Robert Chesser Jr Law

Estate Planning Attorney in Chattanooga, Tennessee

423-445-1188

What Makes up a Thoughtfully Comprehensive Estate Plan in Tennessee?

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What Makes up a Thoughtfully Comprehensive Estate Plan in Tennessee?

Planning for your family’s future is one of the most important steps you can take to protect your loved ones. A thoughtfully crafted estate plan is more than just a will or trust, it’s a personalized blueprint that addresses your unique needs and goals while adhering to Tennessee laws and allowing you to pass on your values to future generations. This article will break down the essential components of a comprehensive estate plan so you can feel confident about your family’s future.

A Will or a Trust: The Foundation of a Solid Estate Plan

 

The foundation of any comprehensive estate plan in Tennessee is a will or a trust. These legal tools allow you to get your wishes down in writing and to choose where you want to leave your money and property when you die. They can also allow you to pass on your values to the generations you leave behind.

  • Wills: A will is straightforward and effective for designating who inherits your assets and who will serve as the legal guardian for minor children.  While simple, there is a catch: your family and/or kids will have to go through the probate court process before they can inherit your assets.  This probate court process can be expensive, time consuming, and uncomfortably public, so most people wish to avoid it completely.  You can learn more about probate by clicking HERE.
  • Trusts: A primary advantage of using a trust over a will is that trusts avoid probate.  This means that your family and/or kids will inherit your assets without any court involvement meaning that it is cheaper, faster, and easier for them after you die.  In certain situations, they can also help to minimize estate taxes and protect your assets from creditors and lawsuits.

Click here to learn more about Wills vs. Trusts.

Whether you ultimately choose a will or trust based estate plan, that foundational piece is just the beginning of a comprehensive plan.

A Children’s Trust Protects Your Kids

A children’s trust is a separate trust that hold’s your children’s inheritance for them and has more than one strategic use.

If you have young children, a children’s trust is a must-have. It ensures that your children’s inheritance is managed responsibly by someone you trust until they’re mature enough to handle it themselves.

If you have grown children, a children’s trust can be just as powerful. Giving your adult kids an inheritance check with no strings attached can be a pretty scary thing.  They may be very responsible and use their inheritance wisely . . . or they may blow most of it on a wild weekend in Vegas then decide they need a sports car.  A children’s trust is the opposite.  It gives your kids access to their inheritance for things that you approve of, like health and education, but restricts access to things that you may not approve of, like gambling.

As an additional benefit, whatever has not been spent from your kids’ children’s trust cannot be taken from them.  They cannot lose their inheritance to a divorcing spouse, creditors, or by being sued.

Including a children’s trust in your estate plan can truly offer peace of mind knowing your kids’ financial future is secure no matter what.

Disability Planning

When people think about estate plan, they typically think about planning for their death.  But what happens if you become disabled and are unable to manage your own affairs?  The truth is that you are 7 times more likely to become disabled in any given year than to die.  If you do not have a legal plan in place to address this, then it can create an extremely stressful and expensive situation for your family.  Fortunately, we can prevent any nightmare scenarios with a comprehensive estate plan that includes a Durable Power of Attorney and an Advance Directive for Health Care.

  • A Durable Power of Attorney: A durable power of attorney allows you to choose someone you trust to make financial and legal decisions and handle those matters if you become disabled and unable to manage them yourself. Without a Power of Attorney, your family might face lengthy court proceedings to gain the authority to manage your affairs.  This is sometimes referred to as “living probate.”

 In Tennessee, a durable power of attorney ensures seamless management of your finances, such as paying bills, managing investments, or even running a business, during times when you’re unable to do so yourself.

  • An Advance Directive for Health Care: An advance directive for health care in Tennessee is like a healthcare power of attorney and living will combined.  Like a power of attorney for financial matters, an advance directive allows you to choose someone you trust to make medical decisions for you if you become disable and unable to communicate those wishes yourself.  Additionally, an advance directive allows you to put your own medical wishes in writing if you cannot communicate them. It ensures your wishes regarding life support, resuscitation, and other critical decisions are honored.

Both parts of the advance directive for health care combine to provide a complete framework for addressing health care scenarios if you become disabled.

Ongoing Support from a Dedicated Estate Planning Attorney

Estate planning isn’t a one-and-done process. Life events such as marriage, the birth of a child, or acquiring new real estate may require updates to your plan. Having a dedicated estate planning attorney ensures your plan evolves with you and remains legally sound.

Your attorney can also provide guidance on Tennessee-specific laws, ensuring your estate plan is going to work as intended when it comes time for your family to rely on it.

Ready to Create Your Comprehensive Estate Plan?

Creating an estate plan tailored to your needs is an act of love and responsibility. By addressing every component—from wills and trusts to powers of attorney and health care directives—you can secure your family’s future and achieve true peace of mind.

If you’re ready to start your journey toward a thoughtfully comprehensive estate plan in Tennessee, contact me today. Let’s work together to protect what matters most to you.

Why I Chose Estate Planning And Don’t Practice Other Areas Of Law

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I only practice estate planning—I create wills, trusts, and customized legal plans for my clients who want to ensure their kids and families are taken care of and protected after they’re gone and even before.  It’s the only thing I do, and that is very much on purpose.  It’s what I love to do for so many reasons and I’m truly blessed to be able to help people in and around Chattanooga every day.

 

I Get to Help My Clients

I practice estate planning because it’s proactive.  It allows me to help families avoid unnecessary pain, conflict, and financial stress before tragedy strikes.  Instead of reacting to bad situations and putting out expensive fires, I get to work alongside my clients to create legal plans that protect their loved ones and provide peace of mind.

