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How will the Dobbs Decision Impact Estate Planning in Tennessee?

How will the Dobbs Decision Impact Estate Planning in Tennessee?

After the US Supreme Court issued its decision in Dobbs on June 24, 2022, women’s equality and reproductive freedom were completely diminished by the state of Tennessee. How does the Dobbs decision impact estate planning? Here are some questions to consider: 

Question: Will children born outside of my marriage have a claim to my estate?

Our opinion: Yes. Tennessee law dictates that Minors inherit from their parent’s estate.

How would a forced pregnancy affect a man who did not intend to become a parent? 

We are not family law attorneys, and if you become aware of a pregnancy by a previous sexual partner, we encourage you to speak to an experienced family law attorney to discuss your options. Please keep in mind that many issues related to child support, pregnancy, and parental rights will be subject to new interpretations of the law under Dobbs.  

However, there are laws in Tennessee that protect minor children from being disinherited by their parents.

For example, if a man dies, all of his minor children are able to inherit from him. While he can disinherit unknown, nonmarital adult children through his will, he cannot disinherit minors, even if he has a Will

So let’s say a man lives in Tennessee and gets a sexual partner pregnant. If he dies while the child is a minor, the mother can petition (on behalf of the child) for a share of the estate. She will have to prove paternity but the child can be acknowledged in multiple ways. This includes communications with the father or testing the paternity via the DNA of the father or his other children. 

Yes, you can be proven a father even after you are dead. It doesn’t matter if this child is born before or after the children of your current marriage or relationship- if they are under 18 when you die, they can ask the Court for a share of whatever you left behind. 

Question: What is the impact of Dobbs on Estate Planning for those who expect to need fertility treatments?

Our opinion: We don’t know yet. 

This is a really tricky area. My best guess is that matters related to artificial reproductive technologies (ART) will be legislated faster than before. We will know more about the impacts on individuals and families as matters work their way through the courts.

As your Estate Planning Attorney I will recommend that we plan for everything, including unborn children

If you’ve ever made an estate plan with an experienced estate planning attorney, you’ll know that we ask some pretty personal questions about your family planning.  

That’s because we usually try to make our plans flexible enough so that future children can be included without needing to pay an attorney to update your Will or Trust. However, we will probably need to update documents more frequently given recent changes to the law. 

Additionally, we will want to make sure that we try to be specific enough in our drafting to disinherit unplanned offspring from outside of relationships. The same goes for any previously frozen biological material that could potentially grow into a fetus. Yet another impact of Dobbs on estate planning to consider!

As fetal cells attain more rights, estate administration may become more difficult

As cells are legislated to have rights of their own, it will become more difficult to administer estates.  For example, let’s say that a man dies after having frozen embryos with his ex-wife. By many state laws, those are now “children” under the legal definition. It would not be unfair for the ex-wife to say she is the mother of children who outlive him and should inherit his estate. If at some point those children were implanted-whether in the ex-wife or someone else- they would have needs as they grew older and the father’s assets could pass to them.  However, it’s more likely that these cells would never be implanted or may be implanted but not be carried to term, at which point, who inherits from the embryo? 

Question: What else should we be thinking about? 

Our opinion:  A lot of things will need to go through the Courts before we have final answers. In the meantime, here are some things I expect:

  • Higher insurance premiums
  • Higher medical bills
  • Fewer OB/GYNs
  • Fewer fertility clinics
  • More single fathers. 
  • Push to create a biological/DNA database to track parents/putative parents. 
  • Doctors will be unwilling or unable to provide appropriate medical treatment for women undergoing miscarriages. This will make undergoing fertility treatments especially dangerous if you have had problems carrying a pregnancy to term. 
  • By effectively creating a system where there are two patients in one body, the law in many states now creates a conflict in the standard of care. The doctor will not be able to take direction from the pregnant person. This will cause more lawsuits against fertility specialists and other OB/GYNs. More lawsuits mean higher malpractice rates, which mean even higher costs for patients.  
  • Many surrogates will no longer be willing to help couples create families. 
  • Frozen embryos will no longer be intentionally destroyed.
  • Fertility clinics may become unwilling to create embryos for future use if they will be unable to destroy the biological material. 
  • Many more babies will be available for adoption. So will older children. 
  • Fewer women will consider using ART, because the inherent risks of pregnancy will no longer be treatable. 
  • There will be fewer medical advances for difficult pregnancies due to women choosing not to have children. 
  • Young adults will begin long-term contraception at earlier ages. 

