You may have heard nightmare stories about probate holding family’s assets hostage. Maybe you aren’t sure what probate means but want to protect your loved ones. Whatever the reason, understanding how a living trust works can help you decide the best estate planning strategy for your family.
Today, Franklin-based estate planning attorney Trent Linville, PLLC, explains how a living trust can help you avoid probate in Tennessee. We’ll also discuss the difference between a living trust and a living will — and why you may need both.
How Does a Living Trust Avoid Probate?
One of the first questions that attorneys are often asked when creating a living trust is, “How does this avoid probate?” The answer: when assets are titled in the name of your trust instead of your name, they don’t go through probate when you pass away.
But don’t worry — creating a revocable living trust still allows you to control your assets during your lifetime. After placing assets into a living trust, you can continue to manage them as you see fit.
Your successor trustee then takes control after your death. They can collect life insurance proceeds, administer retirement accounts and annuities, settle final debts, and distribute trust funds to your beneficiaries according to your wishes — all without probate court involvement.
Living Trust vs. Will: What’s the Difference?
In addition to avoiding probate, one of the most appealing benefits of a living trust is that it survives both during your lifetime and after your death. By contrast, a last will and testament only takes effect at your death — and must go through Tennessee probate court before assets are distributed.
Do All Assets Avoid Probate with a Living Trust?
One important thing to know about a living trust is that any assets not properly transferred into the trust may still go through probate. For example, property you acquire after creating your trust could be subject to probate unless it is retitled.
Your estate planning attorney can prepare a “pour-over will” to transfer remaining property into your trust after death. However, that property still passes through probate first. That’s why it’s essential to review and update your trust regularly with a Tennessee trust attorney.
Do I Still Need A Living Will?
A living will is not the same as a last will or a living trust. Instead, a living will (also called an advance health care directive in Tennessee) outlines your wishes for medical treatment if you are incapacitated and cannot communicate.
Your living will does not govern property or bank accounts — only health care decisions. Many families choose to have both a living trust (to avoid probate and protect assets) and a living will (to ensure medical decisions reflect their wishes).
Take the Next Step: Protect Your Family’s Future
The decision between a will and a living trust depends on your goals, assets, and family needs. However, many Tennessee families benefit from having both a living trust and a living will.
At Linville Estate Law we help clients across Middle Tennessee create customized estate planning solutions. Contact our office today to schedule a discovery call and enjoy the peace of mind that comes with knowing your family is protected.
