Category: Estate Planning

• 5 Benefits of a Revocable Living Trust

  

  Revocable living trusts offer a variety of estate planning benefits to those who create them. Here are five of the biggest benefits.

  

  A Revocable Living Trust is an estate planning tool that provides tremendous benefits for individuals and families. Unlike a Will, which only takes effect after death, a Revocable Living Trust is effective during your lifetime. These Trusts are increasingly popular in modern estate planning.

  Contrary to popular opinion, revocable living trusts not just for people with large estates. The benefits of this estate planning vehicle are available to people of ordinary means, too.

  In this article, we will discuss five benefits that Revocable Living Trusts offer. And these benefits are available to almost everyone, regardless of wealth level.

  1. Revocable Living Trusts Offer Flexible Asset Management and Distribution

  A Revocable Living Trust allows you to manage your assets during your lifetime and afterward. You can serve as the trustee of the trust and manage the assets as you see fit.

  A Trust can hold many types of property. A Trust can hold a variety of asset, like real estate, vehicles, bank accounts, tangible personal property, insurance policies, and business interests.

  The Trust Agreement can lay out a number of ways to manage the property it holds. For example, during your lifetime you likely will want the ability to use trust assets whenever you wish. But for your Beneficiaries, you may want to gradually give portions of their inheritance over time, or upon achieving certain life milestones.

  2. Trusts Bypass Probate and Keep Your Estate Private

  

  One of the primary benefits of a Revocable Living Trust is probate avoidance. Probate is a court-supervised process of transferring assets after a person’s death. Probate can be time-consuming and costly.

  Court fees, attorney fees, and executor fees can add up quickly. Especially if there are significant hurdles to deal with in handling your final affairs.

  By transferring assets to a Revocable Living Trust, the assets are not subject to probate, saving your Beneficiaries time and money.

  Additionally, it is much harder to contest the validity of a Trust than it is for a Will. Trusts are administered privately and are generally not subject to court supervision. This means you can pass your assets on and minimize the risk of unnecessary public family drama, if that is a concern of yours.

  3. A Revocable Living Trust Can Have Incapacity Plans

  Revocable Living Trusts are also capable of planning for incapacity. If you become incapacitated or are otherwise unable to competently manage your affairs, the Successor Trustee can take over management of the Trust assets without court intervention.

  Sometimes in life, tragedies happen that leave us unable to take care of our affairs permanently. If that is the case, a conservatorship would normally be necessary to manage our responsibilities.

  With a Trust, a conservatorship may be unnecessary (at least for your financial matters held under the Trust). There can be a fairly smooth transition to having a Successor Trustee manage assets. And this can be done without the publicity and expense of conservatorship proceedings.

  This can provide a seamless transition of asset management, and assurance that your financial affairs are still in order.

  As a side note, a Revocable Living Trust does not substitute for a Living Will or a Healthcare Power of Attorney. It is very important to convey your end-of-life care wishes to your family and healthcare providers. You can read more about Living Wills here.

  4. Business Owners Can Avoid Hardships in Transition

  

  If you own a small business in Tennessee, a Revocable Living Trust can provide a smooth transition of management and ownership in the event of death or incapacity.

  You can transfer ownership of the business interest to the Trust, and the Successor Trustee can take over management of the business without the need for court intervention. This provides operational continuity for your business and prevents things from grinding to a halt.

  The alternative is for the probate court to oversee the management of your business, which can severely hinder business operations. If the court has to appoint a receiver, this incurs additional costs that take away from what your Beneficiaries would otherwise receive.

  By placing your business interests into a Revocable Living Trust, you can provide authority to carry on business after death or incapacity. This ensures the business can discharge its obligations, including employee management, inventory acquisition, payroll, etc.

  5. A Trust Can Provide Protections for Minor Children

  A Revocable Living Trust can also provide protection for minor children. Your Trust Agreement lay out a structured distribution plan for the time your children are minors, and even into adulthood.

  The terms of your Trust can provide for current needs while also providing assurance of proper asset management. By placing the assets in a trust subject to a spendthrift provision, you can also provide protection from potential creditors or lawsuits. This provision keeps the Trust assets under separate legal ownership, so your children’s creditors have no right to get money from the Trust.

  A minor child cannot legally hold property in his or her own name. Someone else must manage that legacy on the child’s behalf. If a minor child is a direct beneficiary of an estate or an asset like life insurance, there may have to be a Guardian of Property appointed to manage the assets until adulthood.

  But when you pass on a legacy through a Revocable Living Trust, the Trust Agreement can provide terms for how to handle this situation. The Successor Trustee would hold these assets until a specified time or upon satisfying a specific condition. There is no need for a Guardianship of Property because the Successor Trustee will handle things until the appointed time.

  Your Trust can also provide reasonable reimbursements to the Guardian for the responsibility taken on to care for your minor children. That way, the Guardian is not put into financial hardship.

  Final Thoughts About Revocable Living Trust Benefits

  

  A Revocable Living Trust provides a range of benefits for individuals and families in Tennessee. These benefits can apply to many types of household situations, not just those with large estates.

  Though creating a Revocable Living Trust is a larger investment with more work required upfront than just a Will, it comes with tremendous benefits for those who choose this estate planning vehicle.

  If you are considering a Revocable Living Trust as part of your Tennessee estate pan, it’s important to work with an estate planning attorney. A professional will draft the Trust correctly and see to it that the instrument accomplishes your goals.

  Reach out to Connell Law, PLLC for your estate planning consultation today to discuss if a Revocable Living Trust is right for you.

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• Update Your Estate Plan After These Major Life Events

  

  Having an estate plan isn’t enough. It’s critical to ensure that after certain life events, it is updated. Here are some examples of times to review and update your estate plan in Tennessee.

  

  Estate planning is a critical aspect of protecting your assets and caring for your loved ones. But it’s not enough to simply create an estate plan. You may need an update to your estate plan to ensure that your legal documents accomplish your wishes.

  Let’s discuss six situations in which you should update your estate planning documents in Tennessee.

  Update Estate Planning Documents After a Change in Marital Status

  In Tennessee, if you get married, divorced, or legally separated, you should update your estate plan. This is essential to ensure that your asset distribution plan doesn’t end up in the wrong hands. This is especially important if your current plan designates your former spouse as a Beneficiary, Executor, or Trustee.

  Under Tennessee law, divorce or annulment revokes the following, unless the Will provides otherwise:

  • A transfer of property made by the Will to a former spouse;
  • Any provision conferring a general or special power of appointment; and
  • Any nomination of the former spouse as Executor, Trustee, Conservator, or Guardian.

  This section only applies to provisions in a Will that relate to a former spouse. Other provisions in the Will that are unrelated to the former spouse remain valid.

  Birth or Adoption of a Child

  

  If you have a child through birth or adoption, you should update your estate plan for the child’s care. These documents also need to name a Guardian in case you or a surviving spouse are deceased.

  Additionally, if you created a Will while married, but later divorced and remarried, having a child in the second marriage revokes that Will. This happens by operation of law, which means you don’t even have to take any action for this to happen.

  If you are in this situation, either re-executing your current Will or drafting a new one is best practice. This ensures that your estate does not pass by the laws of intestate succession (a default statutory scheme).

  Significant Change in Financial Situation

  If your finances change significantly, such as a large inheritance or selling a business, you should update your estate plan. The new documents should reflect your new assets and direct their distribution according to your current wishes.

  For example, if you had a business that your current estate plan bequeathed to one Beneficiary, that business will not be in your estate if you sell it. The doctrine of ademption would apply. That that Beneficiary may have a legal right to claim the value of that business interest from elsewhere in your estate.

  A simple way to address this issue is to amend that provision so it’s not an issue. You may be able to keep most of your Will or Trust intact with only a few minor adjustments.

  Update Estate Planning Documents After a Significant Change in Health Status

  

  If your health deteriorates, you should update your estate planning documents to reflect changes in your medical care or treatment. This may also be a consideration if family members have undergone challenges with their Living Wills or Healthcare Powers of Attorney.

  For example, you may have certain wishes about life support, nutrition, or hydration if you are in a permanent coma. You may also have specific instructions in the event of a heart attack or cardiac arrest. This could include a do-not-resuscitate order.

  These need to be in writing and in compliance with Tennessee law. This provides the greatest likelihood that healthcare providers and your healthcare Agent comply with your wishes.

  In Tennessee, you can include a Living Will in your estate plan to specify your end-of-life care preferences. You should also designate an Agent with Power of Attorney for Healthcare. This person will be authorized to make healthcare choices for you if you are unable to do so.

  You should have great trust in this person to do what’s right. He or she should have a solid understanding of your values on this sensitive topic.

  Relocating to a Different State or Country

  If you move to a different state or country, you should update your estate plan to comply with the new laws governing your assets’ distribution.

  Tennessee has a statute governing the foreign execution of a Will. Foreign simply means outside of Tennessee. As long as a Will was validly executed in the jurisdiction a person lived in at that time, the courts here will honor it.

  But it’s still a good idea to have your Will reviewed at that time. After all, moving to a new state or country is a significant life change. Previous nominations for Guardians, Executors, and Trustees may prove difficult if those people are far away.

  If you move to another country, there may be new estate or inheritance tax considerations, as well. While your Will might still be valid, there could be significant taxes owed if the plan does not include tax plans.

  Update Your Estate Planning Documents After Changes in Personal Relationships

  

  If your relationships with your Beneficiaries or other individuals named in your estate plan change, you should update your documents to reflect any changes in your wishes or preferences.

  In Tennessee, you can modify a Will or a Revocable Trust at any time you are of sound mind. This may be advisable if relationships with your Beneficiaries, Executors, or Trustees take a sour turn.

  If a Beneficiary is living in a manner that you do not approve of, you may wish to make changes. For example, you may wish to restructure an adult child’s inheritance through a Trust if he or she has an addiction. In that situation, money could cause significant harm.

