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.

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

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.

The Reason Why You Should Have A Will - Even If You Don't Have Many Assets

The Reason Why You Should Have A Will - Even If You Don't Have Many Assets

"If you don’t have a will, the state has one for you. Regardless of how old you are or how much wealth you have, would you rather have government officials dictate where your property goes or would you rather decide that for yourself?”

Beginner's Guide To Completing Your Estate Plan

If you dread the idea of estate planning then, trust us, you are not alone. Many people avoid making proper legal arrangements for their end-of- life desires and assets for as long as possible.

While it is certainly understandable – both because there is some work required and the fact that thinking about death is unpleasant for some – this is the type of thing that should not, and need not, be procrastinated.

The first step is to have a clear understanding of exactly what estate planning entails. Estate planning is simply the legal specification of your desires for the management of all of your property after your death. Estate planning also often includes provisions for your healthcare if incapacitated before death and the desired arrangements for your body after death.

These are decisions you will want to make after giving them proper thought and consideration but just deciding on a course of action is not enough. Unfortunately there are a couple legal hoops that need to be jumped through to make your end-of- life wishes legally binding and enforceable after your death. You will want to consult with a trustworthy attorney in order to arrange your estate planning but below are a few things that everyone should know about the process.

While the term “estate” might leave you inclined to think of estate planning as only necessary for the wealthy it is, in fact, not a matter of wealth at all. You don’t need to live in Wayne Manor to have what is legally considered an estate.

By legal definition, your estate is just the umbrella term for all the property and assets that you own. This extends beyond just homes, cars, and jewelry to other intangible property such as bank accounts and insurance policies. With this understanding in mind, you can see that you don’t need to be of retirement age for estate planning to make sense.

If you own property and would like to have a say in what happens to it when you die then you will want to tackle your own estate planning sooner rather than later. Without legally binding estate planning, your end-of- life circumstances (both in terms of property and your own healthcare/burial matters) will be left to the whims of local laws, relatives, and doctors.

No two estates are the same so no two estate planning processes are the same either. In some cases the transferal of property is simple and clear and requires just a few pages of legal documentation. In most cases, however, arranging who gets what and when they will get it requires a number of different legal documents.

In addition to a declaration of what property goes to what person, you also want to consider aspects such as legal guardianship of dependent children, who will act as your agent in making decisions after your death, and how to handle any outstanding debts and taxes.

The most basic and essential document is a will but most people also find it necessary to set up a trust in order to legally arrange for a person (or people) to have the right to manage all or some of your assets upon your death without going through probate court (which is costly and time-consuming).

Trusts can be set up as revocable or irrevocable, with the former meaning that it can be amended down the road if you so desire and the latter meaning that once finalized it cannot be changed.

Wills and trusts are just two of the most crucial documents needed to properly arrange for your wishes to be carried out after your death. Depending on your circumstance, there may be other estate planning documents that you need and you will certainly want to consult with an attorney in that process.

Call J. Cutler Law Today

At J. Cutler Law, we offer free estate planning consultations for you and your family. We handle all the steps of estate planning, can help simplify the process for you, and are available to consult on any stage of the process. Call us today for a free consultation at (801) 618-4469 or contact us online.