3 Wills for Heroes Clinics Planned

The TBA Young Lawyers Division has three Wills for Heroes clinics planned during Celebrate Pro Bono Month. The first will take place Oct. 22 from 9 a.m. to 5 p.m. at the Benjamin L. Hooks Public Library in Memphis. The second will take place Oct. 29 from 9 a.m. to noon at the Immanuel Baptist Church in Lebanon. The third will take place Nov. 12 from 9 a.m. to 1 p.m. at Franklin Police Department in downtown Franklin. Volunteers are needed for all events. Get details and contact information for each clinic on the website.

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What to Do with an Estate with Foreign Assets (Even that 'Little' Bank Account in Europe)

This article regards estates of decedents who owned foreign assets and the tax and reporting requirements. Many people are quite shocked to learn about the reporting requirements for foreign bank accounts, in particular. After all, tax is typically being paid in the foreign jurisdiction, or perhaps the foreign bank accounts generate little to no income that is taxable anyway. There are, however, two categories to be concerned with: First, of course is taxation;  second is reporting in and of itself. How does this all relate to estates? Well, if the estate has foreign assets and the proper reports are not made, then the personal representative of the estate could be liable.

One of the main reporting obligations is actually not an IRS form at all, it’s a treasury department Form FinCen 114, commonly called an FBAR (Foreign Bank Account Report). It’s part of the financial crime enforcement network, and if the foreign bank accounts in the aggregate exceed $10,000 at any point during the year (even very briefly) then this report must be electronically filed. The penalties for failure to file can be quite draconian, including willful penalties of 50 percent or more of what is not reported. Again, note that this filing has nothing to do with the amount of tax owed, if any.  If a person has signature authority of foreign financial accounts then there can also be a reporting requirement, even if there is no financial interest in the account.  As such, one should be careful about the accounts that a person has signature authority over.  Similarly, one should be careful about having a power of attorney over one’s parents who have a foreign account, as there could be a reporting requirement.

As for tax reporting, several years ago an act of Congress commonly called FATCA added Form 8938, Statement of Specified Foreign Financial Assets. It is very important that this form is filed, since the statute of limitations never runs if it is not – meaning that there could be a potential tax problem forever.  The IRS recently released regulations requiring this form to be filed by certain domestic entities as well.

Foreign mutual funds held in an estate of a United States citizen or resident are particularly problematic. A United States citizen or resident should never own foreign mutual funds because of the extensive reporting under Form 8621, PFIC shareholder filings and the often very unfavorable tax treatment and the difficulties in obtaining information from often very reluctant foreign financial institutions (FATCA and PFICs are two of the main reasons it’s often hard for United States citizens and residents to open accounts overseas). Although there may be some elections available to alleviate some of the tax burden, foreign financial companies often refuse to supply the needed information.

Of course, some will wonder how the IRS would ever know about these accounts. Well, FATCA requires foreign financial institutions to identify and report US holders of non-US financial accounts. The U.S. already has agreements with most countries for this reporting.

The major forms to be concerned with are set forth in the list below. This is not an exhaustive list and not every form is needed in every circumstance. The form number is listed with its title in parenthesis:

  • FinCen 114 (Foreign Bank Account Report),
  • Form 926 (Transfers to Foreign Corporations),
  • Form 1042 (Payments to Foreign Taxpayers),
  • Form 3520, 3520A (Foreign Trusts),
  • Form 5471 (US Owned Foreign Companies),
  • Form 5472 (Foreign Owned US Companies),
  • Form 8233 (Independent Personal Services by Nonresident),
  • Form 8621 (Passive Foreign Investment Corporations),
  • Form 8833 (Treaty Based Disclosure Form),
  • Form 8840 (Closer Connections Form),
  • Form 8858 (Foreign Disregarded Entities),
  • Form 8865 (Foreign Partnerships),
  • Form 8938 (Specified Foreign Financial Assets),
  • Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding).