My journey to estate planning wasn’t a straight line.  I started my career in litigation and family law, handling cases like divorces and custody battles.  While I have some fond memories from that time, I also have a lot of difficult ones.  Litigation was 100% reactive.  I was often thrown into situations where I could only respond to bad things that had already happened, and I couldn’t help but think about how it didn’t have to be that way.  One particular case still sticks with me.  It’s the story that led me to dedicate my career to estate planning.

A couple had passed away unexpectedly without naming a legal guardian for their young child.  They left behind plenty of family members who loved their child, but unfortunately, multiple people stepped forward to ask the court for custody.  The mom’s sister and the grandparents on the dad’s side both wanted to raise the child.  What should have been a blessing—having family ready to step up—turned into a truly awful legal battle.

The court had to decide where this child would live and, initially, the child was sent to live with the grandparents.  But just as he was beginning to settle into his new reality, he was ripped from their home and sent to live with the aunt.  The court battle lasted years.  Thousands of dollars were spent, relationships were broken, and the child was caught in the middle, being tossed back and forth while still grieving his parents.

Like most lawsuits, no one really won in that case, but the one who suffered most was the child.  And the most frustrating part?  It was all avoidable.  If the parents had done some basic estate planning, they could have named a guardian, and this nightmare never would have happened.

That case changed everything for me.  I decided that I wanted to help families avoid situations like that one.  I wanted to focus on solutions, not reactions.

Estate planning allows me to do exactly that.  I get to work with clients to ensure their kids and loved ones are taken care of, no matter what.  Instead of watching families tear each other apart in courtrooms, I help prevent those heartbreaking scenarios in the first place.

I recently worked with a client who had an adult special needs child and they were worried about what would happen after they were gone.  If they left too little money, their child might not have enough to live on.  If they left too much, their child could lose access to critical government assistance.  I designed a plan that gave them the best of both worlds and provided their child with access to their rightful inheritance while still preserving their eligibility for government benefits.

When I told my clients the good news, the relief on their faces was something that I will not soon forget.  That’s why I do this work.

When my clients look at their families, I want them to have the peace of mind that comes with knowing they’ve protected the people they love most.  They’ve taken the legal and financial pressure off their loved ones, so if the worst happens, their family can focus on grieving and healing—not on courtroom battles or financial worries.

I love being able to take that burden away from my clients.  I love being proactive.  And I love knowing that the plans I create will make a real, lasting difference for the people they care about most.

 

 I Love Estate Planning Because It’s Nerdy

Growing up as the son of a math professor and a hedge fund accountant, it’s safe to say the apple didn’t fall far from the tree.  Add to that my love for The Lord of the Rings trilogy of books, and it’s no surprise I’ve often been labeled a bit nerdy.  But when it comes to legal practice areas, estate planning is about as “nerdy” as it gets—and that’s one of the reasons I love it. Every case is a puzzle, and solving those puzzles is incredibly rewarding for me.

Estate planning is not something you can ever fully master.  It’s a constantly evolving field that demands ongoing learning and dedication.  No matter how many years you’ve been practicing, there’s always a new situation to tackle that comes with something new to learn.  And for someone like me, that’s part of the appeal.  I enjoy digging into the details, researching, and reading—always working to get just a little bit better and find more creative solutions to help my clients.

 

Having a Sole Focus on Estate Planning is What’s Best for my Clients

I chose to focus solely on estate planning so I can truly serve my clients in the best way possible.  Estate planning requires a level of dedication and knowledge that simply isn’t possible when it’s just one of many practice areas.  Unfortunately, many attorneys dabble in estate planning without fully committing to understanding its complexities.  The unfortunate result is that their clients are left with plans that often don’t meet their needs and sometimes create more problems than they solve.

I’ve had many clients come to me with estate plans they paid for years ago which they don’t fully understand and that certainly don’t provide the best solutions for their families.  These plans are often created by attorneys whose main focus lies elsewhere.  For example, someone might call their personal injury attorney, who did a fantastic job helping them after an accident, and ask for a will.  The attorney agrees, pulls out an old form from their desk or downloads a generic template, fills in the blanks, and calls it a day.

The problem with this approach is that estate planning is much more than just drafting legal documents.  A great estate plan requires thinking through countless contingencies and coming up with solutions to each family’s unique situation.  It’s the estate planning attorney’s job to anticipate every possible scenario, and those skills only come from focused experience and specific knowledge.

Even worse, most clients with these “bare-bones” estate plans weren’t educated on the options available to them in the first place or, worse, on what their estate plan actually does.  For instance, I’ve had clients bring me wills that they assumed would protect their families, only to learn that their loved ones would still face a lengthy and costly court process after they’re gone.

By focusing exclusively on estate planning, I’m able to provide something different: customized, comprehensive plans that truly address my clients’ unique situations and goals.  I take the time to educate my clients so that they can make the best decisions about their families’ futures.  This education also allows my clients to talk to their families about their estate plan in a meaningful way.  Once they are educated and able to make the best decisions, I design creative solutions that fit their needs and goals.

At the end of the day, I know I’m providing my clients with the best possible service and product.  And with that, the peace of mind that comes with having a thoughtful, well-crafted estate plan. That’s why I dedicate my practice entirely to estate planning.

 

I Do Not Practice Other Areas of Law

I DO NOT practice any other area of the law.  Please don’t contact me about probate or conservatorships.  If you would like a referral for an attorney who does practice in these or other areas, I am happy to point you in the right direction! But I will not represent you in those matters.

If you’re ready to take the next step, contact our offices and schedule a call with me by clicking the link below.

 The Difference Between Revocable and Irrevocable Trusts in Tennessee

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Trusts are one of the most versatile tools in estate planning, helping individuals and families safeguard their assets, avoid the time and expense of probate, and achieve their long-term financial goals.  If you’ve begun researching trusts, you’ve likely come across the two main types, broadly speaking: revocable and irrevocable trusts.  Each serves a distinct purpose and comes with its own set of benefits and limitations.  Let’s explore the differences under Tennessee law to help you make an informed decision.

