Inter-aquifer water exchange between the shallow and Memphis aquifers in Shelby County, Tennessee may pose a contamination threat due to the downward migration of younger, poor quality groundwater into deeper, more pristine aquifer. Discontinuities (breaches) in the upper Claiborne confining unit (UCCU) allow for leakage into the Memphis aquifer, a sand-dominated aquifer that provides about 95% of the groundwater used in the Memphis area. This study created a multi-layered 3D groundwater model for Shelby County using the United States Geological Survey’s MODFLOW-NWT program to evaluate water exchange for a simulation period from January 2005 to December 2016. Results indicate an overall leakage through the UCCU of 61 m3/min into the Memphis aquifer in Shelby County, accounting for 10% of its water budget inflow, with localized areas experiencing as much as 20% water exchange. As young water tends to stay in the upper part of the Memphis aquifer, water budget assessment for the upper 60 m of the Memphis aquifer revealed leakage representing 29% of the zone inflow, and as much as 53% in certain areas. More localized studies must be conducted to understand the location, characteristics, and orientation of the confining unit breaches, as well as the inter-aquifer water exchange.