  Final Thoughts on Updating Your Estate Planning Documents

  Regularly reviewing and updating your estate plan is crucial to ensure your wishes become reality. Otherwise, the results may be far from what you intend at this point in time.

  Working with a Tennessee estate planning attorney can help you navigate the complex legal landscape and create an effective estate plan that meets your unique needs.

  Contact Connell Law, PLLC today to request a consultation.

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• So, You’ve Been Named as a Successor Trustee—Now What?

  

  Being named as someone else’s Successor Trustee is an honor. But it can also feel overwhelming, especially when it happens after the death of a loved one. Most people step into this role with little warning and no real training, all while still grieving. Nonetheless, there’s an important job to do. If that’s where you…

  

  Being named as someone else’s Successor Trustee is an honor. But it can also feel overwhelming, especially when it happens after the death of a loved one. Most people step into this role with little warning and no real training, all while still grieving. Nonetheless, there’s an important job to do.

  If that’s where you are right now, take a breath. You don’t need to have everything figured out right this second. We’ve written this article to give you a basic understanding of what a Successor Trustee does, where to start, and what mistakes to avoid, without burying you in legal jargon.

  Think of this as an abbreviated roadmap. While it’s not legal advice for your specific situation, this is a way for you to get oriented.

  For our purposes, we will refer to Revocable Trusts. With these Trusts, the goal is often probate avoidance. With Revocable Trusts, a person (the Settlor) forms a Trust by executing a Trust Agreement. He or she then transfers assets into the Trust by assigning them or retitling to the Trust.

  After the Settlor dies, someone has to take over and carry out his or her wishes. That’s the Successor Trustee.

  What Is a Successor Trustee?

  A Successor Trustee is the person (or institution) named in a Trust to take over management of the Trust when the original Trustee can no longer serve. This is most often because of death or incapacity.

  Once the Trust becomes irrevocable (which typically happens at death), the Successor Trustee needs to take over the Trust’s administration. This means that your role, as the Successor Trustee, changes substantially from what you may have been doing before:

  • You are no longer following the settlor’s personal wishes informally

  • You are now acting in a fiduciary capacity and have legal responsibilities toward the Beneficiaries of the Trust

  • Your actions must strictly follow the terms of the Trust and applicable law

  At this point, the Trust is no longer belongs to someone else. It is a legal entity for which you are responsible.

  Think of this position like an Executor of someone’s estate. With a Will, the person named as Executor must go to the probate court to receive Letters Testamentary.

  But with a Trust, the Trust Agreement’s terms state how to handle assets and who will pick things up. This does not require going to court, which is a huge benefit of a Living Trust.

  Step One: Confirm That You Are Actually the Successor Trustee

  

  Before doing anything else, confirm that you are actually the Successor Trustee. That usually means reviewing:

  • The Trust Agreement and Certification of Trust

  • Any amendments to the Trust

  • Any required conditions for succession (such as a written acceptance)

  In many cases, need a Certification of Trust to prove your authority to financial institutions. This is a short summary of the Trust and will document your authority to act as Successor Trustee. You may also have to provide a death certificate. Do not assume institutions will simply take your word for it.

  Gather Key Documents Early

  Trust administration becomes much harder when documents are scattered or incomplete. As early as possible, locate:

  • The complete Trust agreement and any amendments

  • Death certificate(s)

  • Financial statements for Trust assets and non-Trust assets

  • Deeds, titles, and insurance policies

  • Contact information for beneficiaries and professional advisors

  This step alone can take time. That’s totally normal. But don’t sit around on this. You need to take action promptly.

  Understand Your Core Duties as Successor Trustee

  Many first-time Trustees are surprised to learn that good intentions are not enough. The law imposes real duties on Trustees, regardless of experience. This includes:

  • Duty to Administer: You must take up the responsibilities placed on you in a timely manner, and continue serving until the Trust terminates or someone else takes over as Trustee.

  • Collect Trust Property: One of your early responsibilities is to determine what the Trust owns and ensure those assets are properly titled and protected.

  • Duty of Loyalty: You must act in the best interests of the Beneficiaries, not yourself.

  • Duty of Impartiality: You must not favor one Beneficiary over another if there are multiple Beneficiaries of a Trust.

  • Duty of Prudence: You must manage Trust assets responsibly, which includes making appropriate investment decisions and managing risk (subject to any waivers that may be in the Trust Agreement).

  • Duty to Inform and Report: Beneficiaries are typically entitled to notice that the Trust has become irrevocable, information about their interests, and periodic accounting of Trust activity.

  State law, both court cases and statutes, describes these duties in detail. It is incumbent on you to carry out all duties the law imposes. The Trust Agreement may modify some standards, but you still must carry out your job diligently.

  Successor Trustees Should Pay Debts, Expenses, and Taxes Carefully

  

  Trust administration is not just about distributions to the Beneficiaries. You may be responsible for:

  • Funeral, burial, and other final expenses

  • Paying outstanding debts

  • Ongoing property expenses, like maintenance and insurance

  • Final income taxes for the Decedent and Trust tax filings

  Distributing assets too early, before these types of obligations are known, can expose you to personal liability.

  Distributions: Slow Is Often Smart

  Many Trusts require specific timing or conditions before the Trustee can make distributions. Others give the Trustee wide discretion in how to distribute. Either way, it is unwise to make distributions hastily. A careful Trustee:

  • Confirms all debts and taxes are addressed before any Beneficiary receives a distribution

  • Understands each Beneficiary’s interest

  • Documents decisions thoroughly

  Moving too fast is one of the most common mistakes Successor Trustees make. If there are outstanding tax or creditor issues and because of quick distribution those are not handled properly, the Trustee could be personally liable.

  You Are Allowed (and Encouraged) to Get Professional Help

  

  Serving as Trustee does not mean you must do everything alone. In fact, getting professional help is often the most responsible choice. Trustees commonly work with:

  • Trust and estate attorneys

  • CPAs

  • Financial advisors

  Reasonable professional fees are typically expenses of administration paid from the Trust’s assets. You do not need to pay these from your own pocket.

  While some Beneficiaries may push back against these professional fees, having professionals working with you protects against avoidable accusations that you did not do your job properly.

  When Trust Administration Goes Sideways

  Even well-intentioned Trustees can run into problems, especially when:

  • Beneficiaries disagree

  • Family dynamics are strained

  • The Trust’s terms are unclear

  • Business or real estate assets are involved

  But early guidance often prevents disputes that later turn into litigation. If you see things going wrong, or a Beneficiary is accusing you of wrongdoing, it’s critical to get help immediately. Failing to mitigate the damage can make things much worse.

  Final Thoughts on Serving as Successor Trustee

  If you are named as a Successor Trustee, you may not have signed up for this. Perhaps it’s a total surprise to you. But, if you’re willing to take it on, you can handle it with the right support and information.

  Trust administration is a process, not a single decision. Taking it step by step, and getting advice early can protect you, honor your loved one’s wishes, and reduce conflict along the way.

  If you’re serving, or about to serve, as a Successor Trustee of a Tennessee Trust and want clarity about your responsibilities, we can help. Contact Connell Law, PLLC to schedule a consultation and get practical guidance for your situation.

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• Why Contingent Beneficiaries Matter in Your Estate Plan

  

  When people think about estate planning, it’s common to focus on who should receive a legacy directly. This is usually spouses, children, or other loved ones. But a well-crafted estate plan goes beyond just naming “primary beneficiaries.” It also addresses what happens if those beneficiaries cannot inherit. That’s where contingent beneficiaries come in. Overlooking the…

  

  When people think about estate planning, it’s common to focus on who should receive a legacy directly. This is usually spouses, children, or other loved ones. But a well-crafted estate plan goes beyond just naming “primary beneficiaries.” It also addresses what happens if those beneficiaries cannot inherit. That’s where contingent beneficiaries come in.

  Overlooking the contingent beneficiary aspect of your estate plan can lead to delays, disputes, and unintended outcomes. Let’s walk through how contingent beneficiaries work in your estate plan and some common ways to use these designations.

  What Is a Contingent Beneficiary?

  A contingent beneficiary is someone who stands in line to inherit if a primary beneficiary cannot. This might happen if the primary beneficiary passes away before you, disclaims the inheritance, or is otherwise legally unable to receive the assets.

  For example, you may name your spouse as the primary beneficiary of your life insurance policy. But if your spouse predeceases you, the death benefit has to go somewhere. If you name your children as contingent beneficiaries, your children receive the policy proceeds if your spouse is no longer living at your death.

  Without contingent beneficiaries, the assets may end up payable to your probate estate, even if your goal was to avoid probate entirely.

  Why Contingent Beneficiaries Are Essential

  1. Preventing Probate Complications

  If there is no contingent beneficiary, and the primary beneficiary cannot inherit, the asset usually defaults back to your probate estate. That means an estate may need to be opened for you just for that asset, even if everything else has a proper place to go. Naming a backup keeps things simple and efficient.

  2. Protecting Minor Children

  Sometimes the problem is not only death, but capacity to receive an asset. For instance, a minor child cannot legally receive certain assets outright.

  Let’s say your spouse is the primary beneficiary on your life insurance and your minor child is the contingent beneficiary. If your spouse predeceases you, your child would receive the policy proceeds. But then a Guardianship Estate would be necessary to manage the payout, as a child cannot own property until becoming an adult.

  It’s far preferable to have a Trust as the contingent beneficiary in this situation. This may be a Living Trust or a Testamentary Trust. Either way, this avoids the need for a Guardianship and allows better protection and asset management for the minor child.

  3. Adapting to Life Changes

  Life rarely follows a predictable script. Divorce, remarriage, estrangement, or even tax considerations can change who should inherit. Contingent designations give your plan layers of protection, ensuring assets don’t fall into the wrong hands if circumstances change.

  It’s always wise to review your beneficiary designations consistently. Our recommendation is to check them at least once per year, but also after a major life change.

  Where You Need Them

  

  Contingent beneficiaries are relevant in more places than many people realize. They should be a part of the following aspects of your plan:

  • Life insurance policies: Primary and contingent beneficiary designations determine payout order of death benefits.

