An estate plan consists of wills and trusts as its basic elements. The majority of the people in Utah die without creating an estate plan, putting their loved ones in a stressful situation. Regardless of how many assets one owns, an estate plan is crucial to carry out one’s wishes and in the simplest and most affordable way possible. The first and the foremost reason that makes estate planning documents so important is the peace of mind for the loved ones. Once you die, you are not there to help your family and loved ones come out of the stressful situation. Therefore, you must create a plan for the time when you will no longer be there to support your loved ones. Because an estate plan is so important, it can sometimes feel like an overwhelming task. This is why we’ve written down some quick tips in helping you prepare your estate plan. The Do’s of an Estate PlanWhen starting an estate plan, you need to consider these factors. Make A WillA will bestows upon a person the legal means to carry out the decedent’s wishes and to distribute their assets. A will is the most basic element of an estate plan and a must for every individual. Not only does a will help in disclosing your wishes, but it even lets you name the guardians for your minor or incapacitated children. It is a way to eliminate family conflicts and even prevent intestate succession (the government decides where your property goes). Make A TrustAlong with a will, it is recommended that anyone that is a homeowner should also establish a trust.. It helps in saving people from probate and the costs and burdens of going to court. It is a great compliment to a will as the trust covers real estate and the will covers everything else. Establish A Durable Power Of AttorneyEstablishing a power of attorney will help you ensure that someone can take care of you financially by all making all your payments and taxes if you ever become mentally incapacitated. Fill Out A Health Care DirectiveA health care directive enables you to choose someone to make health care decisions for you if you are in a coma or otherwise incapable of making decisions for yourself. The Don’ts of an Estate PlanWhen creating an estate plan, there are several factors that you need to avoid at all times. Do Not Keep The Attorney Out Of The LoopYour estate planning attorney needs to stay in the loop at all times. No matter what decision you are making, your attorney must have complete knowledge about it. It is best to discuss with an attorney whenever you are planning to buy or sell a property or transferring it. A wrong decision might trigger tax and legal problems.\ Do Not Assume That Your Bank Keeps Track Of Your Real Estate DocumentsKeeping track of all your real estate paperwork is your responsibility. Assuming that your bank is keeping track of all your real estate documents is a mistake. A bank has other high-priority matters to attend to; therefore, it is you who is responsible for safely keeping all important legal documents. Do Not Forget About The Backup PlanLife is full of unpredictable circumstances, and that is why having a backup plan is very important. There is a chance that you may outlive your beneficiaries. Have a document that clearly mentions the plan B if your beneficiaries were to die. Not doing so will bring the matter under the court, and what the court decides might not be in your favor! Understanding Utah’s Intestate Succession LawIntestate succession laws vary from state to state. However, in Utah, when a person passes away without an estate plan, their estate is subjected to intestate succession laws. Therefore, their assets and property will be distributed to their heirs based on the line of succession. According to Utah probate laws, the surviving spouse will inherit their assets if the deceased individual was married. If the decedent has descendants (children, grandchildren) who aren’t related to their surviving spouse, then the spouse is only eligible to receive a portion of their assets. In this case, the surviving spouse will only receive $75,000 of the decedent’s intestate property and half of the value of the estate. Whatever is left will be equally divided amongst the decedent’s children. The calculation is complicated because assets that pass through beneficiary designation or by joint tenancy also affect the distribution. If the deceased individual wasn’t married, their estate would be inherited by their descendants, children, or grandchildren. If there are no descendants, then their estate would be passed on to their parents. If their parents aren’t alive, then their assets would pass to their siblings. Some people are content with relying upon intestate succession laws. However, if you have a blended family, adopted children, or a problematic relationship with a relative who can potentially become an heir, having a Will in place is critical. If you die without a Will in Utah, you relinquish control over how your assets are distributed. Who Gets Guardianship Of Your Children?If you have children, it is important to know that there are not any intestate succession laws regarding the guardianship of children. Therefore, if a minor child’s parents pass away without a Will that designates who they desire to have guardianship of the child, anyone can petition the Probate Court to seek custody. In cases where there is more than one interested party, the courts will determine which candidate is most suitable. If you have children under eighteen, you will want to make sure that they are well taken care of in the event of your death. Selecting a guardian and naming them in your Will is the only surefire way to establish this choice as legally binding. Will The State Inherit Your Property?If there are no living relatives found, your estate can pass into “escheat.” This means that your estate is passed onto the state. Yet, this rarely happens because intestate succession laws are designed to pass your assets and property off to anyone remotely related to you. For example, the descendants of a spouse who passed before your death are also eligible to receive your estate if there are not any closer relatives. Intestate Succession and ProbateWhen a person