Estate planning isn’t just making a will in case of your untimely demise. It is preparing for any situation in which you are incapacitated and ensures your affairs are in order in case of death.
When people think about estate planning, they generally think of the will. A will is a document in which you can make your final wishes known. This document will inform the courts, family and friends who you want to care for your children as well as how, asset distribution, pet care, and more. Without a will, it will be up to the probate court to determine where and with whom your children will live as well as asset distribution.
A living trust is a trust which allows you to transfer your assets or property to a person of your choosing (trustee) while you are still alive. There are essentially two main types of living trusts: revocable and irrevocable. A revocable living trust allows you to place the items into a trust while you are still living and the benefactor would receive them upon your death, after taxes. It allows the flexibility to modify the trust, remove or add beneficiaries, set or change the terms of the trust and determine how the assets are managed.
An irrevocable trust does not offer the same flexibility that a revocable trust does but has its own benefits. Once an irrevocable trust is established, you are not able to modify any aspect of the trust (there are certain exceptions, but those exceptions will come with great difficulty). It does offer a benefit to the benefactor in that they will not have to pay taxes on the assets upon death, nor would they be responsible for any taxes on income earned from said assets.
While a revocable trust is easier to establish, an irrevocable trust can be more difficult, and it would be in your best interest to hire an experienced estate planning attorney in Los Angeles to assist you.
Advanced Healthcare Directives
Advanced Healthcare Directives is another big one that you can’t afford to go without. The Advanced Healthcare Directives is comprised of several documents that will act as your voice in the event of becoming medically or mentally incapacitated. The set of documents can include:
Durable Power of Attorney
The Durable Power of Attorney is a document in which you would name an individual (an agent) to act on your behalf (the principal). This would allow the agent to pay your bills, speak to creditors and much more while you’re incapacitated. It’s important to choose someone who has your best interests at heart. A durable power of attorney as opposed to a general power of attorney only becomes effective once the individual becomes incapacitated (if created specifically for incapacitation).
Do Not Resuscitate (DNR) Order<h/h2>
The Do Not Resuscitate Order is a part of the living will. It is a document in which you make your wishes known whether you’d like to be resuscitated should the need arise.
Physician’s Order for Life-Sustaining Treatment(POLST)
This document allows you to choose a primary and secondary physician to carry out your end of life treatment. The secondary comes into effect if your first-choice physician is unwilling or unable to carry out your wishes.
Organ and Tissue Donation
Also, as a part of your living will, you’ll be able to make your wishes known if you’d like to donate any organs or tissue in the event of your death. That may be a lot to take in and you may be wondering where to start. The best and safest way to structure your estate planning and all that comes with it is to consult and work with an experienced estate planning attorney in Utah for the best outcome.
The Hidden Benefits of Estate Planning in Utah
It is widely accepted that a valid will, established trusts, and other estate planning strategies and documents have various benefits for the heirs of a decedent’s property. In fact, the act of estate planning itself gives rise to an array of practical and immediate benefits.
Looking at Your Assets
When writing a will or establishing a trust, you will need to look over and take careful stock of the property and assets you own. Investments, cash, insurance policies – all these and more must be taken into account when planning for your estate. You will also need to think seriously about what you want done with these assets after your death, and who the best person is to carry out your wishes. Sound familiar? Of course – but consider this. By forcing you to take a hard look at the status, amount, and distribution of your assets, the estate planning process also gives you a newfound awareness and understanding of your financial situation. It forces you to assess your property from a pragmatic, logical perspective which is also useful for managing your assets during your lifetime. In other words, you benefit immediately from estate planning.
Communication – The Next Step
Another thing that estate planning forces you to do is communicate. You must discuss your plans with your family and friends, negotiate compromises, and persuade hold-outs, if you want to avoid conflict over your property after you die. The hidden benefit? An increased dialogue with the people you care about, especially since the conversation concerns an issue both parties should be interested in. Furthermore, estate planning may also require that you build a relationship with lawyers, financial advisors, doctors, and/or other professionals who can help and advise you in other matters as well. The network you build through estate planning will benefit you even in your daily life and affairs. The process of estate planning not only prepares you for the distant future, but also provides benefits in the here and now.
How to Avoid Probate in Utah
• Revocable Living Trust: Living trusts were invented to let people make an end-run around probate. The advantage of holding your valuable property in trust is that after your death, the trust property is not part of your probate estate. (It is, however, counted as part of your estate for federal estate tax purposes.) That’s because a trustee not you as an individual owns the trust property. After your death, the trustee can easily and quickly transfer the trust property to the family or friends you left it to, without probate. You specify in the trust document, which is similar to a will, whom you want to inherit the property. (To learn more about living trusts, read How Living Trusts Avoid Probate.)
