When planning for the future, one of the most important steps you can take is establishing a clear and legally sound strategy for managing and distributing your assets after your death. In Tennessee, two of the most common estate planning tools are wills and trusts. Each has distinct advantages and potential drawbacks depending on your personal circumstances, goals, and family needs.
At King Law, we’re here to help you understand your options so you can make informed decisions for your legacy and loved ones.
What Is a Trust?
A trust is a legal entity that holds assets for the benefit of specified individuals, known as beneficiaries. The person creating the trust (the grantor) appoints a trustee to manage and distribute the assets according to the trust’s terms. Trusts can be either revocable (changeable during the grantor’s lifetime) or irrevocable (generally unchangeable once established).
Pros of a Trust:
- Avoids Probate: Assets held in a trust typically bypass probate, saving time and maintaining privacy.
- Privacy: Unlike a will, a trust does not become part of the public record.
- Continuity: Trusts can provide for the management of your assets if you become incapacitated.
- Control Over Distribution: You can set conditions or timelines for how and when your beneficiaries receive their inheritance.
Cons of a Trust:
- More Expensive to Set Up: Trusts usually involve higher upfront costs and legal fees.
- Ongoing Administration: Trusts require continued management and funding during your lifetime.
- No Guardianship Provision: Trusts cannot be used to name a guardian for your children—that must be done in a will.
What Is a Will?
A will is a legal document that outlines your wishes regarding the distribution of your property, the care of minor children, and the appointment of an executor to carry out those instructions after your death. In Tennessee, a will must be signed by the testator and witnessed by two competent individuals.
Pros of a Will:
- Simplicity and Cost-Effective: Wills are generally easier and less expensive to create than trusts.
- Clear Legal Guidance: A well-drafted will provides clear instructions to the probate court and your executor.
- Guardianship Designations: Only a will can name a guardian for minor children.
Cons of a Will:
- Probate Required: All wills must go through the Tennessee probate process, which can be time-consuming and may involve court fees.
- Public Record: Once filed with the court, your will becomes a matter of public record.
- Limited Control Over Distribution: A will becomes effective only upon death and cannot provide ongoing management of assets.
Which Option Is Right for You?
Choosing between a will and a trust often depends on your specific goals:
- If your estate is relatively simple and you’re primarily concerned with naming heirs and guardians, a will may suffice.
- If you want to avoid probate, keep your affairs private, or ensure long-term management of your assets, a trust could be the better solution.
Combining Both for a Comprehensive Plan
Many Tennesseans choose to use both a will and a trust to cover all their bases. A “pour-over will” is commonly used to direct any remaining assets into a trust upon death, ensuring everything is handled according to your comprehensive estate plan.
Let Us Help You Plan With Confidence
At King Law, we understand that every family’s situation is unique. Whether you’re just beginning to consider estate planning or you’re ready to put a detailed plan in place, our experienced attorneys are here to guide you through every step.
We proudly serve clients in Eastern Tennessee. Call us at 888-748-KING or fill out our secure contact form to get started.