Using a Living Trust in Estate Planning in Tennessee

Estate planning is an important part of preparing for the future, since it ensures that your assets are managed and distributed according to your wishes and that your heirs and loved ones are taken care of. A popular tool in estate planning is the living trust. In Tennessee, as in other states, this legal tool offers numerous benefits, including privacy, avoidance of probate and flexibility in asset management.

A living trust is a form of revocable trust that can be created to hold and distribute an individual’s assets. The person who creates the trust is called the grantor, and during their lifetime, they can act as the trustee, being full control of the trust assets. To establish a living trust, the grantor drafts a trust document, which details how the trust assets should be managed and distributed. The document must be signed and, in most cases, notarized. Once the trust is created, the grantor transfers ownership of some or all of their property to the trust, which means retitling property, bank accounts and other assets in the trust’s name.

One of the primary characteristics of a living trust is its flexibility. As long as the grantor is alive and mentally competent, they retain control over the trust assets. They can buy, sell or transfer assets into and out of the trust, amend the trust document or even revoke the trust entirely if they wish. 

Upon the grantor’s death, the assets in the living trust bypass the probate process and are placed in the hands of a successor trustee named in the trust document. The successor trustee then manages and distributes the assets as the trust document directs. This is a significant advantage, as probate is a court process that is open to public scrutiny that can be time-consuming and costly. By contrast, the successor trustee can administer the trust in private and distribute the assets quickly and cost-effectively.

Despite the advantages of a living trust, it is still advisable to have a will. This is because a will can address any assets that were not transferred into the trust before the grantor’s death. This document, often referred to as a “pour-over will,” ensures that any assets not already in the trust are distributed to it upon the grantor’s death. A will also can appoint guardians and set up trusts for minor children.

Living trusts offer numerous benefits. However, they are not a one-size-fits-all solution and should be considered as part of a broader estate planning strategy that includes a will. An experienced trusts and estates attorney can provide the guidance needed to deal with the complexities of estate planning and ensure that all documents are correctly drafted and executed.

The Collierville Law Firm advises clients in Collierville and the greater Memphis metro region on all types of estate planning methods including wills, trusts, and advance directives. Please call 901-614-0318 or contact us online to schedule a free initial consultation.