Disclaimer

"The Disclaimer" - The following is a summary/outline and does apply to your particular situation and is not legal advice. It's general information.

 

Living Trusts

Living Trusts are alternatives to Wills. They are touted as a way to "avoid probate" and the costs that go along with probate. In my experience, we usually end up having both a probate estate and a trust estate for a number of reasons. Living Trusts do not protect you from paying taxes or reduce your tax burden in Tennessee. Tennessee does not have an inheritance tax. The federal tax exemption is over $5 million for an individual and over $10 million for a married couple.

For certain persons, a living trust makes sense to take care of assets and facilitate the transition of these assets down to future generations, or to keep assets in trust long after the Grantor (the person that creates and initially funds the trust) is deceased.

The basic idea of a Living Trust is that your Trust will own all your assets. During your lifetime, you will manage these assets as the Trustee. During your lifetime, the trust is revocable, so you can change your mind. Upon your death (or incapacity) a Successor Trustee will take over and continue managing the assets for you if you are still alive, then follow the instructions in the Trust document after your death. Usually, the trust becomes irrevocable upon your death.