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What is a living trust in Tennessee?
What is a living trust in Tennessee? It is a trust made during the settlor's life and governed by Tennessee law, in which a trustee holds assets for beneficiaries under a written deed. This page answers the questions families ask, from basics and set-up to running the trust, reporting and getting help.
Reviewed by a senior trust administrator, updated
Top questions
Jump to an answer below.
Key facts
- Governing law
- Investment services trusts: Tennessee Investment Services Act of 2007[2]
- Perpetuity period
- Trusts may last up to 360 years[3]
- Asset protection rule
- A creditor must prove intent to defraud by clear and convincing evidence[1]
- Foreign law rules
- Forced heirship, legitime and elective share claims are not exceptions[1]
- Trustee requirement
- Qualified trustee: a Tennessee-resident individual or a supervised entity[2]
Numbers in brackets point to the Sources list at the end of this page.
Basics: settlor, trustee, beneficiaries and the deed
The basics involve three roles and a single document. A settlor transfers assets, a trustee holds them and beneficiaries benefit, while a written deed tells the trustee what it must do.
The Tennessee Investment Services Act of 2007 sets rules for an investment services trust, including how long a creditor has to sue (source: Tennessee Code: Tennessee Investment Services Act of 2007, chapter 16).
A qualified trustee, resident in the state or supervised there, is needed under that Act (source: Tennessee Code: qualified trustee and trust instrument, chapter 16).
Setting up: checks, drafting and moving the assets
Most of the set-up time goes on identity checks, documents and third parties such as the law firm and the bank.
The step-by-step guide lists the documents the trustee asks for and the order of the steps.
Running the trust: records, decisions and later changes
After signing, the trustee administers the trust under the deed. The trustee holds the assets, keeps records and accounts, convenes trustee meetings for decisions and repeats identity checks over the years.
Changes after set-up are limited to the powers that the deed grants at the start.
The legal features page gives the creditor rules and their limits, each with its source.
Reporting and tax: what the trustee files
Reporting is for the trustee to handle; your own tax stays with your adviser.
The trustee takes in tax residence forms and hold the records banks require for account reporting.
When a non-US person dies with US-situated assets over the IRS threshold, the estate files Form 706-NA (source: Internal Revenue Service: Some nonresidents with U.S. assets must file estate tax returns).
Getting help: a call or a quote first
Who drafts the deed, who serves as trustee and what we coordinate is set out in the overview of Tennessee trusts.
To get started, send us your enquiry. You can also compare Tennessee with another place.
Other questions
What does a trustee do in Tennessee?
The trustee holds title, follows the deed, keeps records and accounts, holds meetings when decisions are needed and handles reporting. For an investment services trust at least one trustee must be a qualified trustee in the state. The trustee also refreshes identity checks over time.
Can someone who lives abroad use a trust in Tennessee?
Yes, a settlor can live elsewhere. Your home country's tax and trust rules still apply to you, and your advisers there should review the plan. For an investment services trust, a qualified trustee must be in the state. Remote checks may add a short delay.
Is a trust the same as a company?
No, they differ. A company is a separate legal person owned by shareholders; a trust is a relationship where the trustee owns assets for others. Still, a trust can hold a company, and a family can form a trust company to serve as trustee.
Can the settlor keep a say in how the assets are invested?
Possibly, through the deed. Whether Tennessee law lets an adviser direct the trustee, and how far, is a point for the deed. Your lawyer confirms how it applies to your deed. Treat any say over investments as a question for the deed, not a right the law gives.
Can a creditor still reach assets in a Tennessee trust?
At times. A creditor of the settlor can sue by proving intent to defraud with clear and convincing evidence, and exceptions include overdue child support, overdue alimony and marital property debts. Your lawyer applies these to your facts and to the 18-month lapse under the Investment Services Act.
How long does a claim against a Tennessee trust stay open?
For an investment services trust, claims against a qualified disposition lapse 18 months after it. Your lawyer confirms how it applies to your deed. Exceptions exist, such as overdue child support, so the creditors that matter in your case are part of that advice.
Does the trust need a trustee in Tennessee?
For an investment services trust, yes: at least one qualified trustee, meaning a Tennessee-resident individual or an entity that Tennessee law lets act as trustee and that a supervisor oversees. Your lawyer confirms who fills the role. The trustee must still accept office under the deed.
Can a trust hold shares in my family company?
It can. When a trust holds shares, the trustee owns them under the deed. We ask for incorporation papers, the share register and an ownership chart, and your lawyers read the company's rules for transfer restrictions. The trustee then votes the shares and receives any dividends, as the deed directs.
What goes into a letter of wishes?
In the letter you describe your hopes: who should benefit first, how to handle education or a business, what to avoid. It informs the trustee without binding it, and you can update it whenever your family changes. It sits beside the deed, and the deed prevails where the two differ.
Can beneficiaries be added or removed later?
Only where the deed confers the power, say on the trustee or a protector. A deed that names a class, such as descendants, lets new family members in without any change. The power is set when your lawyer drafts the deed.
What happens to the trust when the settlor dies?
The deed keeps governing. The trustee goes on administering the trust and pays out as directed. Whether a US estate tax filing arises depends on where assets sit, and your lawyer confirms how the deed handles the settlor's death. A letter of wishes, if you left one, guides the trustee without binding it.
Is a living trust the same as a family trust?
Not exactly. A living trust is made during the settlor's lifetime rather than by will, while a family trust is defined by its beneficiaries, who are relatives. Many family trusts are living trusts, so the two overlap. Your lawyer confirms which label fits your deed.
Will a trust reduce my tax?
We cannot answer that, because it turns on your residence, your citizenship and the location of your assets. Having a trust does not end reporting duties. Ask advisers both at home and in the United States, since each may treat the assets differently.
Do I need my own lawyer as well?
Yes. A Tennessee law firm drafts the deed, but you should have your own lawyer review it, especially for your home country's rules on trusts, inheritance and tax. We do not give legal advice. Your own lawyer also checks how your home country treats a trust with a qualified trustee in the state.
What should I prepare before contacting a trustee?
List the purpose, the assets and their location, the beneficiaries, and any protector or advisor you would like. Gather passport details and a rough account of the source of your wealth. Say whether you mean a plain living trust or one under the Investment Services Act, which needs a qualified trustee.
Sources
- Tennessee Code: Tennessee Investment Services Act of 2007, chapter 16, read 2026-11-05.
- Tennessee Code: qualified trustee and trust instrument, chapter 16, read 2026-11-05.
- Chambers: Tennessee Trust Bill Takes Effect and Makes Important Changes to the State's Trust Laws, read 2026-11-05.
- Internal Revenue Service: Some nonresidents with U.S. assets must file estate tax returns, read 2026-11-05.