Estate planning involves writing a will but it, itself is not a will. Estate planning can be precisely defined as a series of legal steps that involves permitting your beneficiaries to steer clear of probate and curtail the taxes incurred. It also requires you to write a living will in which you appoint trusted acquaintances who would acquire the power of attorney and executor status should you be debilitated or die.
Following are certain basic facts about Estate planning:
• It permits you to exercise direct control over how your property will be treated when you are incapacitated.
• The most important aspects of any estate plan are the procedures followed to evade too much of the estate’s value being lost to taxes like the death tax, estate tax, etc. You can curtail the estate tax by naming the recipients of funds or property from your estate in your legal will. Also, indicate that a certain amount should be given as a gift. The lifetime tax-free gift threshold is of $1 million.
• Inclusion of a living will in the estate plan is also important. Your enduring power of attorney (EPA) can be challenged only by the court in case you fail to implement the living will as a legally binding decision.
• In case you die without writing a will, the explicit laws of your state will decide how your property will be divided following probate. In such a case, it is quite possible that your estate will be taxed the maximum probable amount. According to the law, in absence of a will, your spouse is entitled to receive one third of the value of the estate. The rest of the amount has to be distributed equally among children.
• An estate plan allows you to lay down terms and conditions regarding the distribution of your property.
• Estate planning provides protection to your assets.
• Estate planning permits very explicit instructions for how your assets should be treated in case you wish to avoid this asset division from happening.
To conclude, Estate planning is the best method by which your assets can be protected from whims of government taxation and financially irresponsible relatives. It also safeguards your property by preventing the dissolution of your property by the normal laws of succession in the country.
Which Assets Pass by Intestate Succession
Only assets that would have passed through your will are affected by intestate succession laws. Usually, that includes only assets that you own alone, in your own name. Many valuable assets don’t go through your will and aren’t affected by intestate succession laws. Here are some examples:
• property you’ve transferred to a living trust
• life insurance proceeds
• funds in an IRA, 401(k), or other retirement account
• securities held in a transfer-on-death account
• real estate held by a transfer-on-death or beneficiary deed
• payable-on-death bank accounts, or
• property you own with someone else in joint tenancy.
Who Gets What in Utah?
Under intestate succession, who gets what depends on whether or not you have living children, parents, or other close relatives when you die. Here’s a quick overview:
If you die with, here’s what happens:
• children but no spouse: children inherit everything
• spouse but no descendants: spouse inherits everything
• spouse and descendants from you and that spouse: spouse inherits everything
• spouse and descendants from you and someone other than that spouse: spouse inherits the first $75,000 of your intestate property, plus 1/2 of the balance
• descendants inherit everything else
• parents but no spouse or descendants : parents inherit everything
• siblings but no spouse, descendants, or parents: siblings inherit everything
The Spouse’s Share in Utah
In Utah, if you are married and you die without a will, what your spouse gets depends on whether or not you have living descendants — children, grandchildren, or great-grandchildren. If you die with no descendants, or if all of your descendants are from you and your surviving spouse. Your spouse inherits all of your intestate property. If you die with descendants who are not the descendants of your surviving spouse; in other words, you have children or grandchildren from a previous relationship. Your spouse inherits the first $75,000 of your intestate property, plus 1/2 of the balance. Your descendants inherit everything else.
If your spouse will split your property with others, there’s another rule to bear in mind: The value of any non-probate transfers — for example, a house that passes through joint tenancy or a transfer of any of the other kinds of property listed under “Which Assets Pass by Intestate Succession,” above — will be added to the intestate estate. The non-probate transfer is considered an “advancement,” meaning that its value will be deducted from the spouse’s intestate share. If the amount of the advancement exceeds what the spouse is entitled to under intestate succession laws, the spouse will not have to pay anything back, but he or she will not inherit anything more.
Children’s Shares in Utah
If you die without a will in Utah, your children will receive an “intestate share” of your property. The size of each child’s share depends on how many children you have, whether or not you are married and whether your spouse is also your children’s parent. For children to inherit from you under the laws of intestacy, the state of Utah must consider them your children, legally. For many families, this is not a confusing issue. But it’s not always clear. Here are some things to keep in mind.
• Adopted children. Children you legally adopted will receive an interstate share, just as your biological children do.
• Foster children and stepchildren. Foster children and stepchildren you never legally adopted will not automatically receive a share.
• Children placed for adoption. Children you placed for adoption and who were legally adopted by another family will not receive a share. However, if your biological children were adopted by your spouse, that won’t affect their intestate inheritance.
• Posthumous children. Children conceived by you but not born before your death will receive a share if they survive at least 120 hours after birth.
• Children born outside of marriage. If you were not married to your children’s mother when she gave birth to them, they will receive a share of your estate if you acknowledged your paternity or if your paternity is otherwise proved under Utah law.
• Children born during your marriage. Any child born to your wife during your marriage is assumed to be your child and will receive a share of your estate.
• Grandchildren. A grandchild will receive a share only if that grandchild’s parent (your son or daughter) is not alive to receive his or her share.
This can be a tricky area of the law, so if you have questions about your relationship to your parent or child, get help from an experienced attorney in Highland Utah.
Will the State Get Your Property?
