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Trusts: Are They as Necessary to Estate Planning as Many Claim?

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The facts about trusts—what they do, whom they benefit, and how.

When many Nashville, Brentwood and Franklin area residents find themselves making decisions concerning retirement and estate planning, the possibility of creating a trust is often one of the options presented to them. However, banks and financial planners—many of whom are located outside of Tennessee—tend to breathlessly hype trusts as “wonderful”, “simple” and “advantageous” as a means to tout their own services, rather than to educate potential clients about the financial decisions that they face. As a result, many local residents may have certain misconceptions about what a trust is, and why creating a trust can be a good idea.

First of all, there are two types of trusts:

  • Irrevocable trusts, in which the individual creating the trust (the “settlor”) relinquishes all rights of ownership to assets placed in the trust, as well as the right to modify the trust. For example, a special needs trust is a type of irrevocable trust in which trust assets are used to specifically benefit a particular individual, usually a close relative of the settler, who has a disability, particularly when the beneficiary lacks the capacity to manage his or her own affairs. By transferring assets, not directly to the beneficiary, but into the trust, proceeds from the trust can be used to assist the beneficiary, who still remains eligible for Medicaid, Social Security, and other government benefits.
  • Revocable trusts, on the other hand, can be dissolved or modified by the settlor at any time, only becoming irrevocable upon his or her death or incompetency. Generally, the settlor transfers ownership of assets from his or her name to the trust’s name, yet maintain control over the asset by appointing themselves trustee. This is the “living trust” often touted as a means to avoid probate; when the settlor dies, a successor trustee steps in to distribute trust assets to designated family members in much the same manner as an inheritance—but without the need for either a will or the probate process.

It should be noted that in Tennessee, the probate process isn’t nearly as drawn out and expensive as it can be in other states—and as a result, not nearly as horrific as it is often portrayed. However, probate avoidance is just one of several benefits that living trusts provide:

  • Taxes—Tax savings are another often-most cited benefit of living trusts, although one should take note of the fact that not all estates are subject to federal estate taxes, that a properly written will can also effectively save taxes, and that tax laws are always subject to change by legislators. All that said, however, living trusts enable a flexible and useful tax strategy, and an experienced Nashville estate planning attorney can tailor a trust to the specific needs and possible tax burdens each client faces.
  • Privacy—Unlike the probate process, in which every action and event is considered a matter of public record, revocable trusts are private, and access to trust records is limited to the settlor and the trustee.
  • Controlling the distribution of assets to certain beneficiaries—Besides enabling the creation of a financial arrangement such as the special needs trusts discussed above, trusts can also limit the distribution of an inheritance for other reasons. For example, a 50-year-old would likely handle the receipt of a sizable inheritance differently than a 20-year-old. The terms of a trust can not only defer such a large disbursement to an heir until he or she has reached a particular, but can also allow a trustee to distribute funds from the trust for a specific purpose, such as an heir’s education, rather than funding a foolish spending spree.
  • Avoiding will contests—Because a will does not go into effect until after the creator of the will dies, it is fairly easy for a disgruntled family member to bring the probate process to a complete halt by contesting it on the grounds of incompetence, undue influence, or fraud, primarily because the deceased cannot dispute the claim. Contesting a trust is considerably more difficult.

At Middle Tennessee Family Law, our dedicated Nashville estate planning attorney believes that while the creation of a living trust can help many Tennessee residents with their estate planning needs, it is but one of several possible options, and we help each of our clients to make an educated decision which is best suited to their personal financial situation and estate planning needs. If you are interested in creating a trust, or just wish to learn more about all of your estate planning options, we urge you to contact us at (615) 620-5846 or online for a free initial consultation. We are located in the Pilcher building in historic downtown Nashville, and we have evening and weekend appointments available.

Avoiding Probate in Tennessee

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Almost everyone puts off estate planning for as long as they can. It is an unpleasant subject to think about, and it is not something we ever think could happen to us unexpectedly. Death happens to us all, yet most Tennesseans never take the steps they need to make sure that their life’s work goes where they want.  Their estates go into Tennessee probate courts because they never take the time to meet with a skilled Nashville estate planning attorney.