A revocable trust is a trust that is created while you are alive and allows you to make changes easily at any time.  The majority of people benefit from this arrangement because of the flexibility it provides.  This is the type of trust that is best for most people while they are alive.  I will dig more into this in the section about revocable trusts below.

An irrevocable trust cannot typically be changed once it is created and may not be the best option for most people–but for certain people, an irrevocable trust can prove extremely useful.

 

Revocable Trusts are the Best Option for Most People

A revocable trust, often called a “living trust,” is designed to be flexible.  As the name suggests, it can be changed or completely cancelled by the trust maker at any time during their lifetime.  This makes it an attractive option for individuals and families who value control and adaptability and wish to avoid cost and delay for their family after their death.

Importantly, a revocable trust becomes irrevocable after you pass away.

With a revocable trust, you retain full control over the assets placed within it.  In fact, most trust makers (you) name themselves as the trustee, allowing them to manage their assets as they always have.  This structure also makes it easy to adjust the trust as circumstances change—whether it’s a new addition to the family, a significant financial shift, or the need to account for new estate planning goals.

For Tennessee families, a revocable trust is often the foundation of a well-crafted estate plan.  It allows for the simple and timely transfer of assets to heirs while avoiding probate, a benefit that saves time and money and ensures privacy.  However, it’s important to understand that while revocable trusts offer convenience and control, they do not provide asset protection.  Assets in a revocable trust remain accessible to creditors and are not shielded from lawsuits.  Additionally, they do not reduce estate or gift taxes although only a very small number of people are subject to estate taxes in Tennessee.

Most younger families who do not have a huge amount of assets, a revocable trust is almost always the best option.  It gives your estate plan the ability to evolve with you as their family and financial situation changes over time.

 

Irrevocable Trusts Provide More Protection, but Only for Specific People

Unlike their revocable counterparts, irrevocable trusts are designed to be permanent.  Once assets are transferred into an irrevocable trust, the trust maker (you) gives up significant control.  These trusts cannot typically be changed or cancelled.

While this might seem like a drawback, it comes with significant advantages also.

Irrevocable trusts are a powerful tool for asset protection.  Because the assets are no longer considered the property of the trust maker, they can be shielded from lawsuits, creditors, and even divorce settlements.  This feature makes them particularly appealing for individuals who want to preserve wealth for future generations or protect their assets in the face of financial risks.

Are you concerned about future nursing home care?  In Tennessee, irrevocable trusts are often used for Medicaid planning.  Medicaid eligibility requires individuals to meet strict income and asset limits, and placing assets in an irrevocable trust can help someone qualify for assistance while still preserving wealth and their home for their family.  Irrevocable trusts are also highly effective for high-net-worth individuals who want to reduce their taxable estate.  By removing assets from their estate by transferring ownership of them into an irrevocable trust they can minimize or even eliminate estate taxes.

 

Types of Irrevocable Trusts in Tennessee

There are several types of irrevocable trusts tailored to specific needs.  For example, Tennessee Investment Services Trusts (TIST) offer significant asset protection during one’s life for those willing to give up a large amount of control over certain assets.  Irrevocable life insurance trusts (ILITs) allow life insurance proceeds to be excluded from estate taxes.  An option for philanthropically minded individuals is the charitable remainder trust, which combines tax benefits with philanthropic giving.

While these options provide the trust maker with certain benefits during their life, other options are often created at death to provide protections for a trust maker’s children (young or adult).  These include general needs trusts, to protect their inheritance from things like divorce, lawsuits, or financial immaturity, and special needs trusts, which protect assets for beneficiaries with disabilities without jeopardizing their eligibility for government assistance.

I was once working with one of my clients designing his trust-based estate plan when he told me that he wanted to disinherit his oldest son.  This came at a bit of a shock to me because he had just spent the last 15 minutes telling me how much he loved his kids, including that son.  I could have left it there and moved on, removing his son from his plan entirely.  Instead I asked more questions and learned that his son was somewhat recently sober and my client was worried that giving him a large inheritance of free money would cause him to fall off the wagon.  He was overjoyed when we came up with a plan to give his oldest son his inheritance but to keep it inside of a general needs trust.  This meant that his son would have access to his inheritance for things that my client approved of, like health and education, but that someone else would oversee managing his inheritance and it could not be lost or squandered.  We even built in measures to incentivize continued sobriety.

While irrevocable trusts offer unparalleled benefits in terms of protection and tax efficiency, they require meticulous planning and a clear understanding of their implications.  Their benefits also come at the cost of flexibility and control

 

The Difference Between Revocable and Irrevocable is Flexibility and Protection

The most significant difference between these two types of trusts is flexibility and control.  A revocable trust allows the grantor to maintain control and make changes as life evolves, while an irrevocable trust locks in its terms, prioritizing protection and long-term planning over adaptability.  Another distinction lies in asset protection.  Revocable trusts leave assets exposed to creditors and lawsuits, whereas irrevocable trusts can provide a shield against these risks.  Additionally, irrevocable trusts offer tax advantages which are not available with revocable trusts alone.  Finally, for Medicaid planning for nursing home care, only irrevocable trusts can help protect your home from being taken after you pass away.

The decision to establish a revocable or irrevocable trust ultimately depends on your personal and financial goals.  A family with young children and a single primary residence might prefer a revocable trust for its simplicity and flexibility.  On the other hand, a high-net-worth individual concerned about taxes and asset protection may find an irrevocable trust to be the better option.  Often the answer is a combination of both.

When considering your options, think about your priorities.  Do you want to retain full control of your assets during your lifetime?  Are you concerned about protecting your wealth from creditors or ensuring eligibility for Medicaid in the future?  Discussing these questions with an estate planning attorney can guide you toward the right choice.

