What kinds of trusts does Tennessee law recognize?

Revocable and irrevocable trusts (Tenn. Code Ann. § 35-15-602), charitable trusts (Tenn. Code Ann. § 35-15-405), trusts for the care of an animal (Tenn. Code Ann. § 35-15-408), noncharitable purpose trusts (Tenn. Code Ann. § 35-15-409), directed trusts with a trust advisor or trust protector (Tenn. Code Ann. § 35-15-1201) and the special needs trust the creditor sections name (Tenn. Code Ann. § 35-15-505(a)(3)).

What is a Tennessee directed trust?

A trust whose terms, a nonjudicial settlement agreement or a court order give a trust advisor or trust protector one of the powers the statute lists (Tenn. Code Ann. § 35-15-1201); the trustee required to follow a direction is an excluded fiduciary (Tenn. Code Ann. § 35-15-710) with no duty to monitor the director (Tenn. Code Ann. § 35-15-1204).

Does a Tennessee trust have to distribute within a set time?

The statute sets no fixed period; a mandatory distribution interest is enforceable as the instrument states it, and a discretionary interest is a mere expectancy reviewed only for dishonesty, improper motive or failure to act (Tenn. Code Ann. § 35-15-814). On termination the trustee distributes within a reasonable time, with a reasonable reserve (Tenn. Code Ann. § 35-15-817(a)).

What is a special needs trust in Tennessee?

An irrevocable trust established for one or more disabled persons, one of whose purposes is to let the person qualify or continue to qualify for public, charitable or private benefits, is an irrevocable special needs trust, and no creditor or assignee of its settlor may reach or compel distributions from it (Tenn. Code Ann. § 35-15-505(a)(3), (4)). Whether a trust qualifies and how a distribution affects a benefit are highly technical questions for a licensed Tennessee attorney. General information, not legal advice.

Types of Trusts in Tennessee

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Common types of Trusts in Tennessee

Revocable living Trust

Created during life and changeable anytime; commonly used to avoid probate and plan for incapacity. You keep control — so it is not asset protection.

Irrevocable Trust

Generally can't be changed or revoked once created; you give up control in exchange for benefits some irrevocable Trusts can offer, such as certain tax or planning goals. Fact-specific — for an attorney to design.

Testamentary Trust

Created by your will and funded only after death, through probate. Useful for leaving assets to minors or in stages.

Special needs (supplemental needs) Trust

Holds assets for a beneficiary with disabilities without disrupting needs-based public benefits like Medicaid or SSI, when properly drafted.

Spendthrift Trust

Includes a spendthrift provision that restrains a beneficiary's ability to transfer their interest and limits some creditors' reach (Tenn. Code Ann. § 35-15-502), within limits.

Charitable Trust

Benefits a charitable purpose; certain forms can combine giving with income or tax planning. Design and compliance are an attorney/advisor matter.

Trust for a pet

A Tennessee trust for the care of an animal alive during the settlor's lifetime, which the Tennessee Uniform Trust Code recognizes (Tenn. Code Ann. § 35-15-408); a noncharitable purpose trust without a definite beneficiary may also be created and enforced (Tenn. Code Ann. § 35-15-409).

Which type of Trust fits your goals?

Trusts are tools — the right one (if any) depends entirely on your goals, your family, your assets, and tax considerations. This page is general information, not legal advice. A free role check can show you where you stand, and a Tennessee attorney can design what fits your situation.

General information about Tennessee law, not legal advice.

Frequently asked questions

What kinds of trusts does Tennessee law recognize?: Revocable and irrevocable trusts (Tenn. Code Ann. § 35-15-602), charitable trusts (Tenn. Code Ann. § 35-15-405), trusts for the care of an animal (Tenn. Code Ann. § 35-15-408), noncharitable purpose trusts (Tenn. Code Ann. § 35-15-409), directed trusts with a trust advisor or trust protector (Tenn. Code Ann. § 35-15-1201) and the special needs trust the creditor sections name (Tenn. Code Ann. § 35-15-505(a)(3)).
What is a Tennessee directed trust?: A trust whose terms, a nonjudicial settlement agreement or a court order give a trust advisor or trust protector one of the powers the statute lists (Tenn. Code Ann. § 35-15-1201); the trustee required to follow a direction is an excluded fiduciary (Tenn. Code Ann. § 35-15-710) with no duty to monitor the director (Tenn. Code Ann. § 35-15-1204).
Does a Tennessee trust have to distribute within a set time?: The statute sets no fixed period; a mandatory distribution interest is enforceable as the instrument states it, and a discretionary interest is a mere expectancy reviewed only for dishonesty, improper motive or failure to act (Tenn. Code Ann. § 35-15-814). On termination the trustee distributes within a reasonable time, with a reasonable reserve (Tenn. Code Ann. § 35-15-817(a)).
What is a special needs trust in Tennessee?: An irrevocable trust established for one or more disabled persons, one of whose purposes is to let the person qualify or continue to qualify for public, charitable or private benefits, is an irrevocable special needs trust, and no creditor or assignee of its settlor may reach or compel distributions from it (Tenn. Code Ann. § 35-15-505(a)(3), (4)). Whether a trust qualifies and how a distribution affects a benefit are highly technical questions for a licensed Tennessee attorney. General information, not legal advice.

General information about Tennessee law, not legal advice.