These are just some things I’m considering as we enter this new legal landscape. 

In conclusion

The implications of the Dobbs decision is completely unknown. However, we do know that it will have a huge impact on Estate Planning. If you’re looking for an attorney in Nashville who can create a thorough will, look no further. Attorney April Harris Jackson will consider everything, including the implications of Dobss on family planning.

How to Set Up a Revocable Living Trust in Nashville, TN

How to Set Up a Revocable Living Trust in Nashville, TN

April Harris Jackson is an Elder Law attorney based out of Nashville, TN. She is also a Chairperson of the NBA Estate Planning and Probate Committee. 

You don’t have to be wealthy to benefit from creating a trust fund! Create a revocable trust with our Nashville attorney as a part of a well-thought-out estate plan. All it takes is proper planning and administration. Come learn the basics with us!

What is a Revocable Living  Trust? 

A revocable living trust (also known as a living trust or revocable trust) can be a great way to help your loved ones protect their wealth and pass it down to future generations. It does this by creating a legal arrangement in which assets are placed within a “trust” and managed by a trustee(s). In most cases, when you set up a revocable living trust, you are also the trustee. 

Why would I want to set up a revocable living trust?

There are many benefits to setting up a revocable trust to pass on your assets. One of the main reasons someone sets up a revocable living trust is because they want 100% control over how and when the assets will be used. This provides protection for your assets and prevents mismanagement. Many people prefer to set up a trust over a will because it provides a private, and hassle-free transition of assets to the family.  You can set up a trust to fund many of your family’s future financial needs. For example: 

Use a trust to pay for college

Parents often wonder if they should fund their children’s college education through loans, a 529, an IRA, or a trust. There are pros and cons to each option, and it ultimately comes down to what the parents feel is best for their family. A trust can be a little more flexible and offer a way to provide a continuous flow of benefits. This is perfect for a parent that wants peace of mind when it comes to their child’s future.  

Provide financial support for a person with a disability

Estate planning for someone with special needs requires a lot of consideration. A trust is a powerful tool that you can use to provide financial support. While Special Needs Trusts are unique and irrevocable, an attorney can create provisions for a revocable trust to become irrevocable after your death. Special Needs Trusts provide stability and predictability in a person’s life, allowing them to maintain financial stability after you are gone. It can also help an individual with special needs remain eligible to receive Medicaid benefits. If you are worried about supporting a person with a disability, reach out to us! Our team is here to help.

Use a trust to donate to a charity

A trust is a great way to simplify the process of donating to a charity. Using a trust to fund a charity is private and much easier to create than a foundation. 

Pass down your large assets with a trust

A trust can be a great way to pass down large assets, such as a house, to loved ones without having to go through probate or other legal hassles. This is because a trust agreement creates a legal document that outlines who will own the property and how it will be managed. Certain types of trusts can also protect your assets from being taken away by creditors or the government. 

Determining Whether a Trust is Needed

When creating an estate plan, one of the decisions you will have to make is whether a revocable trust is needed. If you want to do something more complicated than an outright transfer of assets at death, a revocable trust is probably right for you.

Advantages of a revocable trust

Here are some of the advantages of a revocable living  trust in Nashville, TN

Avoid probate – If you’re like most people, you want to avoid your family being exposed to the lengthy process of probate court. A well-managed trust negates the need for this. 

Privacy – Privacy is a cherished commodity and many of us would like to have some degree of privacy when it comes to our finances. A revocable trust can provide a way for people to have privacy while still maintaining control of their assets, even after death.

Provide for future generations- A revocable trust can distribute outright at a certain time or may provide for generations past the creator’s own children. If you have concerns about how your children or their spouses may spend their inheritance, a trust can be a way to make sure that assets are used in a prudent way and preserved for future generations. 

