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April Harris Jackson

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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.

3 Tools for Estate Planning for Blended Families in Tennessee

a family with children from multiple relationships hug on a beach at sunset in tennessee
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.

two mothers snuggle their toddler and baby while sitting on a park bench. They are considering making an estate plan for their blended family
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.

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.

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. 

To learn more about trusts and other estate planning tools that Elder Law Attorneys in Tennessee use, follow us on Facebook or Instagram!

How to Include Your Service Providers In Your Estate Plan

How to Include Your Service Providers In Your Estate Plan

A  Davidson County will and trust lawyer’s job is to make sure that you have all of your ducks in a row so that if you become incapacitated or die, your loved ones will know how to manage your estate and follow your wishes.  Laws in Tennessee vary from those found around the country, which is why you want to work with an attorney who is skilled in understanding your specific needs.  One area that should be considered is your service providers. 

Make a list of your service providers and put it in your estate plan

“Service providers” covers a wide range of individuals involved in your life.  Should you be unable to communicate with them, you want to ensure that your trustee, executor, conservator, or other responsible person is able to communicate with them on your behalf.  Having them all listed in one place will make this job much more manageable. 

Household Providers 

This list should include all of the people or companies that you deal with when it comes to the maintenance of your home.  In some cases, your home will need to continue to function in your absence, and your representative will need to be able to contact these people to make sure things keep running smoothly.  In other cases, whether you are deceased or incapacitated, there are certain services that you may no longer need, and the person in charge needs to be able to contact the service providers and cancel with them. 

Some examples of household providers that you will want to list might include: 

  • Computer support 
  • Food or water delivery 
  • Gardening 
  • Pet care
  • Housekeepers 
  • Heating/Cooling system maintenance 
  • Heating oil delivery 
  • House sitters 
  • Pest control 
  • Pool or spa maintenance 
  • Utilities 
  • Vehicle maintenance 

Basically, anything that you have performed on a regular basis should be noted, along with contact and payment information. 

Medical Service Providers 

You should also provide your representative with contacts for your medical service providers.  This information could be very valuable should you need medical attention but be unable to reach out to these providers on your own.  Additionally, if you have standing appointments with these providers, it will be helpful to have them canceled so you don’t accrue charges for services you’re not using. 

Some of the medical service providers you may want to include on your list are: 

  • Chiropractor 
  • Counselor 
  • Dentist 
  • Massage therapist 
  • Ophthalmologist 
  • Physical therapist 
  • Primary care physician 
  • Psychiatrist 
  • Specialists 

Personal Service Providers

There are other types of regular services that you may use, and you’ll want to include these as well for the same reasons already mentioned.  Some personal service providers to keep in mind for inclusion: 

  • Childcare provider 
  • Hairdresser 
  • Home care provider 
  • Meal preparation 
  • Transportation 
  • Tutors 

Additional Information 

Along with the contact information for these service providers, it’s a good idea to make notes about when they are expected, and you may even want to include service agreements and contracts.  For example, if you have a standing arrangement to have your sprinkler system blown out each fall, make a note of that. 

Your estate planning attorney may not include all of this information directly in your estate plan, but they will want to be able to assist your family with where it can be located when the need arises. 

If you are seeking estate planning services, please book a call with our office here .