  • Retirement accounts (401(k), IRA, etc.): These also pass directly to the named beneficiaries, bypassing probate. Without a named beneficiary, your estate may be the default beneficiary. This comes with significant tax issues.

  • Payable-on-Death (POD) and Transfer-on-Death (TOD) designations: These are frequently available for bank accounts and non-retirement investment accounts.

  • Trusts and Wills: You can (and should) include alternate beneficiaries in case someone predeceases you. With Wills and Trusts, there can also be more customization for the outcome than with beneficiary designations alone.

  Naming your primary beneficiary is just step one. It’s critical to take that next step to account for the possibility that your primary beneficiary predeceases you. While rare, it does happen.

  Putting It All Together

  A solid estate plan coordinates beneficiary designations, including contingent beneficiaries, with the rest of your legal documents. Your Will, Trust, retirement accounts, and life insurance policies should all speak the same language and have a coordinated goal.

  For example, married couples often have each spouse listed as the primary beneficiary of their Wills, retirement accounts, life insurance, etc. Children may be the contingent beneficiaries. But the proper way to do this for minors is with a Trust.

  Under a Will, there can be a contingent Testamentary Trust created for the couple’s minor children. This Trust should be the contingent beneficiary for retirement accounts, life insurance, and other assets with beneficiary designations.

  In our experience, financial institutions work best with Living Trusts. So if you choose to set up a Testamentary Trust, it’s important to work closely with your financial institutions so that your designation is honored and your assets go to the Trust.

  Final Thoughts on Contingent Beneficiaries

  Naming contingent beneficiaries is one of the simplest, most effective ways to strengthen your estate plan. It protects your intentions, shields your family from unnecessary legal hurdles, and provides additional peace of mind that your wishes will be honored even if the unexpected occurs.

  For assistance with aligning your contingent beneficiary designations with the rest of your estate plan, reach out to Connell Law, PLLC to request a consultation.

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• Why You Should Never Name a Minor as a Beneficiary

  

  It may seem natural to name a child or grandchild as the beneficiary of your Will, life insurance policy, retirement account, or other assets. But naming a minor as a beneficiary is almost always the wrong choice. And when a parent or grandparent dies, it’s often too late to avoid the problems that come as…

  

  It may seem natural to name a child or grandchild as the beneficiary of your Will, life insurance policy, retirement account, or other assets. But naming a minor as a beneficiary is almost always the wrong choice. And when a parent or grandparent dies, it’s often too late to avoid the problems that come as a result.

  Let’s discuss the problems with this approach and what the better options are when you want to have a minor as your beneficiary.

  Why Not Name a Minor as Your Beneficiary?

  Minors cannot legally own property in their own names. This means that a court will have to step in to appoint someone to manage the funds until the child reaches the age of majority (18 in most states). Tennessee law calls this arrangement a Guardianship of Property.

  A Guardianship of Property requires that an adult petition the probate court to be appointed as the child’s Guardian of Property. The petitioner must describe the property known to belong to the minor and propose a property management plan. The law also requires the Guardian to file an inventory within 60 days of being appointed.

  The Guardian also has to file regular accountings with the court. Accountings document everything that has come into and gone out of the Guardianship Estate’s accounts. This can be time-consuming and expensive, especially if the child still has many years until reaching adulthood.

  This result is hardly ever what families want to have happen. But it’s what happens when there is no plan in place, or an improperly structured plan. The good news is that there are far better ways to leave assets to a child.

  The two most effective approaches are Trusts and UTMA (Uniform Transfer to Minors Act) accounts. We will discuss each of these in detail below.

  Trusts for Minors as Beneficiaries: The Preferred Option

  

  A Trust gives you significant control over how, when, and why assets are used for a child’s benefit. You appoint a Trustee to manage the funds, and you decide the rules for distributions. Trusts can cover everything from education and healthcare costs, to staged distributions in adulthood.

  Two types of Trusts we’ll discuss here are Living Trusts and Testamentary Trusts.

  Living Trusts

  A Living Trust is something you create during your lifetime. For our purposes, we will focus on Revocable Trusts, which you can change at any time while you are living.

  You can structure a Living Trust so that if you die while any Beneficiary is a minor, the Trust holds your assets for his or her benefit. This can be for your children or even for your grandchildren. The Trustee you name will step in and manage those funds according to the instructions in the Trust Instrument.

  Living Trusts are highly flexible, especially in Tennessee. Assets held in a Trust or made payable to a Trust also do not have to go through probate. This makes them an excellent option for parents who want to make sure children are provided for without needing to have the courts involved.

  Testamentary Trusts

  A Testamentary Trust is created under your Last Will & Testament. It only comes into effect after your death. The assets in your probate estate fund the Testamentary Trust. You can also have life insurance and retirement accounts made payable to a Testamentary Trust.

  While it won’t avoid probate, it still ensures that assets earmarked for a minor are managed under your chosen terms. The Trustee you name will have clear instructions about how to handle the funds until the child reaches the age you specify.

  In our experience, there can sometimes be additional hurdles with Testamentary Trusts. Especially for assets like life insurance and retirement accounts, financial institutions tend to prefer Living Trusts.

  A Living Trust, because it’s already in existence, has a specific date of creation. But a Testamentary Trust doesn’t exist yet, so it doesn’t have a date. Financial institutions usually require the date of the Trust when naming it as the beneficiary. The Will has a date, but it’s not quite the same thing.

  If a Testamentary Trust is part of your plan, you may need to have additional conversations with your financial planner and/or insurance agent to verify that your beneficiary designations are correct.

  The last thing we want to see is a large asset like life insurance going somewhere we don’t want, or having these assets stuck in limbo while your attorney works things out.

  For many families, a Testamentary Trust can be a cost-effective way to provide structure and avoid a lump-sum payout to an 18-year-old. But know that there can be some tradeoffs with this option.

  Uniform Transfers to Minors Act (UTMA)

  

  Another option is to name a Custodian under the Uniform Transfers to Minors Act (UTMA). Tennessee law allows parents, grandparents, and others to set up UTMA accounts that a Custodian manages for the benefit of the child. For estate planning, a provision in a Will can make this designation.

  The Custodian has discretion to use the funds for the child’s needs. The account terminates when the child reaches a specified age. At this point, the Custodian must pay out any balance in the account.

  In Tennessee, UTMAs can exist up to age 25 if this age is specified in the instrument. This is often desirable to give more time for the child to mature before paying the money out. The default age is normally 21 in Tennessee.

  But unlike a Trust, UTMAs are not customizable. Once the child reaches the termination age, he or she receives the entire account outright. The law mandates this even if the payout would cause harm because of addiction or financial troubles.

  UTMAs can work well for modest accounts where parents want a straightforward management option. But for larger sums, the lack of flexibility makes them less appealing than Trusts.

  Final Thoughts on Minors as Beneficiaries and Your Next Steps

  Naming a minor directly as a beneficiary almost always creates unnecessary court involvement, expenses, and risks handing a child a lump sum at 18.

  A Trust offers far more control and flexibility. But know that there will be Trust administration expenses to pay, like tax preparation fees, legal fees, and Trustee compensation. So there have to be sufficient assets in the Trust to cover these costs.

  An UTMA account can also be useful to avoid a full-on Guardianship Estate. It’s less expensive than a Trust long-term, but it lacks the customization and safeguards of a Trust.

  At Connell Law, we help families choose the right tools to protect their children’s futures and create plans that align with your values. We can also assist families dealing with the challenges of handling an estate where a minor is a beneficiary.

  Contact us today to schedule a consultation and start building the plan that’s right for your family.

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• What are the Tax Consequences of a Revocable Trust?

  

  The Revocable Trust is a powerful estate planning tool. The flexibility that this type of instrument offers your family is tremendous, especially in Tennessee. But many people misunderstand the tax consequences of a Revocable Trust, both during life and after death. We’re going to discuss some highlights about the tax treatment of Revocable Trusts, both…

  

  The Revocable Trust is a powerful estate planning tool. The flexibility that this type of instrument offers your family is tremendous, especially in Tennessee. But many people misunderstand the tax consequences of a Revocable Trust, both during life and after death.

  We’re going to discuss some highlights about the tax treatment of Revocable Trusts, both during life and at death. Whether you’re creating a Trust or are a Trustee yourself, these basics can help you avoid tax surprises.

  Income Tax Treatment for Revocable Trusts

  The IRS treats a Revocable Trust as a “Grantor Trust” for federal income tax purposes. That means the IRS ignores the existence of the Trust while the Grantor (or Settlor) is alive.

  All income and deductions flow through to the Settlor’s personal tax return. No separate EIN or a Trust tax return is necessary while the Trust remains revocable. The Settlor’s Social Security Number is the Trust’s tax identification number during his or her lifetime.

  Let’s say you have a non-retirement investment account. Retitling the account to your Trust does not cause any realization of capital gains or change the reporting. You are still the owner for tax purposes. If you sell any stock after that, the gains or losses simply go to your tax return as if the Trust didn’t exist.

  This makes administration of a Revocable Trust pretty simple while the Settlor is alive.

  Gift Tax Implications

  

  Like with income taxes, there are also no gift tax consequences when you transfer assets into a Revocable Trust. That’s because the Settlor retains full control of the Trust’s assets.

  Since the Trust is still revocable, the IRS does not consider the transfer to be what’s called a completed gift. When someone fully relinquishes control over an asset to another person, that’s a completed gift for tax purposes.

  If the amount of the gift to a non-spouse exceeds the annual exclusion ($19,000 in 2025), there is either gift tax due, or the donor must file a gift tax return to use some of the lifetime credit against estate and gift taxes.

  But because the Settlor of a Revocable Trust can change any aspect of the Trust, including the distribution plan, there isn’t any giving up control of those assets.

  Not to mention the fact that, most of the time, the Settlor will also serve as Trustee while living. But even if there is someone else serving as Trustee, if the Trust is revocable, there is no complete gift.

