Tennessee has a reputation as one of the country’s most trust-friendly states, attracting individuals and companies from elsewhere for its flexible trust laws. State law provides a powerful legal tool known as a Tennessee Investment Services Trust (TIST), designed to shield assets against future creditors. When properly established and administered, a TIST can deliver significant asset protection, which is beneficial for retirees, business owners, professionals and high-net-worth individuals.

A TIST is Tennessee’s version of a domestic asset protection trust (DAPT). It allows the person creating it (the grantor) to also be a beneficiary and still enjoy creditor protection. A TIST is irrevocable by nature, meaning the grantor ordinarily cannot reclaim assets transferred into it. However, Tennessee law allows for significant flexibility. You may retain certain rights, such as veto authority over distributions, receipt of distributions at the discretion of a trustee and the power to replace trustees. 

There is an 18-month statutory limitation period that begins upon the TIST’s creation (or six months if timely notice is provided to creditors). Once that period has expired, the assets in the TIST are, with limited exceptions, out of reach of future creditors. 

There are rules and limitations governing TISTs, including the following: 

• They cannot be used to shield assets from existing or foreseeable creditor claims. Any transfer intended to defraud creditors, evade known debts or skirt lawsuits can be undone by a court. 

• Each TIST must have at least one qualified Tennessee trustee — either a Tennessee resident or a Tennessee-based corporate fiduciary — to ensure the state’s laws apply. 

• The grantor must sign a detailed affidavit of solvency, confirming they are not transferring assets to hinder or defraud creditors. Failing to sign an affidavit or signing one with false statements can invalidate the trust’s protections. 

• Some creditors — such as those owed alimony, child support or government claims — may still reach TIST assets. Courts scrutinize transfers made shortly before divorce or financial hardship.

TISTs are particularly suitable for business owners and professionals bearing liability risk, individuals seeking to protect significant personal wealth, families focused on long-term legacy planning and anyone concerned about economic uncertainty or future lawsuits. 

Given the complexities involved, professional guidance is essential. Even minor errors in establishing, funding or administering a TIST can weaken or negate its creditor protection. An experienced Tennessee asset protection attorney can ensure that every statutory requirement is met while tailoring the trust to your unique circumstances and objectives.

Parham Estate Law, with offices in Memphis and Henderson, serves clients throughout Tennessee, Mississippi and Arkansas who wish to protect their assets by creating a TIST and through other methods. Call 901-602-3361 or contact us online to schedule a consultation.