Estate Planning in Tennessee: What You Actually Need

Tennessee is one of the most favorable states in the country for estate planning. No state income tax. No state estate tax. No state inheritance tax. The historical Hall income tax on investment earnings was fully repealed on January 1, 2021, and the state estate and inheritance taxes were eliminated on January 1, 2016.

That tax-friendly environment means Tennessee estate planning is less about minimizing state taxes and more about two practical problems: keeping assets out of probate and making sure the right people are authorized to act when you cannot.

The Core Documents

Every Tennessee estate plan needs four documents. Not five, not ten — four, unless your situation demands more.

1. Last Will and Testament

Your will names an executor, directs who gets what, and — if you have minor children — nominates a guardian. Under T.C.A. Section 32-1-104, the will must be signed by you in front of two disinterested witnesses who sign in your presence and each other's presence.

Add a self-proving affidavit (T.C.A. Section 32-2-110) during signing. Without it, your witnesses may need to appear in court after your death to verify the execution. With it, the probate court accepts the will without witness testimony.

A will does not avoid probate. It goes through probate — it just tells the court how to distribute your assets instead of letting the state's intestacy rules decide.

2. Durable Financial Power of Attorney

This authorizes someone you trust to manage your finances if you become incapacitated — paying bills, managing investments, filing taxes, selling property. "Durable" means the authority survives your incapacity (a regular power of attorney dies when you do or when you lose capacity).

Without this document, your family must petition the court for a conservatorship to manage your affairs, a process that costs thousands and takes months.

3. Healthcare Power of Attorney

This names your healthcare agent — the person who makes medical decisions for you when you cannot communicate. Tennessee law also allows you to include specific instructions about end-of-life treatment, resuscitation, and organ donation.

Tennessee has a default surrogate law, but the statutory hierarchy may not match who you actually want making decisions. Your spouse is first, then adult children, then parents. If you want a specific child rather than all of them sharing authority, or if you want someone outside the statutory list, you need this document.

4. Advance Directive (Living Will)

The advance directive covers situations where you are terminally ill or permanently unconscious and cannot communicate. It tells your medical team whether to continue life-sustaining treatment, and under what conditions to withdraw it.

This overlaps with the healthcare power of attorney but serves a different function — the advance directive speaks directly when your agent is unavailable or when no agent has been appointed.

The Probate Avoidance Layer

The documents above handle authority and distribution. The next layer handles probate avoidance — keeping assets out of court entirely.

Tennessee's probate system is not optional for assets owned solely in your name at death. If you own real estate, bank accounts, or vehicles without a co-owner or beneficiary designation, those assets go through probate regardless of what your will says.

Tennessee makes probate avoidance harder than most states because it does not recognize transfer-on-death deeds for real property. House Bill 1793 attempted to authorize them but was withdrawn in February 2026. That means you cannot simply add a beneficiary to your property deed like you can in most other states.

Your probate avoidance options in Tennessee:

• Joint tenancy with right of survivorship — property passes directly to the surviving owner
• Tenancy by the entirety — married couples only, adds creditor protection
• Revocable living trust — holds assets outside of probate entirely
• Payable-on-death designations — for bank accounts
• Beneficiary designations — for retirement accounts and life insurance

If your personal property (excluding real estate) totals under $50,000, your heirs can use a Small Estate Affidavit under T.C.A. Section 30-4-101 after a 45-day waiting period. But any real estate in your sole name requires formal probate.

Tennessee-Specific Considerations

TennCare estate recovery. Tennessee's Medicaid program recovers long-term care costs from the estates of recipients aged 55 and older. Recovery is limited to the probate estate — assets that pass outside probate (through joint ownership, trusts, or beneficiary designations) are shielded from TennCare claims.

Elective share. Tennessee protects surviving spouses from being disinherited. The elective share is calculated on a sliding scale based on length of marriage: 10% for under 3 years, scaling up to 40% for marriages of 9 years or longer.

Community Property Trust. Tennessee's Community Property Trust Act (2010) allows married couples to voluntarily convert assets into community property inside a trust, securing a double step-up in cost basis at the first spouse's death. This eliminates capital gains taxes for the surviving spouse on appreciated assets.

County-level court variation. Tennessee has no uniform probate court system. Davidson and Shelby counties have dedicated Probate Courts. Knox, Hamilton, and Wilson counties handle probate through Chancery Court. Other counties may use General Sessions or Circuit Court. The substantive law is the same statewide, but knowing where to file matters.

What You Do Not Need

Not every tool in the estate planning catalog applies to every family:

• A trust is not always necessary. If your assets are jointly titled, have beneficiary designations, and your personal property is under $50,000, a will-based plan may be sufficient.
• A Tennessee Investment Services Trust (TIST) is for specific situations. Self-settled asset protection trusts require an irrevocable transfer, a qualified Tennessee trustee, and an affidavit of solvency. They protect against future creditors but are designed for high-net-worth individuals and professionals in high-liability fields — not for typical estate planning.
• Tax planning at the state level is largely unnecessary. With no state death taxes, the primary tax concern is federal estate tax (exemption of $13.99 million per person in 2025) and capital gains on appreciated assets.

Getting Started

Start with an honest asset inventory. List every account, property, and policy you own, and note how each is titled. The gap between "assets that bypass probate" and "assets that do not" tells you exactly what your estate plan needs to address.

The Tennessee Basic Estate Planning Kit provides the full document set, titling guidance, and a step-by-step checklist tailored to Tennessee law.

See more Tennessee guides →