The Tennessee Advantage - Counsel Trust Company

In 2013, Tennessee (TN) made significant ‘trust friendly’ liberalizations to its trust laws – essentially adopting (and improving) the best legal provisions of other trust friendly states such as South Dakota, Nevada and Delaware.

Tennessee consistently ranks in the top three states in the U.S. for superior trust laws, enabling Counsel Trust, chartered in TN, to offer clients significantly enhanced trust and estate planning capabilities such as:

Zero state income tax on trusts – There is no state tax on accumulated income and capital gains for TN trusts with nonresident beneficiaries.
Self-Settled Asset Protection Trusts – An irrevocable trust providing asset protection from creditors while also providing benefits to the creator of the trust. There must be an independent (qualified) trustee but the grantor can maintain vast powers, including distribution discretion to himself / herself as beneficiary.
Perpetual or Dynasty Trusts – The rule against perpetuities was abolished, replaced with a 360-year limit, including real estate held as an entity in corporate, LLC, LP or business trust form.
Incentive Trusts – Distributions to beneficiaries can be governed by certain grantor defined moral or ethical behavior, outcomes, goal achievements, or avoidance of certain pitfalls.
Liberal Investment Provisions – The grantor can modify normal fiduciary duty to diversify, enabling the trust to hold overly concentrated stock, a closely held business or a high-risk portfolio.
Strong ‘No Contest’ provisions – Beneficiaries are limited in challenging a trust’s provisions. Contests are limited to fraud, undue influence or lack of testamentary capacity.

Additional TN Benefits

Favorable TN ‘directed’ trust statutes broaden and strengthen grantors’ ability to design and customize family trusts that address current needs of the grantor and future needs of beneficiaries.

A TN situs trust provides grantors with significant flexibility and control to assign a variety of responsibilities such as:

Bifurcated Trust Services – Trust asset management, custody and administration can be segregated and independently assigned or aggregated with a single provider.
Trust Protector – often a trusted family member, attorney or other advisor who can be given the power to remove and replace trustees, advisors, modify or amend the governing instrument to change the situs, achieve favorable tax status or more efficient administration, or modify powers of appointment.
Investment Advisor – the grantor’s preferred investment manager can continue uninterrupted management of the portfolio with broad discretions such as maintaining a concentrated stock position.
Closely Held Business Advisor – an individual or committee (including family members) responsible for managing the business and ultimately directing a specific succession plan.
Distribution Advisor – responsible for making subjective, family sensitive distribution decisions.