Tennessee
allows Community Property Trust (“CPT”) and has since 2010 when the legislature
passed the Tennessee Community Property Trust Act of 2010. The advantages
of having a CPT, especially if you are a business owner, are great.
Essentially, the CPT allows you to pass on your business on to loved ones
without a significant (or sometimes any tax burden). For example, Mom and
Pop Sporting Goods Store (worth $4.5 million) has been in business for 50 years
and they come to see me about their estate planning. One of their main goals
is to pass the family business on to their children with as little taxes as
possible. One option I let them business owner clients know about is a
CPT for them together and both executing separate Revocable Living Trusts
(“RLT”). The purpose of the CPT is when the first spouse dies, the other
spouse will receive the business on step-up basis. That said, the icing
on the cake is that when the second spouse dies, the beneficiaries also receive
a step-up basis. This is outstanding news for small and large business
owners alike. Proper estate planning should not be delayed. Contact
me, Adam M. Bullock, at Ratliff Law Firm to secure peace of mind for your loved
ones. abullock@ratlifflawfirm.com
or (865) 932-3441 ext. 706.
