How to Set Up a Revocable Living Trust in Tennessee
A revocable living trust is a valuable estate planning tool that allows individuals in Tennessee to manage their assets during their lifetime and dictate how those assets will be distributed after their passing. Setting up a revocable living trust involves several key steps, which ensure that your estate is managed according to your wishes. Below is a detailed guide on how to set up a revocable living trust in Tennessee.
1. Understand the Basics of a Revocable Living Trust
A revocable living trust is a legal document that places your assets into a trust for your benefit during your lifetime. You can modify or revoke this trust at any time. The primary advantages include avoiding probate, maintaining privacy, and providing a smoother transition of asset management should you become incapacitated.
2. Identify Your Assets
The first step in setting up a revocable living trust is to identify all the assets you want to include. These may consist of:
- Real estate
- Bank accounts
- Investments
- Personal property
Make a comprehensive list of all your assets, as this will assist you in transferring them into the trust later.
3. Choose a Trustee
The next step is to choose a trustee to manage your trust. As the creator of the trust, you can appoint yourself as the initial trustee, allowing you to retain control over your assets. Consider naming a successor trustee, who will step in to manage the trust after your death or in case you become incapacitated. This individual can be a family member, friend, or a professional trustee such as an attorney or financial institution.
4. Draft the Trust Document
Creating the trust document is a critical step. While you can find templates online, it is advisable to consult with an attorney experienced in estate planning to ensure that your document meets legal requirements and adequately reflects your wishes. The trust document should include:
- Your name and address
- The name of the trustee and successor trustee(s)
- A description of the assets included in the trust
- Detailed instructions on how assets will be managed and distributed
5. Fund the Trust
After drafting the trust document, it's essential to fund the trust by transferring ownership of your assets into it. This process involves changing the title of each asset to the name of the trust. For example, if you have real estate, you will need to execute a new deed that transfers ownership from yourself to the trust. Additionally, you must inform your financial institutions to retitle your bank and investment accounts.
6. Update Your Beneficiary Designations
While a revocable living trust includes your assets, it is important to review and update your beneficiary designations for life insurance policies, retirement accounts, and other assets that may bypass the trust. Ensure that these designations align with your overall estate plan.
7. Review and Revise As Needed
As life circumstances change, so too may your estate planning needs. Regularly review your trust, especially after significant life events such as marriage, divorce, the birth of children, or a substantial change in assets. You can amend or revoke the trust as needed to reflect your current desires.
8. Consult an Estate Planning Attorney
Setting up a revocable living trust can be complex, and the laws can vary significantly from state to state. It is wise to consult with an estate planning attorney in Tennessee who can provide guidance specific to your situation, ensuring that your trust complies with state laws and meets your goals.
Conclusion
Establishing a revocable living trust in Tennessee is a proactive step towards effective estate planning. By following these steps and seeking professional advice, you can create a trust that protects your assets and provides for your loved ones in accordance with your wishes.