Tennessee Legislature Passes Tenancy by the Entirety Joint Living Trust

Update: Click here to read more about the law.

Tennessee is without a doubt one of the leading Trust Law jurisdictions, and Tennessee estate planners have more tools than ever before.

In 2000, Tennessee adopted the Uniform Principal and Income Act which provides certainty and safe harbor to Trustees with respect to trust accounting principles.  In 2002, the Uniform Prudent Investor Act did the same with respect to the management of investments.

In 2004, Tennessee adopted the Uniform Trust Code (one of the first five jurisdictions to adopt it).  Although the Trust Code did not diverge significantly from the common law, it made Tennessee Trust Law more accessible and cohesive.  Among other things, the Trust Code gave Tennessee attorneys innovative methods such as virtual representation, Non-Judicial Settlement Agreements, and judicial and non-judicial trust modifications and terminations to deal with some of Trust Laws most vexing issues.

2007 brought a 360 year rule against perpetuities (which coincidentally I may be able to thank for my job!), self-settled asset protection trusts (innocuously named the Tennessee Investment Services Act), and updates to the now non-uniform Tennessee Uniform Trust Code which allowed beneficiaries to serve as their own trustee without jeopardizing the spendthrift protections granted to them by the trust.

2010 brought further Trust Code updates, but more importantly brought the Tennessee Community Property Trust Act.  Read more about Community Property Trusts here.

In 2012, Tennessee retroactively repealed the Tennessee Gift Tax and gradually repealed the Tennessee Inheritance Tax through 2016.  Read more here.

Finally, 2013 brought comprehensive reform to the (now ironically named) Tennessee Uniform Trust Code.  As is discussed in a previous post, 2013’s reform essentially did three things: (1) enhance asset protection for beneficiaries, (2) protected Trustees by giving them far more discretion, and (3) allowed for directed trusts to allow trusts to segregate the roles of investment and trust administration.  Another change enhanced the attractiveness of Tennessee Asset Protection Trusts.  Read more here.

The Reveal.  So. . . What’s next? It looks like Tennessee Attorneys will have yet another arrow in their estate planning quiver come July 1, 2014: The Tenancy by the Entirety Joint Revocable Trust.  Click here for a summary of HB2068/SB1907.

Continue reading Tennessee Legislature Passes Tenancy by the Entirety Joint Living Trust

Wrong Ruling in Lorenzen Wright Case? Appeals Court Rules that Lower Court had no Authority to Investigate Ex-Wife’s $1 Million Apparent Misappropriation

Update: According to the Commercial Appeal, a court is contemplating removing Sherra Wright as Trustee of the Insurance Proceeds Trust (the article does not relate which, but I expect that it is the Circuit Court).  Click here to read more.

In an opinion dated March 27, 2014, the Tennessee Court of Appeals ruled that a Probate Court Judge exceeded his authority when he appointed an attorney (known as a Guardian ad litem) to investigate how Sherra Wright spent the nearly $1 million dollars that she was in charge of for the benefit of Lorenzen Wright’s children.

This particular proceeding was the latest in a series of cases involving the children and their inheritance from their father, Lorenzen Wright.

In this proceeding, Sherra Wright (the mother of Lorenzen Wright’s children) and Herbert Wright (Lorenzen Wright’s father, and the grandfather of the children) fought Continue reading Wrong Ruling in Lorenzen Wright Case? Appeals Court Rules that Lower Court had no Authority to Investigate Ex-Wife’s $1 Million Apparent Misappropriation

Mississippi Modernizes Trust Law by Adopting the Uniform Trust Code

Mississippi Governor Phil Bryant signed the Mississippi Uniform Trust Code into law yesterday.  Click here for the final version.  By doing so, Mississippi became the 27th state (28th if you count DC) to adopt the code (or a trust code substantially derived from it).

Other changes for Mississippi Trust law are on the horizon.

Notably, Mississippi has retained existing Mississippi Spendthrift law codified in the Family Trust Preservation Act of 1998, Sections 91-9-501, et seq.   This act appears to have been modeled on previous versions of the Trust Code.

The Uniform Trust Code (“UTC”) brings a lot to the table.  Continue reading Mississippi Modernizes Trust Law by Adopting the Uniform Trust Code

Having a Baby? You need a Will.

If you have a child or are expecting your first, its time to pony up and get a Will.  This is your responsibility as a parent.

Personal Guardian.  If something happens to you, you can name a guardian for your child in a Will.  A guardian is the individual who makes decisions for your child such as what school and church to attend, who cares for the child, where the child lives.  Typically the personal guardian raises your child in your absence.  If you do not have a Will or fail to name a personal guardian in your Will, then a Court has no guidance as to who it should be. It is not hard to imagine that the choice a court might would make you roll over in your grave.  Why leave it to chance?

Financial Guardian. If your child is under 18, then the child is legally unable to manage their own property.  If the child inherits something, then the child must have a financial guardian appointed by a court to manage their inheritance.  The financial guardian has to ask the Court’s permission to access trust property and must have an attorney.  In other words, it is expensive and avoidable.

Continue reading Having a Baby? You need a Will.

Tennessee Federal District Judge issues Ruling in Same-Sex Marriage Case

A Tennessee Federal District Court has issued a preliminary order barring the state of Tennessee from enforcing its Defense of Marriage Act and related “Anti-Recognition Law” against six same-sex couples who brought the lawsuit.  Read the article in The Tennessean.  Read filings in the case.

Stay Tuned.

Rob Malin

Mammas Don’t Let Your Babies Grow Up…

. . . without naming you on a medical power of attorney!

Alright.  I know.  That was bad.  However, if you keep up with my blog you will soon learn that I love bad puns.  Now that I have gotten that out-of-the-way. . .

If your adult kids (over 18) don’t do any other estate planning, they should name you as their agent under a medical power of attorney.

Click your state to find state approved forms: Tennessee, Mississippi, and Arkansas.

When your kids are minors you as their parent and natural guardian make their personal and medical decisions for them.  However, as soon as they reach adulthood they are presumed to be able to make their decisions.  Likewise, when they turn 18 (if they do not have a medical power of attorney), neither you nor anybody else can step in to make their decisions if something happens to them.

Continue reading Mammas Don’t Let Your Babies Grow Up…

Barry Blackburn Passes

It has come to my attention that Olive Branch, Mississippi attorney Barry Blackburn has recently passed away.

Per Jason Bailey of Jones Walker:

There will be a Celebration of Barry’s life on Monday, March 24, 2014, from 5:00 – 7:00 p.m. It will be held at Getwell Road United Methodist Church 7875 Getwell Road, Southaven, MS 38672.

His body will be interred in Nashville in a private service at a later date.

Click here to read his obituary.

My condolences to his family.

Rob Malin