THE TENNESSEE ADVANTAGE
TOP TEN ATTRIBUTES OF TENNESSEE TRUST LAW
- Asset Protection Trusts. Tennessee’s statute is ranked 3rd best in the U.S.*
- Dynasty Trusts. Tennessee trusts can be protected from creditors, predators and taxes for 360 years. Tennessee’s climate for Dynasty Trusts is ranked 3rd best in the U.S.*
- Community Property Trusts. Tennessee is one of only two states that allow non-residents to convert their assets from separate property to community property. This results in a double basis step-up at the first death.
- Modifications. Tennessee’s decanting statute is ranked 5th best in the U.S.* Tennessee has several other options for addressing issues with trusts without going to court, including nonjudicial settlement agreements, and nonjudicial modifications. Our virtual representation statutes are expansive in allowing representation of various beneficiaries to make it easier to implement modifications.
- No State Income Tax on Non-Residents. Tennessee does not impose state income tax on non-residents.
- Tenancy by Entireties Trusts. Residents and non-residents of Tennessee can create tenancies by entireties trusts in order to retain credit protection during their joint lifetimes and enhance creditor protection for the surviving spouse following the first death.
- Spendthrift Trusts. Tennessee spendthrift trust statutes were strengthened in 2013 to make it even less likely that a creditor would be able to access a beneficiary’s trust interest. Tennessee does not recognize the various types of “exception creditors” that are recognized in many other states.
- Directed Trust. Our directed trust statute was overhauled in 2013 so directed trustees are protected for the decisions made by investment advisors, special trustees, trust protectors, etc. This allows the settlor to pick the best person or entity for each particular aspect of the administration of the trust.
- Settlor’s Freedom. Tennessee’s trust code permits a settlor to design a trust instrument as he or she sees fit and protects the future enforcement of the settlor’s intent. As one of the many examples, Tennessee allows so-called “silent trusts.”
- Responsive Legislature. The Tennessee legislature has passed legislation to improve its trust laws eight separate times since 2001 and the executive branch of our government is proactively seeking opportunities to further improve our laws to attract more trust business to Tennessee.
*Trust rankings created by Nevada attorney Steve Oshins – 2nd Annual Trust Decanting State Rankings Chart (Jan. 2013); 5th Annual Domestic Asset Protection Trust State Rankings Chart (April 2015); and, 4th Annual Dynasty Trust State Rankings Chart (Oct. 2015).