WHY YOU NEED AN ESTATE PLAN

There is no one estate plan that fits all families.   Every family has different goals, some might be concerned with avoiding taxes, another family might want a spendthrift trust to protect assets from a child who has struggled with addiction in the past.  Yet another family might want to make certain that their minor children will have a guardian that shares their values, should they not be there to raise their children.  "Blended Families" with children from previous marriages, so called "Brady-Bunch" families, will need a trust to ensure their children aren't disinherited when the first spouse passes.  Your situation will be unique to you, which is why you need to discuss your estate plan with an attorney who can help your protect your assets and your legacy long after you're gone.    

MORE THAN A WILL. 

You have responsibly been in charge of your assets your whole life.   While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to use those assets to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones of the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.   An Estate Plan lets you continue your legacy.

Your first pillar of protection: the revocable living trust.

Many people believe a will is adequate to pass their assets on to their children, but if you only have a will, your family will have to go to court to probate your estate, a process that can take months and maybe even years to complete. You can protect the wealth that you have worked so hard to accumulate, avoid probate, and ensure your assets pass immediately to your loved ones by using estate planning devices like a revocable living trust.

The second pillar - plan for incapacity.

Incapacity. We've all had loved ones suffer from reduced mental awareness, or heard stories of grandparents who slowly decline and can no longer make financial decisions for themselves, parents suddenly incapacitated by a car accident, or someone who has very strong opinions for their end of life decisions, but failed to state those choices in a durable power of attorney for health care.

We help you decide who will care for you when you can't. As hard as it is to talk about, by making these decisions now, your family will avoid the expense of having a court appoint a guardian who you might not even know.

End-of-Life health care decisions almost always present a difficult situation for everyone involved. That is why it is important to make your own wishes known before the need arises by signing a Durable Power of Attorney for Healthcare that includes provisions to appoint a trusted person to make health decisions for you when you cannot, such as to avoid life-sustaining treatment when it would be hopeless, as well as a "do-not-resuscitate" order (DNR). 

Likewise, your Durable Power of Attorney for Assets lets your hand-selected a friend to act as your agent to take care of your assets should you become incapacitated. They can pay your mortgage, your bills, and provide funds for loved ones. When you get better, the control of your money returns to you., no guardianship or court order needed.

The Third Pillar of Protection - Funding your trust and keeping it up to date.

If something unexpected happened to you, do you know what would happen legally - to you, your loved ones, your money and everything else you care about? If you have a trust, and you've failed to properly fund it, or if your plan is out of date, your assets could be subject to an unnecessary Court process. Other assets could be lost to the State Department of Unclaimed Property. Our systems of creating and updating your trust will help you leave a legacy that could last for generations. 

 
Going FURTHER - The Fourth Pillar of Protection - Crafting additional trusts for asset protection, tax avoidance, and creating your legacy.

Tennessee has been working hard since 2007 to be a jurisdiction with modern and streamlined trust statutes, and those around the country should consider Tennessee when they're looking for trust jurisdiction. Tennessee has a new statute that provides an opportunity for people outside of Tennessee to register a trust in the state of Tennessee, and claim Tennessee jurisdiction and disclaim other states jurisdiction. 

Here's a few types of Trusts that Tennessee has enacted which rival Alaska and Nevada for strong trust protection: 

The Tennessee Investment Services Trust or TIST. Tennessee has numerous trusts to protect your assets from Creditors, and now allows Tennessee residents to create self-settled domestic asset protection trusts or "DAPTS". Since 2007, Tennessee’s version of a DAPT has been called a Tennessee Investment Services Trust, or "TIST." The TIST is an irrevocable trust that allows a settlor/client to protecting the property from the client’s creditors, which simultaneously having access and control over a significant amount of the property placed in the trust. The property can include real and personal property, including investments, interest in a business, etc.

Tenancy By the Entireties Trust. Tennessee has simplified version of a creditor protection trust where a married couple can transfer Tenancy by the Entirety property into the trust and maintain their Tenancy by the Entirety protection. Tenancy by the Entirety ownership allows protection from a creditor of one spouse while both spouses are living.

Marital Asset Protection Trust. Tennessee MAP trusts - Marital Asset Protection trusts - go one step further, they not only protect assets from the creditors of one spouse while both are living, but prevent the surviving spouse's creditors from seizing the trust's assets after the first spouse dies - PROVIDED THAT (a) the survivor remains a beneficiary of the trust and (b) does not have a non-fiduciary power to appoint to self.

A Spousal Lifetime Asset Trust, or SLAT, is a trust created by one spouse (grantor spouse) for the benefit of the other spouse (beneficiary spouse). The purpose of a SLAT is to put assets beyond the reach of the estate tax (and creditors), while allowing the spouses to retain access to the assets. Thus, a SLAT lets you have your cake and eat it too. A strategy to creating a SLAT is for both spouses to create reciprocal SLATS, and other states require the Grantors make the SLATs contain different terms and be created at different times in order to avoid the SLATs being disallowed as a “reciprocal trust.” A new Tennessee statute eliminates any concern about a reciprocal trust agreement being made by a creditor if two spouses create trust for each other. Tennessee will no longer invalidate the SLATs by instead ignoring the fact that one spouse created trust when evaluating the protection offered by the other trust.

A Tennessee Community Property Trust is a way for a married couple to avoid capital gains taxes for any jointly-owned appreciated property placed into the trust. Property that was purchased years ago for a low amount (called the tax basis), which later appreciates in value will require the couple to pay capital gains tax on the profit when they sell it. In a common property state such as Tennessee, in which each spouse is considered a separate owner, there’s only 50% step up in the tax basis upon the first spouse to die. However, if the couple had first placed their property into Community Property Trust, then rather than a half-step up on basis, the surviving spouse will enjoy a full step-up in basis on the death of the first spouse. The surviving spouse can then sell the property with zero capital gains. 

Spendthrift Protection.   A feature of all trusts we've discussed above is its spendthrift provision, and Tennessee now prevents a creditor or assignee of a beneficiary from forcing a distribution even if the beneficiary has the right to enforce a mandatory distribution. Further, if an interest is a discretionary interest (i.e., and independent trustee has discretion when to distribute the assets) then no creditor may force or reach a distribution or require a fiduciary to exercise discretion to distribute.

Tennessee's new Decanting Statute.  Think you are stuck with an irrevocable trust? Maybe not. Tennessee reworked its decanting statute making it clear that while a decanting cannot add beneficiaries, it can, in many cases, limit or eliminate a beneficiary's income interest and can also accelerate the beneficial interest of a future beneficiary after the settler's death. 

Tennessee has made its modification of irrevocable trust procedures pretty flexible. If the trustee and all qualified beneficiaries agree to modify an otherwise irrevocable trust, so long as the settler does not object, or after the settler's death, if the trustees and qualified beneficiaries agree that the modification does not violate a material purpose of the trust, then the change can be made.