First Citizens Hosts Smart Women Event on Estate Planning
This article is republished with the permission of the State Gazette and Rachel Townsend.
State Gazette photos/ Rachel Townsend

Thursday, February 28, 2019

Picture Image of Event

First Citizens National Bank hosted a Smart Women event focusing on estate planning Thursday evening at Dyersburg State Community College. Pictured below, Dr. Karen Bowyer, president of DSCC, opened the program with a few words regarding the college’s programs and partnership with Smart Women.

Dyersburg State Community College President Dr. Karen Bowyer

First Citizens National Bank welcomed Senior Trust Officer Andrew Carter as the guest
speaker for its latest Smart Women event, held at the Dyersburg State Community
College Student Center.

Judy Long, President and COO FirstCNB

First Citizens National Bank COO and President Judy Long welcomed all in attendance at the first Smart Women event to be hosted this year.

Throughout the hour-long seminar, Carter discussed important key factors in understanding estate planning, touching on issues including power of attorney, living wills, advanced directives, last wills and testaments and living trusts.

When placing someone in charge of your affairs, Carter says it’s important to know what documents should be put into place, and what powers are to be granted, both limited and unlimited.

Carter says appointing a power of attorney is an important step in planning your estate, without which, your estate is forfeited to the state.

While you may want to consult an attorney regarding your living will, Carter says those who prefer not to involve an attorney may download a free living will declaration online at:

First Citizens National Bank Senior Trust Officer, Andrew Carter

A program regarding estate planning was presented by First Citizens National Bank Senior Trust Officer Andrew Carter.

The living will allows a person to choose their last wishes such as medical care, pain management, hospice care, burial arrangements, donating organs, being placed on life support or opting for feeding tubes. The living will should be notarized with two witnesses present during the signing.

Carter shared four ways assets pass at death:

1. Joint assets pass to surviving owners by law.
2. Beneficiary designation (payable on death) assets pass per contractual agreement.
3. All assets in sole and separate name go through probate and pass by the terms of a will, if one exists, or by the laws of intestacy.
4. Living trusts continue to control assets after death based on rules you created during your lifetime.

Carter says the probate process, in which assets in the sole name of the deceased pass under state law, allows a time and process for creditors to file claims including: cost of administration, funeral expenses, taxes and debts for which claims are filed.

In Tennessee, the distribution of probate estate by intestate distribution is as follows:

• Spouse and no children: All goes to spouse
• Spouse and one child: ½ to spouse, ½ to child
• Spouse and two or more children: 1/3 to spouse, 2/3 to children
• Children and no spouse: to children equally
• No spouse or children: to parents, if surviving; otherwise to brothers and sisters and their issue.

Requirements of a valid will in Tennessee include: intent, capacity, freedom from fraud, duress, undue influence or mistake and execution in accordance with state law. Two witnesses must be in the presence of the testator and be in the presence of each other.

Carter says estates typically pass onto the surviving spouse without a tax penalty. If the estate then passes onto the children, it will be taxed if the federal exemption exceeds $11.4 million. However, in the event there is no surviving spouse, the estate will pass tax free to the surviving children.

According to Carter, the estate tax applies to all non-exempt assets at death. Property subject to estate tax includes life insurance policies, (including those transferred in kind, up to three years before death), ½ of joint assets owned with a spouse, foreign assets owned are included for citizens and resident aliens.

Trusts are created as means to control assets bound by terms or rules for an intended individual. Carter says trusts are beneficial as they protect beneficiaries from taxes, creditors, or even spouses, providing a way to encourage positive behavior and lifestyles. 

When setting up a contingent trust, the same rules apply as discussed previously regarding estates. A contingent trust is created if both parents are deceased. The trust account for the surviving children will be assigned a trustee who controls how and when assets are distributed. A guardian should be named for minor children.

With marital deduction planning, Carter says the trustee controls distributions. In the instance of a marital deduction planning, the trustee is the surviving spouse. Under state laws, marital deduction doubles the amount of tax-free money passing from estate tax and Generation Skipping Transfer (a federal tax equal to the maximum estate tax at the time of the transfer to grandchildren or beyond).

In the case of unlimited marital deduction, no gift or estate tax will be required if paid to a spouse who is a citizen or is in a qualified trust, regardless of the amount.

Need to remove assets from your taxable estate?

Carter says, “spend lavishly and keep nothing of value,” gifting appreciated or qualified assets to charities while making annual exclusion gifts to your loved ones.

In closing, Carter encouraged everyone in attendance to take charge of their estate, assigning a fiduciary, either corporate or individual, to oversee the correct allocation of their estate, controlling assets the way they intended.