  There is an important nuance for married couples creating a Joint Trust. These couples should retain the right to withdraw their respective contributions at any time without the consent of the other Settlor. Each may also retain what’s called a general power of appointment over their respective Trust shares.

  Without these provisions, their contributions could be completed gifts. This could cause a loss of the step up in tax basis.

  Estate Tax Inclusion of Assets in a Revocable Trust

  Many people assume that assets in a Revocable Trust avoid estate tax. But that’s not true.

  For federal estate tax purposes, assets in a Revocable Trust are in the Settlor’s gross estate under the tax code sections 2036 and 2038. This is so because the Settlor keeps control over the Trust’s assets and can revoke the Trust at any time.

  Some provisions in a Revocable Trust can take advantage of available deductions from estate tax. But the existence of the Trust itself does not prevent imposition of estate tax on assets in the Trust.

  Fortunately, few people are subject to the estate tax these days. The exemption level in 2025 is $13.99 million per person. In 2026, that exemption will go up to $15 million per person thanks to the passage of the “One Big Beautiful Bill Act.” The IRS will index this exemption amount for inflation starting in 2027.

  Step Up in Basis at Death

  

  One important tax benefit of a Revocable Trust is that it doesn’t interfere with the step up in basis at death.

  When the Settlor dies, assets in the Trust generally receive a new cost basis equal to their fair market value on the date of death. This can eliminate capital gains tax on built-in appreciation for assets like real estate, businesses, and stocks.

  Let’s say you own your primary residence and place it into your Trust. At your death, the house’s tax basis is adjusted up to the house’s fair market value. The step up applies regardless of whether the asset passes through probate or a Revocable Trust.

  The step up applies to assets in a Revocable Trust because of what we discussed in the prior section. When an asset is in a person’s gross estate for tax purposes, that asset will generally get a step up in basis.

  This can be a two-edged sword for those with taxable estates, as estate tax can be an issue. But that’s very few people these days.

  Post-Death Tax Treatment for Revocable Trusts

  After the Settlor of a Revocable Trust dies, the Trust becomes irrevocable. At this point, the Trust needs a new tax identification number. The new Trustee generally must file a tax return for the Trust each year of its existence after it becomes irrevocable.

  A Revocable Trust that has become irrevocable is its own taxpayer. When it comes to filing Trust tax returns, tax brackets are compressed compared to individuals. The highest marginal rate of 37% starts at merely $15,650 of Trust income in 2025.

  But, Trusts have what’s called a Distributable Net Income deduction. This allows the Trustee to distribute income to the Beneficiaries of the Trust and reduce what is taxable to the Trust. The Beneficiaries are then taxed on this amount based on their tax brackets, which are almost always lower than the Trust’s brackets.

  Trust administration is more complex once the Trust is irrevocable. So it’s important for Successor Trustees to work with professionals who understand Trust accounting and fiduciary duties.

  Closing Thoughts on Tax Consequences of Revocable Trusts

  

  Trusts are an excellent vehicle to accomplish a variety of goals. Though they are not for everyone, many types of people can benefit from having a Trust, including small business owners and parents of minor children. We’ve written at length about Trusts in other articles on our Resources page.

  Before setting up a Revocable Trust, you should understand the basics of the tax implications. Thankfully they are minimal during your lifetime. But things become much more complex once your Trust becomes irrevocable. Which is why who you choose to carry out your plan is almost as important as what you choose to do.

  At Connell Law, PLLC, we help Tennessee families create and manage their Revocable Trusts with confidence. If you’re wondering whether a Revocable Trust is right for you, contact our office today to request a consultation.

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• What is the Step Up in Basis and How Does it Work?

  

  When someone passes away, one of the most important tax rules that comes into play is something called the “step up in basis.” While the tax code is quite complex, this topic is actually pretty straightforward. And it’s great news for a Decedent’s Beneficiaries. Let’s break down what the step up in basis is and…

  

  When someone passes away, one of the most important tax rules that comes into play is something called the “step up in basis.” While the tax code is quite complex, this topic is actually pretty straightforward. And it’s great news for a Decedent’s Beneficiaries.

  Let’s break down what the step up in basis is and how it works. We’ll also discuss some assets that the step up does not apply to. If you’re the Executor of a loved one’s Estate, a Successor Trustee, or just curious about the tax effects of your legacy, this article is for you.

  Defining the Step Up in Basis

  In simple terms, the step up in basis is a tax adjustment to the fair market value of certain assets when the owner dies. This is thanks to Internal Revenue Code § 1014. When someone owns an asset for many years, it will generally appreciate. This is especially so for assets like real estate here in Middle Tennessee.

  The step up applies to “capital assets.” Most assets we own are capital assets, unless the tax code specifically excludes something. We’ll discuss some of these exceptions later.

  The asset’s “basis” for tax purposes is generally what the Decedent paid for it. There can also be adjustments for improvements or investments made into the asset. But we won’t go into all those nuances here.

  Normally, when the owner of a capital asset (such as a house, stock, or a business) sells it, capital gains tax applies to the difference between the purchase price and the sale price. This assumes, of course, there is a gain from the sale.

  But upon the owner’s death, the tax code allows the basis of capital assets to receive a “step up” to the fair market value as of the date of death. This adjustment significantly reduces capital gains taxes for the Decedent’s Beneficiaries. In many cases, the step up completely wipes out taxable gain.

  Example: Step Up for The Family Home

  

  Let’s say your father bought his primary residence in Murfreesboro for $100,000 in 1995. The house is now worth $750,000.

  If he sold the house now, he would have a capital gain of $650,000. While a special tax provision excludes $250,000 of that gain, the remaining $400,000 is subject to capital gains tax.

  But let’s say you inherit the home after he passes away. You then sell it shortly after for $750,000. In this case, you won’t owe any capital gains tax. That’s because your basis “stepped up” to the date-of-death value, which was $750,000.

  Without the step up, you’d be taxed on $650,000 of gain. With the step up, the gain is zero.

  Step Up in Basis for a Brokerage Investment Account

  Here’s another example. Suppose your mother has a taxable investment account holding various shares of stock. She paid $50,000 total for those shares over the years. The account is now worth a total of $250,000.

  If she sells all of the stock during her lifetime, she would have capital gain of $200,000 and a hefty tax bill to pay.

  But let’s say she holds onto it and gives it to you through a transfer-on-death beneficiary designation. Your tax basis in the brokerage account is whatever the value of the account was on the date of her death. All of the stocks held get “stepped up” to their publicly listed price on that day.

  So if you sell the investments a few months later, and the value of the account is $260,000, your capital gain is only $10,000. Without the step up in basis, you would have capital gain of $210,000.

  Assets That Do Not Get a Step Up in Basis

  

  It’s important to know that not everything qualifies for the step up in basis. Here are some common assets that do not receive this tax benefit:

  • 401(k) and other employer-sponsored retirement plans
  • Traditional IRAs
  • Roth IRAs (they grow tax-free, but don’t receive a step up)
  • Annuities
  • Cash or bank accounts (there’s no gain to adjust)

  The tax code categorizes retirement accounts, like the 401(k) and Traditional IRA, as income in respect of a decedent (IRD). Distributions from these assets are ordinary income to the Beneficiary and are subject to ordinary income taxes.

  So while a house or share of stock gets a favorable capital gains adjustment, a Traditional 401(k) or IRA is fully taxable when withdrawn. This is the case even though the retirement accounts can hold the exact same investments as a brokerage account.

  How This Fits Into Probate and Trust Administration

  During probate and trust administration, it’s essential to identify which assets receive a step up in basis and which do not. This helps the Executor or Trustee to:

  • Accurately report asset values for tax purposes
  • Avoid unnecessary capital gains taxes on inherited assets
  • Account for income taxes that may be due from IRD assets
  • Provide correct basis information to the Beneficiaries

  Failing to track tax basis properly can lead to costly tax consequences or disputes later on.

  We’re Here to Assist

  If you’ve recently lost a loved one, you’re likely dealing with a lot—grief, legal paperwork, financial decisions, and more. We can help lighten the load.

  Understanding how the step up in basis works is just one part of navigating probate and estate administration correctly. At Connell Law, PLLC we guide families in through every step of the process with clarity and care.

  Request a free consultation with us today to get proper guidance on carrying out your loved one’s wishes.

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• What Happens to Debt After You Die?

  

  If you’ve recently lost a loved one, your grieving family is likely being hit with more than just sorrow. You may also be bombarded with bills, creditor calls, and legal paperwork. A common fear, if you don’t know about what happens to debt after you die, is that family will get stuck with the debt.…

  

  If you’ve recently lost a loved one, your grieving family is likely being hit with more than just sorrow. You may also be bombarded with bills, creditor calls, and legal paperwork. A common fear, if you don’t know about what happens to debt after you die, is that family will get stuck with the debt.

  The good news? A deceased person’s personal debt doesn’t automatically transfer to family members or other Beneficiaries. But that doesn’t mean it just disappears.

  Let’s walk through what really happens to debt after you die, and what steps the Personal Representative of a probate Estate must take.

  Debt after Death: Secured vs. Unsecured

  You may have received bills in the mail that the Decedent had at the time he or she died. This can include credit cards, personal loans, auto loans, and a mortgage.

  One of the first things to do is to determine if the debt is secured or unsecured.

  Secured debts have some asset attached to the amount. The two most commons types in our everyday lives are auto loans and mortgages. For these debts, the debt will stay with the asset until it’s paid off. There is also a significant risk of repossession is payments are not timely made.

  Some secured creditors will work with the Personal Representative of a Decedent’s Estate. But they won’t wait forever. With secured debts, action is needed fairly quickly to prevent foreclosure.

  For unsecured debts, these creditors must file a formal claim against the Decedent’s Estate. This will include things like credit cards, personal loans, and medical bills. There is generally not the same urgency for unsecured debts as there is for secured debts, since there is no underlying asset to repossess.

