For years, families with significant wealth looked to Delaware, South Dakota, and Nevada for sophisticated trust planning. That is no longer necessary. Over the last two decades, Tennessee has rewritten its trust code and built one of the strongest planning environments in the country.
For families based in Franklin, Nashville, and across Middle Tennessee, the tools top advisors recommend are now available at home.
A modern, flexible trust code
The Tennessee Uniform Trust Code at T.C.A. § 35-15-101 et seq. gives families real flexibility. Decanting is permitted. Non-judicial settlement agreements are permitted. Directed trusts, trust protectors, and silent trusts are all built into the statute.
Decanting under T.C.A. § 35-15-816 is particularly valuable. It lets a trustee move the assets of an older, less flexible trust into a new trust with better terms. No court involvement is required. No beneficiary consent is required. For families with trusts drafted decades ago, decanting is often the single most useful estate planning tool Tennessee offers.
One of the strongest asset protection regimes in the country
Tennessee permits self-settled asset protection trusts under T.C.A. § 35-16-101 et seq. The vehicle is called a Tennessee Investment Services Trust, or TIST.
A properly structured TIST allows the person creating the trust to transfer assets into it, remain a discretionary beneficiary, and after an eighteen-month lookback period, protect those assets from most future creditors. It is often the centerpiece of a broader asset protection plan.
Only a handful of states offer anything comparable. Tennessee's statute is well established and reliably administered.
No state income tax on trust income
Tennessee has no state income tax on wages. The Hall Tax on investment income was fully repealed effective 2021.
For trusts administered in Tennessee, undistributed trust income is generally not subject to Tennessee state income tax at the trust level. For a trust holding significant investment assets, the savings compound across decades. This is one of the primary reasons out-of-state families now move trust situs into Tennessee.
Directed trusts let families keep their advisors in place
Tennessee's directed trust statute at T.C.A. § 35-15-1201 et seq. allows families to divide trustee responsibilities among different parties. A corporate trustee handles administration. An investment advisor directs investments. A distribution advisor directs distributions.
Each role goes to the person or institution best suited to it. Professional administration sits at the center. The family's existing wealth managers stay involved.
Trusts can last up to 360 years
Tennessee permits trusts to last up to 360 years under T.C.A. § 66-1-202. For practical planning purposes, that is a perpetual trust. For families focused on multi-generational wealth transfer, Tennessee is now a credible home for the kind of generational structures that used to require Delaware or South Dakota.
Why this matters for Middle Tennessee families
For families already based in Williamson County, Davidson County, or anywhere across Middle Tennessee, the planning tools top advisors recommend are now available at home, administered under Tennessee law. For families relocating to Tennessee from other states, moving existing trusts into Tennessee is often one of the first planning moves on arrival.
If you are reviewing an existing trust, considering a move of trust situs, or building a new plan, our estate planning and asset protection practices help families take full advantage of what Tennessee law now offers. Schedule a consultation with our team.