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Tennessee asset protection trust: key features and rules
A Tennessee asset protection trust is an investment services trust under Title 35, chapter 16 of the Tennessee Code, with a qualified trustee in the state and set limits on creditor claims. Below are the governing law, who may act as trustee, and the features and limits, each with its source and date.
Reviewed by a senior trust administrator, updated
The legal frame at a glance
What the law provides, with the source number for each item.
Key facts
- 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.
Swipe sideways to see the whole diagram.
- SettlorSets up the structure and transfers assets into it
- transfers assets under a trust deedTrusteeHolds the assets and manages them under the trust deed
- holds and distributesBeneficiariesPeople who benefit from the trust under its terms
- Trustee holds legal titleTrust assetsThe property held in the structure
Roles and notes
| Part of the structure | What it does |
|---|---|
| Settlor | Sets up the structure and transfers assets into it |
| Trustee | Holds the assets and manages them under the trust deed |
| Beneficiaries | People who benefit from the trust under its terms |
| Trust assets | The property held in the structure |
- The settlor transfers assets to a trustee under the deed; whether the deed can also give an adviser or protector directing powers depends on the deed. Your lawyer confirms how it applies to your deed.
- For an investment services trust, at least one trustee must be a qualified trustee in Tennessee.
- The trustee holds legal title and carries out the decisions the deed gives it.
- A private trust company can act as trustee for a single family.
- Your Tennessee lawyer confirms the wording of each power and who must serve as trustee.
The governing law
Tennessee’s main provision for this purpose is the 2007 Act on investment services trusts, in Title 35, chapter 16 of the Tennessee Code (source: Tennessee Code: qualified trustee and trust instrument, chapter 16).
It applies to a qualified disposition into a trust of that kind. Your lawyer confirms what the instrument must say about governing law and revocability.
The rest of Title 35 covers trusts more generally. Which of its provisions fit your deed is a question for your lawyer.
Sources and review dates are listed below. Our overview of Tennessee trusts puts the law in context.
Who may act as trustee
An investment services trust needs a qualified trustee: a Tennessee-resident individual who is not the transferor, or an entity that Tennessee law lets act as trustee and that a supervisor oversees (same source).
The qualified trustee must also hold some trust property, keep the records, prepare the tax returns or otherwise take part in running the trust in the state.
A family can also use a private trust company of its own. The Tennessee Code has a section on private trust companies (source: Tennessee Code: Private Trust Companies, chapter 2).
A directed trust is one in which an adviser guides the trustee. How far Tennessee law accepts that shape is a point your Tennessee lawyer confirms before the deed is drafted.
We help you work through these roles with your lawyer.
Features the law allows
The deed can combine a few statutory tools:
- Creditor limits. Claims lapse 18 months after a qualified disposition (source: Tennessee Investment Services Act of 2007).
- Burden of proof. A creditor must prove intent to defraud by clear and convincing evidence.
- Long duration. A trust may last up to 360 years (source: Chambers: Tennessee Trust Bill Takes Effect and Makes Important Changes to the State’s Trust Laws).
Each feature is a tool, not a result. Whether it works for your family depends on your residence, your assets and the law of the places where they sit.
How the pieces fit together
The Act, the general trust chapter and the trust company provisions work as three layers. The Act decides whether a transfer into the trust qualifies and how long a creditor has to challenge it.
The Code’s chapter on trusts covers the day-to-day law of the trust: the trustee’s duties and the beneficiaries’ rights.
The trust company provisions matter only if the family wants a company of its own to serve as trustee. The Act is short and the detail sits in the deed, so most of the work is drafting.
Limits and requirements
The same Act sets limits. A Tennessee asset protection trust is not a shield against every claim.
Exceptions include overdue child support, overdue alimony and debts under a marital property division. Forced heirship, legitime and elective share claims are not exceptions (source: Tennessee Investment Services Act of 2007).
Whether a creditor that existed before the transfer is treated differently, and whether the settlor must sign a sworn statement before the transfer, are points your lawyer confirms for your case.
Sources and review dates
Your lawyer confirms how each fact above applies to your deed.
The cost guide explains who charges for the work, and the plain-answers page covers the practical questions.
Tell us what you are planning and ask for a quote.
Frequently asked questions
Which law governs a trust in Tennessee?
The trust instrument chooses the law. For an investment services trust, Title 35, chapter 16 of the Tennessee Code applies. Your lawyer confirms the governing-law wording the instrument needs and which other provisions of Title 35 fit your deed. Claims against a qualified disposition lapse 18 months after it.
Can a trust in Tennessee have a protector?
Whether a Tennessee deed may give a protector or adviser duties that would otherwise sit with the trustee depends on the wording of the deed. Your lawyer confirms how it applies to your deed. The same applies to a directed trust, where an adviser guides the trustee, so both roles are reviewed together before anything is signed.
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.
- Tennessee Code: Private Trust Companies, chapter 2, read 2026-11-05.