The Stiles Law Firm

Can You Avoid Probate in Tennessee? Here's What Actually Works

Tue, 14 Jul 2026 18:18:09 GMT

Nobody looks forward to probate. It takes time, involves court filings, and can add stress to an already difficult season for a grieving family. The good news is that with the right planning, a meaningful portion, sometimes all, of an estate can bypass the probate process entirely. Here's what actually works in Tennessee.

The Small Estate Affidavit

If the total value of a deceased person's personal property (not counting real estate) is under $50,000, Tennessee allows heirs to use a small estate affidavit instead of going through full probate. There's a required 45-day waiting period after death before it can be filed, and it can't be used if a personal representative has already been appointed or if probate proceedings have already begun. It's a meaningfully faster and simpler path for estates that qualify, but it's worth noting it only covers personal property, real estate still has to be addressed separately.

Assets With Named Beneficiaries

Certain assets pass directly to whoever is named as beneficiary, completely bypassing probate, regardless of what a will says. This includes:

- Life insurance policies

- Retirement accounts (401(k)s, IRAs)

- Accounts with a payable-on-death (POD) or transfer-on-death (TOD) designation

The catch is that these designations need to actually be filled out, and kept current. We regularly see cases where a beneficiary designation was never updated after a divorce or a death in the family, sending assets to an unintended person entirely outside of probate's checks and balances. Reviewing these designations periodically is one of the simplest, highest-impact things you can do.

Jointly Owned Property

Property owned as "joint tenants with right of survivorship" automatically passes to the surviving owner when one owner dies, without going through probate. This is common for married couples on a home or bank account, though it's worth being thoughtful about adding a non-spouse (like an adult child) as a joint owner, since that can create its own complications around gift taxes, creditor exposure, and control of the asset while you're still living.

A Revocable Living Trust

For a more comprehensive approach, a properly funded revocable living trust avoids probate for everything titled in the trust's name, real estate, investment accounts, and other property alike. Unlike a will, a trust doesn't require court validation after death; your named successor trustee simply steps in and distributes assets according to the trust's terms. This tends to make the most sense for families with real estate in multiple states, a desire for privacy, or more complex distribution wishes.

Tennessee-Specific Considerations

Because Tennessee doesn't have a state estate or inheritance tax, probate avoidance planning here is generally more about time, cost, and privacy than about tax savings, unlike some states where tax considerations drive a lot of the planning. That said, larger estates should still consider federal estate tax exposure as part of a broader plan.

Is Avoiding Probate Always the Goal?

Not necessarily. Tennessee probate isn't always as slow or burdensome as its reputation suggests, particularly for simple, uncontested estates. For some families, a straightforward will and a personal representative they trust is a perfectly reasonable plan. The right approach depends on your assets, your family situation, and how much you value privacy and speed versus simplicity and upfront cost.

Building the Right Plan for Your Family

Whether full probate avoidance makes sense for you, or a more modest approach fits better, the key is making an intentional decision rather than leaving it to chance. If you'd like to talk through your options for your own estate, we're happy to help you figure out what actually fits your goals.

How Does Probate Work in Tennessee? A Step-by-Step Overview

Tue, 14 Jul 2026 18:17:00 GMT

When a loved one passes away, the word "probate" starts getting used a lot, often without much explanation of what it actually involves. If you've been named executor, or you're simply trying to understand what's ahead for your family, here's a clear walk-through of how the probate process typically works in Tennessee.

Step 1: Filing the Will (or Opening the Estate)

The process begins with filing the deceased person's will, if one exists, with the probate court in the county where they lived at the time of death. If there's no will, the estate is considered "intestate," and Tennessee's laws of intestate succession determine who inherits, generally starting with a surviving spouse and children.

Step 2: Appointing a Personal Representative

The court appoints a personal representative (called an "executor" if named in a will, or an "administrator" if there's no will) to handle the estate. This person is responsible for gathering assets, paying debts, and eventually distributing what remains to the beneficiaries or heirs. The court issues "letters testamentary" or "letters of administration," which give the personal representative legal authority to act on the estate's behalf.

Step 3: Notifying Creditors

Tennessee law requires published and/or actual notice to potential creditors of the estate, giving them a window of time (generally four months from the date notice is first published, or up to one year from the date of death if no notice is given) to file claims against the estate for debts owed by the deceased.

Step 4: Inventorying the Estate

The personal representative is generally required to file an inventory of the estate's assets with the court, unless this requirement is waived under the terms of the will or by agreement of the beneficiaries. This includes real estate, bank accounts, investments, vehicles, and other property owned by the deceased.

Step 5: Paying Debts and Taxes

Before any assets can be distributed to beneficiaries, valid debts and final taxes must be paid from the estate. This can include medical bills, credit card debt, final income taxes, and, if applicable, estate taxes (though most estates fall well under federal estate tax thresholds and Tennessee no longer has a separate state estate or inheritance tax).

Step 6: Distributing the Remaining Assets

Once debts, taxes, and administrative expenses are settled, the personal representative distributes the remaining assets according to the will's instructions, or, if there's no will, according to Tennessee's intestate succession laws.

Step 7: Closing the Estate

Finally, the personal representative files a closing document with the court (often called a final accounting or, in cases where beneficiaries agree, a simpler closing affidavit), formally ending the probate process and releasing the personal representative from further duty.

How Long Does This Take?

Simple, uncontested estates in Tennessee can often be closed within about six months to a year, largely because of the required creditor notice period. More complex estates, those involving significant assets, disputes among heirs, or complications like unresolved debts or missing beneficiaries, can take considerably longer.

