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Navigating estate planning can be difficult. It’s hard to know what documents you need, which you don’t, and how to create them to be valid. Don’t do it alone. Check out these frequently asked questions about trusts in Tennessee.
Can trusts avoid inheritance tax?
In 2016, Tennessee removed the state inheritance tax. However, there are other federal estate taxes that families need to be aware of when finalizing their estate plans.
To create a trust, you need to first decide what type of trust you want to create and who your successor will be. You’ll also want to determine beneficiaries. From there, you will need to work with an estate planning attorney to write the document and have it signed in front of a notary.
What is the best type of trust to have?
There is no one size fits all for trusts. The type of trust which will work best for you will largely depend on the size of your estate and the needs of your beneficiaries.
What is the main purpose of a trust?
The main purpose of a trust is to manage someone’s assets who is living or deceased to avoid taxes and probate. Trusts can protect assets from creditors as well as set inheritance terms for your beneficiaries.
What are the types of trusts?
There are four main types of trusts. They are:
Revocable Trusts – You are able to control the trust in its entirety.
Irrevocable Trusts – These trusts cannot be changed once you pass away and must be followed exactly.
Family Trusts – Designed to transfer an estate of high value to a living spouse without tax fees.
Special Needs Trusts – These trusts allow a special needs family member to continue receiving government benefits even if they have an alternative source of income like an inheritance.
Who needs a trust?
Contrary to what you may have been told, not everyone needs a trust. But, a Google search will not be your tell-all. You need to review your assets and the terms of your estate with an experienced estate planning attorney who can work with you to see which estate planning documents will be most useful to you.
Can I change my trust?
You can change some trusts. Those trusts, known as Revocable Trusts, put you in control of how you want the trust to work, as well as who gets what.
However, you cannot change Irrevocable Trusts so you need to plan accordingly.
Is a trust better than a will?
Since a trust and a will are not the same things, neither is better than the other. However, when used together, they become a powerful estate planning tool. Keep in mind, everyone needs a will, but not everyone needs a trust.
Estate planning can be complicated. If you have questions about trusts in the state of Tennessee, do not hesitate to reach out to us. Estate planning is what we do.
Contact the Nashville trust attorneys of Martin Heller Potempa & Sheppard, PLLC today.