Caution! Do not get caught thinking the trust mentioned in your will avoids probate!

Yesterday I was talking with a client from McKenzie, Tennessee who has a testamentary trust in her will for a child with special needs. A testamentary trust is a trust that is not established during someone’s lifetime (called an inter-vivos trust) but is a trust established in a Last Will and Testament after someone has died. She wants to protect this child with a mental health disability from squandering his inheritance and she wants to avoid probate so the child’s mental health concern will not be public record. She was surprised when I told her that she will have to probate her will in order for that special needs trust to be legally established. She was told by a financial advisor that she would not need to probate that will in order to establish that trust.

The financial advisor is mistaken. A Will becomes effective upon death in Tennessee but state law prohibits anyone from administering the Will before it is admitted to probate. Only the executor of the will can take action to establish the testamentary trust. I had this same issue a few months ago with a family from Humboldt, Tennessee.

Husband and wife had a will that established a trust for the surviving spouse. The husband passed away and a piece of commercial property was deeded from the surviving spouse to the trust named in her husband’s will. The problem is the will was never submitted to probate. Years later, after the wife passed away the heirs agreed to sell the property. At this point, the problem came to a head because no one was legally the trustee to sign the warranty deed conveying the commercial property into the ownership of the buyers.

Do not make the same mistake. Estate planning is complex, even for lawyers and financial advisors. If you are anxious that you do not have everything set up just the way you want it, contact an attorney whose practice is devoted solely to estate planning.

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