Does Every Estate Have to Go Through Full Probate?

Not necessarily. Estates with a total value under Tennessee's small estate threshold may qualify for a simplified process using a small estate affidavit rather than full probate administration, and assets that pass outside of probate entirely (like jointly owned property, accounts with named beneficiaries, or assets held in a trust) don't go through this process at all.

Facing Probate as an Executor

Being named executor is often described as an honor and a burden in the same breath. The responsibilities are real, and the deadlines matter, but you don't have to navigate it alone. If you've recently lost a loved one and are facing the probate process in Shelby County or the surrounding area, we're here to help guide you through each step.

FSBO in Tennessee: What Sellers Handling Their Own Sale Need to Know

Tue, 14 Jul 2026 18:15:26 GMT

If you've never bought or sold a home before, "closing" can feel like a mysterious final step that everyone talks about but few people explain clearly. Here's what actually happens during a Tennessee real estate closing, and what to expect if you have one coming up.

What Is a Closing, Exactly?

Closing is the final step in a real estate transaction, the point where ownership of the property officially transfers from seller to buyer, funds change hands, and all the paperwork gets signed and recorded. In Tennessee, closings are typically handled by a closing attorney, rather than a title company representative alone, which is one of the notable differences from how things work in some other states.

What Happens Before Closing Day

Before you ever sit down at the closing table, a lot of work has already happened behind the scenes:

- Title search: The closing attorney's office searches public records to confirm the seller actually has the legal right to sell the property, and to identify any liens, judgments, or title defects that need to be resolved first

- Title insurance: A title insurance policy is issued to protect the buyer (and the buyer's lender, if there is one) against certain future claims related to the property's title

- Loan documents: If the buyer is financing the purchase, the lender prepares final loan documents, which the closing attorney's office reviews for accuracy

- Final walkthrough: Buyers typically do a final walkthrough of the property in the day or two before closing to confirm its condition matches expectations and that any agreed-upon repairs were completed

What Happens at the Closing Table

On closing day, buyers and sellers (sometimes together, sometimes at separate times) review and sign a stack of documents that typically includes:

- The deed, transferring ownership from seller to buyer

- The closing disclosure, itemizing all costs associated with the transaction

- Loan documents, if applicable, including the promissory note and deed of trust

- Title affidavits and other closing certifications

The closing attorney walks through the key documents, answers questions, and ensures everything is signed and notarized correctly. Funds are then disbursed, paying off the seller's existing mortgage (if any), covering closing costs, and delivering the seller's net proceeds.

After the Table: Recording

Once signing is complete, the deed and deed of trust (if there's a loan involved) are recorded with the register of deeds in the county where the property is located. This is what makes the transfer of ownership part of the public record and finalizes the transaction. In Shelby County, this typically happens quickly after closing, though it's not always instantaneous.

Why Working With a Closing Attorney Matters

Because Tennessee closings are attorney-conducted, you have someone with legal training reviewing the title work, the loan documents, and the closing disclosure before you sign, not just someone facilitating paperwork. If a title issue turns up during the search, or if something in the loan documents doesn't match what was agreed to, having an attorney involved from the start means those issues get caught and resolved before closing day, not discovered at the table.

Buying or selling a home is one of the biggest financial transactions most people will make. If you have a closing coming up in the Memphis area and want a team that will walk you through it clearly, we're happy to help make sure it goes smoothly.

What Actually Happens at a Tennessee Real Estate Closing

Tue, 14 Jul 2026 18:14:20 GMT

When people hear "estate plan," they often think it just means a will. In reality, a complete estate plan is a set of documents that work together, some for after you're gone, and some just as importantly, for while you're still living but unable to make decisions for yourself. Here's the core lineup we walk Tennessee clients through.

1. Last Will and Testament

Your will directs where your property goes after your death and names an executor to carry out those instructions. If you have minor children, it's also where you name a guardian for them, arguably one of the most important decisions in the entire document for young families.

2. Financial Power of Attorney

This document names someone you trust to manage your financial affairs, paying bills, managing accounts, handling property, if you become unable to do so yourself due to illness or incapacity. Without one in place, your family may need to petition a Tennessee court for a conservatorship just to access your accounts or make decisions on your behalf, an expensive and time-consuming process compared to having the document ready in advance.

3. Advance Healthcare Directive (Living Will)

This document lays out your wishes regarding medical treatment, particularly around end-of-life care, if you're unable to communicate them yourself. It typically addresses things like life support and resuscitation preferences, giving your family clarity during an already difficult time.

4. Healthcare Power of Attorney

Separate from the advance directive, this names a specific person to make medical decisions on your behalf when you can't. In Tennessee, this is often combined with the advance directive into a single document, but the two serve different functions: one states your wishes, the other names who carries them out.

5. HIPAA Authorization

This often-overlooked document authorizes specific people to receive your medical information from healthcare providers. Without it, even a spouse or adult child may run into obstacles getting basic updates from a hospital or doctor's office.

6. Beneficiary Designations

Life insurance policies, retirement accounts, and certain bank accounts pass directly to whoever is named as beneficiary, regardless of what your will says. These designations need to be reviewed periodically, especially after a marriage, divorce, birth, or death in the family, since an outdated beneficiary form can override your current intentions without you realizing it.

7. Letter of Instruction

This isn't a formal legal document, but it's one of the most helpful things you can leave behind. A letter of instruction can include things like the location of important documents, digital account information, funeral preferences, and personal messages to loved ones. It won't be legally binding, but it can save your family significant time and stress during an already emotional period.

