Let’s get one thing straight right off the bat – estate planning is not about death. If you look at it like that, you’ll be putting it off forever. Thinking about death is dwelling on the negatives when estate planning is all about dwelling on the positives: financial security and surety for your family. In order to plan for your estate, you must first take inventory. Keep account of every piece of real estate, every bank account, every investment, and every large expense. These should be divided up in your will or living trust. However, they are the only important things.
Remember to keep track of the small things as well. While your attorney will counsel you about the larger things, the small items might be the ones your family cares about the most. It’s the happy memories associated with them that make them so important, so keep a watchful eye. If your daughter plays your piano each time she visits, leave it to her. If your son watches you each time you smoke a cigar, leave him your cigars. If your spouse’s favorite getaway location is your cabin by the lake, then make sure that no one can take it away from them.
Taxes can often times cripple your good intentions. That’s right; everything you leave your friends and family members in your will is going to be taxed. However, there are ways to lower the taxes for your family’s benefit. A trust is a document that is usually preferred to a will. With a trust, you can decide how and by whom your assets will be divided and lower the estate and gift taxes associated with that division. Also, with a trust your family can avoid probate court, a drawn-out and costly process that leaves many bitter and aggrieved.
Finally, discuss these things with your family before the documents are finalized. See what matters most to them and will it to them if you can or place those things in a trust. Inheritance is a touchy subject, but it pays to know what your family expects, especially if they will not be receiving exactly what they expect.
Communication about such things only improves matters. Not only will foreknowledge erase the potential confusion and animosity between family members during the final will and testament divisions, but it will allow you to have frank discussions with those closest to you before it’s too late.
Remember, estate planning is not something to be avoided. There is no law that says a person who plans for their estate will die soon after. In fact, there are those who institute living trusts when they are in their 30s, updating them throughout the years, and living to the ripe old age of 93. It happens all the time. So don’t put this off – it is this positive thinking that will ensure your family’s well-being.
Phases of Estate Planning
Estate planning is the process of accumulating and disposing wealth before death of an individual or estate owner. 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. In this article, we will discuss 3 phases of estate planning.
Most people misunderstand that wealth creation is only for people already have financial stability or are married. In fact wealth creation is for anyone who is over the age of 18 and has a permanent job. If you work, no matter what income levels you are, you can start to save some money through financial planning. Some people created their wealth by investing only $100 per month at first. Remember the rule that you have to pay yourself 10% from your income first then spend only for what you need and limit spending on what you want.
After You have created your wealth through years of following your financial plan, you now have reached the age or time that you would like to preserve your wealth. Here are some things that you can do:
1. Buy universal life insurance
Universal life insurance policies give you the privilege to defer your income accumulated up to maximum amount allowed every year. If you die, the investment amount together with the life insurance will be paid to your designated beneficiaries tax-free. This is helpful to preserve your wealth.
2. Invest prudently
Through careful financial planning without any emotional buying or selling caused by fluctuation of stock market(such as stock crash, stock down turn), and if you monitor your plan annually, you should be able to build a sizable wealth for your estate.
3. Maximize your IRA or RRSP contribution
IRA and RRSP contribution allows you to defer you income tax until they are withdrawn. The more IRA and RRSP contribution up to maximum amount, the more taxes are deferred that give you more income to plan for your wealth accumulation.
III. Wealth transferring
By writing your will, your wealth will be distributed according to your wish to the beneficiaries. It is the time to choose a knowledgeable and trustful person as your executor who will help to distribute your asset after you dies. You may want to form a testamentary trust if you have a disable beneficiary.
• By forming testamentary trust you can provide period of income for your disable beneficiaries. Since testamentary trust has it’s own tax status, it pays less tax if there is income retained every year.
• Use universal life insurance to pay for all deferred tax investment such as capital gain, so you can leave more wealth to your beneficiaries
• Transfer some assets to join tenancy with the right of survivor, so your estate will not need to pay tax after you die.
Legal Capacity of a Will in Estate Planning
Legal capacity of a will is a law of the State and Provincial government that helps to make a will valid. What makes a will valid:
Most State and Provincial government define a certain age for people to have the legal capacity to create a valid will. In most States and Provinces the age is set at 18, that means anyone who is 18 or older has the legal capacity to create a will. In Canada, most provinces have a majority age at 19.
b) Testamentary capacity
Testamentary capacity is defined as a person’s legal and mental ability to make a valid will. This means the person must have a sound mind and memory or disposing mind and memory. Since the requirements for testamentary capacity is minimum, it is up to the estate owner to make a will valid without being contested upon his or her death.
c) Testamentary intend
Testamentary intend means that the person who makes the will has the intention to instruct what he or she wants his or her estate to be distributed. You make sure that your have a clear intention of whom you want your wealth to be distributed to avoid any unnecessary contest upon your death.
d) Will formalities
The general formalities of wills include the following:
• Attested will: It is a witness will. It must be signed by the estate owner and signed by 2 witnesses.
• Holographic will: It is hand written by the estate owner. Holographic will is not required to be witnessed.
• Nuncupative will: Nuncupative will also known as oral will or verbal will, it must have two witnesses. Oral is usually used when a person is in terminal illness and unable to draw a proper written will.