dies with a Will or without a Will in Utah, their assets will first have to first pass through probate. Probate is a judicial process that determines the distribution of assets and property in the deceased individual’s estate. For many reasons, probate can be a lengthy and expensive process. Although the probate process in Utah isn’t as extensive as it is in other states, it can still be inconvenient for families who have suffered a devastating loss. In some instances, establishing a Revocable Trust is advisable. Transferring your assets to a Trust means your family doesn’t have to go through the probate process. It also eliminates challenges to the estate that can occur with a Will. A Trust allows you to disinherit anyone who challenges the measures you’ve set upon your death. Establishing a Trust offers numerous benefits. When you establish a Trust, you will need to designate a Trustee who serves at your incapacity or death. The Trustee acts on your behalf and is authorized to make important decisions regarding your property and finances. This should be someone you trust to have your best interests in mind. Does Utah Have an Inheritance Tax or an Estate Tax?Utah does not collect an estate tax or an inheritance tax. However, state residents must remember to take into account the federal estate tax if their estate or the estate they are inheriting is worth more than $11.18 million. And if you inherit property from another state, that state may have an estate tax that applies. You may also have to file some taxes on behalf of the deceased. Other Necessary Tax FilingsWhen you die, there are many federal and state tax situations that need to become a priority for those who survive you. Besides the state estate tax, you need to look out for the following: How to Plan Your EstateMost Americans do not have a will, and this is a fact. The absence of a will leads to consequences after the time of death of a person. Someone who does not make a will and dies will leave their family at a loss with sorting out properties. Distribution of assets of the deceased is frustrating and expensive without a will. This is why an estate planning attorney advises that a will must be created. What Happens If One Does Not Have A Will?The courts will go through what has been indicated in the law. The biggest share goes to the legal spouse, while the children share equally what is left. The formula for this can be complicated because seldom do assets come as a single aggregate. The belongings of the deceased will have to be determined first before plan on distribution can be made. This is a slow and exhausting process. Those who are still living can avoid imposing such serious inconvenience on their family by arranging the required documents before they die. With a valid will, you can be assured that your properties will go to the people you want to inherit them. The problem is that many people are not comfortable tackling such planning. Some even argue that they are not old enough to plan their own estate. However, early estate planning has its advantages. A common misconception about it, is that it is designated for wealthy people only. Even if you are just an average person with modest earnings, you surely must have possessions that need to be distributed to your loved ones in case you die. An estate plan includes a will, which is a legal document that details how you want your property to be disbursed. It also includes details on who will take care of it. It also involves a trust, which fixes your belongings for the benefit of your beneficiaries. You need an estate planning attorney in making a will and a trust. It also includes details on who benefits from the life insurance and gifts (term to describe transfer of obtained property to chosen people). Estate planning is basically based on your wishes. Discernment is often tough, because you do not want to displease your family. You may want to include them in your will to make sure you arrive at decisions favorable to everyone. The services of a professional estate planning adviser are important. Advice and assistance can be provided by an estate planning and real estate tax attorney. Details that should be taken into account are your current income and income prognosis, expenditure, current assets and liabilities, and tax implications. You may need to update your will sometime in the future if you haven’t already done so. Every now and then, you will need to review your estate planning documents, such as the will. A significant event may result in the need to make some adjustments to the will. Notify your lawyer if this need arises. Hiring an estate attorney to plan the estate can mean spending over a thousand dollars. If that is okay with you, then go on, considering money is wisely spent after all. The alternative is do things on your own, such as filling out forms. Then, you can hire a lawyer for a few hours to check your documents and make necessary arrangements. Estate Assets Not Distributed by a WillEstate planning is the process of accumulating and disposing wealth before the death of an individual or estate owner including married couples. The most important goal of estate planning is to make sure that the greatest amount of the estate passes to the estate owner’s intended beneficiaries while paying the least amount of taxes. There are estate assets of a deceased person that are not distributed by a will. Estate Assets Not Distributed By A Will1. Life insurance 2. Segregate fund 3. Registered pension funds including IRA account, 401K account, RRSP, and registered pension fund, registered annuity and registered retirement income fund. All funds under the name of “registered” are not distributed by a will, since all of them are required to name a beneficiary at the time of purchase with the intention to give the spouse some kind of protection in case of sudden death of the owner. 4. Tenant by entirety 5. Joint tenant with the right of survivor Others include certain trust documents and transfer registered account at death. Required Documents1. Life insurance Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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