Wills and trusts are both foundational estate planning tools. As a result, wills & trusts attorneys use these instruments in most estate plans. However, before you can decide how to incorporate these documents into your estate plan, it is important to learn a little bit about each. The discussion below is intended to familiarize you with these tools so when you meet with a lawyer, you know what to expect.
If you are looking for a lawyer for wills and trusts, consider calling Batson Nolan PLC. Our attorneys are known across the state for their diligence and commitment to our clients. At Batson Nolan PLC, we have more than 160 years of experience skillfully crafting wills, trusts, and other estate planning documents on behalf of clients from all walks of life. Over this time, we’ve helped countless families create effective estate plans designed to provide them peace of mind for years to come. We are immediately available to help identify your needs and effectively prepare an estate plan to accomplish your goals. Contact our lawyers today.
What Is a Will?
A will is a legal document that accomplishes several important things. First, when you create a will, you must outline how you want your property distributed upon your death. To effectuate your desires, you name a person to oversee the administration of your estate. These individuals go by various names, but they are most commonly referred to as executors or personal representatives.
What Else Can You Accomplish with a Will?
Aside from setting out a framework for where your assets go when you die, you can also accomplish other things in a will. For example, you can put in language that creates a trust upon your death, and you can name a guardian to care for any minor children.
What Are the Requirements to Create a Will in Tennessee?
To create a valid will in Tennessee, you must meet certain criteria. If a judge determines your will is invalid, they essentially declare it to be null and void and go forward as if you had never made a will. The requirements for a Tennessee will include:
- You must be at least 18 years of age;
- You must be of sound mind;
- Your will must be printed, meaning it cannot be electronic;
- Your will must be signed in front of two uninterested witnesses (i.e., witnesses who do not stand to benefit from your will); and
- Each witness must sign in the presence of you and the other witness.
In certain situations, Tennessee permits handwritten and oral wills; however, these are generally not a good idea and should be reserved for emergency situations. The Brentwood wills & trusts attorneys at Batson Nolan PLC have over a century of experience meeting our clients’ various estate planning needs.
What Happens if You Die Without a Will in Tennessee?
If you die without a will in Tennessee, the court will not know how you wanted to pass on your belongings. Thus, the court will rely on a set of default rules called intestacy laws. In Tennessee, the rules of intestate succession look at the familial relationship of surviving loved ones—and that is the only factor that they consider in determining who gets what. For example, if you die without a will and leave behind only a single child, all your assets pass to your child. This remains the case even if you haven’t spoken to your child in 20 years and intended for them to inherit nothing. For this reason, intestacy laws are a good backup plan, but that’s about it. They prevent your assets from escheating to the state but do not take into account your personal desires.
To learn more about what goes into creating a will, contact a will attorney at Batson Nolan PLC to set up a free consultation.
What Is a Trust?
A trust is a legal relationship made up of at least three parties: the grantor, the trustee, and the beneficiary. The grantor creates the trust, naming a trustee to oversee the administration of the trust for the ultimate benefit of one or more beneficiaries. In some cases, the grantor can name themselves as the trustee, but not always. It depends on the type of trust.
Trusts have many potential uses, including:
- Providing for loved ones with special needs without jeopardizing their public-assistance benefits;
- Limiting or controlling a beneficiary’s access to funds;
- Reducing the number of estate assets that are subject to probate;
- Protecting assets from creditors in the event of a lawsuit, bankruptcy, or divorce;
- Reducing the tax exposure of an estate; and
- Converting countable income into non-countable income for Medicaid qualification purposes.
There are many other reasons to create a trust, but these are some of the most common.
What Are the Advantages of Trusts?
Trusts are perhaps the most versatile of all estate planning tools, allowing families to realize a broad range of potential benefits, some of which include:
- Estate tax savings,
- Long-term care planning,
- Asset protection,
- Providing for loved ones with special needs,
- Limiting a beneficiary’s unfettered access to their inheritance, and
- Probate avoidance.
Given the variety of advantages a trust can provide, it is essential to understand the different types of trusts as well as the benefits and limitations of each.
Types of Trusts
There are different types of trusts. But as a general rule, you must choose between creating a revocable or irrevocable trust. Revocable trusts offer tremendous flexibility, so if you want to change beneficiaries or the terms of the trust, that’s an option. Revocable trusts, like irrevocable trusts, also remove all trust assets from the probate requirements. Thus, a revocable living trust is commonly used by those who want to maintain control and avoid probate but are not concerned about estate taxes.
On the other hand, irrevocable trusts are much less flexible. Once you create an irrevocable trust, you cannot modify or terminate the trust. However, assets transferred to an irrevocable trust officially belong to the trust. Thus, irrevocable trusts are a popular choice for those seeking asset protection or a reduction in estate tax exposure. When properly structured and timed, an irrevocable trust can also allow you to qualify for Medicaid benefits while protecting your home and other important assets.
While all trusts fall into one of these two categories, there are many types of revocable and irrevocable trusts. Some of the most commonly used trusts include:
Special Needs Trusts
A special needs trust is a specific type of irrevocable trust. You can use it to provide special needs individuals with ongoing access to assets in a way that does not jeopardize their eligibility for public assistance. In this way, special needs trusts solve a common problem for families looking to leave an inheritance to a loved one with a disability. Without transferring an individual’s inheritance into a special needs trust, the inheritance will likely put them over the asset limit for Medicaid and Social Security benefits. This potentially precludes the receipt of much-needed benefits. Special needs trusts are administered by the selected trustee, who distributes assets according to the terms of the trust. Generally, funds in a special needs trust are used for all supplemental needs not covered by government benefits.
If you want to leave money to charity while deriving tax benefits for your generosity, you can use a charitable trust to accomplish this goal. By creating and funding a charitable trust, the creator reduces the taxable value of their estate while claiming a tax deduction for the donated amounts.
A living trust is a type of revocable trust, the primary purpose of which is to avoid probate. Assets transferred into a revocable living trust automatically transfer to beneficiaries upon the grantor’s death without the need for probate. However, if you create the trust, the assets remain in your control while you are still alive. While living trusts are a great probate avoidance strategy, they do not remove the assets from the reach of creditors nor do they reduce the taxable value of an estate.
If you are considering a trust, reach out to a trust attorney at Batson Nolan PLC to learn more about your options.
An irrevocable trust is an instrument that is used differently than a living, revocable trust. The downside to this type of trust is that once you create it, you cannot change the trust or eliminate it. It is truly irrevocable—hence the name. But the advantages may make it worth the risk for some. The biggest advantage to using irrevocable trusts is that the assets you put into the trust are no longer considered part of your estate. That means that they will not be subject to estate taxes, and it also means that creditors cannot reach those assets. But you must know how to properly create such a trust, and our attorneys can help.
Contact the Brentwood Wills & Trusts Lawyer at Batson Nolan PLC Today
If you have recently learned of your need for these estate planning documents and don’t know where to start, you can reach out to a Brentwood wills and trust attorney at Batson Nolan PLC. At Batson Nolan, we have been helping clients across Tennessee with their estate planning needs for more than 160 years. We also have a team of estate planning lawyers to help your family address your other estate planning needs, such as creating powers of attorney or a living will. To learn more and schedule a free consultation with the Brentwood wills & trusts lawyers at Batson Nolan PLC call one of our offices. You can also connect with us through our secure online contact form.
The experienced lawyers at our firm handle other types of cases as well, including: