September 3, 2024 I Sherrard Roe Blog I Lisa K. Helton
Being asked to serve as an individual trustee is an honor. Trustees step into a leadership role in a family’s life, controlling assets and making important decisions that impact the trust beneficiaries. Individuals serving as trustee for the first time may have questions about their roles and duties and generally wonder where to start. The following discussion sets forth some initial considerations for individual trustees in Tennessee as they embark on their fiduciary journeys.
Trustees should spend time familiarizing themselves with the trust’s beneficiaries and developing a relationship with those individuals. For effective and harmonious trust administration, trustees must understand the beneficiaries’ circumstances, needs, plans, and goals. Trustees should plan to connect with the beneficiaries regularly, with the goals of establishing mutual-trust and open communication.
From a legal perspective, it is important for trustees to understand the terms of the trust, including the trustee’s enumerated powers and the standards set forth in the trust for distributions and other trust-related decisions. New trustees should view the trust document as their instruction manual and must spend time familiarizing themselves with its terms.
It is equally important for trustees to understand the laws that control their conduct in Tennessee. For example, the Tennessee Uniform Trust Code (Tenn. Code Ann. §§ 35-15-101 to -1301) (the “Trust Code”) is an important body of law for Tennessee trustees. Of particular note, the Trust Code establishes various fiduciary duties that Tennessee trustees must fulfill in their administration. These duties include but are not limited to: loyalty, impartiality, prudent administration, and control and protection of trust property. The Trust Code addresses many additional topics, such as the trustee’s powers, record keeping, and judicial proceedings.
Beyond the Trust Code, there are additional statutes in Tennessee that may be relevant to the trustee’s position, depending upon the circumstances. These include the Tennessee Uniform Prudent Investor Act (Tenn. Code Ann. §§ 35-14-101 to -114) and the Tennessee Uniform Principal and Income Act (Tenn. Code Ann. §§ 35-6-101 to -602). Again, new trustees should familiarize themselves with all relevant statutes when embarking on their new role.
When the trust includes a discretionary component for making distributions, the trustee position presents challenges of fairness, balance, and long-term vision for the best interests of the beneficiaries. Typically, for discretionary distributions, the trust instrument will list specific circumstances when a distribution may be made, such as for the beneficiary’s health, education, maintenance, and support (often referred to as a HEMS standard). When considering a beneficiary’s request for a discretionary distribution, the trustee must consider whether the request fits within the standards established by the trust and is consistent with other considerations under Tennessee law.
It is vital to note that in Tennessee, non-residents may not serve as trustees until they have properly registered with the Tennessee Secretary of State. More information may be found here: https://sos.tn.gov/node/482.
Serving as trustee involves an honored position of trust and responsibility. As outlined above, understanding the beneficiaries, following the terms of the trust document, and complying with Tennessee law are foundations to a productive and enjoyable trusteeship.
Lisa Helton focuses her practice on estate and trust litigation, appellate practice, general and commercial litigation, landlord/tenant law, representation of homeowners associations, homeowners association disputes, and IRS tax litigation and controversy. She was recognized by Best Lawyers® as the 2025 “Lawyer of the Year” in Nashville for Trust and Estate Litigation and as the 2023 “Lawyer of the Year” in Nashville for both Trust and Estate Litigation and Tax Litigation and Controversy.