Now, back to the subject of personal representative liability. Pursuant to Title 31 U.S.C.§3713(b) any personal representative who pays “any part of a debt of the . . . estate before paying a claim of the Government is liable to the extent of the payment for unpaid claims of the Government.” Therefore, the personal representative may be liable for taxes, interest and penalties if the distribution leaves the estate unable to pay the government and the personal representative had notice of the government’s claim. In terms of notice “the executor must have knowledge of the debt owed by the estate to the United States or notice of facts that would lead a reasonably prudent person to inquire as to the existence of the debt owed before making the challenged distribution or payment.” United States v. Coppola, 85 F.3d 1015, 1020 (2d Cir.1996). Therefore, there is a duty of inquiry regarding the existence of these obligations, and as such important that the proper reporting is done and taxes paid.

The good news, however, is that much of the reporting, aside from the PFIC reporting of course, is actually not very difficult. Moreover, there are generally tax credits that can be used due to foreign tax paid, meaning that the U.S. tax liability is often quite small. If there are past years that have not been reported, the government currently offers several different programs to settle the tax and reporting obligations for reduced penalties (provided that a person comes forward prior to receiving IRS notice).  Considering the severity of the penalties, proper reporting is obviously very advisable.

Written By Michael Goode, Executive Council Member, TBA Estate Planning & Probate Section

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Read About Estates, Torts, Family Law … and Dodge Ball?

Murfreesboro lawyer Josh McCreary examines last wills and testaments, writing that "in the wake of the 2015 Court of Appeals opinion in In Re: Estate of Morris, the Tennessee legislature has stepped in and amended Tenn. Code Ann. §32-1-104 to lessen the formalities of Wills executed before July 1, 2016." Read in the September Tennessee Bar Journal what this will mean for estate practice. Columnist John Day writes about the two times in the past five years that the statute of limitations applicable to personal injury claims filed on behalf of persons with mental impairments has been changed. Columnists Marlene Eskind Moses and Manuel Benjamin Russ look into finding and defining income available for child support and alimony, and humor columnist Bill Haltom writes about his dubious experiences with junior high sports, particularly Dodge Ball.

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Court Square 2016 Debuts in Columbia

This year’s Court Square CLE series will launch Sept. 7 at First Farmers Bank in Columbia. Nathan Ridley, Jeff Carson and Roger Maness will address legislative updates, estate planning for digital assets and family law in mediation. Learn more or register online.

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Retirement Webinar on Tap for Wednesday

The ABA Retirement Funds Program is hosting a free webinar on the role of self-directed brokerage accounts (SDBA) within retirement plans. The session will be held this Wednesday at noon Central Daylight Time. Topics include: the basics of SDBAs, the benefits of SDBAs, SDBA product details, how SDBAs work within the regulatory environment of ERISA, and trends related to SDBAs in the marketplace.

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Bristol Lawyer Charged with Stealing from Estate

Bristol lawyer Don W. Cooper has been charged with stealing from an estate for which he was serving as executor, according to the Tennessee Bureau of Investigation. The agency said it began investigating the 70-year-old in November 2015 and found that he stole more than $10,000 from an estate in which the beneficiary was supposed to be St. Jude Children’s Research Hospital. Cooper, who was indicted in April for stealing from another estate, turned himself in and was released on a $15,000 bond, the Greeneville Sun reports.

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Message From the Incoming Chair

Dear Section Members,

As the incoming chair of the Estate Planning and Probate Section for the 2016-2017 bar year, I cordially invite you to join us June 15-18 at the annual TBA Convention in Nashville at the Sheraton Music City Hotel. In particular, please make plans to attend the Estate Planning and Probate Section meeting on Friday, June 17, at 10 a.m. in the Cheekwood Room.

We will discuss plans for the upcoming TBA year, including continuing education and networking opportunities. As a Section Member, we welcome your attendance, participation and suggestions as to how we can make the Section stronger and a more valuable resource to you and your practice.

Please reach out to me directly if I can be of assistance. I look forward to serving as your Chair and hope to see you at the TBA Convention in Nashville.

Jeff Carson

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Estate Planning and Probate Section to Meet at TBA Convention

Please make plans to join the TBA Estate Planning and Probate Section for a business meeting that will be held in conjunction with 2016 TBA Convention.  The TBA Estate Planning and Probate Section meeting is scheduled as follows:


Friday, June 17, 2016
10:00 – 11:00 a.m. Central / 11:00 a.m. – 12:00 p.m. Eastern Time


Sheraton Music City Hotel
777 McGavock Pike
Nashville, TN 37214
(615) 885-2200

Room Location - Cheekwood Room

A conference call will be available for those unable to attend in person. The following are the instructions for joining the call:

You will dial in on the following number: 1-855-795-9620

You will then be prompted to enter the following conference ID number, followed by the pound (#) sign: 5722409#

There is still time if you would like to register for TBA Convention. You may register by calling the TBA at (615) 383-7421 or register online at:

2016 TBA Convention

You do not have to be registered for Convention to attend this Section meeting.  We hope to see you there!

