From the Blue Ridge Mountains, to University of Tennessee football, to the Grand Ole Opry, to Memphis-style ribs, there are many reasons residents are proud to call Tennessee home.
Our great state continues to climb in the ranks of best places to retire in the U.S. Four distinct seasons and the country’s most-visited national park make Tennessee a great place for those rounding out their careers, as well as the ones just getting started.
A less well-known factor is that over the past decade, Tennessee also has become a top state in the nation’s trust industry, due in large part to legislation that makes trusts easier to administer.
Why is this important?
Historically, a trustee (the person or the organization responsible for the trust’s administration) was limited to administering a trust as it was written, with the only alternative being turning to the courts for assistance.
Fortunately, Tennessee’s laws now provide trustees with tools that allow them to be proactive and flexible in trust administration. For example, laws may change, leaving a document drafted decades ago out of date with current laws.
With the current federal estate tax exclusion of up to $5 million per person and Tennessee’s elimination of the inheritance tax effective this year, the original intent of a trust written a decade ago may no longer apply. Tennessee’s laws provide a trustee with methods to manage these challenges. These tools include methods for clarifying, revising, or terminating a trust agreement, oftentimes without going to court, saving the trust (and its beneficiaries) money and time.
In Tennessee, we also now have the flexibility to structure a trust to run 360 years, with protections against creditors for your heirs. This means your children’s inheritance should be protected in the event of divorce. Such long-term trusts also can be adjusted to fit changing situations.
For example, Tennessee has provided a decanting statute that allows a trustee to make changes to the trust when warranted to ensure the trust is utilized to its optimal potential for the beneficiaries — again, without the cost or delay associated with going to court.
Tennessee also provides flexibility in the drafting of trust documents. By law, trustees are required to notify beneficiaries of certain trust activities. While we encourage communication, some people do not want their beneficiaries to receive specific information. Mom and Dad may not want the children getting copies of all the trust activity during the surviving parent’s lifetime. Tennessee laws support these wishes.
The push in recent years by the Legislature for improved trust legislation provides clearer laws for the trust industry, and flexibility for those wishing to use trusts.
In his 2015 ranking of states in order of best laws for certain trust issues, lawyer Steve Oshins ranked Tennessee third in the nation. This ranking helps encourage trust business to come to Tennessee — providing an enhancement to our economy. That is an advantage to us all.