Some Tennessee residents benefit from the use of a living trust. Unlike some other trusts, a living trust allows the individual who created it to benefit from it during his or her lifetime. And since the assets are owned by the trust, they can avoid probate and are not subject to public scrutiny. However, a living trust may not benefit you as you hope if you do not fund the trust.
As explained by Forbes, a living trust is used for certain tax advantages and as part of estate planning. A living trust works when you name the trust as the owner of your assets. You retain control of the assets by serving as a trustee. If you have a spouse, your spouse can act as a co-trustee. You may also designate a successor trustee to take over if you become incapacitated.
However, you must do more than set up a trust. You also have to change the legal title of your assets to the trust. Until you do, the trust does not actually contain the assets you may think it does. Accounts held at many banks and financial institutions, for instance, require the trust to be designated as the owner, not the person who set up the trust. Other titles, such as real estate or automobile titles, may also have to be changed.
Not transferring the assets to the trust makes the trust just an empty vessel, also known as an unfunded trust. If you are unable to continue as trustee, a successor trustee has no power over your assets since they are not in the trust. When you pass away, your trust is powerless to protect your assets from probate. How your assets are dispersed will be governed by your will if you had made one, or possibly by a court-appointed executor if you have not.
Because the estate needs of Tennessee residents will vary, only read this article as general information and not as legal advice for your situation.