Putting It All Together

Each of these documents serves a distinct purpose, and together they cover both incapacity planning (what happens if you're alive but unable to make decisions) and legacy planning (what happens after you're gone). Missing even one piece can leave a gap that ends up costing your family time, money, or unnecessary court involvement down the road.

If you're not sure which of these you already have in place, or whether your existing documents still reflect your current wishes, we're happy to review where things stand and help you fill in the gaps.

Seven Documents Every Tennessee Estate Plan Should Include

Tue, 14 Jul 2026 18:13:09 GMT

Of all the questions we hear from clients starting the estate planning process, "do I need a will or a trust?" comes up more than almost any other. The honest answer is: it depends on your goals, your assets, and your family situation. Here's how to think through the decision.

What a Will Does

A last will and testament is a document that spells out who receives your property when you pass away and, if you have minor children, who you want to serve as their guardian. In Tennessee, a valid will must generally be in writing, signed by you, and witnessed by two individuals who are present at the same time.

A will is often the right starting point for many families. It's straightforward, less expensive to set up than a trust, and covers the essentials: naming an executor, naming guardians for minor children, and directing where your assets go.

The tradeoff: assets that pass through a will still have to go through probate, the court-supervised process of validating the will and distributing assets. In Tennessee, probate isn't as slow or as public in every case as its reputation suggests, but it does involve court filings, a personal representative's duties, and typically several months to a year (sometimes longer) before an estate is fully closed.

What a Trust Does

A revocable living trust is a legal arrangement where you transfer ownership of your assets into the trust during your lifetime, while retaining full control over them as trustee. When you pass away, your named successor trustee distributes the assets according to the trust's terms, without going through probate court at all.

Trusts tend to make the most sense when:

- You own real estate in more than one state (which would otherwise require probate in each state)

- You want to keep the details of your estate private, since a will becomes part of the public court record once filed, while a trust generally does not

- You have a beneficiary with special needs, a history of managing money poorly, or a blended family situation where you want more control over how and when assets are distributed

- You simply want your family to avoid the probate process altogether

The tradeoff with a trust is upfront cost and effort. A trust needs to be properly funded, meaning your accounts, real estate, and other assets actually need to be retitled into the name of the trust. A trust that's signed but never funded doesn't accomplish what you set out to do, this is one of the most common and costly mistakes we see.

Most People Actually Need Both

This surprises people, but a well-built estate plan usually includes both a will and, if a trust is appropriate for your situation, a trust as well. Even with a trust in place, we typically recommend what's called a "pour-over will", a will that catches any assets that weren't properly transferred into the trust during your lifetime and directs them into the trust upon your death. It's a safety net for the inevitable asset or account that gets overlooked.

Making the Right Choice for Your Family

There's no one-size-fits-all answer here. A young family with a home and a couple of retirement accounts often has very different needs than a business owner with property in two states, or a parent planning for a child with special needs. The right approach starts with an honest look at your goals and your assets.

If you're trying to figure out whether a will alone is enough for your situation, or whether a trust makes sense, we're happy to walk through your specific circumstances and help you land on a plan that actually fits.

Will vs. Trust in Tennessee: Which One Do You Actually Need?

Tue, 14 Jul 2026 18:12:03 GMT

What a Will Does

What a Trust Does

Trusts tend to make the most sense when:

- You own real estate in more than one state (which would otherwise require probate in each state)

- You want to keep the details of your estate private, since a will becomes part of the public court record once filed, while a trust generally does not

- You have a beneficiary with special needs, a history of managing money poorly, or a blended family situation where you want more control over how and when assets are distributed

- You simply want your family to avoid the probate process altogether

Most People Actually Need Both

Making the Right Choice for Your Family

Veterans Benefits for Long-Term Care: What Tennessee Veterans and Their Families Often Don't Know They Qualify For

Tue, 14 Jul 2026 18:10:07 GMT

Many veterans and surviving spouses who could benefit from VA long-term care assistance simply don't know the programs exist, or assume they won't qualify. Given how many families in the Memphis area have a connection to military service, it's worth taking a closer look at what's actually available.

Aid and Attendance: The Benefit Most Families Miss

The VA's Aid and Attendance benefit is an enhanced pension available to wartime veterans (and, in many cases, their surviving spouses) who need help with daily activities like bathing, dressing, or managing medications, or who are housebound. It's designed specifically to help cover the cost of in-home care, assisted living, or nursing home care.

The eligibility requirements involve three main pieces:

- Service requirements: generally at least 90 days of active duty with at least one day during a wartime period, and a discharge that wasn't dishonorable

- Medical requirements: a demonstrated need for assistance with daily living activities

- Financial requirements: income and net worth limits, though unreimbursed medical expenses can be deducted from countable income, which often makes families eligible who assumed their income was too high

That last point trips up a lot of families. They see the published income limits, assume they're over, and never apply. But because ongoing care costs can be subtracted from income for eligibility purposes, many veterans and spouses who initially appear over the limit end up qualifying once those deductions are factored in.

Surviving Spouses Often Qualify Too

If your spouse served and has since passed away, you may still be eligible for a version of this benefit as a surviving spouse, provided you haven't remarried and meet the other requirements. This is one of the most under-utilized benefits we see, many surviving spouses never realize they have any continued connection to VA benefits after their spouse's death.

How This Interacts With Medicaid Planning

For veterans who may eventually need Medicaid as well, it's worth understanding that VA benefits and Medicaid are separate programs with different rules, but they can sometimes work together. A veteran might use Aid and Attendance to help cover assisted living costs for a period, then transition toward Medicaid planning later if care needs increase or if the VA benefit alone isn't enough to cover costs. Coordinating the two takes some planning, since asset and income rules aren't identical between the programs.

