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The Tennessee Court of Appeals recently decided a case that is instructive on the probate or administration of an estate in Tennessee when the deceased is involved in a divorce case that is not finalized before the date of death.

Here’s the problem that may come up when one of the parties to a divorce dies before the divorce is final: what happens to the real property that the couple owns jointly? Does the surviving spouse get the property even where the parties had already agreed in a settlement agreement for the property not to go to the surviving spouse but no deed has been signed before death?

In re Estate of Cleveland, the Tennessee Court of Appeals was confronted with a situation very similar to this. Mr. and Mrs. Cleveland were involved in divorce proceedings in Georgia. They had entered into a settlement agreement that provided that Mr. Cleveland would get some jointly owned real property in Georgia, and Mrs. Cleveland would get some jointly owned real property in Tennessee.

Before the parties had signed the quitclaim deeds that finalized the property transfers and before the parties’ divorce was final, Mrs. Cleveland died.

There were a number of issues raised in the lawsuit, including whether Mr. Cleveland had rescinded the settlement agreement before Mrs. Cleveland died.

What is important and instructive is this: the Tennessee Court of Appeals determined that if the settlement agreement had not been rescinded before Mrs. Cleveland died (and it found that, indeed, there had been no valid recession), the Probate Court was obligated to enforce the settlement agreement between the parties, even though there had been no deeds signed and the parties were still legally married at the time of Mrs. Cleveland’s death.

Of course, if a person dies in Tennessee before a pending divorce case is final, one must look to and take into account an executed settlement agreement entered into between the parties in connection with the divorce. If the settlement agreement provides for a disposition of jointly held property that is different from how the property would otherwise go on the death of one of the parties, the settlement agreement is likely to prevail.

Probate of an estate of a party involved in a divorce proceeding can raise difficult and challenging questions. It is important that all parties involved–the named executor under the last will and the beneficiaries–look into the underlying facts and consult legal counsel experienced in Tennessee probate matters.