 

Need Help Deciding? Ask an Experienced Estate Planning Attorney

Trusts are highly customizable tools, but their effectiveness depends on careful design and adherence to Tennessee’s specific requirements.  This is especially true for irrevocable trusts, which require specific language and thoughtful planning to achieve their intended purpose.  An experienced estate planning attorney can help ensure that your trust is legally sound, tailored to your needs, and stays aligned with your goals long-term.  Without professional guidance, you risk costly mistakes that could jeopardize the effectiveness of your plan.

Choosing between a revocable and irrevocable trust is a significant decision that can have lasting implications for you and your family after you’re gone.  By understanding the unique benefits and limitations of each, you can make an informed decision that protects your family and provides you with peace of mind.  If you’re ready to take the next step, contact our offices and schedule a call with me by clicking the link below.

How to Determine Mental Capacity for a Will or Estate Plan

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When it comes to creating a will, a critical factor is sometimes overlooked: mental capacity.  You might assume that as long as someone puts their wishes on paper and signs it, their will is valid, but that’s not always the case.  Courts take mental capacity very seriously, and for good reason.  Establishing capacity ensures that your wishes are honored, your loved ones are protected, and disputes are minimized.  Let’s explore what it means to have capacity, the challenges of proving it, and how careful planning can save your family from future difficulties.

 

Why Does Capacity Matter for a Will?

Before a will is created or accepted by a court after someone’s death, it must be clear that the person making the will had the mental capacity to do so.  Mental capacity essentially refers to the legal ability to understand and sign a valid will.  This ensures that the individual was of sound mind and free from coercion, so their true wishes are respected, and their family is provided for as they intended.  This is important because, if someone lacked the ability to understand what they were doing there is no way we could be sure their will actually reflects their wishes.

Legal Standards for Mental Capacity in Tennessee

Under Tennessee law anyone who is at least 18 years old and of sound mind can create a valid will.  But what does “sound mind” actually mean? Courts look for two main things:

  1. The person understands the effect and what it means to create a will.
  2. They have a clear sense of the property they own.

Interestingly, the bar for capacity is relatively low.  Even someone who can no longer legally sign contracts or conduct general business for themselves might still meet this standard for making a valid will.

 

Challenges in Proving Capacity

When a person passes away, their will goes through probate court, where a judge oversees the process of distributing their assets.  One of the first steps in this process is proving that the person had the mental capacity to create a valid will at the time it was signed.

Unfortunately, proving capacity can be challenging—especially if the will was signed years earlier.  Evidence such as medical records, expert testimony, or witness statements might be required.  Even then, disputes over capacity can turn into lengthy and expensive legal battles.  Courts must take these matters seriously in order to protect families from wills created under fraud, coercion, or undue influence, but it can be difficult to sort out these issues after the fact.

How to Prevent Capacity Disputes: Self-Proving Affidavits

Luckily, there are steps you can take now to avoid these headaches later.  One of the most effective tools is a self-proving affidavit.  When you sign your will, two witnesses must also sign it to confirm its validity.  A self-proving affidavit goes one step further. It’s a written statement, signed by your witnesses, typically at the same time as the will, affirming that they saw you sign the document and believe you were of sound mind.  This affidavit is attached to your will and serves as automatic proof in probate court, making it much more difficult for anyone to contest.

 

What Happens When Capacity Is Lacking?

If someone no longer has the mental capacity required to create a will due to dementia or another condition a conservatorship may be necessary.  In this process, a concerned family member or friend asks the court to appoint them as a legal conservator.  If granted, the conservator can then make decisions on the person’s behalf, including decisions about their estate.  However, this process, often referred to as “living probate,” can be costly, time-consuming, and emotionally draining.  That’s why it’s so important to create your comprehensive estate plan well before capacity becomes an issue.

 

Planning Ahead for Peace of Mind

The best way to avoid these challenges is to create a comprehensive estate plan with the help of a qualified attorney.  A comprehensive legal plan goes beyond just a will and typically also includes tools like: a Durable Power of Attorney (to name someone you trust to manage your financial affairs if you’re incapacitated); an Advance Directive for Health Care (to outline your medical wishes and name someone to make other medical decisions for you); and possibly a Revocable Living Trust (to allow someone to manage your assets, avoid probate court, and simplify the transfer of assets).  These documents ensure that your wishes are followed, and your loved ones are spared unnecessary stress.

Choosing who to name in these roles is a big decision.  You might want to discuss it with your family to ensure everyone is on the same page.  And even if you don’t involve your family in these decisions, it’s important to inform the people you do choose so they know what’s expected of them.

Ensuring capacity for a will protects your wishes and your family’s future.  By taking proactive steps, like creating a comprehensive estate plan with a self-proving affidavit, you can avoid unnecessary conflicts and provide peace of mind.  Contact our offices and schedule a call with me by clicking the link below.

How To Set Up My Estate Plan So My Children Don’t Fight

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Creating an estate plan is one of the most important steps you can take to protect your family’s future.  Beyond ensuring your assets are distributed according to your wishes, a well-crafted estate plan can prevent unnecessary conflict among your children.  Without careful planning, even the most loving families can face misunderstandings, resentment, or disputes after you’re gone.  By taking proactive steps, you can set up your estate plan in a way that promotes harmony and minimizes the chances of family disagreements

Talking to Your Children

Conversations with your adult children can go a long way in preventing future conflicts, especially if you plan to distribute inheritances unevenly.  Sometimes, disparities in circumstances—such as age gaps, career choices, or health conditions—make unequal distributions necessary.  For example, perhaps you paid for one child’s education or helped another buy a home, but circumstances didn’t allow for the same support across the board and you would like to leave one child a larger share of your estate to compensate.

By explaining these decisions, you can help manage expectations and reduce the potential for surprises or misunderstandings.  Some parents seek their children’s input before making decisions, while others base their plans solely on what they believe is fair.  Either way, discussing these matters can go a long way toward ensuring your children understand your decisions and reducing the likelihood of conflicts.  The holidays often make a good time for this conversation and people are often surprised by how relieved they feel after having it.

