Living Trust

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

5 Reasons Why You Should Do Your Estate Plan This Year

If you're like most people, you understand that estate planning is a good idea. You know that an estate plan ensures that your property goes to the right people and ensures your children are properly taken care of. Although you probably understand the importance of estate planning, you know it's all too easy to put off actually sitting down and making your plan.

If you can relate, then what better time then the New Year to resolve to actually finish your estate plan? While you may already have several New Year's resolutions swirling around in your head (or better yet already written down), a resolution to prepare your estate plan is a realistic goal that can be achieved by anyone.

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So to further encourage you to make finishing your estate plan a goal for the New Year, let us offer five reasons why your estate plan should be done this year:

1. Your Property Will Go To The People You Want

Without an estate plan you do NOT get to decide where your property goes when you die. Instead, state law determines who gets what. This may be the number one reason to do your estate plan. Even if you are not wealthy, you can still prepare a simple will or living trust to ensure your property is transferred to the people you want.

2. Your Children Will Be Taken Care Of According To Your Wishes

If you have young children and die without an estate plan then state law also determines who is the personal guardian of your minor children and who is the financial manager of their inheritance. This is why you'll want to ensure that your children are taken care of according to your wishes. In your will, you can name guardians to raise your children and managers to look after their inheritance. 

3. Your Medical And Financial Decisions Will Be Made By People You Trust

If you ever become incapacitated you will want to ensure the people you trust make important decisions for you instead of a court order or court appointed receiver. Part of estate planning is preparing for what would happen if you ever become unable to make medical and financial decisions for yourself. This can be done through a health care directive and a durable power of attorney. These documents can save your family much heartache.

4. You Will Save Time And Money By Avoiding Probate

Probate is the court process for wrapping up an estate. It's often time-consuming and expensive and rarely provides any benefit to the beneficiaries. With a little estate planning you can keep most or all of your estate out of probate, saving your loved ones time and money.

5. You May Reduce Your Estate Taxes

For the year 2017, if you pass away and your estate is worth more than $5,490,000 then your estate will be subject to federal estate taxes. If you already own this amount, or plan to eventually, then you will want to use your estate plan to reduce the tax that your estate could owe after your death. 

 

Hopefully these five reasons encourage you to make estate planning part of your goals for the New Year. Estate planning may seem overwhelming and time-consuming but it does not have to be. Keep in mind that many people need only a simple estate plan. You may even be able to prepare all your documents yourself. Or you might discover that having a lawyer do all the work for you is easier. Either way, planning your estate is a worthwhile goal that you can achieve this year. To start, get a free consultation to discuss what is best for you.

 

 

If I create a living trust, do I still need a will?

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The short answer is yes. Even if all of your property is owned by your revocable living trust, there are several reasons why you still need a will. A will "backs up" your living trust in case there is some property that somehow did not make it into the trust.

For example, a backup will helps:

  • dispose of suddenly acquired property (e.g. sudden gift, insurance proceeds, lottery winnings, a lawsuit settlement, etc.)
  • dispose of property that is generally not desirable to transfer to a living trust, such as your personal checking account or car;
  • name a personal guardian who will look after your young children; or
  • name a property manager who will look after your children's property.

If you have are planning on preparing a living will, make sure that you have a backup will for all of the above scenarios and more. Doing so will ensure that all of your property is disposed according to your wishes.

 

Do I need a living trust?

For those wishing to avoid probate, a living trust is often the most common avoidance tool. This is especially true for people that have major assets like a home, investment property, stocks, bonds, and other big ticket items.

Given the advantages of avoiding probate, it may seem like a living trust is something that everyone needs no matter their situation. However, while some lawyers make such a claim, a living trust may actually not be necessary for everyone. 

There are two reasons for that; first, there are other probate-avoidance tools that may be more appropriate, especially for certain types of property; and second, some people don't really need to avoid probate.

