Legalese 101: Probate Court

 
Legalese 101 is our running series aimed at helping you understand key terms found in common legal documents. At J. Cutler Law we don’t just want to collect a paycheck, we want to make sure our clients’ legal needs are fully met. A fundamental part of that is ensuring that they completely understand the legal work we do for them.

Legalese 101 is our running series aimed at helping you understand key terms found in common legal documents. At J. Cutler Law we don’t just want to collect a paycheck, we want to make sure our clients’ legal needs are fully met. A fundamental part of that is ensuring that they completely understand the legal work we do for them.

 

You may have heard people suggest that it’s a good idea to avoid probate court. And it is. But many people don’t understand exactly why.

Probate court is the name of the specific court that oversees the way a deceased person’s property is distributed to others. It also covers crucial matters like who will care for any of the deceased’s minor children.

So, in the most basic sense, probate court makes sure that your things go to the right people once you die and that your minor children will be properly cared for.

That might make you wonder why there’s talk of avoiding it. It doesn’t sound like such a bad thing, right?

Although probate court serves an important purpose in many cases, the process of going through probate can be expensive and time consuming for the friends and family you leave behind. Probate court handles cases responsibly, as you’d expect, but there’s no guarantee that they’ll decide to distribute your possessions, or provide for the care of your minor children, in the way that you would have.

The good news is that probate court is avoidable. If you’ve arranged a proper estate estate plan then you can avoid probate and ensure that your children and are cared for by the person you trust and your possessions are given to the correct people.

Call J. Cutler Law Today

J. Cutler Law is one of Utah’s most trusted estate planning firms and we’d be happy to answer more of your questions and help you arrange the estate planning you need. We can help you outline all of your estate planning options based on your needs and advise on the best course of action. Call us today for a free consultation at (801) 618-4469 or click the appropriate button to schedule a free consultation or begin the estate planning process.

Is It Really Necessary That I Have a Will and Trust?

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This is one of the most common questions we hear at J. Cutler Law.

Unfortunately, the easiest way to answer this is with another question: do you own real estate or $100,000 in assets?

If yes to either one, then you need both a Trust and a Will.

If no, then you only need a Will.

The reason for this is actually pretty simple. Under Utah law, if a person passes away and owns real estate, and/or $100,000 worth of assets, then their property must pass through probate court. However, if a person’s property is transferred to a Trust, then that property does not have to go through probate court. So a trust allows you to legally dodge probate court. And, as you can guess, probate court is expensive, time-consuming and just an all around hassle.

A Will is necessary in all circumstances because sometimes property is overlooked and not transferred into a Trust. In those situations, it is very helpful to have a simple Will (called a “Pour-over Will”) that states that any property that was not transferred into the Trust should go into the Trust. So, in addition to important things like designating guardians for minor children, a Will is a really useful backup device to a Trust.

Call J. Cutler Law Today

J. Cutler Law is one of Utah’s most trusted estate planning firms and we’d be happy to answer more of your questions and help you arrange the estate planning you need. We can help you outline all of your estate planning options based on your needs and advise on the best course of action. Call us today for a free consultation at (801) 618-4469 or click the appropriate button to schedule a free consultation or begin the estate planning process.

Legalese 101: Trusts

 
“Legalese 101” is a running series aimed at helping you understand key terms found in common legal documents. At J. Cutler Law, we want to make sure our clients’ legal needs are fully met and a fundamental part of that is ensuring that they completely understand the legal work we do for them.

“Legalese 101” is a running series aimed at helping you understand key terms found in common legal documents. At J. Cutler Law, we want to make sure our clients’ legal needs are fully met and a fundamental part of that is ensuring that they completely understand the legal work we do for them.

 

A Trust is just an agreement between a trust creator and the person who has legal control of the trust (called a trustee). This is often the same person initially but a successor trustee is usually designated for when the original trustee passes away. A common example would be a married couple that set up a trust (trust creators) and control it initially (trustees) but then designate their oldest child to take control of the trust when they pass away (successor trustee).

Upon creation of the trust, the trust creator (also called a Grantor, Trustor, or Settlor) transfers property to the trust by changing title to the property into the legal name of the trust agreement. So, for example, a homeowner would change the ownership of their home from their individual name to the name of the trust.

