Avoid Tennessee Probate: Use a Pour-Over Will and Trust

What Is a Pour-Over Will and Trust?

A pour-over will works hand-in-hand with a revocable living trust. During your lifetime, you create and fund the trust with your assets. At death, the pour-over will directs any remaining probate assets to “pour over” into that trust so the trust’s terms control final distribution. Tennessee recognizes testamentary additions to trusts by statute (see T.C.A. § 32-3-105).

Why Use This Strategy in Tennessee?

A well-funded revocable trust can reduce the assets that must pass through probate, streamline administration for loved ones, preserve privacy for trust matters, and provide continuity if you become incapacitated (your successor trustee can manage trust assets without waiting for court appointment). The pour-over will helps capture assets that were not retitled to the trust so your plan remains unified under the trust’s terms.

Will You Still Need Probate?

Maybe. If all assets are titled to your trust or pass by beneficiary designation or joint ownership, your estate may avoid a full probate proceeding. If assets remain solely in your name at death, the pour-over will typically must be probated to transfer those assets into the trust. Tennessee also provides a small-estate procedure in certain circumstances (see T.C.A. § 30-4-101 et seq. and the Tennessee Courts forms). Whether you qualify depends on factors like asset type, value, and beneficiary designations.

Key Benefits

• Privacy: Trust administration occurs outside the public probate docket, keeping distributions and valuations more confidential. Note that a will filed for probate becomes a public record.
• Efficiency: Properly funded trusts can simplify transfers to beneficiaries and reduce court involvement.
• Continuity: Your successor trustee can manage trust assets during incapacity and after death without waiting for court appointment (you may still want a durable power of attorney for non-trust assets).
• Centralized Control: One set of instructions—the trust—governs distributions across assets you have coordinated into the plan.

Common Tennessee Pitfalls

• Not Funding the Trust: Creating a trust without retitling assets defeats the purpose and can lead to probate.
• Outdated Beneficiary Designations: Coordinate retirement accounts and life insurance with your plan.
• Real Estate Deeds: Tennessee real property should be retitled to the trust to avoid probate for that parcel; confirm deed form and recording requirements.
• Out-of-State Property: Real estate outside Tennessee can trigger ancillary probate in that state unless titled to the trust.
• Special Assets: Business interests and vehicles may require specific transfer steps or third-party consents.

Practical Tips for Tennessee Families

Trust Funding Checklist

How to Set Up a Pour-Over Will and Trust

• Consult Counsel: Align your goals with Tennessee law, titling practices, and tax considerations.
• Create a Revocable Living Trust: Name yourself as initial trustee and a reliable successor trustee.
• Sign a Pour-Over Will: Direct any probate assets to the trust (recognized under T.C.A. § 32-3-105).
• Fund the Trust: Retitle bank and brokerage accounts, record deeds for real estate, assign business interests, and coordinate beneficiary designations.
• Maintain Your Plan: Review after major life events, asset changes, or legal updates.

Small Estate and Simplified Procedures

Tennessee law provides procedures that may simplify administration for certain estates (e.g., small-estate affidavits). Eligibility depends on your asset mix, values, and other facts (T.C.A. § 30-4-101 et seq.; see state court forms). Proactive trust funding and coordinated beneficiary designations can further reduce court involvement.

Taxes and Creditor Considerations

• No asset protection during life: A revocable trust is generally reachable by the grantor’s creditors while the grantor is alive (T.C.A. § 35-15-505).
• Income tax while living: Most revocable trusts are grantor trusts, taxed to the grantor; common reporting methods are outlined in 26 C.F.R. § 1.671-4.
• After death: A continuing trust typically becomes a separate taxpayer (obtains its own EIN). An estate and a qualified revocable trust may elect to be treated as one entity for income tax purposes (26 U.S.C. § 645).
• Tennessee transfer taxes: Tennessee does not impose a state inheritance or estate tax for decedents dying on or after Jan. 1, 2016 (Tennessee Dept. of Revenue — Inheritance Tax).

Coordination With Beneficiary Designations

Assets like retirement accounts and life insurance pass by contract. Coordinate designations with your trust and pour-over will. For tax-deferred retirement accounts, consider whether to name individuals or a properly drafted “see-through” trust to preserve tax-favored treatment and comply with federal distribution rules (26 U.S.C. § 401(a)(9); see also 26 C.F.R. § 1.401(a)(9)-4).

When to Update Your Plan

• Marriage, divorce, or birth/adoption
• Death or incapacity of a beneficiary, executor, or trustee
• Significant changes in assets or business interests
• Acquisition or sale of real estate
• Relocation to or from Tennessee
• Changes in tax laws or probate procedures

FAQ

Does a pour-over will avoid probate in Tennessee?

Not by itself. If assets remain in your name at death, the pour-over will is typically probated to move those assets into the trust.

Can I keep everything private with a trust?

Trust administration is generally private, but a will filed for probate is a public record. Proper funding minimizes what appears in probate filings.

Do I need a power of attorney if I have a trust?

Yes. A durable power of attorney covers non-trust assets and personal matters your trustee cannot handle.

What happens to my trust taxes after I die?

The trust typically becomes a separate taxpayer. In some cases, a 645 election can align trust and estate income tax reporting.

Will out-of-state real estate require extra steps?

Yes, it can trigger ancillary probate in that state unless the property is titled to your trust.

Getting Started

An initial planning meeting typically covers your goals, a review of assets and beneficiary designations, and a roadmap for trust funding. Your attorney will prepare the revocable trust, pour-over will, and related documents (powers of attorney and health care directives) and guide you through funding and follow-up. Ready to begin? Contact our Tennessee estate planning team.

References

• T.C.A. § 32-3-105 — Testamentary additions to trusts
• T.C.A. § 35-15-505 — Creditors’ claims against settlor
• T.C.A. § 30-4-101 et seq. — Small estates
• Tennessee State Courts — Forms and guidance (including Small Estate)
• Tennessee Department of Revenue — Inheritance Tax (repealed for deaths on/after 1/1/2016)
• 26 C.F.R. § 1.671-4 — Grantor trust reporting
• 26 U.S.C. § 645 — Estate and revocable trust election
• 26 U.S.C. § 401(a)(9) — Required minimum distributions and 26 C.F.R. § 1.401(a)(9)-4

Disclaimer

This blog is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Probate and trust procedures vary by county and individual circumstances; consult a Tennessee attorney about your specific situation.