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Nursing Home Ejections Raise Legal Questions

The ABA Journal explores the legality of nursing homes ejecting patients who are considered undesirable. The Long-Term Care Ombudsman Program found eviction and discharge complaints have increased about 57 percent since 2000. The article highlights a California case where the family of an ousted patient appealed to the health department and won, yet the nursing home still refused to readmit the patient. 

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Register Today for the 135th Annual TBA Convention

Join us on June 15-18 in Nashville for the 135th Annual Convention! Registration for the 2016 TBA Convention includes:

  • free access to all TBA CLE programming;
  • the Opening Reception;
  • the Bench Bar Programming and Luncheon;
  • Law School and general breakfasts;
  • the Lawyers Luncheon;
  • the Thursday evening Joint (TBA/TLAW/TABL) Reception;
  • the Thursday night dinner and entertainment at the George Jones Museum;
  • and the Friday night Dance Party.

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House Civil Justice Committee Forwards Bills

The House Civil Justice Committee this week sent several bills to the House floor before it closed for the year. Among those are: changes to the conservator law, HB2030 by Rep. Jeremy Faison, R-Cosby; changes to the tolling statute for those persons who “lack capacity” were made with HB1651 by Rep. David Hawk, R-Greenville; and HB2033, also by Rep. Faison, as amended creates civil immunity for those property owners who do not post “no guns allowed” signs.

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Mentors in Estate Planning & Probate Needed

The TBA Mentoring Program is looking for volunteer mentors dealing with estate planning & probate in the Davidson, Williamson, Maury and Rutherford County areas. Mentoring is the most effective way to pass along skills, knowledge and wisdom and it is critical to a new lawyer’s success. There are many new attorneys signed up for this program, but there is a shortage of mentors to match them with. 

To qualify as a mentor, you must have a minimum of eight years of experience with no formal BPR investigation pending or disciplinary action imposed in the last 10 years. For more information on the program, visit:

If you’re interested in signing up, please contact Kate Prince at 615-277-3202.

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Bill on Witness Signatures for Wills Moves to Senate Floor

The Senate Judiciary Committee today passed SB1560 by Sen. Ferrell Haile, R-Gallatin, with an amendment. The bill as amended provides that any will executed prior to July 1 will be considered executed if the witnesses to the will signed a self-proving affidavit incorporated in a will and other existing statuary requirements are met. The bill will go to the Senate floor next. Rep. William Lamberth, R-Cottontown, passed the companion bill, HB1472, on the House floor last week.

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Bill Addressing Witness Signatures Moves Out of Committee

Legislation from Rep. William Lamberth, R-Cottontown, permitting until July 1, 2016 the combined signatures of witnesses and those executing a self-proving affidavit to validate a testators signature moved out of the House Judiciary Committee today. The bill (HB 1472) is intended to address a situation like that addressed in the Court of Appeals case IN RE Estate of Bill Morris.

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News About Section Members

Matthew Buyer recently moved to Pinnacle Financial Partners to open the Memphis Trust Department. In addition, he will continue to serve as an adjunct in the MBA program at Webster University in Millington. He also recently completed 32 years of reserve duty with the Army National Guard.

Jeff Carson of Franklin has been named vice chair of the TBA Estate Planning and Probate Section. He will assume the chairmanship for the 2016-2017 bar year.

Jennifer Exum has recently been named Of Counsel for Chambliss Law in Chattanooga.

Angelia Nystrom of Knoxville has been named Director of Specialty Programs for the University of Tennessee Institute of Agriculture.

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LAET Partners with Attorney to Offer Free Estate Planning

Attorney David Coates, of the Law Offices of David Coates, has partnered with Habitat for Humanity and Legal Aid of East Tennessee to offer free estate planning this Saturday to every Habitat for Humanity of Greater Chattanooga Area homeowner in the Chattanooga area. “Now that these families are homeowners, it is such a blessing to see them able to meet with a lawyer to help protect their homes,” Cheryl Marsh, Director of Family Services, said. The clinic, along with a free legal clinic, will be held in the Chattanooga Housing Authority’s multipurpose room located at 801 N. Holtzclaw Ave.

