Amends TCA Title 30; Title 31; Title 32; Title 34; Title 35 and Title 67.

This bill makes various revisions and additions relating to trusts and estates, including:<br /> <br /> (1) For small estates (which are estates where the value of the property does not exceed $50,000), present law requires the court to receive and file an original affidavit as a part of the court's permanent records and the clerk to deliver to the affiant as many certified copies of the affidavit as are requested. This bill revises this provision to instead require the clerk to deliver to the affiant small estate letters of authority with a single certified copy of the affidavit.<br /> <br /> (2) Generally under present law, a person is prohibited from undertaking the administration of the estate of a minor or person with a disability until the person has been issued letters of guardianship or letters of conservatorship. However, a court may waive the prohibition when:<br /> <br /> (A) The total property of a minor or a person with a disability does not exceed $20,000; or <br /> (B) The court uses a fund or recovery that does not exceed $20,000 for the support of the minor or person with a disability.<br /> <br /> This bill increases the applicable dollar amount in the above provisions from $20,000 to $25,000.<br /> <br /> (3) Present law authorizes the conversion of an income trust to a total unitrust in certain circumstances and if certain requirements are met. Present law specifies that the provisions governing total return unitrusts pertain to the administration of a trust and are available to any trust including a trust initially converted to a total return unitrust under the laws of another jurisdiction that is administered under Tennessee law or to any trust, regardless of its place of administration, whose governing instrument provides that Tennessee law governs matters of construction or administration unless:<br /> <br /> (A) The governing instrument reflects an intention that the current beneficiary or beneficiaries are to receive an amount other than a reasonable current return from the trust or gives the trustee no discretion to distribute any trust principal to the income beneficiary under any circumstances;<br /> (B) The trust is a pooled income fund or a charitable-remainder trust described under federal law; and<br /> (C) Except for testamentary trusts established prior to July 1, 2010, the governing instrument expressly prohibits use of the present law provisions by specific reference to the law or expressly states the trustor's intent that net income not be calculated as a unitrust amount.<br /> <br /> This bill revises (A) above to remove the provision regarding the trustee having no discretion to distribute. This bill clarifies "charitable-remainder trust" in (B) above to mean "charitable-remainder trust as described in federal law". This bill revises (C) above to remove the provision for testamentary trusts established prior to July 1, 2010.<br /> <br /> (4) Under this bill, a revocable trust that becomes irrevocable upon the death of its settlor may refer to a written statement or list to dispose of tangible personal property not otherwise specifically disposed of by the revocable trust other than: money, evidences of indebtedness, documents of title, securities, and property used in a trade or business. The written statement or list may be created or altered at any time and must be handwritten or signed by the settlor, be dated, and describe the personal property and beneficiaries with reasonable certainty. Under this bill, the trustee will not be liable for any distribution of tangible personal property to the apparent beneficiary under the settlor's revocable trust without actual knowledge of the written statement or list, and the trustee has no duty to recover property distributed without knowledge of the written list. <br /> <br /> (5) Under present law, unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.<br /> <br /> This bill adds that a trustee who has resigned or been removed may, prior to delivering the trust property to another person, petition the court for a release and discharge from all liability related to a trust. All qualified beneficiaries must be made a party to any such proceeding. <br /> <br /> (6) Generally, present law requires a recordation tax on all transfers of realty on an instrument evidencing transfer of any interest in real estate of 37 cents per $100. This bill exempts from the tax deeds executed by the trustee of a testamentary trust or revocable living trust to implement the distribution of the real property from the recordation tax. <br /> <br /> (7) This bill specifies, in regard to the present law provisions for a person to disclaim inherited, gifted, or otherwise transferred property or interests, that the requirement to file the disclaimer with the court where the decedent's estate proceedings are or would be apply if the disclaimer involved an interest in the decedent's estate, that the estate to which the provisions are referring are the probate estate.<br /> <br /> (8) This bill adds under the Uniform Trust Code that when a trust is apportioned into separate shares for a single beneficiary or related beneficiary group, the apportioned separate share of the trust will be treated as separate trusts even though such share may be commingled with other separate shares for investment and tax reporting purposes. This bill also specifies that the present law requirement for a trustee to keep certain beneficiaries of a trust reasonably informed will only apply to the beneficiaries of the separate share of the trust in situations where the trust is divided into separate shares for a single beneficiary or a separate group of beneficiaries.<br /> <br /> ON APRIL 1, 2019, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 542, AS AMENDED.<br /> <br /> AMENDMENT #1 removes the provisions of this bill that are described above in the bill summary in items (1), (5), and (7).<br /> <br />