Never assume that a will is not for you and that you are better off using trusts for the purpose of estate planning. More often than not, a will may be the best option for you. It is important that you understand the entire probate process before you take a decision. Speak to an experienced Herriman Utah probate lawyer.
In most living trusts, the individuals act as their own trustees and retain control over how their assets are managed while they are alive. After their death, their assets and property, depending on the terms set down in the trust, can either continue to be held in trust or be distributed to heirs.
What are the advantages of living trusts?
If properly administered, they offer several advantages:
1. Avoid probate. The probate process is time-consuming, often taking a year or more from beginning to end, and can be expensive. The workings of the court can often be inefficient and complex, requiring the help of an attorney. A trust will pass your estate on without court involvement. If you have a will that needs to be probated, contact an experienced Herriman Utah probate lawyer.
2. Maintain privacy. Probate plays out in public courthouses, where the individual’s will and estate will be recorded for all to see. Trusts bypass probate, and the public disclosure of an individuals financial affairs.
3. Protect against disability. With the individuals’ assets placed in trusts, their designated trustees will manage those assets if they were to become incapacitated. Without a trust, the individuals’ estates may bear the time and expense of going to court to have a guardian appointed to oversee their assets.
4. Silence nit-pickers. Probate is not only public, it also entitles the individual’s next of kin to receive notice and the opportunity to object to the wills or the actions of the executor. If they question every step taken by the executor of the will, that will slow down (and add to the cost of) the process. If the will of your deceased relative is being objected to by someone, consult with an experienced Herriman Utah probate attorney. The attorney will help you deal with the objection and get the will probated.
5. Provide flexibility. The trust can often be drafted to accommodate more of the individual’s wishes than a will can. This can be important if the individual want to control the use of certain estate assets after his or her death. For example, if the individual wants to ensure that a son can continue to live in his home for as long as he wants-with it sold only when the son moves out-this complicated arrangement is best provided for in the form of a trust.
If properly funded, you can avoid the expense and formality of having a court approve the choice of executor named in your will to manage your estate after death. You can simply provide within the trust document for a successor trustee to take over management of trust property after your death. The successor trustee will not require court approval, and if all assets were titled in the trust name, there would be no estate left to probate. In the event that some of your assets remain in your name, you should draft a short will providing that all assets be “poured over” into the trust at grantor’s death.
In the event that the grantor becomes unable to handle his own affairs during his lifetime, the trust can provide for a successor trustee during the grantor’s life. This can avoid the necessity of going to court in order to have someone appointed as a guardian to take care of the grantor’s affairs. Just be sure that some sort of objective criteria, such as a family doctor’s certification, is needed in order to establish this disability.
If you own real estate in more than one state, you would normally need to have a probate proceeding in each state where the property is located, since it is the location of real property that determines which state probate law applies. However, by placing your real estate within the living trust, you can avoid all probate proceedings.
Unlike a will, which does not become effective until testator’s death, a living trust becomes operational as soon as it is funded. Therefore, it would be more difficult for classes of individuals who feel they’ve been treated unfairly to challenge the validity of the trust based on the fact that the grantor did not realize what he was doing when he created the trust (i.e., lacked testamentary capacity), or was forced into this arrangement against his desire (duress), or was tricked into signing the document (undue influence).
The grantor must change the title in all assets funded within the trust and, if he should name himself trustee, manage trust affairs throughout his life. Additionally, it would be far more time consuming and expensive for someone to sue the trustee of a trust than it would be to object to a probate proceeding, particularly if the objecting party was decedent’s next of kin.
Once a will is offered for probate its contents will become a matter of public record and anyone can read it. In addition, any person named in the will, and anyone who would have a claim to decedent’s property if there were no will, must consent in order to have the will accepted for probate. If there is no consent, then a formal citation proceeding must follow, giving notice to the non-consenting party where and when to object to the will’s validity.
Joint Account Arrangement
Is holding ownership in a joint account with rights of survivorship an easier and less costly alternative to a revocable trust? In a joint account arrangement, the asset held will pass to the survivor automatically, by operation of law, so that if all assets were titled in this manner there would be no need for a probate proceeding. The two primary disadvantages of such an arrangement are:
Joint accounts of personal property (i.e., non-real estate) will give either joint tenant the present ability to take the entire asset without the other’s approval. In a living trust, the trustee, who could be the grantor, maintains control over the asset.
Joint accounts between spouses may create an enormous estate; when the surviving spouse dies, estate tax would have to be paid. This could have been avoided if the attorney were creative in drafting the living trust provisions, by keeping part of the trust assets within the trust even after the grantor’s death. Obviously, the trust would have to provide for a successor trustee should its provisions survive the grantor, and the grantor was originally named trustee.
Irrevocable Trusts and Tax Planning
Once a transfer is made to an irrevocable trust, it can’t be undone. Transfers made to an irrevocable trust will not only avoid probate, but may also help to minimize estate taxes since they are completed transfers for gift tax purposes. In this way, all future appreciation in the property’s value will escape estate taxation.