 

In Tennessee You’ll Want To Use a Trust

Like most people, I grew up playing Monopoly with my siblings—in my case, with my overly competitive family of four boys.  One thing I remember is how every game eventually reached a point where we felt like we never wanted to talk to each other again.  And that was with fake money and fake properties.  Now, imagine that same dynamic, but with real houses, real money, and real emotions.  Unfortunately, that’s what probate can feel like for many families.

When someone dies with a will rather than a trust, their estate must go through probate, a court-supervised process for transferring assets.  While necessary, probate creates a perfect setting for family conflict.  It’s public, costly, time-consuming, and offers a forum where disputes can arise, especially when deep-seated emotions may be involved.

Creating a trust instead of relying solely on a will is one of the best ways to avoid putting your family in this position.  A trust bypasses probate entirely, meaning no court involvement is required.  It’s a more private, efficient, and cost-effective process that significantly reduces the likelihood of disagreements among your children.  By using a trust, you can avoid these Monopoly-style sibling rivalries.

 

Choose Your Executor or Trustee Wisely

The person you choose as the executor (often called a “personal representative” in Tennessee) of your will or the trustee of your trust can greatly influence whether your children get along after your passing.  These roles carry authority and responsibility, and careful thought should go into selecting the right person.  When considering candidates, take an honest look at their strengths, weaknesses, and circumstances.  Avoid naming someone who is overly authoritative, inexperienced with finances, or prone to conflict.  The best option is someone who is level-headed, organized, and able to maintain peace.

For example, if one of your children is already managing a growing business and raising multiple kids, they might not have the time or energy to take on these additional responsibilities.  Similarly, if emotions might cloud someone’s judgment, they may not be the best choice.  You can also appoint co-executors or co-trustees to share the responsibilities.  However, it’s important to ensure they can work well together to avoid unnecessary disagreements.

 

In Tennessee You Can Use a HIPAA Waiver

An Advance Directive for Health Care is an essential part of a comprehensive estate plan.  It allows you to document your medical wishes and name a trusted individual—often a spouse or child—to make decisions on your behalf if needed.  However, naming one child as your agent can inadvertently create tension as they’ll have access to your medical information and healthcare providers while their siblings may be left in the dark.  A simple solution is to include a HIPAA waiver in your estate plan.  This document grants equal access to your medical information to all your children, or anyone else who you choose, leveling the playing field and minimizing potential tension.

Your estate plan is more than just a set legal documents, it’s a way to carry on your values and a testament to your love for your family.  By having open communication, choosing the right tools, and making thoughtful decisions, you can help preserve peace and protect your children’s relationships long after you’re gone.  Book a call with me by clicking the link below.

How to Protect Your Assets in Tennessee With Asset Protection And Estate Planning

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We all work hard to build up what we have, so the idea of losing it to a lawsuit or creditor can be worrying.  The good news is that Tennessee offers some strong asset protection strategies that can help keep your assets safe.  In this post, we’ll break down five asset protection strategies, from basic statutory safeguards to more advanced measures like self-settled asset protection trusts, so you can feel confident that your hard-earned wealth is as secure as possible.

 

What is Asset Protection?

Asset protection is about strategically safeguarding your wealth from threats like lawsuits, creditors, bankruptcy, or divorce.  Unfortunately, many people are misled on this subject—often hearing from a friend or co-worker that simply placing assets in a trust makes them “untouchable.”  While certain trusts can offer some protection, they’re not always practical for everyone.  Let’s explore a few practical strategies and tools that many people may already be using unknowingly, plus one more extreme option involving a specific type of trust.

 

✅Some of Your Assets are Already Protected by Law

The first layer of asset protection involves statutory safeguards that automatically protect certain assets by law.  For example, federal law generally provides significant protection for retirement accounts like 401(k)s, 403(b)s, and IRAs from creditors.  Similarly, Tennessee state-sponsored retirement plans, such as the Tennessee Consolidated Retirement System (TCRS), enjoy protections under state law.  Life insurance policies are also protected and typically pass to beneficiaries free from creditor claims.

A certain amount of equity in your home may also be protected from creditors through something called the Homestead Exception.  Under the Tennessee Homestead Exception, if you were to face financial difficulties and creditors sought to seize your assets, they would generally be unable to take your home and all of your equity.  The amount of equity that is protected depends on your age, whether you own the home jointly with someone like your spouse, and whether you have minor children, with the amount protected ranging from $5,000 to $25,000 at the time of this post.

 

✅Your Marital Home is Protected from Creditors of One Spouse

We are fortunate to live in Tennessee when it comes to asset protection, as our state affords us many protections that other states do not.  One of these protections applies to a marital home.  Under this unique protection, spouses in Tennessee each own their marital home as a single legal entity—meaning both spouses are considered to own 100% of the property as opposed to a 50/50 split.  This structure protects the home from being seized by creditors of only one spouse.

For example, let’s say a husband and wife purchase a home together after they are married and one of them is a doctor.  If the doctor spouse makes a mistake with a patient and gets sued, the home cannot be taken through the lawsuit because the other spouse is not being sued and owns the home completely—it does not matter that the doctor spouse also owns the home completely.  In other words, since the spouse not involved in the lawsuit owns the entire home as well, creditors cannot force its sale.  This makes tenancy by the entirety a powerful tool for protecting your primary residence from individual creditor claims.  An important note here is that this protection ends after the death of a spouse.

 

Insurance is a Simple and Inexpensive Form of Asset Protection

A low-hanging fruit when it comes to asset protection is always insurance.  If someone is worried about exposure (liability), they are well advised to implement insurance policies for their specific concerns.  This means maxing out their home and auto insurance policies for maximum protection from lawsuits if someone injures themselves on their property or in a car accident.