Disadvantages of a trust

Hiring an attorney – The upfront fee of hiring an attorney can intimidate people and can be seen as a disadvantage to setting up a trust. However, the cost should not be a determining factor. An estate planning attorney will understand the legal system and its implications on your estate. 

Asset accessibility – A family trust may be less accessible to beneficiaries than other types of estate plans. 

Difficult to change – It can be more difficult to change or revoke a trust than a will.

Revocable living trust vs a Will – What’s the difference?

The difference between a living trust and a will is mostly timing and control. 

A revocable living trust allows you to change the terms or revoke the trust. It “lives” and operates alongside you while you are alive. This is important because it gives you the ability to control your assets and make decisions about how your money is used. You can also change your mind about how your money is used or who gets access to it after you die.

A Will, on the other hand, only goes into effect after you die. It specifies to the probate court how you wish for your assets to be transferred.

A revocable living trust is designed to become irrevocable after a certain event occurs- often the death of the first spouse in a long-term marriage. 

Step-By-Step Guide: How to set up a revocable living trust

Step 1: Hire an Estate Planning Attorney near you

Regardless of the size of your estate, you must get counseling from a qualified estate planning attorney in your state. While every law firm is different, most follow a process that is similar to this: 

How to hire an estate planning attorney

Reach out to a law firm 

At Graceful Legal Services, PLLC, we offer you the chance to see if we are the right fit for each other first. The first step is to schedule your free 15-minute call. During this call, you will discuss your needs and your situation. Our intake coordinator will let you know if we can help you and give you an estimate of the attorney’s fees. If we are a good fit, and you decide to move forward with our services, you will be invited to schedule an hour-long Strategy Session with our attorney.

Do a paid consultation with an attorney

At GALS, we offer an hour-long Strategy Session. At your Strategy Session, you get to discuss your situation with our attorney, ask questions, and share concerns. After our attorney gets all of the details, they will provide a recommendation to fit your needs. They may recommend a specific kind of trust or discourage you from making one altogether. Our firm will also provide a step-by-step plan of action that you can use to achieve your goal. In other words, get a consultation with an estate planning attorney to help you decide what is best for you based on your assets, your family situation, and your goals. 

Hire an attorney to carry out your plan

After your consultation, you will know if you need to hire an attorney. Let’s assume that you do at this point. It will be up to the firm to send you their contract for legal representation. We call this a “Representation Agreement”. Once you sign the Representation Agreement and pay the retainer fee, you become a client.

A word of caution: 

Please do not set up a revocable trust online or by yourself. While we would love to send people to a less expensive option, the truth is that things get so messed up when you’re dealing with trusts. Our firm has tested many of the will and trust drafting software (curiosity killed the cat, right?) and there’s a lot of room for error. You cannot imagine how messed up a trust like this could be. 

The key point is this: If you are going to set up a trust, hire an estate planning attorney to discuss your options. There are rules that need to be followed in order for a trust to operate correctly. 

Step 2 – Gather Information Needed to Create a Trust Document

A trust document is an important legal document that sets forth the terms and conditions of your trust. Your estate planning attorney will be responsible for the meat and potatoes of the trust document. However, you will be responsible for knowing who the players will be. You will also be responsible for outlining the assets and property you would like to place within your trust. 

At GALS, we use decision-making software that makes everything easier. If you would like to get a glimpse of the software, consider taking our Virtual Estate Plan Challenge. With this 7-email series, you will be guided through thought exercises to prepare you for creating your estate plan. At the end of the challenge, you will be invited to try out the software. It costs nothing and it’s easy!

In order to understand the trust document, you need to be familiar with these legal terms:

Grantor

Grantors are the individuals or entities who transfer assets and property to the revocable trust. A grantor is a person who signs the trust document as the initial settlor.

Initial Settlor

The person who sets up the trust. Same as the Grantor. 

Trustee/Executor

The person or entity who administers the trust. You can have more than one trustee but it’s not common. Sign up to watch this Webinar: It Takes Two, or Does it? if you would like to learn more about having multiple trustees or executors. The trustee you choose must be completely trustworthy. Choose your trustee wisely. If you are unsure about trusting someone you know, hire an attorney or a Trust Company to act as the administrator of the trust. 

