How Do I Get Started With Creating A Trust?
Creating a secure and prosperous future for yourself and your loved ones is a top priority, and trusts can be a powerful tool in helping achieve that goal.
A trust allows you to set aside assets for the benefit of others, while maintaining control over how and when they are distributed. With various types of trusts available, including charitable, special needs, and spendthrift trusts, you can tailor your estate plan to meet your unique needs and goals.
At Batson Nolan PLC, our experienced estate planning attorneys in Tennessee can help you navigate the complexities of trusts and create a customized plan that ensures your wishes are carried out, while helping to minimize taxes and avoid probate. Whether you’re looking to provide for a loved one, support a charitable cause, or simply ensure a smooth transfer of assets, we’re here to guide you every step of the way
What Is a Trust?
A trust is a financial tool that allows you to place money aside for a third party to manage on behalf of a beneficiary. Trusts involve three specific roles:
- Grantor – the person who creates the trust;
- Beneficiary – the person, people, entity, or entities that benefit from the trust; and
- Trustee – the third party that manages the trust.
Trusts also come in many mix-and-match varieties. If you create a trust during your lifetime to be dispersed while you are living, that is an inter vivos trust. A trust created in a will to be funded upon your death is a testamentary trust. Trusts can be revocable, meaning you, or someone entitled to stand in for you, can take the money back, or irrevocable, meaning no one can take the money back.
Depending on your unique goals, you may want to use one or more trusts in your estate plan. Trusts can usually bypass the probate process, allowing beneficiaries to receive funds sooner. You can also set trust terms that last long after you are gone. In some cases, passing money through a trust also allows you to lower the taxes associated with your estate.
What Types Of Trusts Are There?
There are many types of trusts, but they can generally be broken down into several categories, including:
- Charitable trusts – set up to benefit a particular charitable cause or beneficiaries who fit specific criteria;
- Qualified terminable interest property trusts – set up to provide income payments on regular intervals to one or more beneficiaries for a set period;
- Spendthrift trusts – set up to provide regular income payments to beneficiaries while protecting the funds from those beneficiaries’ creditors;
- Special needs trusts – set up to benefit a disabled loved one who may need support after you are gone; and
- Totten trusts – set up to provide money to beneficiaries on death but bypass probate.
This is by no means an exhaustive list. An experienced attorney at Batson Nolan PLC can explore your options with you and help you establish a trust that meets your unique needs.
Tennessee Special Needs Trusts
A special needs trust (SNT) is a legal arrangement that helps families continue to provide financial support to a loved one with a disability.
Since financial resources can disqualify individuals from government benefits like Medicaid or Supplemental Security Income (SSI), a trust can provide a solution that preserves their eligibility. By holding assets in a trust rather than directly in your loved one’s name, an SNT provides access to funds that can greatly enhance their quality of life.
Typically, an SNT is established by:
- A parent
- A grandparent
- A legal guardian
- A Tennessee court
In some cases, individuals with disabilities can create their own trust, depending on the type of SNT and the applicable laws. Additionally, these trusts are often set up as part of a comprehensive estate plan to facilitate the long-term care and financial security of a loved one with special needs.
In addition to providing for a family member without disqualifying them from needs-based programs, the benefits of an SNT are numerous:
- Covers expenses such as education, therapy, transportation or recreation, enhancing the quality of life
- Facilitates responsible asset management by a designated trustee
- Creates a financial safety net that provides long-term support for the beneficiary
- Offers families peace of mind about the future of vulnerable loved ones
The estate planning attorneys with Batson Nolan PLC understand the emotional and legal complexities of setting up a special needs trust. We are also well-versed in Tennessee’s laws on wills and trusts, and can help you create a special needs trust tailored to your unique needs. Our services include:
- Drafting trust documents to meet personal goals
- Helping ensure compliance with public benefit programs and tax regulations
- Providing ongoing legal support for trust management and updates
- Simplifying the complex legal process for families and individuals
From drafting your documents to helping you fund your special needs trust, we can provide comprehensive support every step of the way. Let us help you secure a brighter future for your loved one with special needs.