Living Trust Attorney in Tennessee — Probate, Community Property Trusts and Trust Planning

Tennessee has no estate or inheritance tax, and it offers a unique tool for married couples: the community property trust. This guide from a living trust attorney in Tennessee perspective explains how Tennessee probate works and how trusts can help.

A living trust avoids probate, provides privacy and handles incapacity. Moreover, a Tennessee community property trust can offer married couples a significant income tax benefit. Therefore, Tennessee families have good reasons to consider trusts.

How Tennessee probate works

Tennessee probate is handled by the probate or chancery court in each county. The executor is appointed, notifies creditors and administers the estate. Creditors generally have a set period after notice to file claims.

For small estates below a set limit, Tennessee allows a simplified small estate procedure. Our Probate Documents service helps executors.

No estate or inheritance tax

Tennessee repealed its inheritance tax, effective 2016. As a result, Tennessee has no state estate or inheritance tax. However, federal estate tax may apply to very large estates.

Consequently, most Tennessee planning focuses on probate avoidance, incapacity and protecting beneficiaries.

Tennessee community property trusts

Tennessee is not a community property state. However, the Tennessee Community Property Trust Act allows married couples to elect community property treatment for assets placed in a qualifying trust.

The main benefit is income tax. When one spouse dies, community property can receive a full step-up in tax basis, not just the deceased spouse's half. As a result, the surviving spouse may owe less capital gains tax on a later sale. However, there are trade-offs, including how property is divided in a divorce. A living trust consultation explains them.

Funding your trust in Tennessee

A trust only avoids probate for assets it actually owns. Therefore, funding is the step that makes everything work.

Real estate

Tennessee homes are transferred to the trust by deed, recorded with the county Register of Deeds. Because Tennessee's options for passing real estate outside probate are more limited than in some states, a trust is a common tool. Make sure any property tax relief continues.

Accounts, retirement and insurance

Next, retitle bank and brokerage accounts into the trust's name, or add the trust as the payable-on-death beneficiary where allowed. Retirement accounts usually stay in your name with beneficiary designations instead. Similarly, life insurance can name the trust or individuals.

Personal property

Finally, an assignment of personal property moves household items into the trust. Our Living Trust package includes step-by-step funding instructions for Tennessee. Consequently, nothing important is left behind.

Blended families, children and choosing a trustee in Tennessee

Blended families need careful planning. For example, a parent may want to support a new spouse while protecting an inheritance for children from an earlier marriage. In addition, Tennessee gives a surviving spouse an elective share in many cases, which can affect plans for children from an earlier marriage. Therefore, a trust can hold assets for the surviving spouse for life and then pass the remainder to the children.

Similarly, a trust can manage money for minor children until they are older, instead of handing everything over at 18. Moreover, you choose the successor trustee. Pick someone organized, honest and willing, or name a professional trustee when family dynamics are complex.

If you already have a trust, a trust review checks whether it still fits your family and Tennessee law.

Flat fee living trust pricing and documents in Tennessee

Our Living Trust service starts at $199 for Tennessee. The standard package tailors the trust to Tennessee law and your family. Meanwhile, the premium package adds attorney review.

A complete plan also needs a durable power of attorney and an advance care plan or healthcare power of attorney, each with Tennessee signing requirements. Our Estate Plan Bundle prepares these to Tennessee standards. In addition, our durable power of attorney and healthcare directive services are available individually.

Not sure whether a trust is worth it for you? A living trust consultation compares a trust with a will and other probate-avoidance tools. For more, read our national guide to flat fee living trusts.

Common living trust mistakes in Tennessee

The most common mistake is signing a trust but never funding it. Consequently, assets left outside the trust may still need probate. In Tennessee, another frequent problem is overlooking the community property trust option, which can provide a full basis step-up for married couples.

Similarly, many people forget to update beneficiary designations on retirement accounts and life insurance. As a result, money can go to an ex-spouse or the wrong person. Therefore, review every designation when you sign your trust.

Finally, keep the trust current. Marriage, divorce, a new grandchild or a large change in assets should all prompt a review. In addition, store the original documents safely and tell your successor trustee where they are.