Successor Trustee/Executor

The trust document lists who will be the successor trustee in the event of incapacitation or death of the first trustee.

Beneficiary(s)

A beneficiary in a revocable trust is someone who receives benefits from the trust, such as income or property. The beneficiary can be an individual, business, charitable organization, or any other legal entity. A trust can have one or more beneficiaries. The beneficiaries may receive the trust property either immediately or at some later time. A trustee must distribute the trust’s assets to the beneficiary whenever the trustee determines that the beneficiary is entitled to those benefits. The beneficiary’s name(s) must appear on the trust document. 

In addition to naming beneficiaries and how you will fund the trust, you will also need to outline how the trust assets will be managed and distributed. What are your terms? Do you want your children to inherit from the trust at a certain milestone or date? Do you have stipulations you would like followed? Your attorney will make suggestions of what to do.

Step 3 – Sign and notarize the trust agreement

The state of Tennessee requires that the trust agreement must be signed and notarized in person. The process of notarizing your revocable trust provides a layer of security and helps to prevent fraud. It also helps to confirm validity after the grantor dies. 

Step 4 – Transfer assets into the trust

Every asset that you want in the trust needs to be transferred. This means that all titles (house, bank accounts, etc). need to be transferred and renamed to that of the trust’s name.

In conclusion

Setting up a family trust in Nashville is a relatively simple process that can provide a great deal of financial security for you and your loved ones. By following the steps outlined in this article, you can rest assured that your assets are well-protected.

If you are considering hiring a lawyer to set up a trust in Tennessee but are unsure if it is the right option for you, don’t hesitate to schedule your initial call with us. We can help you determine if trusts are right for you and if we can help create one that meets your specific needs. Our free 15-minute call can provide you with the information you need to make an informed decision.

How to appoint a guardian for a child in your will

How to appoint a guardian for a child in your will

One of your main concerns when drawing up an estate plan in Nashville will be appointing a guardian for a child in case of death. As a parent, you likely consider “what if’s” every day. Estate planning is no different, especially when it comes to your children. There are multiple considerations to keep in mind when thinking of a potential guardian for your children. We will go over a few of these below.

What if I Am No Longer in a Relationship with My Child’s Other Parent? 

Tennessee law presumes that the parents of a minor child are the child’s “natural guardians”. If one parent dies before the other, the surviving parent will usually obtain full custody of the child.  

If parentage has not been legally established, you may want to appoint the child’s other parent as the legal guardian in your estate plan. Naming the other parent will ease the transition through the legal system. A court may need to establish a child’s parentage if they were not married at the time of conception and birth. A court will decide a child’s parentage for custody or inheritance purposes. 

Hopefully, there are no concerns about your child’s welfare if they need to live with their other parent full-time. However, if you have concerns, consider them objectively and put them in writing. Write down the name of the person you prefer to appoint as the guardian of the minor children. The only way to make sure the other parent does not gain custody is to have their parental rights terminated. This is an extreme measure. 

If the surviving parent is the father, a paternity test will be required before petitioning the court for custody. Paternity can be established through a signed birth certificate, an acknowledgment of paternity form, or a blood test. Establishing paternity typically grants a father certain rights in regard to his child. However, paternity is not a guarantee that he will be awarded custody of the child. The court will use its own judgment to determine which guardian would be in the best interests of the child. 

What If I Am Married to My Child’s Other Parent, but Something Happens to Us Both?

Generally, the surviving spouse will be granted custody of any minor children. But what happens if you both die? You must consider who you want to care for your children in the event that neither of you is living. Failing to do so could result in confusion and trauma for grieving children. 

Many people make the mistake of believing that if you die, the guardian of a child will be granted to grandparents, aunts, or uncles. However, if the will does not specify a guardian, the court may be faced with multiple petitions for guardianship from family members and friends. In this scenario, the judge will choose a guardian with no input from you. So, what should you consider when choosing a guardian for your children? 

Who should I consider appointing as a guardian for my children in my will?

