When a person who created a trust passes away, the trust often enters a process called trust administration. During this time, the trustee manages assets, pays certain expenses and follows the instructions in the trust. Many people have misconceptions about how this process works. Here are six common myths about trust administration in Tennessee.
Myth 1: Administration happens automatically
A trust does not manage itself after the creator’s death. The trustee must take specific steps to handle assets, review trust terms and carry out the clearly stated instructions.
Myth 2: A trustee can do whatever they want
Trustees have important responsibilities. Tennessee Code Annotated § 35-15-801 requires them to administer the trust in good faith and according to its terms and purposes. They must act in the best interests of beneficiaries and follow outlined directions.
Myth 3: Trusts eliminate all delays
While they can help avoid some court proceedings, administration still takes time. Gathering information, valuing assets and settling obligations may require several months or longer.
Myth 4: Beneficiaries have no right to information
Beneficiaries are often entitled to certain information. Tennessee Code Annotated § 35-15-813 establishes a default rule requiring trustees to keep certain beneficiaries reasonably informed, though the creator of the trust can restrict or completely waive this disclosure requirement under Tennessee law. This may include providing relevant information, responding to reasonable requests and supplying accountings that show assets, income, expenses and distributions.
Myth 5: Only wealthy families use trusts
Trusts are not just for the wealthy. People of all income levels use them to manage property, support family, avoid probate and provide for beneficiaries like minor children or those with special needs.
Myth 6: All trusts work the same way
They can vary greatly. Some distribute assets quickly, while others may continue for years. The process depends on specific terms and assets involved.
The reality of trust administration
Administration involves much more than distributing property. Tennessee statutes, including the Tennessee Uniform Trust Code, impose duties on trustees and provide rights to beneficiaries. Understanding these legal requirements can help families set realistic expectations and reduce the risk of disputes.