For broader concerns, it is advisable to obtain coverage through an umbrella policy, which extends beyond the limits of your existing auto or home insurance, providing an additional layer of protection against lawsuits and other liabilities.  These umbrella policies offer a broad range of protection from lawsuits caused by many things and can also cover legal expenses.  On the other end of the spectrum, professional liability insurance is a very specific type of coverage that is important for anyone whose career comes with enhanced liability, like doctors and lawyers.

LLCs and Asset Isolation

For those who own income-generating assets like rental properties or a business, it’s important to keep those assets legally separate from your personal wealth.  If you own a personal residence for your family along with a rental property that you lease to tenants, and you own the rental property in your own name without an LLC, you may be exposed to unnecessary risk.  If a tenant sues after being injured at your rental property, all of your personal assets, including your home, could be subject to being seized through the lawsuit.

A better idea is to form an LLC that owns your rental property.  An LLC acts as a shield between the property and your personal assets.  In this case, the suing tenant could not typically pursue your personal family home or any of your other personal assets.  The LLC essentially puts a wall of insulation around the rental property.  (Note: there are other legal entities aside from LLCs, like corporations and limited partnerships, that may be better suited for specific businesses, situations, or assets.)

 

Self-Settled Asset Protection Trusts

The final strategy is a more drastic measure: a self-settled asset protection trust, often referred to as a Tennessee Investment Services Trust.  This trust allows you to shield certain assets from future creditors, but it comes at the cost of significant control.  To implement this type of trust, you must transfer the assets that you want to protect out of your own name and into the name of this trust.  While you can still benefit from the trust’s assets, an independent trustee must manage them, and the trust is irrevocable, meaning you cannot simply take back control and reclaim your assets into your own name.  Due to these restrictions, this strategy is best suited for individuals with substantial assets who have exhausted other options.

An important note here is that this type of trust only provides protection from threats that are not foreseeable at the time of the trust’s creation and only after a waiting period has passed.  For example, if a person finds out they are likely about to be sued and immediately creates this type of trust to avoid liability for that lawsuit, not only would the trust not provide the intended protection but it would also be considered fraudulent.

 

No Plan is Foolproof

These strategies provide some strong steps for protecting your assets, but no plan is entirely foolproof.  Each approach comes with its own limitations and potential exceptions, and the success of your plan depends on how well it’s tailored to your specific needs.  Additionally, both Tennessee and federal laws change over time, which could impact the protections you have in place.  That’s why it’s important to speak with an estate planning attorney who can help you navigate the complexities of estate planning and asset protection and keep your plan up-to-date over time. Contact our offices and schedule a call with me by clicking the link below.

Do You Need an Attorney to Create a Will or Trust in Tennessee?

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When it comes to estate planning, the availability of cheap, quick, and DIY options can be attractive.  But what many people don’t realize is that these internet templates often lack the nuance and customization needed to fully protect your assets and loved ones.  Estate planning isn’t just about filling out forms, it’s about creating a legal plan specifically tailored to your family and circumstances.  Working with an experienced estate planning attorney not only ensures that your plan is legally sound and strategic, but also provides you with personalized guidance, ongoing support, and the peace of mind that your family is truly protected. In the long run, the risks of a DIY estate plan outweigh any initial savings.

Not Working with an Estate Planning Attorney Creates Risk for Your Family

There are less qualified options than working with an estate planning attorney available for families who may simply not know better.  Unaware of the complexities of estate planning, these families may turn to less qualified options.  In the legal community, these are often referred to as “bare bones” estate plans.  They involve wills and trusts that are often prepared by attorneys who do not focus on estate planning or sometimes even by non-attorneys.  Beware of these documents, as they might not comply with state law, often lack essential personalized planning, such as provisions for guardianship of minor children, asset protection strategies, or tax-saving mechanisms to protect your family, and frequently skip the follow-up work required to ensure the plan works as intended upon your death—often causing your family unnecessary expense, time, and stress.

Even worse, some people attempt to draft their own estate plans using online websites or software.  These are ultimately fill-in-the-blank form plans and are not designed to account for the specific requirements and nuances of state law.  Estate planning laws vary widely between states, and a document that works in one state might not be valid in another.  Additionally, I have personally seen judges outright refuse to accept documents submitted by individuals who created those documents using legal drafting websites like LegalZoom.  While DIY is perfectly fine for crafts or small home projects, I do not recommend going the DIY route for estate planning documents.  The bargain option can cost your family thousands after you’re gone, if it even works at all.

 

An Estate Planning Attorney Will Create a Custom Plan that Actually Works

Given these risks, it’s important to understand the value of working with a professional. A better idea than taking the DIY approach is to work with an attorney who specifically focuses on estate planning.  Estate planning is a unique area of law with many nuances, and having the luxury of a professional providing tailored advice can be the difference that gives you true peace of mind, knowing that you’ve protected your family.  One of the most important things that an estate planning attorney provides is education.  There are many moving parts to a comprehensive estate plan, not just a will or a trust.  This can create confusion when trying to learn the ins and outs by yourself, especially with so much conflicting information online.  A knowledgeable estate planning attorney can cut through the noise to make things simple and understandable.

An experienced estate planning attorney will ask detailed questions about your family and goals, using their experience to provide advice tailored to your unique situation.  No two families are the same, and neither should their estate plans be.  An estate plan for a family with one young child born during the marriage will have drastically different provisions than a plan created for a blended family with grown children.  With this in mind, advice that is personalized to each unique family is incredibly important and not possible from less qualified estate planning options.  Along with personalized advice, an estate planning attorney will lay out all the options available to you, discussing the pros and cons of each, and helping you determine which options may or may not be the best fit.