The Application Process Takes Time

VA benefit applications, especially Aid and Attendance, require significant documentation: military service records, medical evidence of the need for care, and financial documentation. Processing times can run several months, so if you anticipate a need for care in the near future, it's worth starting the application process earlier rather than later.

A Benefit Worth Investigating

If you or a family member served, or if you're a surviving spouse of someone who did, it's worth having someone take a real look at whether Aid and Attendance or other VA benefits could help offset the cost of care. Many Memphis-area families are eligible for meaningful help and simply never find out.

If you'd like help figuring out whether your family qualifies, or coordinating VA benefits alongside a broader elder law plan, we're glad to help you sort through the details.

Understanding Medicaid Planning in Tennessee: What Families Should Know Before a Crisis Hits

Tue, 14 Jul 2026 18:09:06 GMT

For many Tennessee families, the topic of Medicaid only comes up once a health crisis has already begun, when a parent has had a fall, a stroke, or a diagnosis that suddenly makes long-term care a real and pressing need. By that point, families often feel like they're scrambling to catch up, and understandably so. Medicaid planning is one of those areas where a little advance understanding makes an enormous difference in the options available to you.

Why Medicaid Matters for Long-Term Care

Traditional Medicare does not cover long-term custodial care, the kind of day-to-day help with bathing, dressing, and other daily needs that many older adults eventually require in a nursing facility. That gap is where Medicaid (called TennCare in Tennessee) comes in. But qualifying isn't automatic. Medicaid has strict income and asset limits, and understanding how those limits work, and how to plan around them legally, is where families often need guidance.

The Five-Year Look-Back Period

One of the most important concepts in Medicaid planning is the five-year look-back period. When someone applies for Medicaid long-term care benefits, the state reviews financial transactions from the previous five years to check for asset transfers that were made for less than fair value, essentially, gifts. If assets were given away or transferred below market value during that window, it can trigger a penalty period during which the applicant is ineligible for benefits.

This is exactly why waiting until a crisis hits to start planning can limit your options. Certain strategies, such as certain trusts, only work effectively if they're put in place well before care is needed. That's not to say families in a crisis have no options at all, there are still crisis planning strategies available, but they tend to be more limited and complex than planning done proactively.

Countable vs. Exempt Assets

Not everything counts against you when applying for Medicaid. Certain assets, like a primary residence (up to certain equity limits), one vehicle, and personal belongings, are generally considered exempt. Other assets, like additional bank accounts, investment accounts, and second properties, are typically countable and must be spent down or restructured to meet eligibility limits. Understanding which category your assets fall into is a foundational part of any Medicaid plan.

Protecting a Spouse

For married couples, Medicaid rules include specific protections designed to prevent the spouse who isn't entering care (often called the "community spouse") from being left with nothing. These spousal impoverishment protections allow the community spouse to retain a portion of the couple's joint assets and income. Navigating exactly how much can be protected, and how, is one of the more nuanced parts of Medicaid planning for couples.

Start the Conversation Early

If you have a parent or loved one who may need long-term care in the coming years, even if that need feels distant, it's worth having a conversation about Medicaid planning sooner rather than later. The families who plan ahead generally have more tools available to protect what they've worked for, while still getting the care their loved one needs.

If you're navigating this for your own family here in the Memphis area, we're happy to walk through what your options actually look like.

Annual Reports and Other Tennessee Compliance Deadlines Small Business Owners Often Miss

Tue, 14 Jul 2026 18:07:46 GMT

Starting a business is the hard part, or so it feels at the time. But keeping it in good standing with the state of Tennessee requires ongoing attention that many owners don't fully plan for. Missing a filing deadline can mean late fees, loss of good standing, or in some cases, administrative dissolution of your company. Here's a rundown of the recurring compliance items Tennessee business owners should have on their calendar.

Annual Reports

Most Tennessee LLCs and corporations are required to file an annual report with the Secretary of State. This report confirms or updates basic information about your business, such as your registered agent, principal address, and member or officer information. It's due each year by the first day of the fourth month following the close of your fiscal year, which for most calendar-year businesses lands on April 1.

It's easy to assume this happens automatically or that your accountant handles it as part of your tax filing. It doesn't, and they may not. This is a separate filing with a separate deadline, and it's one of the most common things business owners forget until they get a notice that their company has fallen out of good standing.

Franchise and Excise Tax

Tennessee imposes a franchise and excise tax on most LLCs, corporations, and other business entities doing business in the state. These are separate taxes: the franchise tax is based on the greater of your net worth or the book value of certain property, while the excise tax is based on net earnings. Even businesses that had a loss for the year are generally still required to file, though how much (if anything) is owed depends on your specific numbers. This is an area where working with both your accountant and your attorney pays off, since the calculations and exemptions can get complicated.

Business Licenses

Depending on your county and the type of business you run, you may need a standard county business license or a minimal activity license if your gross receipts fall under a certain threshold. These are renewed annually and are separate from your state-level filings. Shelby County and the individual municipalities within it (Memphis, Bartlett, Germantown, Collierville) each have their own licensing offices, so it's worth confirming you're square with both the county and your specific city.

Operating Agreement and Bylaw Updates

While not a government filing, this is worth mentioning because it's so often neglected. If your business has added or removed members, changed ownership percentages, or shifted how decisions get made, your operating agreement or bylaws should reflect that. An outdated governing document can create real headaches if there's ever a dispute between owners or a sale of the business down the road.

