News

August Columns Laser in On Technologies

Don't miss the columns this month in the August Journal, offering various takes on new technologies. Knoxville lawyer Eddy Smith explains how to plan for and administer digital assets in the estate planning process. Nashville lawyer Kathryn Reed Edge explains "fintech" companies -- firms "that use new technology and innovation with available resources in order to compete in the marketplace of traditional financial institutions and intermediaries in the delivery of financial services." If your head is not spinning after that, read Memphis lawyer Bill Haltom's take on a lawsuit where at issue is laser sensor technology used in driverless cars. The suit is between Google and Uber and it's "shaping up to be a huge legal battle. And there is no one in the driver’s seat."

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15-Hour Annual Review CLE Set for Knoxville

On Aug. 25, a special Tennessee Bar Association CLE will provide 15 hours of combined live and online continuing legal education. Attend for seven live hours and receive an additional eight online credits to complete at your convenience. Topics for the live portion include cyber security, real estate, unemployment compensation, probate and more.

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Knox County Lawyer Suspended

The Tennessee Supreme Court today suspended Knox County lawyer James Lester Kennedy from the practice of law for one year. Kennedy served as the executor of an estate that was opened in 1987. In 2009, the beneficiaries discovered that the estate had not been closed, that Kennedy had ignored repeated orders by the Court to appear and settle, and in 2000, the Court had retired the case due to inactivity. Kennedy was  found in contempt and the Court removed him as executor.   
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Item of Interest

Below is an article that was published in the the Disability Section Connect. We thought it had information that would be of interest to those of you in this section as well.  

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Elder Law Forum 2017 This Friday

The Elder Law CLE Forum will be held this Friday at the ATT Building in downtown Nashville. This full-day forum offers essential and practical material for practicing Elder Law attorneys and those interested in Elder Law. Registration is still open, so sign up or get more information now

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July TBJ: Mentors, Annuities and the Challenges of Change

Covington lawyer Amber Griffin Shaw writes about how having a mentor in Houston Gordon made all the difference in her law practice. Read her story — and his advice — in the July Tennessee Bar Journal. Knoxville lawyer Glen A. Kyle writes about planning options for spousal annuities. President Lucian T. Pera writes about the challenges of change – whether it be in the changing of leadership at the helm of the TBA, the need for improvements in indigent defense for Tennessee’s least-privileged citizens, or how lawyers respond to the dramatic changes “facing not just the profession or the business of lawyers, but the whole market for the delivery of legal services.”

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Estate Planning & Probate Section to Meet at TBA Convention

Please make plans to join the TBA Estate Planning & Probate Section for a business meeting that will be held in conjunction with 2017 TBA Convention.  The TBA Estate Planning & Probate Section meeting is scheduled as follows:

Date/Time:

Thursday, June 15, 2017
3:00 – 4:00 p.m. Eastern

Location:

MeadowView Marriott
1901 Meadowview Parkway
Kingsport, TN 37660
(423) 578-6600

Room Location – Bays Mountain Boardroom

A conference call will be available for those unable to join us 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#

Items for discussion include:

  1. Increasing Executive Council Participation
  2. Ideas for CLE programming and webcasts
  3. What items would you like to see in your inbox?  Getting the most out of your Section Connects.
  4. Pro Bono Opportunities
  5. Networking and Mentoring within the Section
  6. Proposed Legislation and Advocacy

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:

2017 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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Turn Your Expertise into a Magazine Article

It’s no surprise that some of the best articles in the Tennessee Bar Journal have come from TBA section and Young Lawyers Division members. Your membership in this group shows that you have a keen interest in trends, developments and case law in this practice area. Sharing this knowledge with your colleagues is one of the best traits of the profession. Readers want to learn what you know, from your unique perspective.

How can you become a Journal author? Think of and refine your topic. It should be of interest to Tennessee lawyers, which is a broad criteria. This could mean you might detail a new state law, explain a complicated area of law, or take a larger issue and connect it to what it means for Tennessee attorneys and the justice system. Find a global issue within your particular experience or knowledge and tell about it and how it affects Tennessee law. Then take a look at the writer’s guidelines at http://www.tba.org/submit-an-article, which will tell you about length, notes and other details.

The Journal is always looking for excellent articles, so send yours in!

And as a bonus, if you are published, you may apply for CLE credit for your work under Supreme Court Rule 21 Section 4.07(b). For details on claiming the credit, check with the Commission on CLE & Specialization at http://www.cletn.com/.