 

An Estate Planning Attorney Will be There for You and Your Family for Years to Come

Once a qualified estate planning attorney creates a customized estate plan, the service doesn’t end there.  Essential follow-up work, like updating beneficiary designations on investment accounts and life insurance policies and transferring your home and business to your validly created trust, is critical to ensuring your plan works as intended.  These important steps are often overlooked and can create nightmare scenarios if neglected.

Beyond that, estate planning is not a “set it and forget it” process.  As your life changes, so should your plan.  A dedicated estate planning attorney offers ongoing advice, helping your family when it matters most and updating your plan to reflect changes in your circumstances.  Often, people who are named in specific roles in estate plans do not necessarily know what to do after that person passes away and the time comes for them to act.  It is important to have someone who can guide your named individuals through this process—preferably someone familiar with your family and custom legal plan.  Not only is having an estate planning attorney there a benefit to your people after you’re gone, but it also provides support during your lifetime.  A true estate planning attorney takes pride not only in delivering a well-crafted legal plan but also in offering peace of mind that it’s done correctly, that you have someone to call whenever you have questions, and that they’re ready to review and update the plan for you—free of charge—at regular intervals as your family, finances, or goals change over time.

 

Your Family Deserves More than DIY Documents

In the end, estate planning is about much more than just filling out forms; it’s about ensuring your family and assets are properly protected for the long term.  While DIY solutions may seem cheap and convenient, they often fall short of providing the comprehensive protection and peace of mind that working with an experienced estate planning attorney offers.  By choosing professional guidance, you’ll benefit from a customized plan that addresses your unique needs and continues to adapt as your circumstances change.  When it comes to protecting your family, there’s no substitute for the experience and ongoing support of a dedicated estate planning attorney.  Our office is proud of the fact that our sole focus is on estate planning and that we are there for our clients and their families for years to come. Schedule an appointment with me today by clicking the link below.

What’s the Difference Between a Will and Trust in Tennessee?

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The first decision anyone has to make when creating an estate plan is whether they want to use a will or a trust as the foundation for that plan.  These two similar but unique documents are alternatives to one another and when it comes to estate planning, deciding between a will and a trust can feel like a big decision—but there’s no one-size-fits-all answer.  A will might work perfectly for one family, while another might benefit more from the flexibility and probate-avoidance of a trust.  It’s all about what makes sense for your family’s unique situation.  Maybe a will is enough, or maybe you want the added protection for your kids’ inheritance that a trust can offer.  Yes, trusts can have a higher upfront cost, but they might save your family money, time, and stress in the long run.  The real question is: what’s right for your family? Let’s break it down.

 

What Is A Will?

A will is a document that allows you to put your wishes into writing, specifying where you want your assets to go after you pass away.  It can direct things like your home, vehicles, and personal property (personal property being things like clothes, furniture, jewelry, firearms, etc.).  Keep in mind, a will doesn’t control assets with designated beneficiaries, like retirement accounts and life insurance.

While a will is a useful tool for many, it’s not always the best option for everyone.  That’s because when someone dies with a will, their family must go through a process called probate before the deceased’s assets can be distributed.  Probate is a formal court case where a judge oversees the transfer of assets through inheritance.  Many people aren’t aware of probate’s challenges until the probate process begins, leaving families surprised and, in many cases, frustrated.

 

A Will Goes Through Probate, Here Are The Downsides of Probate:

Probate is expensive.  On average, probate costs between 3-8% of the total estate going through the process.  This is due to various fees: court fees, executor fees, bond fees, real estate appraisals, business valuations, and of course, attorney fees.  These costs can add up quickly, even for what might seem like a simple estate.  For a somewhat modest estate worth $750,000, the family could expect probate to cost between $22,500 and $60,000.

Probate takes time.  In Tennessee, probate often lasts between 12 and 18 months—or sometimes even years.  During this time, assets are frozen, and a judge’s permission is needed to do almost anything.  If a loved one relied on those assets for support, such as a child’s tuition, they might not have access to that money until probate is complete.

Probate is public.  Probate essentially puts your financial life on display.  When a will is filed, it becomes a public document, along with a list of assets, their value, and who is inheriting them.  Not only is this information personal, but it can also lead to family disputes, potentially increasing the cost and complexity of the probate process.

Despite these downsides, a will can still be a good option for some families, especially if they aren’t concerned about the costs or delays of probate.  For others who want to avoid these pitfalls, a trust may be a better alternative.

 

A Living Trust Instead Of A Will May be a Better Alternative

A trust is an alternative to a will in most cases, and it has grown in popularity over the past few decades to become the go-to estate planning tool in most states—including Tennessee.  Like a will, a trust allows you to put your wishes into writing, specifying where you want your assets to go.  However, unlike a will, a trust can manage assets with listed beneficiaries such as retirement accounts and life insurance.  One instance when a trust is almost always preferable over a will is when you own real estate.  When real estate has to go through the probate process, selling or passing on the family home becomes a slow and costly process in most cases.  A trust streamlines the process, saving money, time, and headache.

While both wills and trusts serve similar purposes, a trust offers more control and protection.

The biggest advantage of a trust is that it bypasses probate entirely.  This means your family can avoid the downsides of probate, such as high costs, long delays, and public exposure.  Since there’s no court involvement, transferring assets is simpler and cheaper.  While there may still be some nominal fees, your family won’t lose 3-8% of their inheritance to probate costs.  Additionally, assets can typically be transferred within weeks instead of months or years, which is especially important if loved ones need access to the funds quickly.  A trust also ensures that your estate remains private, both during your life and after your death. This privacy can help avoid family conflicts and keeps sensitive financial details out of the public eye.

If avoiding probate is important to you, then a trust is likely the better choice over a will. But what if you want to protect your children’s inheritance after you’re gone?

 

A Living Trust Can Protect Your Kids After You’re Gone

Many parents worry about their children losing their inheritance—whether through their children’s own financial immaturity or through outside factors like divorce, bankruptcy, or lawsuits.  The good news is that a trust can help safeguard your children’s inheritance from these risks.