Building a Compliance Calendar

The businesses that stay out of trouble are usually the ones that treat these deadlines as recurring calendar events rather than things to figure out reactively. If you're not sure what applies to your specific entity type or where you currently stand, it's worth a conversation to get a clear picture, and a plan, so nothing catches you off guard.

If you're a Memphis-area business owner and want help mapping out what compliance actually looks like for your specific situation, we're glad to help you sort through it.

Do You Need a Registered Agent in Tennessee? Here's What Business Owners Should Know

Tue, 14 Jul 2026 18:05:05 GMT

If you're forming an LLC or corporation in Tennessee, one requirement often gets overlooked in the excitement of launching a new venture: naming a registered agent. It sounds like a small administrative detail, but it plays a bigger role in protecting your business than most new owners realize.

What Is a Registered Agent?

A registered agent is the person or company designated to receive official legal and government correspondence on behalf of your business. This includes service of process (meaning: notice that your business is being sued), state filings, tax notices, and annual report reminders from the Tennessee Secretary of State.

Every LLC, corporation, and other formal business entity registered in Tennessee is required to have one. It's not optional, and it's one of the first things you'll need to designate when you file your formation documents.

Who Can Serve as a Registered Agent?

In Tennessee, your registered agent must:

- Have a physical street address in Tennessee (a P.O. Box doesn't count)

- Be available at that address during normal business hours

- Be either an individual Tennessee resident or a business entity authorized to do business in the state

Many new business owners simply name themselves. That works, but it comes with tradeoffs worth thinking through.

Why Naming Yourself Isn't Always the Best Move

If you're your own registered agent, your name and business address become part of the public record. That means anyone can look up your address through the Secretary of State's business search. For business owners who work from home, or who simply prefer to keep their address private, this can feel uncomfortable.

There's also the availability issue. If you're out of town, in a meeting, or simply don't check the mail that day, and a lawsuit or important state notice arrives, you could miss a critical deadline. Missing service of process can lead to a default judgment against your business without you ever knowing the case existed until it's too late.

For these reasons, many Memphis-area business owners choose to use a registered agent service or, in some cases, their attorney, rather than themselves.

What Happens If You Don't Maintain a Registered Agent?

Tennessee requires your registered agent information to stay current. If your agent resigns, moves, or otherwise becomes unreachable and you don't update your filing, your business can fall out of good standing with the state. That can affect your ability to get loans, sign contracts, or even defend yourself in a lawsuit, and in some cases can lead to administrative dissolution of your entity.

A Small Detail With Real Consequences

Choosing a registered agent is one of those decisions that seems minor on day one but matters enormously the one time it counts. Whether you're launching a new LLC in Shelby County or restructuring an existing business, it's worth taking a few extra minutes to think through who's best positioned to reliably receive and forward important legal notices on your behalf.

If you're setting up a new business in the Memphis area or reviewing your current business structure, we're happy to walk through your options and make sure the foundational pieces, registered agent included, are set up to protect you long-term.

Tax Implications and Benefits of Home Ownership

Mon, 27 Feb 2023 23:34:00 GMT

I recently had a client reach out and ask what if any tax breaks they would qualify for if they purchased a home. Given the state of the real estate market, I know many prospective homebuyers are looking right now for any kind of financial cushion.

With that in mind, I thought I would share with you the good news I gave this client: There are a number of tax benefits that come with homeownership. Take a look at a few key ones below.

You can deduct the interest you pay on your mortgage if the amount is over $600–up to a certain limit.
You may be able to deduct the amount paid for mortgage insurance .
You can reduce how much you owe in federal taxes by deducting your state and local real estate taxes by up to $10,000 in 2022.
When you sell your home, you can exclude part or all of the profit from capital gains tax as long as you lived there for at least two of the past five years.
People with lower incomes might be eligible for mortgage interest tax credits if issued a qualified Mortgage Credit Certificate from the state or local government.

Improvements to your home can also come with tax benefits.

You may be able to get a credit for installing certain types of renewable energy improvements like solar water heaters and heat pumps. And if you need to make modifications to your home for medical reasons , like installing a wheelchair ramp, you may be eligible to deduct those costs as well.

With that said, if you are considering buying a home or doing a considerable remodel, it’s always a good idea to take note of the tax benefits you might qualify for. If that’s in the cards for you, do not hesitate to reach out if you’d like me to take a look at your unique situation–I’d be happy to see how you might be helped by tax breaks.

Choosing the Right Business Entity

Mon, 21 Nov 2022 23:23:00 GMT

When you start a business, you have thousands of decisions to make. One of the most important is how you will classify your business legally.

And while you’ve probably heard the terms floating around -- sole proprietorship, partnership, LLC, and corporation -- it’s crucial to understand the differences so you can choose the structure that works best for you. It will impact how much you pay in taxes, the liability you face, and your ability to raise money.

Here are a few thoughts I often share with my clients as they make decisions about their new business venture:

Sole Proprietorship

A sole proprietorship is the most common form of business organization. These businesses’ owners report business income and expenses on their personal tax returns and pay tax on any profit.

ADVANTAGE: It's easy to form and gives the owner complete control of the business.
DISADVANTAGE: The owner is personally liable for all financial obligations.

Partnerships

A partnership involves two or more people who agree to share in the profits or losses of a business.

ADVANTAGE: Partners do not bear the tax burden of profits or the benefit of losses -- they are simply reported on partners’ individual income tax returns.
DISADVANTAGE: Each partner is personally liable for the financial obligations of the business.