Did you know that you can appoint different guardians for your child to manage different aspects of their future? The most obvious guardian is the one who will have custody and take care of your child. This guardian will provide a home and make important decisions for your child. These decisions can be about doctors, schools, and how they maintain relationships with friends and family. 

You may also decide to appoint a separate guardian for your child’s financial future. This person would be in charge of the administration of a trust or other financial planning arrangement. If you want to learn more about leaving property to a minor child, read this article.

Whether you appoint one or multiple guardians, you will need to carefully weigh several important factors such as:

Young woman hugging a child. The child looks a little sad. The adult looks pensive. Appointing a legal guardian for your child in your will is an important decision to make.
Who is the best guardian for your child if you die?

Age and Ability of the Guardian

Your first choice for your children’s custodial guardian might be your parents; after all, they raised you! However, it is important to consider your parents’ age and physical ability to care for your children. This may be especially relevant if your children are younger or have special needs. Similarly, think about your preferred guardian’s emotional ability as well. Appointing your younger sister as a guardian for your child who has yet to finish school or maintain a job may not be the best choice. You will need to choose someone who is both physically and emotionally capable of providing for children. 

Religion and Education 

If you intend for your children to follow certain religious practices or receive a certain type of education, it is important to choose a custodial guardian who holds your values or who you know will follow through with your wishes. Naming a specific church or school that you want your children to attend does not mean that your custodial guardian will have to obey that wish. 

Location of the Guardian of your Child

You will also need to decide if it is important that your children are raised in a certain city or state. In some cases, your desired custodial guardian may not be able to relocate for the sake of your children. In that case, your children may need to move to the custodial guardian’s home or you may need to select somebody else. 

Specify each child’s guardian(s) and their role in your will

Finally, be sure to name all of your children in your will, and specify what role you want each guardian to play for each of them. Your attorney may advise you to select both a primary guardian and an alternate guardian. Most importantly, do not forget to ask your guardian if it is okay to name them in your will. As your children age, you may want to change the legal guardian. Ask a qualified attorney to help you modify your will if you want to do this.

If you want to learn more about estate planning, consider signing up for our newsletter. We update our blog with useful content on a regular basis.

Who should I name in my healthcare power of attorney?

Who should I name in my healthcare power of attorney?

Your medical power of attorney, also known as your healthcare power of attorney (HPOA),  should name somebody who is accessible in an emergency. This is someone who will naturally be right by your side or someone who will be available by cell phone. This person is known as your “agent” for healthcare decisions.

Who is the best person for the job?  

The ideal candidate for a healthcare agent is someone who can meet these basic qualifications: 

You trust their judgment

It’s good to have somebody who is already in a position of making decisions with you and for you. Someone who you would trust to help you in carrying out the decisions that you have made. They also need to be able to take the information you have provided them and apply it to a different situation. 

They can handle stress in an emergency

All medical emergencies are stressful. Pick an agent who has a history of making logical decisions at difficult times. 

The agent will honor your values regarding medical decisions or end-of-life care

The agent you choose should be someone who knows you very well. You have discussed your values, goals, and preferences. Make sure your agent is someone who will act as your spokesperson and advocate.

You feel comfortable speaking to them about your death, dying, or care during incapacitation

In order to have a good healthcare agent, make sure that you are both comfortable discussing your values around death and dying. This is a serious topic that deserves a well-thought-out conversation. Be prepared to discuss what quality of life you want to have and what types of treatments you would want to have to maintain it. The more you speak together about your feelings towards death, dying, and treatments if incapacitated, the better your agent will be. 

They will be available at any time

A good healthcare agent is someone who is going to be available when you need them. There’s no way for you to know when you will need your healthcare power of attorney. You need a reliable person who will answer the phone or make a return call as soon as they get the message that they are needed to make healthcare decisions for you. 

Someone who lives nearby

Oftentimes it’s a good idea to choose an agent who lives close by. While not completely necessary, it is better to have an agent who will naturally come to the hospital to be with you during an emergency. 

Someone who is younger than you

While not necessary, it is often very useful to have an agent who will likely outlive you. 

close up of a person wearing leather shoes and blue jeans. They are standing on asphalt in front of arrows that point in several directions. The largest arrow says "Medical Decisions"
Choose someone who can be your proxy for medical decisions.