A trust agreement includes instructions to the Trustee regarding the management and control of everything included within the trust property. The Trustee then follows the trust instructions and manages the trust property for the benefit of those that will one day receive the trust property, called Beneficiaries (covered in another Legalese 101).

The most common type of trust is a living trust, which simply means a trust agreement whereby the Grantor and Trustee are the same person and the Beneficiaries don’t receive the trust property until the Grantor/Trustee passes away.

Call J. Cutler Law Today

J. Cutler Law is one of Utah’s most trusted estate planning firms and we’d be happy to answer more of your questions and help you arrange the estate planning you need. We can help you outline all of your estate planning options based on your needs and advise on the best course of action. Call us today for a free consultation at (801) 618-4469 or click the appropriate button to schedule a free consultation or begin the estate planning process.

Three Ways of Distributing Your Children's Inheritance That You Need to Consider

Three Ways to Distributing Your Children's Inheritance That You Need to Consider

When it comes to deciding how and when your children will eventually receive their inheritance, there are three options that are commonly chosen: outright, in stages, or in a lifetime trust. All three choices have their pros and cons so there is no right or wrong choice. As you will see, what it usually comes down to is the age, experience, and family/financial situations of your beneficiaries. 

1. Inheritance is immediately distributed outright

This is the most simple way to go because the inheritance is simply distributed directly to the beneficiaries once all of the decedent's bills and taxes have been paid.

While this may be a good choice for some, there are some drawbacks. Namely, this may not be the best choice for beneficiaries that are young or poor at managing money (it will be gone in no time), for those that are in a bad marriage (the inheritance could be lost in a divorce), for those that are in a profession that is high-risk (the inheritance could be lost in a lawsuit), or for those that are already wealthy (the inheritance will only increase their estate tax bill).

2.  Inheritance is given out in stages

This option holds a beneficiary's inheritance in a trust fund and pays the beneficiary one or more lump sums in stages - in other words when the beneficiary reaches a certain age or achieves a specific goal; then they'll receive an outright distribution of their inheritance.

For example, you could pay a beneficiary 50% of their inheritance when they reach the age of 25 and then the balance at 30, or 50% when they earn a college degree and then the balance when they complete graduate school or reach the age of 35.

Meanwhile, the property held back in the beneficiary's trust fund could be used by the Trustee to pay for the beneficiary's college or graduate education, medical bills, a car, housing, and any other day to day needs.

However, once the beneficiary receives a lump sum distribution, the same drawbacks as leaving an entire inheritance outright will apply. This option also requires a responsible trustee to manage the trust fund, which often entitles the trustee to compensation for his or her services in managing the trust (unless a trusted friend or family member is willing to do it for free).

3.  Inheritance is left in a lifetime trust

This option holds a beneficiary's inheritance in a trust fund for the beneficiary's entire lifetime. Similar to Option 2, while property is held in the trust, the Trustee can take out trust funds at anytime to pay for a beneficiary's day to day needs. 

With a lifetime trust, often times the Trustee is a third party while the beneficiary is younger (to protect the beneficiary from bad decisions and outside influences). Then, when the beneficiary is at an age where he or she will be responsible enough to take full control, the beneficiary is made the Trustee of his or her own trust.

This option has many benefits.  Any assets held in the trust are shielded from a beneficiary's creditors for their entire lifetime. This protects the assets from claims made by a beneficiary's spouse in a divorce, from any bankruptcy proceeding, and from claims made against the beneficiary in a lawsuit. This option would also ensure that any assets remaining at the beneficiaries' death would pass free of probate, state inheritance taxes, and federal estate taxes. 

However, like Option 2, this option does require ongoing trust management by a trustee - although once the beneficiary is named the trustee this is not much of an issue.

Call J. Cutler Law Today

At J. Cutler Law, we offer free consultations for you and your family regarding the right estate plan for you. We can help you outline all of your estate planning options based on your needs and advise on the best course of action. Call us today for a free consultation at (801) 618-4469 or contact us online.

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Complete Your Estate Plan in 3 Easy Steps!

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Interested in creating your will or trust but you don't know where to start? Or perhaps you've been putting off estate planning because it seems like a burdensome task?