• Pay-on-Death Accounts and Registrations: You can convert your bank accounts and retirement accounts to payable-on-death accounts. You do this by filling out a simple form in which you list a beneficiary. When you die, the money goes directly to your beneficiary without going through probate. You can do the same for security registrations, and, in some states, vehicle registrations. More than half of the states also now allow transfer-on-death real estate deeds that take effect when you die.
• Joint Ownership of Property: Several forms of joint ownership provide a simple and easy way to avoid probate when the first owner dies. To take title with someone else in a way that will avoid probate, you state, on the paper that shows your ownership (a real estate deed, for example), how you want to hold title. Usually, no additional documents are needed. When one of the owners dies, the property goes to the other joint-owner—no probate involved.
You can avoid probate by owning property as follows:
• Joint tenancy with right of survivorship. Property owned in joint tenancy automatically passes, without probate, to the surviving owner(s) when one owner dies.
• Tenancy by the entirety. In some states, married couples often take title not in joint tenancy, but in “tenancy by the entirety” instead. It’s very similar to joint tenancy, but can be used only by married couples (or in a few states, by same-sex partners who have registered with the state). Both avoid probate in exactly the same way.
• Community property with right of survivorship. If you are married (or in Utah, if you have registered with the state as domestic partners) and live or own property in Alaska, Arizona, California, Idaho, Nevada, Texas or Wisconsin, another way to co-own property with your spouse is available to you: community property with the right of survivorship. If you hold property in this way, when one spouse dies, the other automatically owns the asset.
• Gifts: Giving away property while you’re alive helps you avoid probate for a very simple reason: If you don’t own it when you die, it doesn’t have to go through probate. That lowers probate costs because, as a general rule, the higher the monetary value of the assets that goes through probate, the higher the expense. And most gifts aren’t subject to the federal gift tax.
Handling Estate Planning After Divorce
If you think that the finalization of your divorce is the last stage of the matter, you need to brush up on your knowledge on this. Usually, this leads to other legal matters, especially those concerning your estate planning. You would need to handle numerous tasks – home refinancing, re-titling of assets, dividing retirement assets, and such others.
Here is a checklist of the areas you would need to pay attention to at this stage. While some of these are easy to handle, some require legal help. Getting a competent family law lawyer can be a necessity in this regard. Amending beneficiary designations for life insurance, employer retirement plans, annuities, individual retirement accounts, and health savings accounts – is comparatively easier. All you need to do is get the right forms, fill these and file these. This applies to Transfer on Death (investment) and Payable on Death (bank) accounts.
Amending powers of attorney, wills, and health care documents – requires expertise in the estate planning aspect of family laws. In-depth knowledge of the Bluffdale laws pertaining to the matter is imperative. Do not neglect this task; these documents are a determining factor affecting the future of your finances.
Eliminating your ex-spouse from living trusts may be a more complex matter. You may need to amend the powers of the beneficiaries and/or trustees. Advanced estate planning techniques, e.g. irrevocable trusts, may be even more complex. You need to get in touch with Utah family law lawyer to handle these issues. As you can very well understand, the finalization of your divorce does not imply that legal issues are gone. You are on the threshold of a new beginning. Ensuring proper protection of your assets in this post-divorce period is essential as it could help ascertain your financial security.
Getting qualified and experienced legal counsel is important to handle these tasks. While a lawyer knows which elements of estate-planning need amendments due to your divorce, you may have no clear idea about the same. Moreover, your lawyer has experience in dealing with such post-divorce estate planning and knows the way to approach it. Apart from qualification and experience, be sure to get a family law lawyer who has expertise in the field of estate planning.
The Probate Process In Utah
Most of what happens during probate is essentially clerical. In the vast majority of cases there’s no conflict, no contesting parties, none of the usual reasons for court proceedings. Probate rarely calls for legal research, drafting, or a lawyer’s adversarial skills. The probate attorney, or the attorney’s secretary, fills in a small mountain of forms and keeps track of filing deadlines and other procedural technicalities. In some states, the attorney makes a few routine court appearances; in others, the whole procedure is handled by mail.
For their services, both the lawyer and your executor will be entitled to fees from your estate.
• Executor fees: It’s common for the executor to waive the fee, especially if he or she inherits a substantial amount of your property.
• Attorneys’ fees: In many states, probate fees are what a court approves as “reasonable.” In a few states, the fees are based on a percentage of the estate subject to probate. Either way, a probate attorney’s fees for a “routine” estate with a gross value of $400,000 (these days, this may be little more than a home, some savings and a car) can easily amount to $20,000 or more.
• Other probate costs: In addition, there are court costs, appraiser’s fees, and sometimes other expenses.
Individuals who are considering drafting a trust or a will may wish to consult with an estate planning lawyer. He or she can explain the advantages of using a trust as well as a will. He or she can make recommendations based on the specific considerations of the client. He or she may even recommend using both documents, such as by using a pour-over will that places any property owned at the time of the testator’s death into the trust.