Corporations

A corporation is a legal entity created to conduct business. The corporation becomes separate from those who founded it. The corporation can be taxed, held legally liable for its actions, and make a profit.

ADVANTAGE: Corporate status allows owners to avoid personal liability.
DISADVANTAGE: The cost to form the corporation and the extensive record-keeping keeps many new business owners from pursuing this option. Setting up an S Corp or C Corp can sidestep some of the liability by allowing income or losses to be reported on individual tax returns (similar to a partnership).

Limited Liability Corporation (LLC)

An LLC is a hybrid form of partnership that’s growing in popularity.

ADVANTAGE: Profits and losses can be passed to owners without taxation of the business itself, while owners are shielded from personal liability.
DISADVANTAGE: Compared to a sole proprietorship or partnership, an LLC is a little more expensive to operate. Additionally, owners must keep personal business separate from the business of the company.

Now that you know a little bit about the different structures, here are a few questions to ask yourself when choosing one:

To what extent do you need to be protected from legal liability? Consider whether your business lends itself to potential liability and, if so, if you can personally afford that risk.
Based on your personal tax situation and business goals, where are your opportunities to minimize taxation? Keep in mind there are more tax options available to corporations than to proprietorships or partnerships.
What funds do you have for setting up (and running) your chosen business structure? The tax advantages of a corporation may be nice, but they may not be enough to offset the costs of conducting business that way.

Note that no two business situations are the same--I’m happy to help guide you based on your personal circumstances. Feel free to give me a call or shoot me an email if I can be of any assistance.

Inheritance and Financial/Estate Planning

Mon, 12 Sep 2022 23:20:00 GMT

I wanted to reach out to address something that routinely comes up in financial and estate planning discussions—how to plan for an anticipated inheritance. It can be tough to discuss, but I encourage all my clients to have a plan in place for when (and if) an inheritance comes their way. Here’s some high-level guidance:

If your anticipated inheritance is years away, plan and save for the future as if it didn’t exist. Then, if circumstances change (and believe me, they often do!), you and your family will still be financially secure.

If an inheritance is imminent:

Identify your current and future financial goals, then use the inherited funds to help you meet those goals.
Refrain from spending your inheritance before you have it. Keep from making large purchases before you know precisely what you’ll be receiving.
Build a team of professionals to help you reach and stick to your post-inheritance goals. This might include a financial planner, an estate planning attorney, and a tax professional.

If you would like to review your financial plans or if you’re in the midst of receiving an inheritance, reach out to schedule a free consultation. I’m here to help however I can.

Medicare Planning Q&A

Thu, 04 Aug 2022 23:08:00 GMT

If retirement is a part of your plans in the next several years, congratulations—what an exciting time in life! With that in mind, I want to briefly touch base about one aspect of retirement that is often overlooked: Medicare planning.

There is no question that Medicare is complex, but you can make the wisest decisions for your future with the right help and guidance. I’m here to help.

To get started, here are a few FAQs about Medicare planning:

Isn’t Medicare “automatic” when I turn 65? Why do I need to plan for it?

Medicare and how it works with Medicaid is sometimes confusing to understand. If you are nearing retirement age, it’s smart to have a professional guiding you through the process of obtaining the benefits you deserve.

What are my Medicare options?

The traditional Medicare plan consists of three parts (A, B, and D), each providing different types of coverage. Medicare Advantage and Medigap provide additional coverage levels that allow recipients to receive care from private service providers.

When should I begin thinking about Medicare?

Medicare planning is best done well in advance of the need for care, particularly if you have assets valued at over $50,000.

In fact, there are some simple steps you should take six months before you turn 65 to ensure a smooth transition.

Call the Social Security office to confirm your eligibility for Medicare and ensure you have sufficient work history to qualify for premium-free Part A.
Consider your potential out-of-pocket expenses on each type of coverage.
Compare the out-of-pocket maximums on Medicare Advantage plans in your area.
Converse with your doctors to see if they accept Medicare and participate in any Medicare Advantage plans.

Will Medicare pay for my assisted-living expenses?

While Medicare will pay for 100% of the cost of care up to twenty days at a skilled nursing facility and approximately 80% of the cost up to eighty more days following an inpatient hospital stay, Medicare will not cover the cost of assisted living.

There is lots more to cover, but it depends on your unique situation. No question or concern is too small. Give me a call—I don’t want you to miss out on the benefits that you need and deserve.

Post-Divorce Tips for Estate Planning

Thu, 07 Apr 2022 23:00:00 GMT

There’s no question that navigating a divorce can be extremely difficult; there are a handful of important considerations to keep in mind as the dust settles–one of them being your estate plan.

I thought I’d reach out and share some insights on a few of the steps to take regarding estate planning after divorce papers have been finalized. Feel free to share this information with anyone you know who may benefit.

1. Update Will and Trust

Many married couples have a will or trust that benefits their spouse–and even though the marriage is over, those provisions are usually still in effect until you say otherwise. You’ll need to revoke your existing will or trust and update it to remove your ex-spouse and assign a new heir (or heirs).

If you have children under 18, you’ll also need to assign a guardian in the event that you pass away. Typically the surviving parent will get custody of the kids even if you’re divorced, but if they too pass away or are deemed unfit for any reason, you’ll want to have another guardian named. The guardian may also control any money you leave to the kids until they become legal adults, which is something to keep in mind.

2. Redesignate Beneficiaries

Many people name their spouses as beneficiaries on life insurance policies, bank accounts, and retirement funds. These types of assets are distributed directly to the beneficiary when you pass away, rather than going through probate court. You’ll need to update your beneficiary forms to remove your spouse and designate a new person to receive those assets. This is typically as simple as requesting a new form from the institution.