  For our purposes, we will focus on unsecured debts.

  Who Owes the Debt After You Die?

  

  Unlike assets, liabilities can’t be given to someone at death. So if a parent passes away and the other parent is widowed, the survivor is generally not liable for the balance on the account. The exception would be if he or she was a joint account owner.

  At the time of death, the Decedent still technically owes the debt. But the responsibility to pay belongs to his or her Estate, not surviving family members.

  Creditors need to have a chance to get paid for outstanding balances. Each state has a Notice to Creditors period during which they must file a claim in order to be paid. This is where the debt gets resolved after you die.

  Creditor Claims

  In Tennessee, the Notice to Creditors period is four months from the date of the first publication of the Notice. This Notice runs in a newspaper of local circulation for two weeks. The Personal Representative of the Estate must send a copy of the Notice to Creditors to those whom he or she knows the Decedent may have owed money.

  A claim against the Estate is a formal legal pleading. This means the Creditor must provide sufficient details what is owed and prove the claim. The Clerk of the Court sends a copy of the claim to the Personal Representative so that he or she can then assess the claim’s validity.

  The Personal Representative must handle the Estate’s debts before distributing to the Beneficiaries. Once this is done, then the terms of the Decedent’s Last Will & Testament govern distribution, or the laws of intestate succession if there was no Will.

  What Happens if a Debt is in Dispute?

  

  It’s common that claims against the Estate are disputed. This can be for a number of reasons. The account may have been paid off before the Decedent died. Or the Personal Representative doesn’t have knowledge about the claim. Or the contract on which the debt is based is not legally valid.

  The typical practice is for the Personal Representative’s legal counsel to file what’s called an exception to the claim. The exception is a formal dispute of the claim and can be based on a variety of different grounds.

  If the Personal Representative has an exception filed, the Court will then hold a hearing on the exception. Quite frequently, the Creditor doesn’t even show up to the hearing. And even if they do, they often cannot provide sufficient proof to validate the debt.

  In such situations, the Court would deny the claim. This could save the Beneficiaries of the Estate a lot of money, depending on the size of the claim. With savvy legal counsel, outstanding debts still owed after you die don’t have to eat away at your legacy.

  Tips for Dealing with a Decedent’s Debts

  If you’re receiving piles of bills, don’t just rush to pay them yourself. This may make things unnecessarily messy. Rather, assess whether the bills are for secured debts or unsecured debts first.

  And for certain secured debts, like a mortgage, it’s especially important to determine if the house will be in the Estate at all. If the house is not a probate asset, the Estate cannot make those payments. This is a common error that many people make and will be discussed in a future article.

  Some debts, like a car payment or a house payment, may need to be paid even before the Estate is open. In such case, keep detailed records of any payment you’ve made. These payments would be reimbursable to you from the Estate.

  But we want to minimize this as much as we can. This is why retaining legal counsel promptly will help you handle these debts properly. If you’re not sure what to do, get professional advice immediately.

  Closing Thoughts on Handling Debts After You Die

  Dealing with a loved one’s debt after death can be stressful. But that doesn’t mean you need to start throwing money at these bills right away. It can often be best to get the Estate opened quickly so that the Estate will be the responsible party for the amount.

  Connell Law, PLLC assists with probate in Rutherford County and the surrounding area. If you recently have lost a loved one who lived in this region, we can help guide you through the process and handling his or her Estate.

  And if there is a substantial amount of debt, we will advocate on your behalf so that Creditors will have to prove the validity of their claims.

  Reach out to us today to request a consultation.

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• Estate Planning Tips: 3 Strategies to Help Things Go Smoothly

  

  Odds are you’re reading this because you’ve been searching for some estate planning tips. We’re glad you’re here and are thinking carefully about this critical topic. This article isn’t really going to discuss the law, though. We’re going to focus on some non-legal strategies for your legacy planning. Setting up your estate plan is an…

  

  Odds are you’re reading this because you’ve been searching for some estate planning tips. We’re glad you’re here and are thinking carefully about this critical topic. This article isn’t really going to discuss the law, though. We’re going to focus on some non-legal strategies for your legacy planning.

  Setting up your estate plan is an investment—not just of money, but also of time. Everyone wants to see the investment pay off. That means having all of your bases covered with proper legal documents. This includes your Will and/or Trust, Power of Attorney for Property, Power of Attorney for Healthcare, and Living Will.

  But your legal documents are not the entire story. Just as important are the people involved (your Fiduciaries) and how you help them carry out your wishes. And that isn’t something the law can provide guidance for.

  Let’s discuss a few non-legal estate planning tips that will help your plan go smoothly. By implementing even one of these three, a lot of hassle can be avoided.

  1. Choose Reliable & Trustworthy Fiduciaries

  One of the most overlooked estate planning tips is about who you involve in the plan. Many people think about whether they need a Will or a Trust, what their Powers of Attorney should look like, and what their wishes are on artificial life support.

  But what if who you pick to act on your behalf can’t, or won’t, carry out your wishes?

  The best plan in the world can fall apart if the wrong people are in charge. Executors, Trustees, and Agents with Power of Attorney aren’t just figureheads. They’re making real decisions, and they have serious legal responsibility.

  Pick people who are responsible, organized, and able to follow your instructions. Bonus points if they have a cool head in a crisis. A strong sense of duty beats “good at Monopoly” every time.

  For example, let’s say your oldest child is a brilliant and successful artist. But she tends to misplace her car keys weekly and lives paycheck to paycheck, no matter how much she earns. She might not be the best choice to manage your financial affairs.

  On the other hand, you have a close friend who runs a successful small business. She diligently plans for her business and has experience making tough calls under pressure. Your friend would be a strong candidate to serve as your Executor or Agent with a Power of Attorney for Property.

  It’s also wise to name Alternates. Life happens, and your first choice may be unable or unwilling to serve when the time comes. Not a situation we want to deal with.

  Think through not just who you trust today, but also who is likely to be available and capable in the coming years.

  2. Share Your Plan with Your Fiduciaries

  

  Imagine being dropped into a plane’s cockpit and told to fly the plane with no instructions. Or let’s say there are instructions available, but no one knows where they are.

  That’s what it’s like for Fiduciaries who have no idea what you planned. But since you’re here looking for estate planning tips already, odds are you know this and want to avoid the problem.

  Once you’ve picked your team, tell them the basics: where your legal documents are, what their job will be, and who to call for help.

  You don’t need to hand over every bank statement, password, and answer to your secret questions. But you need to give them a roadmap of where to find things when they need to. The alternative is guesswork when the time comes. And this is not the time anyone wants to be guessing.

  For example, talk to you Agent with a Power of Attorney for Healthcare about what your medical preferences are, especially for end-of-life care. This includes whether you want all possible measures taken to keep you alive regardless of possibility of recovery, or if you prefer comfort care only if the odds are low.

  End-of-life care wishes should also be spelled out in your Living Will, which will address artificial life support. Your Healthcare Agent needs to have a copy of this document.

  Tell your Executor where you keep your original Last Will & Testament, as well as how to access it. You should also tell him or her who your attorney is.

  If you’ve set up a Trust, make sure your Successor Trustee knows the content of the Trust instrument and what their role looks like. Your Successor Trustee should also have a copy of the Trust instrument on-hand, ready to go.

  You don’t need to go into deep legal theory. Just plain-English conversations work best.

  “Here’s the binder where everything’s kept. If anything happens to me, call my lawyer at Connell Law, PLLC and he’ll help you through it.”

  A simple conversation like that can save your loved ones a lot of panic and confusion. In extreme circumstances, it could even help prevent a Will contest.

  3. Keep an Organized List of Key Information

  Your Fiduciaries can’t do their job if they can’t find anything.

  Keep an updated list of your important information: assets, beneficiary designations, liabilities, key contacts, and locations of documents. Think of this as giving them a map to find exactly where they need to go.

  Include things like:

  • Bank accounts, retirement accounts, and life insurance policies
  • Credit cards and any outstanding debts
  • Safe deposit box locations and keys
  • A list of real estate, vehicles, or other titled property
  • Names and contact info for your attorney, CPA, financial advisor, and insurance agent
  • People you want contacted and informed after you’ve passed away

  Here’s a super important estate planning tip about crypto-assets. It does your Executor or Trustee no good to know that you own Bitcoin, XRP, Cardano, etc. if they have no idea where it is. You need to indicate if these assets are held on an exchange, like Coinbase, or on cold storage, like a USB drive.

  You also have to tell your Executor or Trustee how to access the asset, or else it may be lost forever.

  Review this information at least once a year. Set a dedicate time of year to do it, like right after tax season or around your birthday. Do this consistently, and let your Fiduciaries know if you make significant changes. Life moves fast, and outdated information is almost as bad as no information at all.

  Final Thoughts on Estate Planning Tips for Smooth Transitions

  

  Estate planning isn’t just about what you put on paper. It’s about setting up real people to succeed when life gets messy. That’s why we published these three estate planning tips that focus on the non-legal aspects of your plan.

  Taking a little extra time now can spare your loved ones from stress, confusion, and costly mistakes down the road.

  Plus, you get bonus points for being the family member who had it all together.

  Choose wisely, communicate clearly, and stay organized. Your future self—and your family—will thank you.

  Connell Law, PLLC provides estate planning in Rutherford County, Tennessee and the surrounding area. We also provide our clients with fillable resources and checklists to help with efficient administration.

  To request a consultation, reach out to us today.

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• You’re an Agent with a Power of Attorney—Now What?

  

  Being named as an Agent under a Power of Attorney (POA) is both an honor and a significant responsibility. Whether you’ve been appointed to manage someone’s financial affairs, healthcare decisions, or both, it’s essential to understand your duties and the scope of your authority. If a family member or friend has named you as their…

  

  Being named as an Agent under a Power of Attorney (POA) is both an honor and a significant responsibility. Whether you’ve been appointed to manage someone’s financial affairs, healthcare decisions, or both, it’s essential to understand your duties and the scope of your authority.

