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:
Legal Terms in a Trust Document
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.
If you have a blended family, you really need an estate plan.
Many people do not begin to think about estate planning until well after they have started a career, gotten married, or had children. By the time we reach the point in our lives where we begin to think about what will happen to our belongings and our loved ones after we die, we have often already experienced big life changes. For many of us, that could mean multiple marriages and a blended family. So when we sit down to work out our estate plan, how do we navigate the murky waters of estate planning for blended families?
Can I use a prenuptial agreement in an estate plan for my blended family?
Just like with other estate planning tools, a lot of couples do not want to think about obtaining a prenuptial agreement. After all, who can blame an engaged couple for not wanting to think about how their marriage might end? However, just like other estate planning tools, prenups have a bad rap. They can be incredibly useful for couples with a lot of assets, or blended families who want to keep certain properties separate. Through a prenuptial agreement, you and your spouse will be able to delegate which property is joint and which is to remain separate. This can make the division of your assets among your blended family a lot easier in the event one spouse predeceases the other.
What is a Life Estate on property in Tennessee?
A lot of the time, when a couple remarries, one spouse will move into a home owned by the other. If this is the case for you, it may be worth considering a life estate.
What is a Life Estate?
A life estate is an ownership interest in real property for the duration of a person’s life. In other words, a life estate will allow the surviving spouse to continue living in the marital home until the end of their life without them inheriting the house outright or passing it down to their own children.
Blended families are also called step families.
Use a Trust when Estate planning for blended families with multiple children
I want to make sure my children inherit from my estate
In some cases, your spouse may not distribute your estate to your children the same way you would. If you have certain assets or a specific amount of money you wish to go to your children, your best bet is to leave it directly to your children through a trust. Of course, this can be a difficult discussion to have with your spouse, but it may be the best decision for your family.
These are just three estate planning tools to consider for your blended family. There are dozens of others that you, your spouse, and your lawyer may find better suit your needs. Blended families are exciting and rewarding, but it is important to maintain your estate plan through one of life’s biggest changes!
If you’re a blended family with questions about how to create your estate plan in Tennessee, consider contacting an estate planning attorney to discover what is best for your situation.
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:
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.
This week we will discuss when a power of attorney can expire. A power of attorney is a legal document that allows someone else to make decisions on your behalf. It is created for a specific purpose such as financial or health care decisions. If the power of attorney expires, it no longer gives that person the authority to make decisions on your behalf.
When you die
A durable power of attorney for finances automatically expires when you die. Once your attorney in fact gets the news of your passing, they no longer have the ability to carry out any actions on your behalf.
For a healthcare power of attorney, the same conditions apply. However, there is one caveat. The healthcare power of attorney will typically allow your healthcare agent to handle the disposition of your body, make the funeral and burial arrangements, or order an autopsy if warranted. Additionally, the agent can order medical records after your passing if needed for some legal reason. Other than that, the general rule is that all powers of attorney pass away when you do.
A power of attorney can expire if the original purpose no longer exists.
A power of attorney can expire if the original purpose no longer exists. For example, if you created a power of attorney to manage your finances, but you no longer need help with those decisions, the document may expire. Please note that you cannot revoke powers of attorney if you are incapacitated.
It is important to document the original purpose of the power of attorney and keep track of changes to your situation. You should update your powers of attorney when changes occur. This helps to ensure it’s still possible to use a power of attorney should the need arise.
If you revoke it
Unless you’re incapacitated, you can revoke a power of attorney. Revoking the power of attorney removes authority from the person you appointed. This is not something we’d necessarily recommend doing without good reason, but it’s possible. We strongly suggest that you name someone who is trustworthy so that you don’t have to revoke it.
However, if you want to revoke a power of attorney, do it in writing. Include the name of the person who is having their authority revoked. We recommend speaking with an attorney if you have to revoke a power of attorney.
Limited powers of attorney
A limited power of attorney is a document that allows someone to make decisions on behalf of another person. This happens when someone cannot be present to carry out decisions for themselves. A Limited Power of Attorney allows someone else to act as your proxy. For example, military families give powers of attorney that expire to a friend or spouse while they deploy.
How often should you renew a power of attorney?
Most powers of attorney are meant to last forever. However, you might need to create a new one to replace an old one. For example, a bank may be hesitant to honor a power of attorney that you signed 20 years ago. They may want you to have it updated. You may also want to update a power of attorney if you move to a new state.
If you have questions or need to get a power of attorney in Nashville, consider scheduling an initial call. This 15-minute call is free and allows us to see if we can help you with your situation.
Did you miss our live webinar about co-executors or co-trustees for your estate?
What it’s about
Many people want to appoint two or more people as joint decision-makers for wills and trusts. April and Mollie host a Q&A about when that’s a good decision….and when it isn’t.
Join Attorney April Harris Jackson of Graceful Aging Legal Services, PLLC, and Mollie Lacher of Sunny Care Services for a discussion on the subject of choosing the right executor(s) or trustees… and why it’s so important.
This webinar is free, so please sign up today to learn more!
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.
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.
