couple receiving key with house shaped keychain and preparing for property trust

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 T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, 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.