  If a family member or friend has named you as their Agent, this article is for you. Let’s walk through what you need to know so that you can carry out your duties properly.

  Who’s Who?

  Before diving in, let’s get our terminology squared away.

  A Power of Attorney is an agency relationship. There are two parties in this relationship: Agent and Principal.

  The Agent, also known as an attorney-in-fact, is someone to whom another person delegates certain responsibilities.

  The Principal is the one who delegates responsibilities to the Agent.

  There are typically two types of Powers of Attorney: Property and Healthcare. These documents are important for all adults to have, regardless of age.

  A Fiduciary Responsibility: What It Means and Why It Matters

  

  As an Agent under any type of Power of Attorney, you hold what’s called a fiduciary duty. This means you are legally obligated to act in the best interests of the person who appointed you as their Agent.  

  Adhering to your fiduciary duties means that you will act in the following manner:

  • Loyally. You must prioritize the Principal’s interests above your own and not use the position to your own benefit.
  • Carefully. You must act prudently and make thoughtful, informed decisions based on what you know the Principal’s wishes and values are.
  • Honestly. You must keep the Principal fully informed and avoiding conflicts of interest.
  • Accountably. You must maintain accurate records of all transactions and decisions that you make on the Principal’s behalf.

  Other types of fiduciary positions include Executor and Trustee. Executors handle probate estates and Trustees handle Trusts.

  Your attorney is also a fiduciary, meaning that he or she must advise you according to what is in your best interests, not the attorney’s interests.

  Failing to meet these standards can result in legal liability. So it’s crucial to take the role seriously.

  Acting as Agent Under a Power of Attorney for Property

  If you’ve been appointed under a Power of Attorney for Property, your responsibilities may include:

  • Managing Bank Accounts. This includes paying the Principal’s bills, depositing checks, and overseeing financial transactions.
  • Handling Investments. You may need to manage stocks, bonds, and other assets in a way that aligns with the Principal’s investment strategy and risk tolerance.
  • Real Estate Management. If the Principal owns real estate, you need to maintain the property as instructed in the POA document, including making mortgage, insurance, and tax payments.
  • Filing Taxes. If the Principal cannot act on his or her own, you may have to step in and file returns correctly and on time.
  • Keeping Records. Documenting all financial decisions and maintaining receipts, statements, and correspondence.
  • Handling Legal Matters. A thoroughly drafted POA may also include authority to handle claims and litigation on the Principal’s behalf.
  • Operating a Business. If the Principal owns a business, you may have to step in an manage the business if he or she is incapacitated.

  It’s important to carefully review the Power of Attorney document to understand the scope of your authority and any limitations.

  If the document states that the Agent cannot take a certain action and you do, you could be personally responsible for fixing the situation.

  Acting as Agent Under a Power of Attorney for Healthcare

  

  When acting under a Power of Attorney for Healthcare, your duties focus on the Principal’s medical care and well-being. These responsibilities can include:

  • Making Medical Decisions. You may need to consent to or refuse certain types of treatment based on the Principal’s wishes.
  • Communicating with Healthcare Providers. As Agent, you also need to communicate with doctors, nurses, and other providers about the Principal’s health situation and available treatment options.
  • Accessing Medical Records. Especially in complex situations, you may have to obtain medical records for other providers as part of the course of treatment.
  • Deciding on Long-Term Care. If the Principal is elderly and unable to care for him or herself, you may have to assist with selection of nursing home, assisted living facility, or home care arrangements.
  • End-of-Life Decisions. If the Principal is in permanent vegetative state, you could have to carry out the decisions laid out in the Principal’s Living Will or Advance Healthcare Directive.

  Just like with a POA for Property, it’s essential to follow the instructions laid out in the document and always act in the Principal’s best interest.

  It behooves you to have a conversation with the Principal now to make sure you understand his or her values well before you may need to act.

  What to Do Now

  Now that you have an idea of what your responsibilities are, this is where it’s important to review the Power of Attorney document carefully.

  If you don’t have one already, get a copy of the POA document. Not having a copy of the document is a common error with POAs. A POA does no good if you as the Agent do not have a copy of the document on hand.

  Ask the Principal to send you a complete copy of the POA document. We advise at least having a version in PDF format, but a hard copy can also be good as long as you keep it in a secure place.

  Read through all the provisions. See what powers the Principal granted to you, and what any limitations are. Also determine if the POA is effective immediately, or if it only comes into effect upon certain conditions being met.

  The bottom line is to do your research ahead of time and ask questions of the Principal while he or she can still answer them.

  Legal Guidance for Agents

  Serving as an Agent under a Power of Attorney can be complex and sometimes overwhelming. Especially if you’re suddenly thrust into a situation where you have to act. But whether you’re managing finances, healthcare, or both, you don’t have to navigate it alone.

  Connell Law is here to help you understand your role, avoid common pitfalls, and carry out your duties with confidence. We prepare Powers of Attorney, but can also provide you with guidance on how to do the job well.  

  We primarily serve Rutherford County and the surrounding area with estate planning, probate, and small business legal services. Reach out to us today to request a consultation.

  Request a Consultation

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• Leaving an Inheritance to Grandchildren: What You Need to Know

  

  Proverbs 13:22 says, “A good man leaves an inheritance to his children’s children.” This timeless wisdom encourages us to think generationally about wealth. But the Scripture doesn’t instruct us on how to leave an inheritance to grandchildren under American federal and state law. The legal realities of passing assets to minor grandchildren require careful planning…

  

  Proverbs 13:22 says, “A good man leaves an inheritance to his children’s children.” This timeless wisdom encourages us to think generationally about wealth. But the Scripture doesn’t instruct us on how to leave an inheritance to grandchildren under American federal and state law.

  The legal realities of passing assets to minor grandchildren require careful planning to ensure proper management of the inheritance. Let’s walk through some of the contours of leaving an inheritance to your grandchildren and options you have to make it happen.  

  Leaving Inheritance Directly to Minor Grandchildren is Problematic

  One of the fundamental challenges of leaving an inheritance to minor grandchildren is that they cannot legally own property in their own names. If a grandparent leaves assets directly to a minor, a court will likely have to appoint a Guardian over the child’s property to manage those assets until reaching adulthood.

  While this arrangement ensures oversight, it has some significant drawbacks.

  First, the court will monitor the Guardian’s management of the funds, which can involve ongoing reporting and legal expenses. The Guardian also likely has a lot of constraints on how he or she can manage funds for the child.

  Second, once the child turns 18, he or she gains full control of the inheritance. There is no discretion to withhold these assets, even if distributing will harm him or her because of an addiction or inability to manage the funds. Suddenly giving a large amount of money to an 18-year-old is asking for trouble.

  Rather than defaulting to court-appointed Guardianship, grandparents should consider one of the two following options: a Trust, or a Uniform Transfer to Minors Act (UTMA) account.

  Trusts Can Hold an Inheritance for Grandchildren

  

  The optimal way to leave an inheritance to a minor grandchild is through a Trust. A grandparent may create either a Living Trust, or a Testamentary Trust in a Last Will & Testament. The Trust document names a Trustee to manage the assets on behalf of the grandchild.

  Some key advantages of a Trust include:

  • The grandparent can specify the Trust’s purposes (e.g., for education, medical expenses, or other needs).
  • The Trust can distribute funds gradually rather than as a lump sum at age 18.
  • The grandparent can designate an age (or stages) at which the grandchild receives full control over the assets.
  • The Trust can protect the inheritance from creditors, lawsuits, or even the grandchild’s own poor financial decisions.

  This option provides the most effective management of an inheritance and ensures that a grandchild benefits from the funds in a responsible manner.

  There can even be provisions addressing a situation where the grandchild cannot handle the inheritance. The Trustee would manage the assets until such a time, as directed in the Trust instrument.

  There are also some downsides with a Trust that ought to be considered.

  • Trusts, once they become irrevocable, must file their own tax returns. Tax rates on Trusts are also quite high, hitting 37% at $16,000 of income in 2026.
  • Administrative expenses, like Trustee fees, can add up over time. The Trust must have enough funds for it to make sense. A Trust with $25,000 is likely uneconomical.
  • If an untrained individual is the Trustee, there is a fairly high chance the Trust will be mismanaged, leading to loss of funds.

  So while a Trust is highly flexible, it has to make financial sense to set it up. If there are not enough assets for a Trust, then an UTMA may be preferable.

  UTMA Accounts Are Less Effective, But Can Still Be Useful

  A Uniform Transfers to Minors Act (UTMA) account allows a grandparent to name a Custodian to manage funds for a minor grandchild until the child reaches a designated age. In Tennessee, the grandparent can specify that the child will receive full control of the funds at age 18, 21, or even 25.

  Key advantages of an UTMA account include:

  • It is simple to set up and most financial institutions have established procedures for these accounts.
  • The Custodian manages the funds without court oversight, and may invest them over long periods.
  • The Custodian can use the funds for a variety of purposes even while the grandchild is still a minor.
  • Assets in an UTMA are subject to lower tax rates, as the minor child’s tax rates apply.

  But the UTMA has notable limitations compared to a Trust:

  • The grandparent has less say in the funds’ use.
  • The funds become the grandchild’s outright at the designated age, regardless of whether he or she is able to handle the inheritance.
  • UTMA accounts do not offer the same creditor and legal protections that a Trust provides. This may even jeopardize financial aid for higher education that would otherwise be available if the funds were in a Trust.

  Generation Skipping Transfer Tax

  Important to note is that an inheritance to your grandchildren may be subject to an additional layer of tax on top of the federal estate tax.

  Generation skipping transfers (GST) are those that intentionally bypass one generation for the next generation below. That would be your grandchildren (or even great-grandchildren). These transfers are subject to the top rate of estate taxation, which is currently 40%.

  The good news is that there is a significant exemption level before this tax comes into play. As of January 1, 2026, the exemption level for both estate tax and generation-skipping transfer tax is $15 million per person. This means very few people need to worry about liability for either tax.