Well that's where we come in. At J. Cutler Law we can help you complete your entire estate plan in these three easy steps:

1. Fill out a brief questionnaire by clicking here

2. Receive a phone call to confirm your wishes regarding your estate plan

3. Get your documents signed at our office or sign them at your nearest notary public

To Sue or Not to Sue

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It seems like people are suing (or getting sued) for all sorts of things these days. You’ve probably seen some crazy lawsuits make headlines and it might make you wonder how someone would even think to sue for such a thing. And what’s even crazier is that if you’re hearing about it, it’s probably because the person not only sued, but won.

While it’s true these things happen, it’s probably not a good idea to use these examples to conclude that filing a lawsuit is a good idea anytime you feel you’ve been on the wrong end of a deal. The reason these things make headlines is because they’re rare. Yes, filing a lawsuit may be the best course of action in your given situation but it is a long and costly process so you will want to have a good idea of what you’re in for before you take that route.

The first thing you’ll want to do is talk through the situation with an unbiased party. If you’re considering filing a lawsuit then chances are good you’ve found yourself in a really frustrating situation so having an objective opinion will help you separate the frustration from the facts.

A judge is not likely to respond to emotional arguments when considering a lawsuit so having a good grasp of the legal elements will be crucial. Consulting with an experienced and trustworthy attorney before filing a lawsuit will help you to know what those legal elements are and whether or not you have a good case.

Each lawsuit is different but the process for deciding whether to pursue one is the same. An attorney will first ascertain the cause of action, which is basically a list of the legally required elements that pertain to your given situation. Once you know these elements then it is usually pretty easy to figure out whether or not you have a good case.

If, for example, the dispute has arisen over a transaction then the first step is to figure out the terms of the contract. If you had a written contract then this is more straightforward (but often not as easy as you’d think). If the contract was oral then it can be a little trickier. Once the terms of the contract are established then you can determine whether or not a breach of that contract occurred and what damages resulted from the breach.

With all of the necessary legal elements laid out you will then be able to determine if filing a lawsuit is the right move. Even if you have a good case, however, it might still be advantageous to move toward arbitration or pursue a settlement. Don’t let the big dollar amounts you see in the news blind you to the reality of your own situation.

Call J. Cutler Law Today

At J. Cutler Law, we offer free consultations for you and your business. We can help you outline all the legally required elements pertinent to your situation and advise on the best course of action. Call us today for a free consultation at (801) 618-4469 or contact us online.

Power of Attorney: What You Need to Know

Although most attorneys would like to believe they have special powers, what we’re actually talking about when referring to powers of attorney is written legal permission to act in someone else’s behalf. The two most important powers of attorney granted are durable powers of attorney for medical and financial matters. These documents are important to have in place in the event that you are incapacitated sufficiently that you are unable to make important and necessary healthcare or financial decisions.

In the most general sense, a power of attorney allows you to give legal decision-making powers to another person/party. Durable powers of attorney differ from other powers of attorney in that they remain in effect even if you are incapacitated. Regardless of your age, health, or financial circumstances, it is wise to make such arrangements. Disaster can strike and the unexpected happens all the time and, in that unfortunate event, none of us would like our health or assets out of our control.

Financial Power of Attorney

A financial power of attorney should be approached in the same way. Your finances are more than just money. In many cases, the decisions that are made by an agent when a person is incapacitated have a major impact on family members and friends. Things like your children’s inheritance and your spouse’s retirement could be in the hands of someone else so you need to make sure those hands are trusted and aware of your wishes. As with medical power of attorney, this legal documentation is often combined with a written declaration of your wishes in a will or trust. These are personal decisions to be made with a lot of care. Consulting with a good attorney is vital because it will ensure that your decisions are given the legally binding backing they need to endure even if tragedy strikes.

Health Care Directive

When working with an attorney to prepare your medical power of attorney, also known as a health care directive, there are some important things to keep in mind. First, most obviously and most importantly, you should choose someone you can trust. Second, you should take the time to communicate with that person about your wishes regarding important healthcare decisions. In many cases, a medical power of attorney is combined with a health care declaration or living will in a single document so that your wishes are not only communicated but legally documented. In any case, you shouldn’t wait until “later” to lay out a plan.

Call J. Cutler Law Today

At J. Cutler Law, we offer free consultations for you and your business. We can aide you in preparing power of attorney documents and advising on the decision making process. Call us today for a free consultation at (801) 618-4469 or contact us online.