3. Reassign Powers of Attorney

It’s common for married couples to give one another medical and financial powers of attorney in the event that one spouse is unable to make health-related or financial decisions for themselves. After getting divorced, you may not want that responsibility to remain with your ex. We can easily revoke the powers of attorney and choose someone more suitable, like a sibling or child, to replace them.

If you have any questions about this information or would like advice about your estate plan, give me a call and we’ll schedule some time to talk more in-depth. I’m here when you need me.

The Estate Planning Checklist

Thu, 27 Jan 2022 22:47:00 GMT

Estate planning can feel overwhelming for those who have never put together a plan or who haven’t reviewed theirs every three to five years as recommended. The good news is that with the help of a specialized lawyer, this process can go much more smoothly and efficiently than many anticipate.

In that vein, I thought I would share a general checklist that I send to my clients who are preparing to create or update an estate plan.

Beneficiary Designations: Make sure you name a beneficiary for all non-probate assets, including 401(k)s, IRAs, life insurance policies, pensions, and bank accounts. For those who already have an estate plan, it’s important to ensure that the person currently named is still the person you want to be the beneficiary.
Financial Power of Attorney: Choose someone you trust who can make financial decisions for you in the event you are unable to do so.
Advanced Healthcare Directive: Ensure your medical preferences are followed using a living will. In addition, you’ll want to name a trustworthy friend or family member (often a spouse, parent, or child) as your medical power of attorney. This person will make medical decisions for you in the event you are unable to do so.
Name a Digital Executor: I n this day and age, it’s wise to name a digital executor. This person can follow instructions you leave regarding all of your digital assets, such as bank accounts, social media, digital files, photos, and online storage.
Proof of Identity: Make sure all of these documents, including your marriage license/divorce certificates, Social Security card, and prenuptial agreements, are in one place and easy to locate.
Property Deeds and Titles: Confirm that all deeds and titles are up to date and in an easy-to-locate place–and if you’ve established a trust, make sure to retitle your property to list the trust as the owner
Funeral Instructions: Make a list of your preferences regarding your funeral and place it with your will and other important documents. List your preferences, such as whether or not you wish to be cremated, a passage you want someone to read, or a list of preferred charities for donations.
Insurance Information: Gather all of your policies and make sure your executor knows where they are and what to do with the information.

While this is not an exhaustive checklist, it’s a good jumping-off point to work from in consultation with an estate planning professional.

That said, if you have any questions about estate planning or would like to set up an appointment to create or update your plan, please give me a call. I’m here to help.

Why Title Insurance is Important

Thu, 24 Jun 2021 17:17:00 GMT

Chris and Lori are buying their first home. Their realtor talked with them about buying title insurance, but Chris and Lori are on the fence about the purchase. It’s a one-time expense that will prevent Chris and Lori from losing their new home if a problem with the title arises.

What is Title Insurance?

Title insurance protects the insured from past occurrences. Common types of title insurance claims include:

Errors in the public records
Undiscovered liens
Omitted heirs
Fraud

When you purchase title insurance, an extensive search of the property’s title is performed. This search minimizes potential liability for the owners by discovering foreseeable title issues. Once the property owner takes possession of the title, title insurance defends against litigation that challenges the validity and legality of the new owners.

Here’s a local example that happened in the Memphis area. An elderly woman passed away leaving her assets, including a home, to her daughters. The two daughters sold their mother’s house and split the proceeds. The new homeowners walked away happy with their purchase. Until two years later when a third sister laid claim to the property.

In this instance, title insurance would have covered what was owed to the third sister thus protecting the new homeowners.

Types of Title Insurance

There are two types of title insurance. Mortgagors purchase title insurance to secure security interest in the estate. Property owners purchase title insurance to protect their investment.

Title Expense

The average title insurance policy costs property owners a one-time payment of $544 while mortgagors pay around $835 for their coverage.

Title insurance may seem like an unnecessary expense to some but the protection and peace of mind it offers is invaluable. A one-time cost at closing allows new property owners to enjoy their investment without worry.

Your closing attorney plays a vital role in ensuring that you, the new property owner, are fully protected with your investment. The Stiles Law Firm is diligent in protecting our clients and giving them the best experience possible during the purchase of their new home or property. Book your free consultation to learn more.

Why An Estate Plan Matters

Thu, 10 Jun 2021 17:05:00 GMT

Estate plans were once thought of as something for the wealthy. However, many people have discovered that even middle-class families benefit from having an estate plan.

What is the difference between an estate plan and a will?

A will is a document that states your final wishes and instructions for care for minor children. A will is part of an estate plan but can be used without a plan as well. An estate plan includes a will but it also controls the distribution of your assets.

Why do I need an estate plan?

If you have any assets to pass onto your heirs, you need an estate plan. A large estate isn’t required to need a plan. Estate planning protects the beneficiaries and gives you control over what happens to your estate when you are gone or become mentally incapacitated. Without an estate plan, the decision of who controls your assets will be decided by a court. This can take months and even years to settle and it can be quite costly for those you leave behind.

Your will is one part of your estate plan. We briefly mentioned that a will contains your wishes for who will care for any minor children you may have at the time of your death. Without a will, the courts will decide who will raise your children. The same applies to pets. If you want to make sure Dottie the Dachshund and Pepper the Dalmatian go to someone who will care for them as you do, you need a will.

Estate plans also allow individualized plans for each of your heirs. These plans may include instructions for the care of a special needs child and trusts so you can control how and when your heirs receive a financial inheritance.