Living Trusts Provide Valuable Estate Planning Benefits
A Living Trust is a legal document that is intended to act as a partial substitute for, as well as a supplement to, a Will. The Settlor may transfer major assets like his or her, home, savings and investment accounts, to the Trust. The trust document contains instructions for distributing these assets upon the Settlor’s death. This type of Trust is referred to as “revocable” because the Settlor can amend or revoked at any time during his or her lifetime. It is a flexible document that can be updated given a change in circumstances such as a marriage, divorce or the birth of a child.
Revocable Living Trusts are managed for the benefit of the Settlor during his or her lifetime. Generally, Settlors name themselves as trustees of their Living Trust so that they may have full control over the management of their assets. If you have named yourself as trustee, you must also name successor trustees in order to establish who will manage the trust once you are no longer willing or able to do so. The biggest advantage of a Living Trust is savings in both cost and time. Unlike a Will, a Living Trust does not have to go through probate to be executed. Probate is the court supervised process through which assets in a Will are distributed. The probate process can take months depending on the complexity of the estate and whether or not anyone chooses to contest the Will. Since the assets held in a Living Trust are transferred directly to the appropriate beneficiaries, the courts do not have to become involved in the process at all. All assets can be liquidated and distributed within weeks.
Living Trusts are also easy to administer, making it easier to choose trustees and successor trustees. Family members or trusted friends with no legal background will be able to serve as trustees. Being able to manage your own trust and have a family member become a trustee when you are no longer able can add to your peace of mind and make the process easier on your heirs. A Revocable Living Trust allows for flexibility and security.
Assets in the Trust can be built up over time, and access to income for beneficiaries continues uninterrupted should you become incapacitated. A Living Trust also ensures that your heirs will be able to avoid any aggravation and frustration that probate may cause. An experienced estate planning lawyer can set up the right trust for you and your loved ones.
Getting Divorced In West Bountiful Utah? Take Charge Of Your Estate Plan, Or The State Will Do It For You
If you are getting divorced, or are already divorced, you need to be aware of how the dissolution of your marriage affects your estate plan. It is important to understand that you already have an estate plan. Either you have a will or a trust, or what West Bountiful Utah provides which could include your spouse getting some or all of your assets. Important issues to consider are what happens during the divorce, what happens after the divorce, whether there are children, and how assets are left to those children?
When you get divorced, the law treats your ex-spouse as if he or she had died at the time of the dissolution. This means there is no need to change your will to eliminate an ex-spouse once the divorce is complete. However, there is no provision when a spouse dies prior to the completion of divorce. If a spouse dies while divorce is pending, the surviving spouse will inherit through the dead spouse’s will. If there is no will, the surviving spouse will inherit all of the estate if there are no children and at least half if there are children. Therefore, when you decide on divorce, it is necessary to amend or create a will to minimize the amount your spouse would inherit. Also, the law does not provide for private contracts such as life insurance. You will need to make sure you change any beneficiary designations naming your spouse.
Elective Share & Homestead
Unfortunately, it will not be possible to completely disinherit your spouse until the divorce is complete. Under Utah Law, a surviving spouse is entitled to a life estate in the primary residence of the dead spouse and can claim up to thirty percent of the value of the spouse’s total estate. The surviving spouse’s rights are not affected while a divorce is pending, only upon its completion. Furthermore, these rights can only be waived by a pre or postnuptial agreement. The matter gets a little more complicated if you have children.
If there are children in the marriage and one parent dies, the surviving parent will likely be the guardian. This preference is statutory, and there is nothing the other spouse can do to affect this. The surviving parent would only be excluded if they were deemed by the court to be unfit as guardian. Regardless, a secondary guardian should be nominated in case the surviving spouse is unable or unwilling to act as guardian. You may not be able to prevent your ex-spouse from becoming guardian of your children, but you can keep them from gaining control of assets you leave for the children including life insurance proceeds, bank accounts, your home and so on.
If no other plans are made, the surviving parent will gain control over the inherited assets as guardian of the children. This result can be avoided through a trust. Using a trust, you can appoint a relative or friend of your choosing to take control of your children’s assets. You can direct how and when those assets are to be used and at what ages they are to be turned over to your children. The trust can be separate or as part of your will.
Divorce is a difficult process, and it is difficult to think of all that must be done, but these issues must be addressed either during or immediately after divorce. Failure to take control over your own estate will mean that West Bountiful Utah will do it for you, and rarely to your liking. Take the time to meet with an attorney, or ask your divorce attorney about these issues. Your peace of mind and your children’s future is well worth it.
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
Ascent Law St. George Utah Office
Ascent Law Ogden Utah Office
West Bountiful, Utah
West Bountiful, Utah
|Incorporated||January 28, 1949|
|Became a city||November 12, 1962|
|Founded by||James Fackrell, Sr.|
|Named for||Bountiful (Book of Mormon)|
|• Total||3.32 sq mi (8.59 km2)|
|• Land||3.31 sq mi (8.56 km2)|
|• Water||0.01 sq mi (0.03 km2)|
||4,268 ft (1,301 m)|
| • Estimate
|• Density||1,754.92/sq mi (677.57/km2)|
|Time zone||UTC-7 (Mountain (MST))|
|• Summer (DST)||UTC-6 (MDT)|
|Area code(s)||385, 801|
|GNIS feature ID||1447113|
West Bountiful is a city in Davis County, Utah, United States. It is part of the Ogden–Clearfield, Utah Metropolitan Statistical Area. The population was 5,265 at the 2010 census, with an estimated population of 5,731 in 2018.