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If you're a resident of Tennessee and trying to decide whether you need a living trust, you might be wondering what to take into consideration. What happens to your property under Tennessee laws if you don't have a trust? When might you want a living trust? How do you make a living trust? Below is an introduction to what a living trust does and a discussion of whether it makes sense for your situation.
A "living" trust (also called an "inter vivos" trust) is simply a trust you create while you're alive. The beneficiaries you name in your living trust receive the trust property when you die. You could instead use a will, but wills must go through probate—the court process that oversees the transfer of your property to your beneficiaries.
Many people create a revocable living trust as part of their estate plan. You can modify or revoke (cancel) this type of trust at any time. Typically, you'll name yourself as the "trustee" of your trust. This means that you retain control of the trust and its property while you're alive. In your trust document, you'll also name a "successor trustee" to take over and manage the trust (including distributing your property) after you die. (If you create a shared living trust, as is often done by married couples, then your successor trustee would assume control after both spouses have died.)
In contrast, irrevocable trusts can't be revoked or modified after they're signed. Irrevocable trusts can be useful tools for specific goals, like reducing taxes, but they require giving up ownership and control of trust property.
When you set up a living trust to transfer your property to your loved ones after your death, you can potentially save them a lot of time, hassle, and money. Property left through a will (rather than a living trust) might be tied up for months or even years in probate court, and probate could involve court costs and lawyers' fees. By contrast, property left through a trust can be distributed to your beneficiaries almost immediately, and often without the need for an attorney.
Some states have fully adopted a model law called the Uniform Probate Code, which streamlines the probate process, but unfortunately Tennessee isn't one of these states. However, Tennessee does offer a simplified probate process for "small" estates, which are defined as estates worth $50,000 or less (not counting real estate or property held jointly and with a right of survivorship with someone else). (Tenn. Code §§ 30-4-102, 30-4-103, 30-4-104 (2024).)
If your estate qualifies for this probate shortcut, called "small estate administration" in Tennessee, the probate process will be quick, straightforward, and relatively inexpensive. So you might not need to worry about making a living trust just to avoid probate.
Yes, you'll still need a will. This might seem confusing—isn't the point of a living trust to avoid needing a will? Yes, it is, and your will might never be used. But you should still write one, for one or both of the following reasons:
If you don't have a will, any property that isn't transferred by your living trust or other method (such as joint tenancy) will go to your closest relatives as determined by Tennessee state law.
Probably not. But most people don't need to worry about federal estate taxes anyway because the federal estate tax is levied only on estates worth more than $13.61 million (for deaths in 2024). As of 2016, Tennessee no longer imposes its own state estate tax.
That said, if you have an estate worth more than $13.61 million—or you and your spouse have a combined estate of close to $27.22 million—you might be able to use a more complicated trust (such as an AB trust) to reduce or avoid federal estate taxes.
To make a living trust in Tennessee, you:
You can use WillMaker & Trust to make a living trust using your computer. It has a simple interview format that allows you to complete the trust at your own pace, and it gives you lots of legal and practical help along the way. Based on your responses, the program produces a living trust document customized for you and your situation. With WillMaker & Trust, you can also make a will, powers of attorney, health care directives, transfer on death deeds, and many other useful documents. Use it just for yourself or for your entire family.
For more on Tennessee estate planning issues, see Tennessee Estate Planning.