In order for a TIST to be effective for asset protection purposes, it must be administered by a “qualified trustee.” A qualified trustee is (a) a Tennessee resident or (b) a bank or trust company that is subject to supervision by the Tennessee Department of Financial Institutions, Federal Deposit Insurance Corporation (FDIC), Comptroller of the Currency, or the Office of Thrift Supervision. Neither you nor spouse should serve as trustee. Ideally, the trustee would not be someone who is “related or subordinate” to you. Instead the trustee should be someone you can trust to manage the trust assets wisely and to follow the terms of the TIST. The latter criterion is especially important, since failure to properly administer the TIST could open the trust up to creditors. Note that after your death, the trustee need not be a qualified trustee.
Source: T.C.A. § 35-16-102(12)
Posted by Joel D. Roettger, JD, LLM, EPLS