You’ll also include beneficiary forms for bank, investment, and retirement accounts as well as life insurance policies. Keeping all these forms together in one plan allows you and your attorney to ensure the beneficiaries on your accounts and in your will line up. It also makes it easier for your family to know your full assets upon your passing.

In addition to keeping the courts out of your final plans, estate planning protects your heirs from a hefty tax burden. You’ll also want to spare your heirs from squabbling with one another over who gets to keep the house and who gets Dad’s classic convertible. Family disputes over left-behind assets can lead to lifelong division among siblings and other relatives.

Finally, an estate plan isn’t just for your family after your death, it’s for you while you’re living. Your estate plan should include both durable powers of attorney and a living will. This ensures the person you want to manage your health if you’re incapacitated is in charge and that decisions are made according to your wishes.

Don’t wait until it’s too late to decide to create an estate plan. Even young adults should begin planning their estate especially if they have children. Estate planning is even more important for middle-aged adults and the elderly.

A critical step in estate planning is choosing the right attorney to handle the legal side of the plan. The attorneys at Stiles Law Firm are highly experienced and ready to help you make the right decisions regarding your final plans. To learn more about how we can help you, book a free consultation with The Stiles Law Firm today.

What does a hot real estate market mean for a prospective buyer/seller?

Mon, 24 May 2021 21:28:00 GMT

We’ve all heard the stories about the house down the street that sold for $50,000 more than the asking price in less than 24 hours. And we’ve heard the tales of heartbreak from home buyers who searched for months and lost out on their dream home because the seller had 10 offers the day it hit the market. Whether you’re a buyer or seller, navigating the hot 2021 real estate market requires the help of a few professionals and a game plan.

On the Seller’s Side

Start with Your Agent

If you’re ready to list your house for sale, it’s tempting to forgo a real estate agent and put a sign in your yard yourself. Afterall, there are more buyers than sellers. Before you run to the hardware store and purchase your sign remember your real estate agent does more than list your property. A seasoned agent can assist you in getting top dollar for your property and help you sort through the multiple offers you expect to receive. They can coordinate showings while you continue on in your busy life. They may also offer wise counsel about the offers you receive (i.e. the highest bidder might not be the best deal).

Be Prepared

If you want to make your closing happen sooner rather than later secure your home’s inspection before you list your house. You won’t have any surprises about items that need to be fixed, and you can present a full picture of the property to the buyers. In a hot market, many houses with problems like an old, leaky roof still sell for top dollar. Your agent can help you decide which issues must be fixed and which ones buyers are usually willing to take on after the purchase. You can also choose the title agent (ahem, that’s your cue to call The Stiles Law Firm). The buyer has the option to choose the title company, but if you’ve already lined one up they likely won’t.

Clean It Up

Although some buyers are willing to take on certain repairs, it will always be worth your time to prepare your property for sale. Spruce up your landscaping. Declutter your living spaces. Do a deep clean before listing and daily cleaning to keep it show ready. And at the top of your list, invest a little to have your home staged if you want a chance to be that property to sells fast and above asking price.

Review Your Offers

If you know you won’t be accepting certain offers let the buyers know quickly so they can move on to the next property. Respond to all your offers in 24 hours. You’ll need to make time in your schedule to speak with your realtor regularly once the listing is live and to review the offers.

Know Where You’re Going

It’s as likely you’ll end up with a cash offer and a faster closing date as it is that you’ll have thirty days to figure out your next move. If you don’t already have a rental or another home lined up, it’s time to make those plans before you put your house on the market.

On the Buyer’s Side

Start with Your Agent

Whether you’re a buyer or a seller the first place to start is with your real estate agent. Talk about what’s important to you in a property and what’s happening in the real estate market. If you aren’t quite ready to buy just yet, let the agent know you’re starting the process. Find out their availability to show properties and how to best schedule your time. If you’re moving from one place to another and will only have a limited amount of time in town to look, schedule that day well in advance.

Browse First

Before you’re ready to buy, take a look at what’s on the market. Make notes about what you love and what you hate. Notice prices and how quickly homes stay on the market in specific neighborhoods. Use this time to get your game plan in place. Take your time. Don’t get caught up in the excitement of a “hot” real estate market and buy a home you don’t love.

Be Prepared

Get preapproved by your lender before you begin looking at properties. Many home sellers won’t even consider an offer if you aren’t approved. And know where you’re willing to compromise. Is that third bathroom really important or do you have to have a large patio?

Make the Best Offer

In a seller’s market, buyers can make the offer sweeter without offering more money. Consider only asking for post-inspection repairs for issues that are estimated to cost more than a certain amount. (But don’t waive the inspection altogether.) You can also offer a rent-back agreement if the seller hasn’t found a place to go yet or let the sellers set the closing timeline.

Have a Plan B

You may not win the first house you make an offer on. The National Association of Home Builders say 64% of homebuyers in 2021 searched for more than three months before they found the right home. And almost half were outbid on at least one property. This means you may need to rent for a while until you find the right home, or if you’re also selling a home work out that lease-back agreement with your buyers.

The hot real estate market has presented challenges for both buyers and sellers. At The Stiles Law Firm, our closing team is here to make sure your closing runs as smoothly and quickly as possible. And we make your closing a celebration.

Protecting assets if you’re in Medicaid’s 5-year look back

Sat, 22 May 2021 18:38:00 GMT

When Don, 85, fell and broke his hip, he wasn’t able to return to the home he shared with his wife Gwen, 79. He needed full-time nursing care to help him do the things he was used to doing for ...

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