Gallatin, TN asked in Estate Planning and Elder Law for Tennessee

Q: Do we need to go to court, in TN, to terminate an irrevocable trust, in which a home is included?

Home in an irrevocable trust. Selling the home now, but grantor is still alive. All beneficiaries, trustee and grantor are in agreement to terminate trust. That way we could avoid paying taxes on all profit, and be able to get the first $250 k in profit free of taxes. Could we do it without having to go to court, just signing affidavits?

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1 Lawyer Answer
Anthony M. Avery
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  • Estate Planning Lawyer
  • Knoxville, TN
  • Licensed in Tennessee

A: If the purchaser wishes to take such a title risk, then all interested parties might sign deed as grantors. But I would not draft that deed. It is recommended that a competent attorney be retained to read the Trust, search the Title, then file suit in Chancery to get authority to convey. Otherwise purchaser would be taking a huge risk, and grantors would not want to sign a warranty deed. If I represented purchaser, I would not recommend paying over 50% of value, due to expectant required litigation to cure title.

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