Detailed Answer
When someone dies in Tennessee, their estate goes through probate. The personal representative (sometimes called an executor) manages the estate. A key task is calculating the net estate—what remains after paying debts, taxes, and fees.
1. Identify and Value All Assets
Start by listing every asset owned by the decedent at death. Common assets include:
- Real property (homes, land)
- Bank accounts and cash
- Investment accounts and stocks
- Life insurance proceeds payable to the estate
- Personal property (vehicles, jewelry, household goods)
File a formal inventory with the probate court. Tennessee law requires this under Tenn. Code Ann. § 30-2-404. See the full Title 30 statutes here: Tenn. Code Ann. Title 30.
2. Determine Allowed Claims and Expenses
Court rules set deadlines and priorities for claims. The main categories under Tenn. Code Ann. § 30-2-306 are:
- Funeral expenses and last illness expenses
- Administration expenses (court costs, attorney fees, bonds)
- Taxes (estate, inheritance, income)
- Secured debt (mortgages, liens)
- Unsecured debts (credit cards, medical bills)
Creditors must present claims within nine months after the date letters testamentary issue. The personal representative reviews, allows or disputes each claim, and pays allowed claims from estate funds.
3. Calculate the Net Estate
Subtract the total of allowed debts, taxes, and administrative costs from the gross asset value. The formula is:
Net Estate = Total Assets − (Allowed Debts + Taxes + Fees)
Example:
- Total assets: $500,000
- Funeral and illness: $15,000
- Administration fees: $10,000
- Taxes: $20,000
- Secured and unsecured debts: $30,000
Net Estate = $500,000 − ($15,000 + $10,000 + $20,000 + $30,000) = $425,000
4. Distribute the Remaining Assets
After you compute the net estate, distribute it to beneficiaries or heirs according to the will or, if there’s no will, under Tennessee’s intestate statutes (Tenn. Code Ann. § 31-2-101 et seq.). For detailed distribution rules, see: Tenn. Code Ann. Title 31.
Helpful Hints
- Keep detailed records of every payment for court review.
- Hire a qualified probate attorney early to avoid missed deadlines.
- Obtain professional appraisals for real property and valuable personal items.
- Communicate regularly with beneficiaries about progress and timelines.
- Consider tax planning strategies if estate taxes apply.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Consult a licensed Tennessee attorney for guidance specific to your situation.