Tennessee Trust Administration
How to administer a Tennessee trust after the grantor dies: successor trustee duties under the Tennessee Uniform Trust Code, notice, accounting, and taxes.
When the person who created a revocable living trust, the grantor, dies, the trust assets do not go through probate. Instead, the successor trustee steps in to manage and distribute them according to the trust document. This process is called trust administration, and in Tennessee it is governed by the Tennessee Uniform Trust Code, Tenn. Code Ann. Title 35, Chapter 15.
If you have just been named successor trustee, this guide explains what you need to do and what your legal duties are. Use it as a planning map, not legal advice.
Trust Administration vs. Probate
Probate is a court-supervised process for distributing a deceased person's estate. Trust administration is largely private and out of court. There is no probate filing for assets that are properly held in the trust, and there is usually no routine court involvement. That is the main reason people use revocable living trusts, and it is why trust administration is typically faster and more private than probate. For how probate works when assets fall outside the trust, see the Tennessee probate guide.
A trust does not entirely replace a will. Most people with a trust also sign a pour-over will directing any assets left outside the trust to pour into it. Those pour-over assets may still require a probate proceeding. The Tennessee revocable living trust guide explains funding and the pour-over will.
Your First Steps as Successor Trustee
When the grantor dies, your authority as successor trustee activates under the terms of the trust. Your first steps:
1. Locate and Read the Trust Document
Find the original trust instrument and every amendment or restatement. The document is your rulebook. It names the beneficiaries, sets what each receives, and defines your powers.
2. Obtain Certified Copies of the Death Certificate
You will need several certified copies to transfer assets. The Tennessee death certificates guide explains how to order them.
3. Notify the Beneficiaries
The Tennessee Uniform Trust Code imposes a duty to keep beneficiaries informed. Under Tenn. Code Ann. 35-15-813, a trustee must keep the qualified beneficiaries reasonably informed about the administration of the trust and the material facts they need to protect their interests, and must respond within a reasonable time to a beneficiary's request for information. Send written notice to the beneficiaries promptly, telling them the grantor has died, that you are serving as successor trustee, and that they are beneficiaries.
4. Obtain a New Tax ID Number (EIN)
A revocable trust uses the grantor's Social Security number during life. At the grantor's death the trust becomes irrevocable and needs its own Employer Identification Number from the IRS. You can apply online at IRS.gov.
5. Open a Trust Bank Account
Open a dedicated account in the trust's name using the new EIN to receive income, pay expenses, and make distributions. Do not mix trust funds with your personal money.
Core Trustee Duties Under Tennessee Law
Part 8 of the Tennessee Uniform Trust Code sets out the trustee's duties. These are legal obligations, not suggestions, and breaching them can expose you to personal liability.
Duty to Administer the Trust
You must administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in line with the Tennessee Uniform Trust Code.
Duty of Loyalty
You must administer the trust solely in the interests of the beneficiaries. Self-dealing is prohibited unless the trust expressly allows it. You should not buy trust assets for yourself, borrow from the trust, or favor your own interests. If you are also a beneficiary, be especially careful to act for all beneficiaries.
Duty of Impartiality
If the trust has more than one beneficiary, you must act impartially in managing and distributing the property, giving due regard to each beneficiary's interests. This matters when one beneficiary receives income and another receives the remainder.
Duty of Prudent Administration
You must administer the trust as a prudent person would, exercising reasonable care, skill, and caution. Tennessee follows prudent-investor principles for investing trust assets, so you should not leave assets idle for long periods or make speculative, concentrated bets. For a large trust, consider a professional investment manager and document your reasoning.
Duty to Keep Property Separate and Keep Records
Keep trust property separate from your own, title it clearly in the trust's name, and keep complete records of administration.
Duty to Inform and Report
Beyond the initial notice, you have an ongoing duty under Tenn. Code Ann. 35-15-813 to keep qualified beneficiaries reasonably informed and to provide information they reasonably request. Be transparent and responsive.
Identifying and Transferring Trust Assets
What Is Already in the Trust
Property funded into the trust during the grantor's life, such as real estate deeded to the trust or accounts titled in the trust's name, is already part of the trust estate. Inventory it and gather documentation.
Real Property
Real estate in the trust transfers by a trustee's deed that you sign as successor trustee, conveying the property to the beneficiary (or to yourself as continuing trustee if the trust goes on). Record the deed in the office of the county register of deeds where the property is located.