Trusts offer a range of protections based on the parent’s goals and the child’s circumstances.  For example, if a parent has a financially stable adult child, they may want to give them control over their inheritance while still providing some protection.  On the other hand, if a child is struggling with personal challenges like substance abuse, the parent may wish to implement more restrictive measures to make sure their inheritance is protected—or even to encourage better choices.

Through a trust, parents can implement tailored protections to prevent their children’s inheritance from being lost due to poor financial decisions, divorce settlements, or legal judgments.  As an example, let’s say a parent leaves an inheritance of $500,000 to their daughter who is married.  Two years later the daughter divorces her husband.  In this case, there is a chance that the divorcing husband could walk away with half of the daughter’s inheritance if the parent passed that inheritance to the daughter with a will.  A trust on the other hand can eliminate this threat and make sure that the entire inheritance stays with the daughter for her life.

 

The Best Choice Depends on Your Unique Family

At the end of the day, the decision between a will and a trust comes down to your family’s unique needs and goals.  Both have their advantages, and what works best for one family might not be ideal for another.  Whether you’re looking to avoid probate, protect your children’s inheritance, or keep initial costs low, the key is to choose the option that gives you peace of mind for the future.  Working with an experienced estate planning attorney will help! Book a call with me by clicking the link below.

How To Name Legal Guardian(s) for Your Children: A 5-Step Guide

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When it comes to estate planning, one of the most important decisions parents will make is choosing legal guardians for their children. Naming a legal guardian in your estate plan ensures that your children will be cared for by someone you trust, should something happen to you and your spouse or partner.

Here are some steps to follow when naming legal guardians for your children:

1, Make a List of Potential Guardians

Start by making a list of people who you would trust to take care of your children. Consider family members, close friends, and anyone else who you feel would be a good fit.

2. Consider the Pros and Cons

Think about each potential guardian and weigh the pros and cons. Consider factors such as their age, health, financial stability, location, and family situation.

3. Talk to the Potential Guardians

Once you have a shortlist of potential guardians, talk to them about your wishes and ask if they would be willing to take on the responsibility. Be sure to discuss the practical aspects of caring for your children, including their needs, education, and any special considerations.

4. Make it Legal

Once you have chosen a legal guardian, you need to make it official by including it in your estate plan. You should consult with an estate planning attorney to draft a will or trust that includes your wishes for your children’s care.

5. Review and Update

Your choice of legal guardians may change over time, so it is essential to review and update your estate plan regularly. Life events such as divorce, remarriage, or the birth of a child may require you to revise your plan.

 

Work with an Experienced Estate Planning Attorney

Choosing legal guardians for your children can be a challenging decision, but it is critical to ensure that your children will be cared for by someone you trust should the unthinkable happen. By following these steps and consulting with an estate planning attorney, you can create a plan that provides peace of mind for you and your family.

How To Involve Your Family In Your Estate Plan

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When deciding your estate plan, there are many things you have to think about. Choosing the right plan, executing and organizing the documents, and meeting with your attorney are all part of the job of planning what will happen to your estate. But one thing that is integral to the process is often the one reason you want to plan in the first place: your family. Even though you’re in the director’s chair it can still be a difficult conversation to broach. At the same time knowing how to talk to your family about your estate plan can be an important step in creating the plan itself, so it has its benefits too.

Everyone has a different reality when it comes to planning their estate with their family. You may be thinking of doing what most do, leaving everything to your spouse and children, or your situation may be a little more nuanced and complex than that. Regardless of what you have in mind for your estate, involving your family in the decision making process can be a tricky thing. It’s important to really consider if, and how you want to involve your family when you are working with your estate planning attorney to plan for your future.

First, Do You WANT to Involve Your Family in Your Estate Plan?

First things first, ask yourself if you want your family to be involved. It is completely okay if you don’t, and a lot of people choose not to have their family involved in the decision making process. Ultimately, this is a process that only involves your assets: you have complete control over where they go and how they get there, and you have a right to hold that conversation how you would like to. If that means it remains a private conversation between you and your estate planning attorney, that is completely okay, regardless of your distribution decisions.

Sometimes, people may choose to avoid conversations with family members because of the choices they are making with their estate. Conversations regarding what you choose to leave behind, if anything, for your family members can be difficult. You have the ability to choose to keep your family uninformed of your decisions regarding your estate. If you decide that, the process and decisions made can remain completely confidential between you and your estate planning attorney until the time comes when your family members need to be notified.

Strategies for Involving Your Family in Your Estate Plan

If you want to involve your family, there are absolutely ways that you can do so. One way is to bring them right into the room and involve them in the conversation with your estate planning attorney. Doing this allows everyone to have a say, and to be able to give their opinion on what they think should be done with your estate. Hopefully, at the end of the day, you can make a decision that has all of your family members support. Even if not everyone is on board with the decision you make, it might be important for you to hear the opinions of your loved ones about what should be done with your estate.

When involving your family members’ input and opinions, it is vital to remember that, in decisions regarding your estate, you have the final say. You can listen and take as many ideas as you want from family members, but what happens to your assets is ultimately your decision. You can also decide just how involved you want your family to be. Whether you want your loved ones there for the entire process, or only there to hear out their opinions, you are in control of the situation. You decide who is there, for how long, and you choose what to listen to.

Wrapping Up

Family can be one of the most important things in our lives. Your family might even be the driving force in deciding to create an estate plan for your assets. If you choose to involve your family in your estate planning process, there are ways to ensure your family is able to give their input. You can decide together, and execute the plan as a team.

If you decide not to include your family, remember that you still have the guidance and advice of your attorney to help you. Even if you choose to make these decisions without familial input, you are not alone in this process. You have complete control over what you decide to do, and you have the final say on what happens to your assets.