In conclusion

Again, your healthcare agent should be someone who is easily accessible. Someone that you feel comfortable discussing your wishes with, even though they may be uncomfortable topics, and someone who respects your choices and would help you carry them out. Most people pick their spouse or adult child to be their healthcare agent. However, if you have a medical professional in your family, that person may be a good choice depending on their relationship with you. Ultimately it is up to you to choose someone you are comfortable with making these types of medical decisions. 

Why do you need a healthcare power of attorney?

While not all healthcare power of attorneys ever go into effect, it is important to have one in the case of an emergency. You never know when you will be unable to make decisions or communicate your decisions for yourself. If you need help with creating a healthcare power of attorney, medical directive, or other documents that formulate a well-thought-out estate plan, consider scheduling an initial call with us.  

Who should I name as my financial power of attorney?

Who should I name as my financial power of attorney?

This month we will discuss the subject of powers of attorney. In week one, we will discuss how to name a financial power of attorney. This is also known as a durable power of attorney.

There are many things to consider when appointing a financial power of attorney (aka an attorney-in-fact). This is an important position. Whoever you appoint would have the ability to make decisions regarding how you manage your finances. While it may seem obvious, it’s important to focus on choosing someone who is organized, trustworthy, and financially responsible.

What powers does an agent have when they have a financial power of attorney?

As stated earlier, the agent with a financial power of attorney can handle your finances just as you can. An agent will have the ability to go to your bank and handle banking transactions. They can contact your investment account broker and manage those funds. They can handle your insurance and sell your house. Of course, you want your agent to only make financial transactions in your best interest while you are incapacitated.

Can things go horribly wrong? Yes! Your agent has the power to clean out all of your bank accounts and sell your home. Heck, if they wanted to, they could take your assets, move to Fiji, and set up a little beach bar! I want to reiterate: It’s important that you choose someone who would never even think of doing something like that. You need to choose someone who will only have your best interest at heart.

Who should be your financial power of attorney?

When considering who should serve as a financial power of attorney, a lot of people are compelled to choose someone close to them. A lot of times this will be a relative, such as your children or possibly a sibling, but it doesn’t have to be. The agent could also be a close friend or even a professional if that is who fits that role in your life. In our practice, we like to make sure that our client acknowledges this very important point: the person you name as your agent in a financial power of attorney will have the ability to handle your finances pretty much the same as you will.

Choose an agent who can communicate effectively

Not only do you need to trust your agent, but we also recommend that you find someone that other people trust! While this element is not completely necessary, it may be important to you that your agent be relied upon to communicate important information effectively with the people in your life.

For example, if one of your relatives says to your agent: “Hey, my Aunty saved a lot of money and invested it well, how much does she have now and what has the spent money been used for?”. Ideally, you would have an agent that relatives intuitively trust to spend your funds in your interest. However, it would be really awesome if your agent took the time out of their day to respond thoroughly to your relative’s questions.

woman wearing a bright yellow sweater holding a smart phone and looking down. The caption says "3 ways online banking simplifies transactions" 1. allow direct debit from accounts 2. set up automatic payments 3. the ability to use instant transfer methods
Choose an agent that is comfortable with online banking

Your agent should be good at bookkeeping

In a perfect world, your agent with financial powers of attorney would be held accountable for the transactions coming out of your assets. A good agent can effectively answer questions about spending and back it up with good bookkeeping!

An agent with power of attorney does not have to live in your state

As we mentioned before, the era of digital banking is here and it allows us the option to choose from a larger pool of agents, regardless of their location. Now, many people think that their agent under a power of attorney cannot be someone who lives out of state. And that is simply not true. Sometimes it helps to have somebody who lives in the state, but that is not a requirement in Tennessee. We do so many things by email and telephone, texting, and online business transactions that your financial power of attorney person, your agent, will likely be handling any business transactions online. 

Choose an agent who will outlive you

While this is not a requirement, it is a good idea to think about someone who will outlive you. Generally, when you are using your power of attorney, it’s when you’re incapacitated. While there are times when a durable power of attorney is used on a temporary basis, such as during a medical event, it is more likely going to be during a period when we are at the end of our lives and are experiencing some type of ongoing health condition that is not likely to improve. We recommend that you look for an agent who can help on a continuing basis. A well-suited agent allows everyone to relax and enjoy the time you have left on this earth.

