This article series examines how moving to Tennessee might impact a person's estate plan. The first two articles examined wills and ancillary documents, and this third article will look at how Tennessee handles trusts created outside the state.
For Tennessee to have much to say about a trust, that trust must be governed under Tennessee law. Migrating a trust in that way was sometimes a confusing question, but recent legal developments have made this a more straightforward task.
Broadly, Tennessee has taken numerous steps over the past few years to become an even more trust-friendly state. With the passage of HB1186 into law in May 2021, a number of brand new trust-friendly changes went into effect. One impactful example is the clearing up of language concerning out-of-state trusts seeking to register as a Tennessee trust. This change seems likely to make it easier to register such a trust with the state, conferring the advantages provided for in Tennessee's favorable trust laws.
Other recent changes include providing greater flexibility to trustees, extending the possible duration of a Purpose Trust to 360 years, and shortening even further the window in which a creditor can file a claim against a Tennessee Investment Services Trust. That last change further advances Tennessee's national recognition for robust self-settled asset-protection trusts. In fact, many rankings organizations now pick Tennessee among the top few states for trusts. Despite this reputation, be sure to consult an estate planning attorney to determine whether registering an out-of-state trust will actually be prudent for your situation.
Disclaimer: This blog is published solely for informational purposes, and nothing posted herein should be considered legal advice. By viewing this blog and/or the posts contained herein, you agree that no attorney-client relationship is created between yourself and the Sents Law Firm. Information found within this blog should not be used as a substitute for legal advice from a reputable attorney. Please consult such an attorney for any questions regarding the topics discussed in this blog and how they may impact any specific situation.