Even though property has been legally transferred to the trust, the government will force its inclusion in one’s estate at date of death fair market value if either:
The grantor has the right to receive income for the rest of his life or
the grantor may determine who will benefit from the trust for the rest of his life.
Transferring property to an irrevocable trust may also shield the assets transferred from long-term costs incurred more than five years after the transfer.
Once the assets are transferred to this type of trust, they are out of your control forever, so make sure the trust document reflects your desires before you fund it.
With all of their advantages, they may appear at first that living trusts are fit for everyone. Speak to an experienced Herriman Utah probate lawyer to know if you should make a will or consider a living trust or both. There are some potential disadvantages of living trusts. They are:
Expense. It costs money to create and set up the living trust. While this might save their estate money down the road, the savings may be no more than the cost of setting up the trust. Unlike a will, a living trust must specify how the property should be managed during the grantor’s life as well as upon his death. That means that the attorney/draftsman’s job is more complicated and the fee will reflect the added time needed to draft the trust. But remember, the goal here is to avoid probate, where the potential attorney’s fees could be prohibitive.
Effort. For the trust to be effective, you must fund it with all of your probate assets, meaning everything you own in your name alone. This may mean changing titles to all of the individual’s real estate and cars and all of his or her bank and investment accounts. It may also mean assigning his or her personal belongings to the trust.
Alternatives. Less expensive and cumbersome options exist to accomplish the same goals, especially if the individual has small estates. They can avoid probate by holding assets in joint names with heirs or moving them to “in trust for” or “payable at death” accounts. People can provide for management of their estates in the event of their incapacity by executing a durable power of attorney, which should be done even if they also have a trust.
Mismanagement. Trusts sometimes don’t accomplish their intended purpose because individuals are given insufficient information about how they operate. Often, after the original funding of a trust, the individual may forget to put newly acquired property into it. Also, if an individual’s home is placed in trust, it may lose protection against creditors and negate the tax breaks. Before you set up a trust, speak to an experienced Herriman Utah probate lawyer. A will may be a better option for you.
No estate tax savings. While trusts can be designed to minimize or eliminate estate taxes, they do not automatically do so. If an individual has a taxable estate, the trustee will have to prepare an estate tax return, even though they avoid probate. The information that must be reported on tax returns duplicates work involved in probating an estate.
Medical care. Assets left in trust to the individual’s spouse under a will are protected if that surviving spouse must enter a nursing home and apply for Medicaid coverage. However, trusts created and funded during the individual’s life follow different rules. In most cases, those rules require that the trust funds be spent down or distributed before the surviving spouse will be eligible for Medicaid.
Potential Medicaid problems. Transfers to the individual’s children from trusts may subject those customers to a 60-month “lookback” period should they apply for Medicaid within that period of time. In contrast, transfers out of the individual’s own accounts are only subject to a 36-month look-back.
Living trusts can be important tools that allow an individual to avoid probate and improve the management of his or her estates’ assets. Whether one is appropriate for an individual depends on where he or she lives, the individual circumstances and how important it is for him or her to avoid probate.
Trusts can solve a lot of problems and ease the process of passing a person’s estates to his r children. Don’t allow yourself to be “scared” into living trusts by horror stories about the probate. In most cases, the process doesn’t pose such a big problem. Speak to an experienced Herriman Utah probate lawyer to take an informed decision. A will must still be drafted even if a living trust is in place. The will provides for items that the grantor did not want to put into the trust, as well as property that the grantor would have liked to pass through the trust but never changed title to. For this reason, the term “pour over will” is frequently used, since it provides that any other assets within testator’s estate should simply be poured over into the trust.
Herriman Utah Probate Attorney Free Consultation
When you need to probate an estate in Utah, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We are accepting new clients. We can help you with estate planning, estate litigation, probate, last will and testaments, trusts including formation and administration, private family company or corporations and much more. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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|Coordinates: 40°30′24″N 112°1′51″WCoordinates: 40°30′24″N 112°1′51″W|
|Became a city||April 19, 2001|
|Founded by||Thomas Butterfield|
|Named for||Henry Harriman|
|• Mayor||Lorin Palmer|
|• Total||21.63 sq mi (56.03 km2)|
|• Land||21.63 sq mi (56.03 km2)|
|• Water||0.00 sq mi (0.00 km2)|
||5,000 ft (1,524 m)|
|• Density||2,549.42/sq mi (984.19/km2)|
|Time zone||UTC-7 (Mountain)|
|• Summer (DST)||UTC-6 (Mountain)|
|Area code(s)||385, 801|
|GNIS feature ID||1428675|
Herriman (/ˈhɛrɪmən/ HERR-ih-mən) is a city in southwestern Salt Lake County, Utah. The population was 55,144 as of the 2020 census. Although Herriman was a town in 2000, it has since been classified as a fourth-class city by state law. The city has experienced rapid growth since incorporation in 1999, as its population was just 1,523 at the 2000 census. It grew from being the 111th-largest incorporated place in Utah in 2000 to the 14th-largest in 2020.