Who should NOT be your durable power of attorney

Again, while it may seem obvious, it is important to reiterate that anyone who is untrustworthy, unlikeable, terrible with money, incapable of balancing a checkbook, or unable to effectively use online banking might not be the best choice for becoming an agent of financial power of attorney. The goal is to find someone who can keep good accounting records and knows exactly where your money went, down to every last penny! A good agent is someone who is willing to communicate with everyone without hesitation. The main point is that no one in your circle should be concerned that your agent is taking advantage of you if you are incapacitated.

Now, if you are not incapacitated, your agent should only be acting if you are telling them to do so. Even if you have your power of attorney take effect immediately, your agent can and should only act under your direction. If you find that the agent acts otherwise, there are legal actions you can take against them in court. 

In conclusion

A power of attorney is a useful tool for organizing the “adulting” part of your life, especially in incapacitation. A financial power of attorney should be someone that you absolutely trust; someone who will not give pause to others in your life. Someone who is financially responsible and organized, and someone who is familiar with handling online transactions. It does not matter if your agent lives in your state. In short, find an agent you believe will always have your best interest at heart.

There are many types of powers of attorney. Many powers of attorney are used when creating a well-thought-out estate plan. Do you think you could use a durable power of attorney in Nashville? Schedule an initial call to see if we can help you with your situation.

How do I protect my Kid’s inheritance if they divorce?

How do I protect my Kid’s inheritance if they divorce?

As a parent, you want your child to lead a happy and fulfilling life and have healthy marriages of their own. However, it is hard to ignore the possibility of divorce. No matter how much you may love your child’s spouse, your interest is always in protecting your child. So when estate planning, how can you ensure that your child’s inheritance will not be split with their spouse in a divorce? 

Division of property in a divorce will depend upon whether the property is considered “separate property” or “marital property”. 

What is the difference between separate and marital property? Separate property is the property that belonged to an individual before marriage. This can include monetary assets, cars, real estate, and sometimes even pets. Marital property, on the other hand, is the property that was acquired or shared during the marriage. So what happens if your child puts their inheritance into a joint bank account? To answer this, we need to discuss how Tennessee law views inheritance.

How does Tennessee view “inherited” property in a divorce?

In Tennessee, inherited money or property is generally considered to be separate property. This means that whether your child inherits before or during their marriage, the court will treat the inheritance as exclusively belonging to your child. They are not obligated to share it with their spouse.  However, have you ever heard a long-married couple say “what’s mine is yours, what’s yours is mine?”  Many couples treat property this way, which can work well unless the couple decides to separate. This brings me to a very important point:

If your child puts an inheritance into a joint banking account shared with their spouse, it would become marital property subject to division at divorce.

How can you ensure that your child’s inheritance will be divorce-proof, no matter how your child handles the inheritance? 

One way to ensure the safety of your child’s inheritance is to set up a Family Trust. In general, a family trust is an estate planning tool that protects your family and your assets. A family trust is a three-party relationship between you (the Grantor), your child (the Beneficiary), and the person in charge of maintaining and distributing the assets in the trust (the Trustee). Through a Family Trust, you will be able to determine how and when your assets will be distributed by the Trustee to your Beneficiaries after your death. 

In the divorce context, a Family Trust is a great option because the property is held by the Trustee. This means that on paper, the property from the Trustee will not technically belong to your child. So in the event of a divorce, a court will not consider the assets from the trust for division. Family Trusts are generally flexible and easy to set up, and they are even cost-effective. Of course, if a Family Trust is not right for you, your estate planning attorney will be able to provide alternate options to achieve the same goal! 

close up of estate planning documents that have a family trust
Do you need a family trust to protect your children’s inheritance?

Of course, nobody wants to believe that their child’s marriage will end in divorce. However, estate planning is all about considering life’s “what if” questions.  In the end, setting up a trust for your family will allow you and your child the confidence that their inheritance is safe. 

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