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What Is a Tennessee Community Property Trust and How Does It Work?

If you’ve got property in your name and are thinking about passing it on to your spouse, kids, or even your grandkids, it’s time to start thinking about estate planning. If the thought of estate planning makes you a little nervous, that’s okay. While the government hasn’t made inheriting property easy, there are things you can do now to make sure you’re giving a blessing instead of a curse. 

What is a community property trust?

A community property trust is a legal trust intended to protect the assets of married couples upon their death. These trusts ensure that any asset or property protected by the trust will appreciate in value after the death of one or both spouses. 

One thing you can do to ensure that you’re leaving a solid legacy is to put your estate in a property trust. If you already live in one of our nation’s nine community property states like Arizona, California, Wisconsin, Idaho, Louisiana, Nevada, New Mexico, Texas, or Washington, you and your spouse have joint ownership of your property (and your debt). But if you live outside one of these nine states, you have to put your property in a community property trust in order to have the same kind of benefits. 

For those that live in any of the nine community property states, estate planning comes a little easier. But for those who live outside of those states, lessening the burden of the government’s tax on your estate isn’t as easy. Not only do your loved ones have to worry about capital gains and estate taxes, but they don’t get to enjoy the full legacy you set aside for them. A community property trust ensures that the burden for your loved ones is minimal.

How does a Tennessee Community Property Trust work?

A Tennessee Community Property Trust ensures that your loved ones won’t have to carry the burden of having to pay major capital gains and estate taxes. While Tennessee isn’t a community property state, this community property act (signed into law in 2010) gives married couples the opportunity to protect their assets from capital gains and major estate taxes when they pass away. 

Let’s say you and your spouse purchased 100 acres of land in Leiper’s Fork valued at $1 million ten years ago. You both decided to work with your financial advisor to put it into a Tennessee Community Property Trust to lessen the burden of capital gains upon your passing. When you or your spouse passes, you can sell the property at the current market value with no capital gains (or very minimal). Now you, your spouse, (or the surviving beneficiary) can use the profits to live.  

If you’re not a Tennessee resident, you can still set up a Tennessee Community Property Trust. That’s right, there are ways to enjoy the benefits of a community property trust without having to live in the state. You just need to appoint a qualified Tennessee resident as trustee or a local bank or institution as fiduciary. 

How do I set up a Tennessee Community Property Trust?

Ready to set up your Tennessee Community Property Trust? We can help! Contact a SageSpring financial advisor to get started. We can work together to determine if this type of community property trust is right for you and your family.

The opinions expressed here are those of the author and not necessarily Raymond James. Opinions are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. This material is being provided for information purposes only. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of Raymond James, we do not provide advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Material provided by Redstory, an independent 3rd-party.

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Jeffrey Dobyns
Jeffrey T. Dobyns

CFP®, CLU, CHFC

President, SageSpring | Financial Advisor, RJFS 
615-861-6102

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Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Jeff Dobyns has enjoyed extraordinary success providing comprehensive financial planning to retirees, entrepreneurs, entertainers, and executives by taking the time to truly know his clients, understand their goals and develop and execute their ongoing, strategic, financial plans.

Jeff earned his finance degree in business administration from Ohio University and has held executive positions with financial planning firms for more than two decades. After serving as Vice President of Investments of Lykins Financial Group, CPA’s, in his hometown of Westerville, Ohio, Jeff moved to Nashville, Tennessee to found SageSpring Wealth Partners in 2002. As its President, Jeff has led SageSpring to remarkable success, holding the distinction of being one of Raymond James’ top independent contractor offices, and a member of its Chairman’s Council*, every year since 2008.

Jeff’s true calling, however, is working directly with clients, helping them plan their financial futures in a manner that aligns with their values and helps provide them with financial confidence. To help meet these goals, Jeff leads the team of Dobyns Wealth Team and also incorporates the expertise of attorneys, accountants and other professionals to provide quality financial, tax and estate planning, and ongoing asset and risk management.

As independent advisory businesses, neither SageSpring Wealth Partners nor Dobyns Wealth Team hold any assets on behalf of clients, with such custodial and brokerage services being provided by Raymond James. As a leader in wealth management, Raymond James has an exemplary reputation and today serves more than $930 billion in client assets through 8,200 financial advisors worldwide (as of 9/30/2020).

In order to meet the highest standards of professionalism and ethics in the industry, Jeff is a CERTIFIED FINANCIAL PLANNERTM practitioner**, a Chartered Life Underwriter and a Chartered Financial Consultant. Jeff is also a participant of the Dave Ramsey SmartVestor program.

Jeff’s work and personal life are both guided by his faith and the Christian principles of honesty, generosity, compassion, and integrity. Accordingly, Jeff devotes considerable time and resources to a number of causes, including serving as a board member of Men of Valor, a prison ministry and mentoring program. He is also on the advisory board of The Signatry of Middle Tennessee, which works with families to increase their charitable giving to their favorite causes. Additionally, Jeff is on the advisory board for Halftime Institute, an organization that coaches marketplace leaders to discern and engage in their life purpose. Lastly, Jeff serves on the board of the Legacy Center of Nashville, a collaboration of independent coaching resources. He is a past board member of Porter’s Call, a Nashville charity that provides free counseling for musicians and their families, and the Martha O’Bryan Center, which empowers those in poverty to transform their lives through work, education, employment, and fellowship.

Jeff and his wife, Amy, are raising their family in Brentwood where they are members of the Brentwood Baptist Church, and their children, Gracyn, Hunter, and twins Tanner and Logan, attend the Christ Presbyterian Academy. For recreation, Jeff enjoys hunting, fishing and just being outdoors.

* Membership is based on prior fiscal year production. Re-qualification is required annually.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

SmartVestor is an advertising and referral service for investing professionals (“SmartVestor Pros”) operated by The Lampo Group, LLC d/b/a Ramsey Solutions (“Ramsey Solutions”). Pursuant to an arrangement between Ramsey Solutions, SageSpring Wealth Partners and your advisor, your advisor pays Ramsey Solutions a flat monthly fee to: (a) be a SmartVestor Pro, (b) advertise services through the SmartVestor website, and (c) receive client referrals in the form of an initial introduction to interested consumers who are located in your advisor’s Pros geographic region. SageSpring Wealth Partners does not endorse and are not affiliated with Ramsey Solutions, except with respect to the arrangement described above, and neither Ramsey Solutions nor its agents are officers or employees of SageSpring Wealth Partners. Further, neither Ramsey Solutions nor its agents are authorized to provide investment advice or act in any way on behalf of SageSpring Wealth Partners, except in connection with providing your contact information to your advisor.

Ramsey Solutions’ relationship and agreement is between SageSpring Wealth Partners only. Raymond James Financial Services, Inc. is not affiliated with the solicitor arrangement between Ramsey Solutions and SageSpring Wealth Partners.

Raymond James is not affiliated with any of the organizations mentioned above.