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TBA Convention in Kingsport is Just Around the Corner

Registration is open for the 2017 TBA Annual Convention. This years programming offers plenty of opportunities to make new friends and renew acquaintances with colleagues from across the state. The highlight comes Thursday night with the Kingsport Karnival at the downtown Farmers Market. Along with fabulous food and drink, there will be live music from two bands, an aerialist, juggler, magician, body and face painters, caricaturist and more. Plus, you'll have access to the fabulous Kingsport Carousel, the delightful project of community artisans. Special thanks to Eastman for support of this event! 

This years convention also offers 12 hours of CLE programming, highlighted by sessions on the Hatfields and McCoys, The Neuroscience of Decision-Making, and the popular Better Right Now wellness program. It is all set at the beautiful MeadowView Marriott Conference Resort & Convention Center. To receive the TBA $129 room rate, you must book your reservation by May 23. Book your room online now or call 423-578-6600.

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Call For Submissions — Law Practice Pointers

One of the benefits of being a TBA Section Member is having access to information from experienced practitioners to assist in your day-to-day practice. The sharing of this information amongst colleagues is one of the best traits of the profession. It is also a way of helping each other to maneuver the evolving legal market and strengthen your legal practice.

How can you help your fellow Section Members?  If you have some Law Practice Pointers you would like to share with your fellow section members, write an article between 300-500 words and submit it to the Section Coordinator for review and approval. These Law Practice Pointers can be related to a court opinion, piece of legislation, or current event or industry trend that affects the practice of law as it relates to the specific Section. The main requirement is to make sure the article gives lawyers practical tips, based on experience, to include in their day-to-day practice.

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Court: Survivorship Rights Ended When Joint Owner Transferred Ownership

In a family dispute over land, the Tennessee Supreme Court has held that, where two persons own land as joint tenants with a right of survivorship, if one of them transfers her interest in the land to someone else, that action terminates both of the joint tenants’ survivorship interests. Justice Sharon Lee filed a dissent in which she argued it would be better to follow the law in jurisdictions such as Michigan or Oregon that do not allow a joint co-tenant to act unilaterally, protecting the rights and expectations of the joint tenants.
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TBA Probate Bill Passes Senate

The Tennessee Bar Association’s probate legislation passed the full Senate today with a vote 30-0 to clear its last hurdle. Sponsored by Sen. John Stevens, R-Huntingdon, the bill revises various provisions relative wills and trusts.

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Banking, Estate Planning … and Someone Named Juris P. Prudence

Here's what you can expect from Tennessee Bar Journal columnists if you haven't gotten all the way through this month's issue yet. Kathryn Reed Edges looks at what the Trump Administration will mean for bankers. Eddy R. Smith explains why Tennessee is an attractive jurisdiction for establishing and maintaining trusts, and Bill Haltom writes about the introduction of a fictional character sure to steal the hearts of law-loving kids everywhere.

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Committees Move Campaign Finance Bill, Asset Forfeiture, Probate Clean Up

Tennessee House and Senate committees both moved forward with legislation that would double the number of campaign finance audits, the Tennessean reports. Also at the legislature, the asset forfeiture bill, as amended in the House, was recommended for adoption in the Senate Judiciary Committee. The TBA-backed probate clean up legislation, sponsored by Sen. John Stevens (R-Huntington), cleared a Senate committee with minor changes.
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Fred Thompson’s Sons Drop Suit Over Estate

The sons of Sen. Fred Thompson have dropped their lawsuit against their step-mother, Jeri Thompson, which claimed they were cut out of the late politician’s estate, the Tennessean reports. Tony and Dan Thompson dismissed their case on March 22. Jeri Thompson’s attorney, Bill Ramsey, claimed that the sons “misread, intentionally or otherwise, descriptions in legal bills that never should have been filed with the court.”
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Probate Omnibus Bill Ready for House Floor Vote

TBA-backed HB 567 has passed through its final House committee and is ready to be scheduled for a House floor vote. That is expected no later than next week. The legislation, sponsored by Rep. Pat Marsh, R-Shelbyville, is referred to as the Probate Omnibus Bill. It will update the Tennessee Code to reflect the elimination of the inheritance and estate tax. Two amendments are traveling with the legislation, deleting sections to avoid any negative impact to court orders on bank accounts, land titles and insurance policies. The companion bill, SB 769, sponsored by Sen. John Stevens, R-Huntingdon, is expected to go before the Senate Judiciary committee as soon as next week.

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Wedding CLE Looks at Everything from Prenups to Blended Families

Last chance to register! On March 29, experience a special wedding CLE at one of Nashville's premier wedding venues, the Cordelle. Sessions will touch on a variety of nuptial-related considerations, such as what to do pre-wedding, how to handle blended families, and the ins and outs of tax planning. Brunch will be included, with all the cake, mimosas and darling wedding mints you could want.

