How long a Tennessee trustee has to distribute the trust, and what the reserve is for

The standard: a reasonable period, with a reserve

Upon an event terminating or partially terminating a trust, or upon the trustee's removal or resignation, the trustee proceeds to distribute the trust property to the persons entitled to it within a reasonable period of time, subject to the trustee's right to retain a reasonable reserve for the payment of debts, expenses, attorney fees and taxes (Tenn. Code Ann. § 35-15-817(a)). The statute sets no number of days. What is reasonable depends on what remains to be settled — and the reserve exists so that the trust can pay what it still owes without recovering money from the beneficiaries.

The contest window

A proceeding to contest the validity of a trust that was revocable immediately before the settlor's death runs within two years after the death, or 120 days after the trustee sends the person a copy of the trust and a notice of its existence, the trustee's name and address and the time allowed for a contest, whichever is earlier (Tenn. Code Ann. § 35-15-604(a)). The trustee may distribute after the death and is liable for a distribution only where it had actual knowledge of a pending contest, or a potential contestant had given written notice and a proceeding followed within 60 days ((b)). If a provision is later adjudged invalid, or a distribution made in error, a beneficiary who received an improper distribution returns it ((c)).

The estate's creditors

After the death, the property of a trust that was revocable immediately before it is subject to the settlor's creditors' claims, the costs of administering the estate and the funeral expenses, subject to the settlor's right to direct the source of payment; a claim barred against the estate is barred against the trust, and the estate's order of payment applies to the trust where the probate estate is inadequate and the personal representative or a creditor has perfected its right to collect from the trust (Tenn. Code Ann. § 35-15-505(a)(6)). Estate claims are barred unless filed within the period the published notice prescribes (Tenn. Code Ann. § 30-2-307(a)(1)) and are forever barred if not filed or sued on within twelve months after the death (Tenn. Code Ann. § 30-2-310(a)). Those dates are part of why a reserve is held.

Taxes, and what the reserve covers

The reserve covers taxes as well as debts and expenses (Tenn. Code Ann. § 35-15-817(a)). Tennessee imposes no inheritance tax in the case of a person who died in 2016 or later (Tenn. Code Ann. § 67-8-318); the federal estate and fiduciary income tax returns, where they are owed, are federal questions with their own dates. Holding back enough to pay what may still come due is the reserve's purpose; the amount is a judgment for the trustee with a licensed Tennessee attorney or a tax advisor.

Closing with the discharge notice

A trustee may send a notice seeking to be relieved from liability upon the full or partial termination of the trust (Tenn. Code Ann. § 35-15-817(b)). It carries a statement of the trust's assets at fair market value and its liabilities as of a date within 30 days before it is sent, a statement of receipts and disbursements for a period of no more than three years, a proposal for distribution and notice that claims under §§ 35-15-604 and 35-15-1005 are barred without a written objection within 45 days after receipt ((c)); it goes to the grantor if living, each qualified beneficiary and the other serving fiduciaries ((d)), and receipt is presumed five business days after mailing where no confirmation is available ((k)). If no one objects in time, the trustee distributes as proposed within a reasonable period, and the trustee is relieved from liability for the most recent continuous period of service ((g), (h)).

When a beneficiary presses for an early distribution

The statute offers routes rather than a deadline: a partial distribution that keeps the reserve, a beneficiary's written consent, release or ratification (Tenn. Code Ann. § 35-15-1009), a nonjudicial settlement agreement among the trustee and the qualified beneficiaries (Tenn. Code Ann. § 35-15-111), or a request for the court's instructions (Tenn. Code Ann. § 35-15-201(c)). Which fits a particular trust is a question for a licensed Tennessee attorney.

Законы, дословно

• Claims against the estate; filing; amendment

  Tenn. Code Ann. § 30-2-307 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Limitation on the time for filing claims

  Tenn. Code Ann. § 30-2-310 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Nonjudicial settlement agreements

  Tenn. Code Ann. § 35-15-111 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Creditor's claims against settlor

  Tenn. Code Ann. § 35-15-505 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Limitation on action contesting validity of revocable trust; distribution

  Tenn. Code Ann. § 35-15-604 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Distribution on termination, removal or resignation; discharge notice

  Tenn. Code Ann. § 35-15-817 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

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