Estate Planning in Tennessee

The key documents in estate planning typically include:

• Last Will and Testament
• Living Trust
• Durable Power of Attorney
• Healthcare Power of Attorney
• Living Will or Advance Directive
• Beneficiary Designations

A will is a legal document that specifies how you want your assets distributed after death and goes through probate. A trust, on the other hand, can be used to distribute assets both during your lifetime and after death, and typically avoids probate. Trusts often offer more control and privacy than wills.

Probate is the legal process of validating a will and distributing assets after death. It can be time-consuming and costly. Common ways to avoid probate include:

• Creating a living trust
• Using joint ownership with right of survivorship
• Designating beneficiaries on accounts and policies
• Giving away assets during your lifetime

 Yes, estate planning is important regardless of wealth. It helps ensure your wishes are carried out, can reduce family conflicts, and can make things easier for your loved ones during a difficult time. Even with modest assets, you’ll want to specify who receives them and potentially name guardians for minor children.

It’s generally recommended to review your estate plan every 3-5 years or after major life events such as:

• Marriage or divorce
• Birth or adoption of a child
• Death of a beneficiary
• Significant changes in assets
• Moving to a different state
• Changes in tax laws

A power of attorney (POA) is a legal document that allows someone else to act on your behalf in specified matters. It’s important because it ensures someone can manage your affairs if you become incapacitated. There are different types of POAs, including durable POAs (which remain in effect if you become incapacitated) and healthcare POAs (for medical decisions).

Estate planning can help minimize estate and gift taxes. Strategies might include:

• Using the lifetime gift tax exemption
• Setting up irrevocable trusts
• Making charitable donations
• Using life insurance to provide liquidity for estate taxes The specifics depend on your individual situation and current tax laws.

If you die without a valid will or trust (known as dying “intestate”), your assets will be distributed according to your state’s intestacy laws. These laws vary by state but typically prioritize spouses and close blood relatives. This may not align with your wishes and can lead to family disputes.

When choosing an executor or trustee, consider:

• Their trustworthiness and reliability
• Their financial acumen or willingness to work with professionals
• Their ability to handle family dynamics
• Their age and health relative to yours
• Their willingness to serve in this role It’s often advisable to name alternates in case your first choice is unable to serve.