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Sullivan County Lawyer Disbarred

Sullivan County attorney Don W. Cooper was disbarred today by the Board of Professional Responsibility. The action is effective immediately. The board found that Cooper misappropriated funds while serving as co-executor, administrator and/or trustee in three separate estates and trusts. Cooper must pay restitution totaling $952,759.37.

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Updates for Estate Planning & Probate Lawyers

Join your colleagues from across the state at the annual Estate Planning & Probate Forum on Friday. Speakers will address asset protection, ethics, legislation and other hot topics. Contribute to the discussion by submitting questions for our ethics and probate panels, email questions for the panelist here.

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TBA Mashup and Mini Legal Hackathon this Friday

In conjunction with the Law Tech UnConference CLE this Friday, the TBA is also offering a variety of free events and programs for lawyers we’re calling a Mashup. One program will teach you about Legal Hackathons and see one in action. A Legal Hackathon is a collaborative effort of experts in the legal profession collaborating with a computer programmer to find a technology assisted solution to a problem in the legal industry. Join the TBA Special Committee on the Evolving Legal Market for a mini legal hackathon that will demonstrate the power of collaborative minds at work. We will have tasty beverages and snacks to help you get your collaborative juices flowing.  
 
Other programs that will be a part of the Mashup include Pro Bono In Action which will show you various pro bono programs you can participate in to help your fellow Tennesseans and Member Benefit Programs that will provide you information on  Fastcase 7, health insurance options for small firms, ABA retirement funds and professional liability insurance.
 
Please sign up now to let us know you are coming.

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Have You Heard About the TBA Mashup?

Interested in observing a legal hackathon or getting a hands-on demonstration of the new Fastcase 7 platform? Both will be part of the first TBA Mashup, a full-day of activities and free programming set for Feb. 17 at the Tennessee Bar Center in conjunction with the annual TBA Law Tech UnConference CLE program.

In addition to the hackathon and Fastcase 7 demo, the TBA Mashup will feature sessions on: 

  • Current State of Health Insurance for the Small Firms
  • Professional Liability Insurance - What to look for in YOUR Policy
  • A Demo of Fastcase TopForm, a powerful bankruptcy filing software
  • Retirement Planning Guidance from the ABA Retirement Funds
  • Pro Bono in Action: How to help with pro bono events and how to take part in online options

At the annual TBA Law Tech UnConference CLE program, you can take as many or as few hours as you need. Registration will be open all day. Payment will be determined at checkout based on the hours you need. Topics will include: 

  • Bill & Phil Tech Show
  • Ethical Considerations for Cyber Security in Law
  • Evolution of the Legal Marketplace
  • Making e-Discovery Affordable 
  • Drone Law
  • Encryption for Lawyers

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Banking, Estate Planning ... and a Business Relationship with Santa

There's still time to catch the December Tennessee Bar Journal -- in this issue, columns include banking law, estate planning and one man’s long-term business relationship with Santa. Nashville lawyer Kathryn Reed Edge writes in her column Bank On It, about preventing insider fraud and abuse; Knoxville lawyer Eddy Smith's column, Where There's a Will, is "Report for Duty: Protecting Against Fiduciary Liability"; and in his column, Memphis lawyer Bill Haltom reveals the secrets of Santa's changing role over the years.

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Did Appeals Court Call for Reconsideration of Cowan Rule?

Since the Tennessee Supreme Court found that a final will cannot be contested by an individual who was left out of a previous will, the so called 1906 “Cowan Rule” has been creating heartburn for judges, the Times Free Press reports. The most recent test came in the case of J. Don Brock. At the trial court level, the judge “reluctantly dismissed” the claims of Brock’s children because they were cut out of a previous version. The appeals court upheld the decision but in a rare move, may have encouraged the state Supreme Court to re-examine the ruling and its practical application. Attorneys for the estate, however, say the appeals court did not ask for reconsideration but merely pointed out that the rule could be used to hide fraud. Read it here.

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Volunteers Needed for Memphis Wills for Heroes Clinic

The TBA Young Lawyers Division will hold a free Wills for Heroes legal clinic tomorrow in Memphis at the Benjamin L. Hooks Library, 3030 Poplar Ave., from 9 a.m. to 5 p.m. The clinic will provide free wills, powers of attorney and advance directives for Tennessee's firefighters, law enforcement officers and other emergency responders. Attorneys who would like to volunteer or get more information should contact Memphis lawyer Chasity Grice.

