You are thinking about how to figure your assets in a way that will provide a means of stability for your loved ones after your death. You also want to consider how and when to distribute those assets.
You may create a trust no matter the amount of income or property you have. There are several types of trusts that Tennessee provides as a protection for you during your life or to give to someone after your death.
Definition of a trust?
A trust is an arrangement a person puts into place to allow a trustee to distribute money or property to a beneficiary. You may add it to your will or create a separate document.
Types of trusts
The state of Tennessee recognizes several trusts. Some include the following:
- Testamentary trusts. You may want to add this type of trust to your will to leave assets to your beneficiary at a specific time. It must go through probate to take effect.
- Special needs trusts. Your beneficiary may have to depend on government assistance because of a physical or mental disability. This type of trust allows your loved ones to continue to receive money without losing their benefits.
- Standalone retirement trust. Your retirement, such as IRAs and 401(k), may need protection. You can create this trust while you are still alive and have the opportunity to change it whenever you would like. Or, you may decide to create the trust so that it cannot change without an OK from your beneficiaries.
- Pet Trust. Tennessee Code 35-15-408 states that you may create a trust to provide for the care of an animal after your death. The trust terminates when the animal dies unless there is more than one animal.
Some trusts do not go through the probate process. The executor of your will distributes the trusts to the person selected as your trustee. If the trust involves property, the trustee may need to fill out a trustee’s deed to convey the property.