What the trustee does after a death in Tennessee

When the trust creator dies, the successor trustee takes over without court involvement. First, the trustee obtains death certificates and secures the assets. Next, the trustee notifies beneficiaries as Tennessee law requires.

After that, the trustee pays debts, expenses and any taxes. In particular, the trustee should confirm the basis of trust assets, especially in a community property trust. Then the trustee transfers or sells real estate by recording documents with the county Register of Deeds.

Finally, the trustee distributes the remaining assets under the trust's terms and keeps records. Consequently, the family avoids probate and keeps matters private. Our executor documents service helps trustees and executors stay organized.

Out-of-state property and moving to Tennessee

Many Tennessee families own property elsewhere, such as homes in Georgia, North Carolina or Florida. Without a trust, each state may require its own probate, called ancillary administration. Therefore, deed out-of-state property to your trust too.

If you move to Tennessee with a trust from another state, it generally remains valid. However, it may not reflect Tennessee's tax rules, property law or signing requirements for related documents. Consequently, a review after a move is wise. In addition, update your powers of attorney and healthcare documents to Tennessee forms, because banks and hospitals accept familiar forms more readily.

Who benefits most from a living trust in Tennessee?

A living trust is not essential for everyone. However, it adds real value in several situations. First, homeowners who want to keep their house out of probate benefit. Second, people who own property in more than one state avoid multiple probates.

Third, anyone concerned about incapacity benefits, because the successor trustee can step in without a court guardianship or conservatorship. Fourth, parents of young children or beneficiaries who need help managing money gain control over how and when assets are distributed.

In addition, Tennessee has the community property trust option, so married couples with appreciated assets may gain a tax advantage. Consequently, many Tennessee families find a trust worth the modest cost. A living trust consultation helps you decide.

Our Living Trusts services in Tennessee

Every service below has a fixed price, is prepared by a qualified attorney and is delivered online — wherever you are in Tennessee. Additionally, you can upload evidence, message your attorney and track progress from your secure client dashboard.

Living Trusts across Tennessee — cities we serve

We work with clients in every part of Tennessee, entirely online. Therefore, it does not matter whether you live downtown or hours from the nearest courthouse. Your documents follow Tennessee law and your county's local practice. Choose your city below to see local details and prices.

• Nashville: Revocable Living Trust in Nashville · Complete Estate Plan Bundle in Nashville · Living trust consultation in Nashville
• Memphis: Revocable Living Trust in Memphis · Complete Estate Plan Bundle in Memphis · Living trust consultation in Memphis
• Knoxville: Revocable Living Trust in Knoxville · Complete Estate Plan Bundle in Knoxville · Living trust consultation in Knoxville
• Chattanooga: Revocable Living Trust in Chattanooga · Complete Estate Plan Bundle in Chattanooga · Living trust consultation in Chattanooga
• Clarksville: Revocable Living Trust in Clarksville · Complete Estate Plan Bundle in Clarksville · Living trust consultation in Clarksville
• Murfreesboro: Revocable Living Trust in Murfreesboro · Complete Estate Plan Bundle in Murfreesboro · Living trust consultation in Murfreesboro
• Franklin: Revocable Living Trust in Franklin · Complete Estate Plan Bundle in Franklin · Living trust consultation in Franklin

More Tennessee services

Complete Estate Plan Bundle in Tennessee · Living trust consultation in Tennessee · Durable Power of Attorney in Tennessee · Advance Healthcare Directive / Living Will in Tennessee · Probate Documents Package in Tennessee · Trust review in Tennessee. See all legal services in Tennessee.

Nearby states

Moving between states, or is the other party elsewhere? We also cover Revocable Living Trust in Kentucky, Revocable Living Trust in Georgia, Revocable Living Trust in Alabama, Revocable Living Trust in Mississippi, Revocable Living Trust in North Carolina. See every location we cover.

Frequently asked questions

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This guide is general information, not legal advice for your situation. Every case is different — speak to a qualified attorney before you act.