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Join Us for the 2016 Estate Planning and Probate Forum

Make plans to attend the 2016 Estate Planning and Probate Forum, which will be Feb. 26 at the Embassy Suites Hotel in Franklin. Learn from some of Tennessee's top attorneys about cutting-edge estate planning techniques and probate considerations, as well as gain insight into the new legislation and case law rulings affecting these areas.

This information-packed, full-day program will provide six general hours of concise and practical CLE. Topics will include trust decanting, portability, the marriage equality decision and a legislative update. Attendees will also be able hear a panel of probate masters discuss best practices in probate court.

Speakers include Newman Bankston, Elaine Beeler, Julie Boswell, Paul Boyd, Jeff Carson, Laura Chastain, Donald Farinato, Robin Miller, David Parsons, Joel Roettger, Stacy Roettger and Al Secor.

Breakfast and lunch will be provided for all attendees. To register, or for more information, please visit the TBA CLE website or call Kaisha Bond at the TBA offices at (615) 383-7421.

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Pending Legislation for Digital Assets

By Donald Farinato, Executive Council Member, TBA Estate Planning and Probate Section

January brings the commencement of a new legislative session, and with it, the continued contemplation of Senate Bill 0326 (SB0326), which is legislation carried over from the last session. If enacted, SB0326 would provide guidance and authority for executors, conservators and other fiduciaries regarding access to digital assets of a deceased or incapacitated individual. 

The National Conference of Commissioners on Uniform State Laws (NCCUSL) promulgated the Uniform Fiduciary Access to Digital Assets Act (UFADAA) in final form during the summer of 2014. UFADAA proposed a uniform system for all fiduciaries, including personal representatives, trustees, conservators and attorneys-in-fact, to access digital assets.On Feb. 3, 2015, SB0326 introduced Tennessee’s version of UFADAA (TUFADAA). Initially, UFADAA was well-received by various states nationwide, and it appeared that Tennessee fiduciaries would be able to rely upon TUFADAA.  However, concerns from various sectors of the technology industry stalled the initial nationwide momentum, and various states postponed pending legislation. In Tennessee, on April 8, 2015, action on TUFADAA was deferred to Jan. 12, 2016. 

In response to the concerns raised by various technology companies, late in 2015 NCCUSL developed the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) to replace UFADAA. An amendment to SB0326 was added to integrate the changes included in RUFADAA in the Tennessee bill. SB0326 continues to be contemplated, and if enacted, would provide a framework for individuals to plan for their digital assets upon their incapacity or death. 

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Sensitizing Clients About Digital Assets

By Donald Farinato, Executive Council Member, TBA Estate Planning and Probate Section

Most of my clients have some type of “digital life” through which they chronicle their vacations on Facebook, capture pictures of a child’s soccer game on their cell phone, automated bill paying through online banking, and otherwise utilize their digital assets. While digital assets are important to many clients, few undertake efforts to protect these assets. Without proper planning, digital assets are subject to loss. 

Digital assets are those assets that exist only in electronic form. Examples include PayPal accounts, LinkedIn profiles and emails. Generally speaking, it is easy for a client to utilize and access digital assets.  However, it can be problematic for others to access a client’s digital assets should the client die or become incapacitated. There are a number of barriers to others accessing a client’s digital assets, including federal legislation, such as the Stored Communications Act, and Tennessee statutes, such as the Tennessee Personal and Commercial Computer Act of 2003. In addition to both federal and state laws, terms of service agreements, which govern the terms of use of electronic accounts, can restrict access to digital assets. 

Because of the potential pitfalls, I endeavor to inform clients about digital assets early in the estate planning process. I want clients to think about their digital assets in terms of three categories: “practical” digital assets, “sentimental” digital assets and “valuable” digital assets. 

“Practical” digital assets include investment accounts solely with an online presence and automated bill paying services.  Many of my clients utilize these types of services, and their loved ones would be inconvenienced if precluded from accessing the accounts.

“Sentimental” digital assets include pictures uploaded on Shutterfly and tweets posted on a Twitter account.  Planning for the protection of this type of digital asset can be important since the electronic account may contain the only pictures of a special event, such as a child’s birthday party.