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The Advantages of Tennessee Trusts: Investment Services Act Trusts

Tennessee is often at the cutting edge of trust law, as evidenced by its recent passage of laws allowing for the creation of Tenancy in the Entirety trusts, which will be a topic of one of my future posts along with posts on other types of Tennessee trusts.

Tennessee Investment Services Act trusts are excellent vehicles for protection of assets, particularly real and personal property located in Tennessee as well as for bank and investment accounts custodied in Tennessee. Investment Services Act trusts are Tennessee’s version of what are colloquially known as domestic asset protection trusts. These trusts can serve more purposes than simply protecting assets from creditors, although they are of course excellent for that purpose.

The basic concept of all trusts is that there is a person who gives property (typically called a grantor or settlor) to a person (known as a trustee) to hold on behalf of the trust’s beneficiaries. Historically, all of the states forbid self-settled spendthrift trusts. “Self-settled” means the grantor (i.e. the person putting the assets into the trust) is also a beneficiary. “Spendthrift” is a provision whereby the trustee decides how the trust funds are spent for the beneficiary, and therefore creditors cannot reach the funds in the trust. Generally, this means the beneficiaries do not have direct control over the trust. It should be noted however that a creditor of that beneficiary could reach any property distributed to that beneficiary.

In 1997, Alaska became the first state to allow self-settled spendthrift trusts. Tennessee and several other states soon followed. The main benefits of the Tennessee Investment Services Act trust (as amended effective July 1, 2013) are that pre-transfer creditors have either two years from the date of the transfer of the property to the trust (or six months from the date of the creditor’s having discovered the transfer) to challenge the transfer or they are barred from bringing a claim. An interesting aspect of Tennessee law is that “discovery” is deemed if the transfer is a public record. Many attorneys have begun recording affidavits of transfers in the applicable counties in order to make the transfers a public record, and thus ensure the shortest statute of limitation possible. Even if an action is filed within the statute of limitations period, it must be shown with clear and convincing evidence that the transfer was for the purpose of defrauding that creditor.

There are other advantages to Tennessee Investment Services Act trusts. They allow for flexible tax planning. Unlike in certain other states, tort claimants are not exemption creditors (i.e. tort claimants would be treated the same as any other creditors for the purposes of the Tennessee act). Tennessee law allows for decanting and virtual representation (I will be covering these topics in future posts, but they allow for methods of fixing certain problems in the trust without court intervention). The Tennessee law creating these trusts, therefore, provides a great deal of protection for assets as well as flexibility for planning. The basic requirements for creating one of these trusts are is that the trust:

  • must be governed by Tennessee law,
  • must be irrevocable,
  • must have a spendthrift clause,
  • must have a qualified trustee, and
  • there must be an executed affidavit.

The qualified trustee must:

  1. be a Tennessee resident or a corporate trustee licensed under Tennessee law, and
  2. have at least some certain duties such as custody of assets, preparing tax returns, or be materially administering the trust.

The grantor/settlor CANNOT be the trustee. The affidavit is required to state that the grantor/settlor had full right and title to transfer the property, that the transfer does not render the grantor/settlor insolvent, that there is no fraud and the assets were obtained lawfully, that there is not litigation or administrative proceedings pending against the grantor/settlor, and that the grantor/settlor isn’t bankrupt.

There are some areas to be cautious about, however. The limited case law has shown that domestic asset protection trusts may have limited or no protection for assets located outside of the state of domicile for the trust. Nonresidents of Tennessee can certainly set up Tennessee Investment Services Act trusts, particularly if the qualified trustee and the property are located/custodied in Tennessee, but great care must be used if property outside of Tennessee is to be added to the trust. The Tennessee Investment Services Trust Act also does not protect against past due child support, past due alimony, and division of alimony. A much longer ten year statute of limitations may also apply in certain cases of bankruptcy.

As a final note, it is generally better to use the domestic asset protection trust law of the state of domicile (provided that said state has such a law) since a recent case out of Utah (regarding a Nevada asset protection trust) has shown that even among states with asset protection trust laws, other states’ laws may have some difficulties in being enforced. Fortunately, Tennessee’s Investment Services Act does have provisions allowing trusts from other states to be transferred to Tennessee.

A decision to enter into any sort of trust is not one to take lightly, as there are real property laws, tax laws, asset protection laws, etc. that must be carefully taken into account, and many of those details exceed the limited scope of this blog post. As always, we strongly recommend seeking the advice of a professional before setting up trusts.

Michael Goode, a Nashville attorney with Stites & Harbison PLLC is a member of the TBA Estate Planning & Probate Section's Executive Council

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