  If estate taxes may be a consideration in your estate plan, it’s important to also think about the GST tax and if it may apply.

  Plan Ahead for a Secure Legacy

  

  Leaving an inheritance to your grandchildren is a wonderful way to provide for their future. But it requires careful planning to ensure proper management of the funds. The last thing we want to see is something that you intended to be a blessing turn into a burden, or for someone to mismanage it.

  The key is to create your own plan instead of relying on the government’s plan. Our philosophy is that you know your family and legacy best, not the General Assembly or Congress. But it’s up to you to take the actions necessary to put your plan into action.
  
  Connell Law, PLLC assists residents of Rutherford County and the surrounding area with estate planning. Contact our office to request a consultation. Plan today for a more peaceful tomorrow.

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• Putting Your House in a Trust? Call Your Insurance Agent Now

  

  When creating an estate plan with a Living Trust, a house is typically one of the main assets the Trust will hold. Placing your house in a Trust requires signing a new deed from the current individual owner(s) to the Living Trust. But signing and recording the deed is not the end. There is additional…

  

  When creating an estate plan with a Living Trust, a house is typically one of the main assets the Trust will hold. Placing your house in a Trust requires signing a new deed from the current individual owner(s) to the Living Trust. But signing and recording the deed is not the end. There is additional work so that the house remains legally protected against loss.

  Many homeowners overlook a vital follow-up task: updating the homeowner’s insurance policy to reflect the change in ownership. Failing to make this adjustment can lead to significant problems down the road.

  Let’s discuss the steps to fund your Trust with real estate, and the importance of making updates to homeowner’s insurance.

  Why is an Update Required When Placing a House into a Trust?

  Living Trusts frequently hold real estate, whether it’s a primary residence or a rental property. Let’s say our client, Joe Smith, owns primary residence. It’s titled solely in his name right now.

  He then works with his attorney to set up a comprehensive estate plan that includes a Living Trust. When he executed the Trust agreement, he also signed a new deed placing his house into the Trust.

  The new deed as recorded may read one of two ways:

  • Joe Smith Living Trust, or
  • Joe Smith as Trustee for the Joe Smith Living Trust

  Either way, the form of ownership has changed. Instead of individual ownership, this is now Trust ownership.

  Because of this new ownership structure, insurance companies want to verify that there is no discrepancy between the insured person/people and the owner of record. This is where you need to take action.

  Contact Your Insurance Agent Promptly to Make the Update

  

  After signing the Trust paperwork and the new deed, the next thing you should do is contact your homeowner’s insurance agent. Let them know that your home is now owned by a Trust and that you need to update your policy.
  
  In most cases, the insurance company will add the Trust as an additional insured. This step ensures that the Trust, as the new legal owner of the property, is protected by the insurance policy in addition to you individually. This generally will not affect your premiums as long as the nature of the home’s use has not changed.

  Each insurance carrier may have specific requirements for making this change. Follow your carrier’s instructions carefully and without delay.

  Consequences of Failing to Update After Placing Your House in a Trust

  When you place your house into a Living Trust, the Trust becomes the legal owner of the property. If your insurance policy still lists you as the owner, there will be a discrepancy between title records and who the policy covers. This could lead the insurance company to deny an otherwise valid claim.

  For example, if your home suffers damage due to a fire, the insurance company may deny a claim because the named insured (you) no longer matches the property owner (the Trust). This could leave you without coverage and responsible for the full cost of repairs.

  Beyond a possible claim denial, an outdated policy can also create confusion and delays in trust administration.

  The purpose of establishing a Living Trust is to simplify the transfer of assets and reduce the likelihood of disputes. But failing to align the insurance policy with the Trust’s ownership can undermine these goals.

  Will the Lender Take Any Actions After Placing the House into a Trust?

  If you still have a mortgage on your house (or more precisely, a note secured by a deed of trust), you may wonder if there is any risk of the lender taking adverse actions.

  Federal law prohibits the lender from accelerating the balance on your mortgage if you place the house into a Living Trust. As long as you are an occupant of the house, you can still keep making payments just as you previously have been. You can read more about this topic here.

  Final Comments on Homeowner’s Insurance and Having Your House in a Trust

  Take the time to update your homeowner’s insurance policy after placing your home in a Living Trust. It’s a simple yet vital step in safeguarding your assets.

  By ensuring that the Trust is properly listed as an insured on the policy, you can avoid claim denials due to administrative oversights that are easily avoidable.

  Connell Law, PLLC guides our clients through the process of retitling assets to their Living Trust, as well as the steps needed after signing estate planning documents. Reach out to us today to request a free consultation.

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• Breach of Trust: What It Is and How to Address It

  

  When someone creates a Trust, there is also a Trustee who must take charge. The Trustee is the person or entity that manages the assets in the Trust on behalf of the Beneficiaries. Most of the time Trustees do their jobs well. But sometimes they don’t. The failures may be so bad that they constitute…

  

  When someone creates a Trust, there is also a Trustee who must take charge. The Trustee is the person or entity that manages the assets in the Trust on behalf of the Beneficiaries. Most of the time Trustees do their jobs well. But sometimes they don’t. The failures may be so bad that they constitute a breach of trust.

  A breach of trust occurs when a Trustee fails to fulfill the legal duties imposed on the role. It’s a specific type of breach of fiduciary duty.

  Understanding these duties, recognizing breaches, and knowing the remedies available can help Beneficiaries protect their interests and ensure Trustees properly carry out their responsibilities.

  Duties of a Trustee

  Under the Tennessee Uniform Trust Code, Trustees owe fiduciary duties to the Beneficiaries. These duties exist to safeguard the Trust’s assets and ensure that the Trustee serves the Beneficiaries’ best interests.

  The duties of a Trustee primarily include:

  • Duty of Prudent Administration: Managing the Trust’s property with care, skill, and diligence, consistent with the Tennessee Uniform Prudent Investor Act (which requires investing Trust assets in a reasonable manner).
  • Duty of Loyalty: Acting solely in the Beneficiaries’ best interests, and avoiding conflicts of interest with the Trustee’s own interests or with others.
  • Duty to Inform and Report: Keeping the Beneficiaries informed about the Trust’s administration and providing them with regular updates about the Trust’s assets.
  • Duty of Impartiality: Treating all Beneficiaries fairly and without favoritism.

  The Trustee must also follow the terms set out in the Trust. Each Trust can have a variety of different instructions depending on the Settlor’s intent.

  Some Trusts may have specific investment strategies, and others may have a highly detailed plan of distribution. The Trustee must carry out the Trust’s purpose as closely as possible.

  Common Examples of Breach of Trust

  

  Trustees who fail to carry out these duties may be found liable for breach of trust. Here are some common examples of situations that can constitute a breach of trust.

  • Failure to Invest Prudently: A Trustee leaves a large amount of money in a non-interest-bearing account for years, failing to generate reasonable returns. The Prudent Investor Act requires Trustees to invest Trust assets wisely, balancing risk and return. Neglecting this duty can significantly diminish the Trust’s value and can be a breach of trust.
  • Failure to Inform and Report: A Trustee does not provide the Beneficiaries with any statements about the Trust’s assets for several years, even after receiving requests for them. Trustees are obligated to keep Beneficiaries informed about the overall administration of the Trust.
  • Failure to Be Impartial: A Trustee shows favoritism by distributing more funds to one Beneficiary than the others without a valid reason. This violates the duty of impartiality, which requires Trustees to act fairly toward all Beneficiaries and protect each of their interests.
  • Improper Delegation of Duties: A Trustee delegates critical responsibilities to an unqualified third-party without proper oversight, leading to loss of Trust assets. Trustees must administer the Trust personally, or ensure that delegated tasks have competent professionals handling them.

  Remedies for Breach of Trust

  When a breach of trust occurs, the law provides several remedies to protect Beneficiaries and address any harm. Some of the remedies laid out in the Tennessee Uniform Trust Code include the following.

  • Compel Performance: A court may order the Trustee to perform their duties correctly. For example, if a Trustee fails to provide an accounting, the court can require them to produce the necessary documentation to the Beneficiaries.
  • Issue an Injunction: The court can issue an order prohibiting the Trustee from committing further breaches of trust. This remedy is often used to prevent ongoing harm to the Trust.
  • Award Money Damages or Restitution: Trustees may be required to restore lost assets, pay monetary damages, or return misappropriated property to the Trust. This ensures the Beneficiaries are compensated for the harm resulting from the breach of trust.
  • Order an Accounting: If Beneficiaries suspect mismanagement, the court can require the Trustee to provide a detailed account of the Trust’s administration. This transparency can uncover further breaches and guide what other remedies may be needed.
  • Remove the Trustee: In cases of serious breaches or repeated misconduct, the court may remove the Trustee and appoint a Successor. This remedy protects the Trust from further harm by that Trustee and restores the Beneficiaries’ confidence in the Trust’s administration.

  The courts also have the power to order other types of relief as may be appropriate under the circumstances. Every Trust situation can be unique based on the trust instrument, assets, and parties involved.

  Additionally, Tennessee trust law allows courts to award attorney’s fees and costs to the prevailing party in breach of trust cases. This is an exception to the normal rule that each party pays their own attorney’s fees.

  Protecting Against Breach of Trust

  

  Trustees play a critical role in managing Trust assets and serving Beneficiaries. When Trustees fail to meet their obligations, Beneficiaries can suffer significant financial harm. This is why it’s highly important to choose your Trustee wisely.

  By understanding Trustee duties, recognizing breaches of trust, and using the appropriate remedies, Beneficiaries can protect their interests and hold Trustees accountable.

  If you see problems with the administration of your Trust, it’s important to take action now to prevent further harm.

  Connell Law, PLLC assists Beneficiaries in Middle Tennessee with protecting their interests in a Trust. Reach out to us today to request a free consultation.

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• What is a Testamentary Trust?

