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April Harris Jackson

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How does someone get an inheritance from a trust?

How does someone get an inheritance from a trust?

What is a trust?

Trusts are a legal tool that can be used for many purposes including estate planning, asset protection, and income tax minimization. Trusts are a way of managing property with the intention of protecting it so that it can be passed on via inheritance to future generations.

Trusts establish a fiduciary relationship that allows a third party to hold a person’s assets on behalf of that person’s beneficiary or beneficiaries. The person establishing the trust and designating the beneficiaries is known as the “settlor” or “trustor,” and the third party who holds the assets on behalf of the beneficiaries is the “trustee.” 

Why do people create trusts?

Why do people create trusts in the first place? How do you know if you need a trust? First, people create trusts to control and protect their assets, especially for after they pass away. Trusts provide legal protection for the trustor’s real and personal property, and can also provide protection from creditors. Second, people create trusts because they are concerned about their money being spent on someone other than who it was intended for. Trusts are established to make sure that the trustor’s assets are distributed according to their wishes. If you have significant assets, especially a significant amount of real estate assets, or you have very specific wishes about how and when you want your assets distributed after you pass away, a trust might be for you. The best thing to do is talk to your attorney, who will help you determine whether a trust is the best way to protect your assets.

A beneficiary cannot just “take” an inheritance out of a trust

Since the purpose of a trust is to protect your assets, beneficiaries cannot just take their inheritance out of the trust as they please. The trustee must follow the terms of the trust established by the trustor.   

Minors & age clauses within trusts

People under the age of 18 legally cannot control their own money. A trust may be established for a minor beneficiary in order for them to have financial resources during their minority, but these resources are managed by the trustee according to the terms established by the trustor. For example, a trustor may include that their beneficiary receives a regular allowance from the trust.  

However, turning 18 does not necessarily mean that the beneficiary will automatically have unlimited access to the trust. Many trustors include payout clauses that extend the trust for a certain amount of time after the beneficiary turns 18. The policy behind this is that, while an 18-year-old may legally be able to control money and property and enter into contracts, the late teenage and early adult years are still a very developmental stage of life. An 18-year-old very well may not have the maturity and money management skills required to handle a significant amount of assets. Age clauses allow for the beneficiary to continue receiving periodic funds from the trust, but provide another level of protection of the trustor’s assets until the beneficiary reaches an age of presumed maturity, usually when the beneficiary reaches their mid-20s. 

Trusts for beneficiaries with special needs

These types of trusts are intended to provide for individuals with special needs while also allowing them to retain government benefits like social security or Medicaid. The Trustee will distribute funds from the trust as needed, or on a regular schedule, to take care of the special needs beneficiary’s living expenses and health care needs. 

pile of papers that belong to a family estate plan with a trust and inheritance. there is a close up of a hand holding a pen, glasses, and a calculator
Do you have assets that need to be directed to a beneficiary in a specific manner?

The terms for receiving an inheritance are set when the trust is created

Overall, money moves from a trust only according to the terms set forth at the creation of the trust. This may mean a periodic payment to the beneficiary distributed by the trustee, lump-sum payment to the beneficiary at a certain age, or both. Assets cannot be removed from the trust unless the terms provide for it. To obtain assets from the trust that are not provided for within the terms of the trust, you likely will have to go to court. 

In conclusion

When it comes to estate planning, there are many ways that you can distribute your assets according to your wishes. One of the most popular ways is to create a trust.

There are many types of trusts out there. A trust can be either revocable or irrevocable and it can have unique clauses for receiving an inheritance. Trusts are in many ways the opposite of a will. A will is used to distribute property after someone dies, while a trust is set up while someone is alive and involves giving up control over the assets.

Not sure if a trust is right for you? Discuss your financial and family situation with a qualified attorney first.

Can I Appoint Someone to Serve as Co-Conservator Over My Adult Child with Disabilities? | Nashville Special Needs Lawyer

Can I Appoint Someone to Serve as Co-Conservator Over My Adult Child with Disabilities? | Nashville Special Needs Lawyer

In the majority of cases, it’s a biological parent (or parents) who will apply to become their child’s legal conservator when they turn 18. But even parents will ask us if they are able to appoint an “alternate conservator” or someone else who can help with all required responsibilities and duties.  Most commonly, we are asked by parents of individuals with special needs if they can appoint one of their other adult children, a stepparent, a sibling, a grandparent, or other relative to serve as co-conservator who could have the same legal rights as the main conservator.

Legally speaking, having a co-conservator is absolutely possible, and it’s something we often consider to help lighten the load. However, the parent or main conservator cannot appoint this person themselves.  Instead, the candidate will need to go through a formal legal process with the Tennessee courts where they will petition to serve as a co-conservator. During this process, the court will need to verify that the person is indeed capable of serving in this capacity, and from there, a judge will ultimately approve or deny the request.

When we meet with families to start the process of filing for a conservator over a young adult with special needs, we will typically ask up front if the main candidate for conservatorship wants someone else to serve in a co-conservator role.  In general, it’s easier and less expensive to take care of everything all at one time.  The bottom line is that every family is different, and it’s important to work with an attorney who will help you create an individualized plan that actually works over the long haul.

Here at the Graceful Aging Legal Services, we want parents and caregivers to feel as secure and supported in their roles as possible, as that ultimately results in the best care for the person with special needs.  If you have questions about how to create a Special Needs Plan that takes into account the unique dynamics or challenges in your family, please feel free to contact us at (615) 846–6201 to schedule an appointment.

What is the Process of Filing a Conservatorship?

What is the Process of Filing a Conservatorship?

Today, we are breaking down the process of filing a conservatorship. A conservatorship is a legal procedure used to obtain authority to make decisions for someone else who is unable to make or carry out decisions for themselves.

Step One: Hire an Attorney

First, you will want to meet with and hire an attorney. Your attorney will collect lots of information about you and the person you are seeking a conservatorship for, such as addresses, family members, financial situations, etc.

Step Two: Prepare Evidence

Second, your attorney will help you prepare evidence for the eventual hearing. The most important piece of evidence in most conservatorship hearings is the Report of Physician. This is a notarized document signed by the person’s doctor that they are unable to make or carry out decisions on their own and a general overview of their medical condition. While you can file for conservatorship without the Report of Physician, it is not ideal.

Step Three: File a Petition

Third, your attorney will prepare a petition and have you sign it in front of a notary. They will then file it with the Court Clerk and the Report of Physician if you have completed one.

Step Four: Set a Hearing Date

Finally, once all your paperwork has been filed with the Clerk, your attorney will work with the Court to set a hearing date. You should be prepared to work with the Judge’s schedule in order to attend. Your attorney will let you know details about what you can expect at your hearing. We’ve also written an article about what to expect at the petition hearing.

If you believe a loved one is in need of a conservatorship, please reach out to our office at (615) 846-6201 or you can schedule a free 15-minute initial call with us here!