tax laws that are very different between states
maryland had at aggressive and greedy set of laws we encountered
funny thing was the money maryland wanted to tax was in ohio
big estate Qed for feds taxes also took forever to pay out

the maryland law was tested on the case of a freed slave
they want a % of the mans value as a slave paid by the freed man
or so the lawyer claimed
any way I only got 1/4 of 1/19 share