It is a fact of life that we live in a very litigious society. It seems that people can sue for just about anything these days. In addition, when your wealth goes up, unfortunately, the chances of you being sued also goes up as well. It is just a fact that people who do not hold any assets are not sued very often for the simple reason that the chance of collecting is low. Therefore, when your assets go up in value, and sometimes, when they dramatically go up in value, it should be a time for you to sit down and have a coversation with an estate, trust, and asset protection attorney.
If you own a business, or if you recently won the Tennessee Lottery, you should sit down with an attorney and discuss the appropriate asset protection strategy for you and your family. In addition, if you recently won the Tennessee Lottery, you may want to set up a trust to accept the lottery winnings. Tennessee is a state where you can set up a trust to accept the lottery winnings. This can keep your name out of the news, and keep your lottery winnings a secret.
However, if you own a business or recently won the Tennessee Lottery, you should also consider a Tennessee Investment Services Trust as part of your asset protection strategy.
In 2007, the State of Tennessee Legislature changed the common law rule that a person could not set up a trust for their own benefit to protect their assets from creditors. Now, a person can create such a trust, subject to very specific rules.
In order to set up a Tennessee Asset Protection Trust, the trust must comply with the following requirements:
1. Appoint a Third Party Trustee (you cannot be the trustee of your trust)
2. The Assets You Contribute Cannot be Subject to Any Liens
3. You Must Name Successor Beneficiaries
4. You Can Set Out the Terms of Management, Investment, and Distribution of the Assets
5. You Must Execute an Affidavit That Says that Transferring the Assets to this Trust Will Not Render You Insolvent, You Are Not Intending to Defraud Any Creditors, and There Are No Pending or Threatened Legal Actions Against You
If you violate any of these provisions, you run the risk of the trust not protecting you from creditors and having the transfer being considered a fraudulent transfer.
These are just some of the basic requirements of the trust, but there are many other rules with these special types of asset protection trusts.
If you own a business or recently won the Tennessee Lottery and seeking to discover a way to protect your assets with an asset protection trust, please contact our office at (615) 472-2482 or e-mail us at [email protected] to schedule an initial consultation to discuss your specific legal issues and needs.