You can find Tennessee trust laws in Title 35 of the Tennessee Code. The law isn't static: In 2010, Tennessee changed its laws and became the second state to let married couples create community property by placing their assets in a joint trust. In Tennessee, a living trust is always revocable unless the declaration of trust specifically states that it can't be revoked.
Creating a Trust
To create a Tennessee living trust, first draw up a trust document — there are self-help books that can guide you in this — appointing you as trustee and naming the beneficiaries who will inherit the trust assets. Then sign the document in front of a notary public. Putting assets into the trust will take more work: You have to transfer title to real estate and other assets from your name as owner to your name as trustee, and fill out whatever added paperwork brokerages and banks require.
Transferring assets to trust beneficiaries after you die is usually faster than going through Tennessee probate: state law sets the minimum duration for probate at four months to give creditors time to submit claims on the estate. Some counties extend probate to more than a year. A living trust also avoids Tennessee probate fees, which run from a minimum 1 or 2 percent up to 6 percent for larger for more complicated estates.
Community Property Trust
Tennessee is not a community property state, but married couples can convert their assets to community property by placing them in a community property trust. Both spouses must agree to this, and at least one of them must be a Tennessee resident. Each spouse can later withdraw some of his or her personal assets from the trust, but if they divorce, everything still in the trust will be divided equally between them. A community property trust has estate tax and income tax advantages for couples.
If you and your spouse share ownership of your assets, you may not need to worry about probate: They pass automatically to your spouse at your death. If your combined assets exceed $1 million, though, this approach could lead to steep Tennessee estate taxes. Another factor to consider, if you prefer keeping your finances private, is that a living trust is not part of a public record. If you distribute your assets with a will, it becomes part of the Tennessee court record and public knowledge.
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.