“Valuable” digital assets tend to be less common and can include well-developed blogs and valuable domain names. For example, a client may have started an online community to discuss Corvettes purely as a hobby, but after the community became quite active, companies selling specialty automotive parts were willing to pay for advertising in the online community. Without proper planning, an otherwise valuable asset could be lost or experience a significant decrease in value. 

I utilize an Estate Planning Questionnaire (EPQ) that I ask all estate planning clients to complete. The EPQ requests that the client provide standard estate planning information, such as financial information and family relationships. About a year ago, I added a section dealing with digital assets on my EPQ, asking the following three questions:

1.  Do you conduct any important transactions electronically (e.g.: paying utilities, monitoring investments)?  If so, please provide additional details.

2.  Do you have personal electronic accounts that are important to you (e.g.: Facebook, Twitter, pictures stored on cell phone)?  If so, please provide additional details.

3.  Do you own or have an interest in any digital assets that are valuable (e.g.: domain names, blogs)?  If so, please provide additional details.

The three questions on the EPQ help sensitize clients about the need to consider digital assets as part of their planning. Because there are not yet sufficient laws in place to provide for the handling of digital assets upon death or incapacity, clients are best served by contemplating early on how they want their digital assets to be handled. Potential decisions include whether to engage in self-help, such as saving pictures from a Facebook account to a computer to make sure beneficiaries have unfettered access. 

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Vanderbilt Law Professor Elected to Estate Planning Hall of Fame

Jeffrey Schoenblum, Centennial Professor of Law at Vanderbilt, has been elected to the Estate Planning Hall of Fame. The award is given annually by the National Association of Estate Planners & Councils in recognition of significant and outstanding lifetime achievements and contributions to the practice and profession of estate planning. Schoenblum has taught trust and estate law at Vanderbilt Law School since 1977.

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Columns: Evolving Legal Markets, Robin Williams, Banking and Fred Thompson

In this issue of the Tennessee Bar Journal, TBA President Bill Harbison writes about the "disruptive changes" that are occurring in the delivery of legal services. Columnist Eddy Smith details the genius of Robin Williams' estate plan and Kathryn Reed Edge covers banking and the U.S. Supreme Court. In his column, Bill Haltom remembers Sen. Fred Thompson and his tremendous contributions to the law and history.

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Memphis City Employees Suing Over Pension Cuts

Unions representing Memphis city employees filed a lawsuit asking a judge to stop planned pension cuts for newer employees, WREG reports. "The City Council just arbitrarily selected 7 1/2 years and there was basis for that decision other than just pick a number," Danny Todd with the International Firefighters Association said. The pension cuts are expected to take place next July.

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Will and Estate Advice Seminar This Weekend in Knoxville

The Knoxville Bar Association will share free will and estate advice at its LawTalk seminar from 9 a.m. – 1 p.m. Friday at the John T. O’Connor Senior Citizens Center, 611 Winona St., and Saturday at Fellowship Church, 8000 Middlebrook Pike. Read more from the Knoxville News Sentinel.

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State Officials Support 'Celebrate Pro Bono Month'

State officials are encouraging Tennesseans to learn more about their legal options this month, NewsChannel 9 reports. The Tennessee Department of Commerce and Insurance's Division of Consumer Affairs reminds everyone that National Celebrate Pro Bono Week is being observed Oct. 25-31 across the nation. The department says that the week is a good time for people to "educate themselves when it comes to their legal options, which could be a title search, estate planning or a legal defense." In Tennessee more than 50 events are happening across the state during October. Now in its seventh year, the Tennessee initiative brings together bar associations, law schools, law firms, legal services providers and individual lawyers to offer free services to those unable to afford a lawyer. Learn more about the 2015 Celebrate Pro Bono Initiative.

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Opinion: Bitcoin Poses Unique Challenges for Lawyers

Because of their unique attributes, bitcoin and other virtual currencies present challenges for lawyers who wish to locate and collect against assets, a contributor to the Nashville Business Journal argues. Andrew Hinkes with the Florida business law firm Berger Singerman says the movement of money “almost instantly, without payment of fees and with minimal records” seriously complicates the tracing of assets. He encourages lawyers to understand how these systems work.

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