Top Estate Planning Concerns for Individuals Age 55 and Over

Estate planning is generally important to individuals of all ages, but America’s Baby Boomer population has most certainly entered the age group where such planning becomes of great importance.  This Article gives a brief overview of several considerations that individuals should keep in mind as they work through completing an effective estate plan.

I.         Planning Documents that Protect Individuals prior to Death

A complete estate plan should include both financial and health care powers of attorney to ensure that the individual in question is cared for in the most efficient manner possible during the remainder of his or her life.

Durable General Power of Attorney

The purpose of a Durable General Power of Attorney is to appoint someone to manage your financial affairs when you are unable to do so yourself.  If an individual becomes incapacitated and no one has been appointed under a Power of Attorney, then it is often necessary to apply to a court for the appointment of a conservator of the person’s property.  A properly drafted Power of Attorney will take into consideration the need to allow your agent the ability to aid in qualification for TennCare or other social benefits programs, if necessary.

Advance Care Plan

Tennessee recently began encouraging the use of Advance Care Plans in place of traditional Health Care Powers of Attorney and Living Wills.  The Tennessee Advance Care Plan combines the features of a Living Will and Health Care Power of Attorney into one document which allows you to appoint a health care agent to make health care decisions for you in the event you are unable to make them for yourself.  The Advance Care Plan also allows you to direct your agent’s decisions with respect to whether you wish to receive certain treatments in the event you are suffering from chronic health conditions.

II.       Planning Documents that take effect after Death

In addition to legal planning documents geared toward decision-making while a person is living, documents are also needed to ensure that the individual’s assets are distributed properly after death.

Last Wills

Individuals who pass away without a valid Will are subject to the state’s intestacy laws, which essentially act as a Will for the deceased individual.  In many states, the intestacy statutes may not match the desires of the decedent with respect to the ultimate distribution of his or her property.  Executing a valid Will allows you to ensure that your property passes according to your wishes.  A properly drafted Will may also make the probate process more efficient.  Finally, with proper drafting, a Will can also provide that assets are to benefit multiple generations and that such assets are to receive protection from creditors, generally through the use of trusts.

Avoiding Probate


Many clients are also interested in avoiding probate at death.  First, it is important to point out that the probate process in Tennessee (and many other states) is not nearly as costly as many make it out to be.  Avoiding probate does, however, lessen the amount of court involvement after an individual’s death and it increases the privacy pertaining to the individual’s estate.

With proper advice, many clients can successfully plan around the probate process.  For fairly complex estates or estates with real property in multiple states, the use of a Revocable Living Trust may be appropriate.  For other estates, avoiding probate may be as simple as titling assets jointly between spouses and ensuring that beneficiary designations and “transfer on death designations” are up-to-date and properly worded.  Keep in mind, however, that if beneficiary designations and documents conveying joint ownership are not worded appropriately, the individual’s estate plan may largely cease to be effective.  We recommend clients work with an attorney who is open to helping you work through beneficiary designations, payable on death designations and joint ownership of assets if you wish to avoid probate.


III.      Elder Law Considerations

Families coping with both the emotional and legal complexities associated with long term elder care face a unique yet serious set of challenges.  Baby boomers in particular face such issues not only with regard to themselves, but with regard to their parents as well.  Medicaid planning, for example, lends itself to various complexities and pitfalls.  People who try to answer Medicaid questions without first undergoing extensive training run the risk of giving out misinformation that may lead to serious, long lasting effects on the care options available to you and your loved ones. Realizing the complexity of this area of elder law is the first step toward ensuring that you or your loved ones do not fall victim to ineffective planning.  As such, when issues pertaining to Medicaid or other social benefits programs arise as part of your (or your parents’) estate plan, we strongly recommend you seek out professionals who specifically focus their practice on elder law issues.  For more information on elder law planning and some of the specific pitfalls therein, you may be interest in reading a short Article entitled “The Value of Hiring an Elder Law Attorney” by Dana Perry and Ryan Barry, which can be found at

IV.     Tax Concerns

Finally, clients often call us with the central goal of minimizing estate and inheritance taxes.  However, recent changes to both Federal and Tennessee law surrounding the topic of transfer taxes has greatly reduced the number of estates that will incur estate and inheritances taxes.

Federal Transfer Taxes


Regarding the Federal estate tax, the American Taxpayer Relief Act of 2012 was signed into law in December of 2012 (the “Tax Relief Act”).  It provides that a tax of 40% will be imposed on all amounts in a taxable estate in excess of $5.25 million for 2013.  Similarly, the gift tax rate for 2013 is a flat 40% for aggregate gifts in excess of $5.25 million.  The $5.25 million credit is known as a “unified credit,” meaning it may be used to shelter gifts during life, after which any remaining credit will be used to shelter transfers at death.


The Tax Relief Act has kept in place the very important feature known as “portability.”  This means that to the extent a spouse’s unified estate and gift tax exemption is not fully used upon his death, it carries over and may be used by his spouse upon her later death to shelter assets from estate tax.  Unfortunately, the GST exemption was not made “portable.”

Thus, single individuals generally need not worry about incurring federal transfer taxes unless their estate is approaching $5.25 million.  For married couples, federal transfer taxes are unlikely until the collective estate approaches $10.5 million.

Tennessee Transfer Taxes

The state of Tennessee has an inheritance tax, which will be fully phased out by 2016.  Currently, individuals are granted an exemption of $2 million (2014) prior to owing any Tennessee inheritance tax.  However, the Tennessee inheritance tax exemption will increase to $5 million in 2015.  There will be no Tennessee inheritance tax on estates of decedents passing away in 2016 or later.  Tennessee has also repealed its gift tax, retroactive to January 1, 2012.

By Dana Perry, CELA | Chambliss, Bahner & Stophel, P.C. | Chattanooga, TN |

This article was originally published at .
It has been re-posted here with permission from the author.

This article is for informational purposes only and is not intended to be advertising, solicitation, or legal advice.  This article may not reflect the most recent legal changes.  Individual circumstances vary, and laws differ from state to state.  If you have a question about your specific situation, we recommend that you find a certified elder law attorney in your area.