Financial Accounts
Contact each institution, present the death certificate and a certification of trust confirming your authority, and follow the institution's transfer procedures.
Retirement Accounts and Life Insurance
These pass by beneficiary designation, not through the trust, unless the trust is named as beneficiary. Handle them separately with the plan or insurer.
Pour-Over Assets
Any assets left outside the trust that must pour in through the pour-over will may require a probate proceeding. The Tennessee probate guide explains that route, and the Tennessee executor duties guide covers the personal representative's role.
Trust Accounting
Even though trust administration is not court-supervised, you must keep accurate records and account to the beneficiaries.
Keep records of the assets you took over (an inventory), all income received, all expenses paid, all distributions made, and all investment transactions. When you distribute the trust, or periodically during a long-term trust, provide the beneficiaries a clear accounting of what came in, what went out, and what remains. A good accounting protects you: it shows you acted correctly and gives beneficiaries a chance to raise concerns before you close the trust.
Taxes During Trust Administration
Trust Income Tax Return
If the trust holds income-producing assets, it may need to file a federal Form 1041 for the year of death and each year until it is fully distributed. Consult a CPA or tax attorney.
No Tennessee Death or Income Tax
Tennessee has no state estate tax and no inheritance tax, both repealed for deaths on or after January 1, 2016, and the Hall tax on interest and dividends was fully repealed effective January 1, 2021. So Tennessee generally does not require a state fiduciary income tax return for trust income. (Source: Tennessee Department of Revenue, Inheritance Tax.) Federal estate tax applies only to very large estates above the federal exclusion (set at $15 million per person for 2026), so most trusts owe no death tax.
Step-Up in Basis
Assets held in a revocable living trust generally receive a step-up in tax basis at the grantor's death under federal rules, just like assets passing through probate, which can reduce capital gains tax when a beneficiary later sells. Basis rules are federal and fact-specific, so confirm with a tax professional.
Distributing Trust Assets
Once debts and taxes are handled and assets are transferred, you distribute the remaining property as the trust directs.
Immediate distribution. Many revocable trusts distribute outright to beneficiaries as soon as administration is complete, similar to settling an estate under a will. You make the distributions and close the trust.
Continuing trust. Some trusts continue after death, for example holding assets for a minor until a set age, providing for a surviving spouse for life, or supporting a beneficiary with a disability. If the trust continues, you administer it on an ongoing basis, investing prudently, distributing as directed, filing annual returns, and providing regular accountings.
Trustee Compensation
Under the Tennessee Uniform Trust Code, a trustee is entitled to reasonable compensation for services. What is reasonable depends on the size and complexity of the trust, the work involved, and local practice. Individual trustees who are also beneficiaries often charge a reduced fee or none at all.
Common Mistakes Trustees Make
- Commingling. Mixing trust funds with personal funds is a serious breach. Keep a separate trust account.
- Distributing before debts and taxes are settled. Distribute only after confirming liabilities are covered.
- Ignoring a dissatisfied beneficiary. Address concerns in writing and promptly, before they escalate.
- Acting beyond your authority. Read the trust carefully; not all trustees have all powers. When in doubt, consult a Tennessee trust attorney.
Related Guides
- Tennessee Revocable Living Trust
- Tennessee Executor Duties
- Tennessee Probate Guide
- How to Avoid Probate in Tennessee
- Tennessee Estate Planning Basics
This guide is general information about Tennessee trust administration. It is not legal advice. Consult a licensed Tennessee trust attorney for advice specific to your trust and situation.
Sources
- Title: Tennessee Uniform Trust Code, Title 35, Chapter 15. Publisher: Tennessee Code (Justia, official text mirror). Publication Date: 2024 Tennessee Code, accessed 2026-06-20. URL: https://law.justia.com/codes/tennessee/title-35/chapter-15/
- Title: TN Code 35-15-813, Duty to inform and report. Publisher: Tennessee Code (Justia, official text mirror). Publication Date: 2024 Tennessee Code, accessed 2026-06-20. URL: https://law.justia.com/codes/tennessee/title-35/chapter-15/part-8/section-35-15-813/
- Title: Inheritance Tax (repealed for deaths on or after Jan. 1, 2016). Publisher: Tennessee Department of Revenue. Publication Date: Accessed 2026-06-20. URL: https://www.tn.gov/revenue/taxes/inheritance-tax.html
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Tennessee Intestate Succession: Who Inherits Without a Will
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Tennessee Notice to Creditors and Estate Claims
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