  

  When it comes to estate planning, you may have heard of a Testamentary Trust. This type of Trust can provide for your loved ones while ensuring your assets are managed according to your wishes after death. But many people misunderstand how this type of Trust works and how to create one. Trusts are highly versatile…

  

  When it comes to estate planning, you may have heard of a Testamentary Trust. This type of Trust can provide for your loved ones while ensuring your assets are managed according to your wishes after death. But many people misunderstand how this type of Trust works and how to create one.

  Trusts are highly versatile estate planning tools. But they’re not for everyone. Their usefulness and value depend on what your objectives are. Also critical is proper funding of the Trust, which many people overlook.

  Let’s run through how a Testamentary Trust works, who they might benefit, and how they compare to other types of Trusts.

  What is a Trust?

  Before discussing the Testamentary Trust, let’s first define a Trust more generally. A Trust is a legal arrangement between three parties: Settlor, Trustee, and Beneficiaries.

  The Settlor creates the Trust. The Trustee manages the assets in the Trust. And the Beneficiaries receive the benefits of the Trust.

  There is a fiduciary relationship between the Trustee and the Beneficiaries. The Trustee must act in their best interest with the assets held in the Trust.

  Trusts usually have a written instrument, with the provisions covering a vast array of potential situations. This includes who the parties to it are, the governing state law, Beneficiary rights, Trustee powers, and the ultimate plan of distribution.

  There are two types of Trusts (for purposes of this article): Living and Testamentary. To read more about Living Trusts, you may read another of ours article here.

  How to Create a Testamentary Trust

  

  Creating a Testamentary Trust begins with executing a Last Will & Testament. The Testator (person making the Will) works with an attorney to draft it. He or she then signs the Will with two witnesses, who also sign it. 

  The Trust in the body of the Will itself. There are specific Articles outlining the terms of the Trust, including the Trustee, Beneficiaries, and how to manage and distribute assets.

  A Testamentary Trust does not exist during one’s lifetime. It exists only after death. The Will must go through probate in order to create the Trust. Probate is a court-supervised process that validates the Will and settles the estate.

  If the Testator is living and has the required legal capacity, he or she can change the Will and its Trust provisions at any time. This allows individuals to adjust their plans as circumstances change.

  Probate can be a time-consuming process, though. This may delay the funding of the Trust. Despite this, Testamentary Trusts remain a practical solution for many estate planning needs.

  Who Can Benefit from a Testamentary Trust?

  Testamentary Trusts can work for a variety of individuals and families. One common scenario involves married couples with “mirror image” estate plans. Each spouse’s Will gives their entire estate to the survivor as the primary disposition plan.

  But if they both die simultaneously, then their Wills each create a Testamentary Trust for their Beneficiaries. This is usually their children.

  This type of Trust ensures that their children are cared for and that a responsible party oversees things. The Trustee invests the assets until the children reach an appropriate age or milestone. The Trustee may also make some distributions, depending on the Trust’s terms.

  Other individuals who might benefit from a Testamentary Trust include:

  • Single parents: This type of Trust is less expensive than a Living Trust, but still provides an avenue to provide for minor children.
  • Blended families: These trusts can help ensure children from prior relationships are provided for while balancing the needs of a current spouse.
  • Children with special needs: A Testamentary Special Needs Trust can protect a Beneficiary’s eligibility for government benefits.
  • Those concerned with asset protection: Testamentary Trusts can include provisions to shield their Beneficiaries from creditors, divorce, or wasteful spending.

  Testamentary Trust vs. Living Trust

  

  A Testamentary Trust and a Living Trust differ in their timing of creation. The Settlor of a Living Trust creates it during his or her lifetime, as the name implies. The Trustee, often the Settlor, manages assets in the Trust immediately.

  A Testamentary Trust, on the other hand, is dormant until the Testator’s death and completion of probate. This means there is a longer process to fund a Testamentary Trust as opposed to a Living Trust.

  Testamentary Trusts require less work upfront to put in place. There’s no need to retitle assets after you execute the Will that has the Trust. But probate is required, which can add substantial work and expense later on.

  Living Trusts avoid probate. But they are more expensive and require more effort to set up and maintain. Choosing between the two depends on your priorities and circumstances.

  Pros and Cons of a Testamentary Trust

  As with anything, each and every estate planning option has benefits and drawbacks. These are just a few for Testamentary Trusts.

  Pros:

  • Easier and less expensive to set up compared to Living Trusts.
  • Flexible, as the Testator can amend his or her Will at any time as long as there is legal capacity.
  • Effective for specific scenarios, especially for young families with mirror-image type estate plans.

  Cons:

  • Requires probate, which can be time-consuming and is open to public inspection.
  • Updating Beneficiary Designations at financial institutions can be cumbersome, as some may not work well with Testamentary Trusts.
  • Delays in funding the Trust may occur due to the probate process.

  Final Thoughts on Testamentary Trusts

  Testamentary Trusts are a fairly cost-effective and practical estate planning tool. They work well for young families and individuals with specific needs, such as planning for minor children, blended families, or asset protection.

  Just like with any estate planning decision, it’s important to understand how this tool works and to have legal counsel working with you so you make the right choice. What’s right for another family may not be right for yours.

  If you’re considering a Testamentary Trust, Connell Law, PLLC can help you determine if it’s right for you. We serve Rutherford County, Tennessee and the surrounding area in the areas of estate planning and probate.

  Contact us today to request a free consultation for your tailored legacy plan.

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• Bridge the Gap: Your Attorney & Financial Advisor Should Collaborate

  

  Both an estate planning attorney and a financial advisor play a crucial role in building and protecting wealth. But these professionals frequently do not communicate with each other about how to best serve their mutual clients. This shouldn’t be happening. By having your attorney and advisor collaborate, you can have a more comprehensive and effective…

  

  Both an estate planning attorney and a financial advisor play a crucial role in building and protecting wealth. But these professionals frequently do not communicate with each other about how to best serve their mutual clients. This shouldn’t be happening.

  By having your attorney and advisor collaborate, you can have a more comprehensive and effective strategy to carry out your goals. Here’s how this teamwork can benefit you and how you can foster it.

  Harmonizing Your Legal Documents and Financial Portfolio

  Your attorney and financial advisor look at your situation in different ways. This is because of the distinct training that each receives.

  Your attorney may mainly focus on getting the structures in place properly so that your assets are managed as you desire. After all, if there is no clear direction, assets may go to undesired places.

  On the other hand, your financial advisor is likely more focused on funding your plans. And odds are that your retirement is the primary consideration. This will include topics like your investment portfolio, insurance needs, tax liabilities, and the like.

  Both of these topics necessarily have to be addressed. But neither professional is likely to have all the necessary skills (or licensure) to handle all parts of your legacy plan. Attorney and advisor should be on the same page when it comes to both structuring and funding your plan.

  Let’s say you create a Living Trust. There is a lot of work that goes into the process of setting up a Trust.

  Your attorney will advise you to fund the Trust, primarily meaning assigning and retitling assets to the Trust. This means executing a new deed for your house, changing bank account ownership from individual to trust, and assigning business interests to the Trust in a written instrument.

  But you can’t forget about Beneficiary Designations. This is largely your financial advisor’s territory: life insurance, retirement accounts, and brokerage investments.

  If your advisor doesn’t know that you created a Trust, he or she won’t know to update your beneficiaries so that the Trust works as you intend.

  Collaborating helps assure the attorney that the plan is funded, while also assuring the financial advisor that your assets have a clear destination.

  Ongoing Monitoring and Adaptation

  

  Life is full of changes. Whether it’s marriage, divorce, birth of a child, or acquiring new assets, life is almost always in motion. Your estate plan and financial strategy need to adapt accordingly.

  Regular updates and communication between your attorney and financial advisor ensure that your estate and financial plans remain aligned with your evolving needs.

  Odds are you speak more frequently with your financial advisor than your estate planning attorney. But if there is a pre-existing relationship between the two, your advisor will be in a position to update your attorney about these major changes. This will help your attorney know sooner when changes become necessary.

  You can also encourage your attorney and advisor to check in regularly to keep an open line of communication. This keeps your plans current, and also reduces the risk of professional liability for each of them. By having at least two sets of eyes on your situation, you can avoid problems before they ever happen.

  Carrying Out Your Plan

  A huge, and all too common, mistake that many people make is not sharing the details of their plans with anyone. After signing legal documents, they’re hidden away and seem to disappear. Without seeing the contents of your documents, your beneficiaries cannot get the legacy you intend to leave.

  By having your attorney and advisor work together, one of the measures you can take is sharing copies of documents. If one of the two professionals retires, dies, or is otherwise not reachable, there are other places where these documents are still accessible.

  These professionals have fiduciary duties to protect your information. This adds another layer of peace of mind regarding your plans. All it takes is sharing electronic copies of everything after you sign.

  Upon your death, your financial advisor can then quickly take action to alert your family members, executor and/or trustee, and your attorney as well.

  Remember, we cannot use a Ouija board to ask what your wishes were. That ship will have already sailed. Your attorney, executor, trustee, and other involved persons have to know where your wishes are laid out and how to access those documents.

  When both attorney and financial advisor collaborate, there is a higher likelihood that your beneficiaries will have clarity about what to do.

  Take the Initiative with Your Attorney and Financial Advisor

  

  As the saying goes, teamwork makes the dream work.

  When you start the estate planning process, tell your financial advisor who you are meeting with. When you do the legal consultation, tell the attorney who your financial advisor is. Then either do an email introduction, or give each of them the other’s contact information so they can connect.

  It’s been our experience that financial advisors find this approach refreshing. By connecting, there may also be new opportunities down the road for collaboration on other client matters.

  At the end of the day, your legacy plan is in your hands. But it helps to have a helping hand, or two. Get your estate planning attorney and financial advisor together so they can serve you in a more holistic way.

  Connell Law, PLLC serves residents of Rutherford County, Tennessee and the surrounding area with estate planning, probate, and small business legal services. Contact us today to request a free consultation.  

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