EP.55 ESTATE PLANNING & TENNESSEE TRUST LAW with AARON FLINN of the WALLER LAW FIRM

The COVID-19 phenomenon has created worldwide economic upheaval and problems for many business owners. One area where the coronavirus has created opportunity is in the field of estate planning.

I was able to speak with AARON FLINN about the opportunities that exist right now. We will go into some of the tools in his toolkit (including the use of preferred jurisdictions like Tennessee) to help successful, and often complicated, families take advantage of a difficult economic environment.

Aaron is a partner of WALLER, a full-service business law firm based out of Nashville, Tennessee with offices across the Southeast and Texas. He specializes in trust and estate work, wealth preservation, business succession and family office structuring.

Why is right now is an optimal time to review estate planning affairs and wealth structure?

1)  The shutdown has been a rare quiet time to think about the how families want to set up future affairs and have internal discussions about the investment, use, direction and purpose of the wealth.

2)  Lower valuations:

With markets generally lower across the board, the valuations of most family assets has decreased as well. This provides added flexibility when using estate planning tools and government defined exemptions to shift wealth out of an estate into the ownership of the next generation.

3)  Generationally low interest rates:

As the government has lowered interest rates to stimulate the economy, many of the standard interest rates used in estate planning have fallen as well. Government defined “Applicable Federal Rates” (AFR’s) are the lowest they have ever been. The amplify the effectiveness of even the simplest of planning techniques.

As part of that planning, there are lots of instruments, jurisdictional choices and legal devices to effectuate a family’s wishes. What makes Tennessee an interesting state for families to consider?

The Friendly Trust Environment of Tennessee

• The theory behind Tennessee’s trust law

• The interaction of the Bar, Trust Industry, and the Regulators

Directed Trusts 

• Specialized control of a trust’s investments – why is that important?

• Involving Trusted Advisors on Distribution Decisions – why is this important?

• Why does the use of an Independent Trust Company for administrative purposes make sense?

Avoiding State Income Tax on Accumulated Income and Capital Gains

• How does this work with clients from other states?

• What should we think about with source income

Asset Protection

• Beneficiary Creditors

• Self Settled Trusts

Distribution Flexibility

Perpetual Trusts

Flexibility for Family wishes

• Decanting

• Trustee Removal

• Silence

Specialized Protection for Independent Advisors

• Special Purpose Entities (SPE) for investment direction advisors

• Special Purpose Entities (SPE) for Distribution Advisors

• Tennessee as an Excellent Environment for Private Trust Companies

• What is a Private Trust Company?

• In building these out what is the best way to ensure the multi-generational success of this flexible structure?

• Jurisdictional and Regulatory “Understanding of the Space”

• Well-suited legal and corporate fiduciary support located locally as required.

COMMENTS or QUESTIONS

Aaron can be contacted here: AARON FLINN

Additionally, I can be contacted here (FRAZER RICE) or here (FRAZER RICE) for further comments and questions.