A lot of people think that they can just write a will on their own and it will suffice to protect their final wishes. That is sometimes true. However, wills written without the expertise of a Nashville wills attorney are more likely to be challenged.  When authenticity is not an issue, procedural issues often arise from wills that are not executed with the use of an attorney. If all required procedures are not followed, then the default probate court rules are followed.

Probate courts just split your assets among your heirs without distinguishing your stated wishes may have been. Although it is common for people to just split their assets among their heirs, the probate court rules do not take tax strategies into consideration. The best Nashville wills and trusts attorneys help you split your assets to minimize tax penalties and deductions from your creditors.

Avoid the perils of having your estate go into probate court—get your last will and testament executed by an experienced Nashville estate planning attorney. A well-drafted will protects your family from painful legal battles and not knowing whether they have fulfilled your last wishes.

Tiffany Johns, the estate planning attorney at Middle Tennessee Family Law in Nashville is knowledgeable, caring and compassionate. She helps Tennesseans through their most difficult issues. She can prepare you for the best and worst of times. To schedule a free initial consultation, call us at 615-771-6944 or contact us online. Serving Franklin, Gallatin, Murfreesboro, Columbia, Nashville and surrounding areas.

Why You Need an Estate Plan

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There are lots of important considerations to make when you start to make plans for after your passing. Estate planning is far more complex than just deciding who gets your money. For most people, dividing up their cash assets is the easiest part. It is all of the other decisions that must be made that require people to seek out the legal guidance of a trusted estate planning attorney. Thorough and proper planning allows your loved ones to minimize their grieving in the darkest of hours.

Incomplete estate planning often leads to a lot of heartache for the family members that are left behind. The fights are not always over just monetary assets. There are decisions that must be made about your remains and what wishes you have for your services. Estate planning attorneys in Nashville help you make all of these decisions and clearly set them out in writing. Families often have ideas about what you would like, but those ideas are often in disagreement with each other. When disagreements ensue, and passions roar, feuds can arise that tear families apart for years to come.

There are some significant tax consequences that come up when you do not meet with an experienced Nashville estate planning attorney. Simply splitting up your assets among your spouse and children is not usually enough. Strategic planning allows you to help ensure that as much of your hard earned wealth as possible stays within your family.

Thorough estate planning is the key to minimizing the pain and suffering of your family after your passing. Your estate planning needs to be thorough, detailed and updated whenever there is a significant change in your life. A good plan minimizes uncertainty for your family and protects your assets as much as possible. Your family’s last memories of you should not be tainted by having a poor estate plan in place.

Tiffany Johns is an experienced Nashville estate planning attorney at Middle Tennessee Family Law and is here to help you properly execute a last will and testament. Her priority is ensuring your estate plan takes all scenarios into consideration so your loved ones are taken care of after you pass. Schedule a free initial consultation by calling 615-771-6944 or contact us online. Serving Franklin, Gallatin, Murfreesboro, Columbia, Nashville and surrounding areas.

 

Brand New WebSite Launch

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Nashville Divorce and Family Law Attorney

Going through a divorce is difficult enough if there are no children involved. If you have children, you need to do everything you can to ensure that the process does not cause lasting harm to them. Choosing the right lawyer is an important first step.

At the Tiffany Johns Law Office in Nashville, Tennessee, our lawyers represent men and women in family law cases such as divorce, marital property division, alimony, child custody, child support, paternity, fathers’ rights and adoption. We also provide entertainment law services.

Your Lawyer Makes a Difference

Choosing the right attorney can make the difference between a drawn-out, costly and acrimonious divorce and one where you obtain your goals with a minimum of stress.

Unfortunately, some lawyers fan the flames of a family law crisis, knowing that the longer a case continues, the higher their fees. Our attorneys will protect your rights but do so in an efficient manner. We won’t spend $2,000 of your hard-earned money on a motion that does not have a chance of success. Instead, we will use your resources strategically to obtain your goals.

Free Consultation: Child Custody Attorney Serving Hendersonville

If you need help resolving a family law issue, contact us at our law office in the Pilcher Building in historic downtown Nashville. Call 615-771-6944 or send us an e-mail using the form on this website.