If you die without a will and don’t have any family, your property will “escheat” into the state’s coffers. However, this very rarely happens because the laws are designed to get your property to anyone who was even remotely related to you. For example, your property won’t go to the state if you leave a spouse, children, siblings, parents, grandparents, aunts or uncles, great uncles or aunts, nieces or nephews, cousins of any degree, or the descendants of a spouse who dies before you do.
Other Utah Intestate Succession Rules
Here are a few other things to know about Utah’s intestacy laws.
• Survivorship period: To inherit under Utah’s intestate succession statutes, a person must outlive you by 120 hours. So, if you and your brother are in a car accident and he dies a few hours after you do, his estate would not receive any of your property.
• Half-relatives: “Half” relatives inherit as if they were “whole.” That is, your sister with whom you share a father, but not a mother, has the same right to your property as she would if you had both parents in common.
• Posthumous relatives: Relatives conceived before but born after you die inherit as if they had been born while you were alive, as long as they survive at least 120 hours after birth.
• Immigration status: Relatives entitled to an interstate share of your property will inherit whether or not they are citizens or legally in the Highland, Utah.
• Advancements: Highland Utah considers non-probate transfers as advancements on a relative’s share. So, if your spouse receives life insurance proceeds or funds from a payable on death account, these amounts are included when calculating your spouse’s share. Additionally, if you make a gift during your lifetime to your relative and put in writing that this should be advancement at the time of making the gift or your relative states this in writing, the value of the property is subtracted from your relative’s share.
Avoiding Probate in Highway Utah
Probate court proceedings (during which a deceased person’s assets are transferred to the people who inherit them) can be long, costly, and confusing. It’s no wonder so many people take steps to spare their families the hassle. Different states, however, offer different ways to avoid probate.
Here are your options in Highland Utah.
In Utah, you can make a living trust to avoid probate for virtually any asset you own—real estate, bank accounts, vehicles, and so on. You need to create a trust document (it’s similar to a will), naming someone to take over as trustee after your death (called a successor trustee). Then—and this is crucial—you must transfer ownership of your property to yourself as the trustee of the trust. Once all that’s done, the property will be controlled by the terms of the trust. At your death, your successor trustee will be able to transfer it to the trust beneficiaries without probate court proceedings.
If you own property jointly with someone else, and this ownership includes the “right of survivorship,” then the surviving owner automatically owns the property when the other owner dies. No probate will be necessary to transfer the property, although of course it will take some paperwork to show that title to the property is held solely by the surviving owner. In Higland Utah, you can own property as joint tenants with the right of survivorship. Property owned in joint tenancy automatically passes to the surviving owners when one owner dies. No probate is necessary. Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts, or other valuable property together. In Highland Utah, each owner, called a joint tenant, must own an equal share.
Payable-on-death designations for bank accounts
In Highland Utah, you can add a “payable-on-death” (POD) designation to bank accounts such as savings accounts or certificates of deposit. You still control all the money in the account—your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank, without probate court proceedings.
Transfer-on-death registration for securities
Highland Utah lets you register stocks and bonds in transfer-on-death (TOD) form. People commonly hold brokerage accounts this way. If you register an account in TOD (also called beneficiary) form, the beneficiary you name will inherit the account automatically at your death. No probate court proceedings will be necessary; the beneficiary will deal directly with the brokerage company to transfer the account.
Transfer-on-death deeds for real estate
Highland Utah now allows you to leave real estate with transfer-on-death deeds, also called beneficiary deeds. You sign and record the deed now, but it doesn’t take effect until your death. You can revoke the deed or sell the property at any time; the beneficiary you name on the deed has no rights until your death.
Transfer-on-death registration for vehicles
Utah does not allow transfer-on-death registration of vehicles.
Simplified probate procedures
Even if you don’t do any planning to avoid probate, your estate may qualify for Utah’s simplified “small estate” probate procedures.
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are all “community property” states, meaning that, in the event of death or divorce, spouses are entitled to half of all earnings amassed during the marriage, including any property purchased with those earnings. Alaska is an opt-in community property state, which gives both parties the option to make their property community property. While you have the right to write a Will that provides your surviving spouse with less than half of these earnings, in these 10 states a surviving spouse has the right to contest the Will and request that he or she receive the full 50%. (In all likelihood, spouses in these 10 states would be awarded a full 50% by a state court.)
In all other states, spouses have the right to claim around one-third of the deceased spouse’s property (specific laws and amounts vary from state to state). Should the Will leave the surviving spouse less than one-third of the deceased’s property, the surviving spouse has the right to contest the Will in court.
Inheritance Rights Of Children And Grandchildren
In general, children and grandchildren have no legal right to inherit a deceased parent or grandparent’s property. This means that if children or grandchildren are not included as beneficiaries, they will not, in all likelihood, be able to contest the Will in court. However, if children were excluded as beneficiaries accidentally, most states will allow children to contest the Will. For example, if an individual created a Will that included existing children and then had or adopted a child after the creation of the Will and did not update it to include this new child, the state will very often recognize the new child’s right to some of the assets. In this type of situation, the state assumes that the parent did not intentionally disinherit the child, but did so accidentally.
Inheritance Rights Of Ex-Spouses
Ex-spouses also generally have no legal right to inherit a deceased ex-spouse’s property. In the case of divorce, it’s always a good idea to create a new Will and explicitly revoke the previous Will should you no longer want to leave property to your former spouse.
Free Initial Consultation with Lawyer
It’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!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506