For example, you may not need a living trust if:

You can more easily transfer your assets by another probate-avoidance device

Other easy ways to avoid probate include pay-on-death bank accounts, joint tenancy, life insurance, gifts, and in Utah, transfer-on-death deeds for real estate. There are also other devices that you can learn about or ask an estate planning attorney about. Each of these devices can be just as effective at avoiding probate as a living trust.

You are young and healthy

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It is not very common when a healthy, younger person dies without warning. Because of this, a Will may be all that you need. While a Will does go through probate, probate only occurs after you die. Thus, as long as your living, probate-avoidance is of no benefit.

Likewise, when you are young it is likely that your primary estate planning goals are simply to ensure your property goes to the people you want and that you name someone to take care of your children (if you have any). If this is true, a will often achieves these goals more easily than a living trust.

Some attorneys may recommend a living trust to young people in case they become incapacitated and can no longer manage their estate. However, most young people don't own substantial assets or estates that need to be managed. More importantly, an easier way for young people to manage their assets should they become incapacitated is to sign a power of attorney.

Overall, if you are young and healthy, a living trust may be more appropriate later in life when the prospect of death is more imminent and you have accumulated more property.

You don't own much property

If you don't own a lot of property than there isn't any real benefit to avoiding probate since probate likely won't cost that much anyway. In fact, in Utah, if your total estate is less than $100,000 than you all of your assets can be transferred by way of a beneficiary affidavit rather than probate.

However, if you don't have much property but you do have a life insurance policy, and your young children are named as beneficiaries, than it may helpful to have a trust set up so that any life insurance proceeds are managed by the trustee instead of a court appointed conservator. This is especially recommended if you do not want your children receiving the insurance proceeds as soon as they turn 18.

You have complex debt problems

If you have a lot of creditors, then going through probate may actually be helpful. The reason for this is that probate provides an absolute cutoff time for creditors to file claims.

For instance, in Utah, creditors have one year to make a claim against your estate as soon as you file in probate court. That time period shortens to three months if you provide public notice of your probate proceeding. In contrast, a trust may be subject to creditors' claims much longer than a year.

So, a living trust?

To sum it all up, a living trust is a great tool to avoid probate and will likely be just what you need at some point in your life, if not already. However, a living trust is not always the answer to your estate planning issues and there other steps you can take to protect your assets and provide for those you care about. A good estate planning attorney can help you decide what is best for you.

 

What property cannot be left in a will?

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In most cases any property that is included in your will is transferred according to the instructions in your will. However, there are certain instruments that nullify property transferred by will. These instruments are probate avoidance devices and are commonly used. So it is helpful to know what they are. 

As an example, if you place place property in the one of the following forms of ownership, then leaving that property in your will has no effect:

  • Joint tenancy property. At your death your share in the property goes automatically to the surviving joint tenants, regardless if you left your share in your will.
  • Transfer-on-death deeds or registrations. Here, at your death the real estate or vehicle goes directly to the beneficiary you named on the deed or registration and does not go to any beneficiary listed in your will.
  • Property in a living trust. All property in a trust goes to the beneficiaries named in the trust, not the will.
  • Pay-on-death bank accounts. The beneficiary named on the bank account receives the funds and not any person named in a will.
  • Life insurance proceeds. These proceeds can only go to the beneficiaries named in the life insurance policy.
  • Retirement plans, including pensions, 401(k)s, IRAs, and profit sharing plans. These funds are payable to the named beneficiaries no matter what your will says.

If you need to review your estate plan to make sure your property is going to exactly the people you want, contact a Utah estate planning attorney at J.Cutler Law.

 

 

What is a living trust?

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Essentially a living trust performs the same function as a will without having to go through the money, delay, and hassle of probate. In other words, a living trust is a legal entity that owns your property during your lifetime, while still allowing you to manage and control it, and then transfers your property to those you wish upon your death. 

An example may help to illustrate this. Let's say John (known as the grantor) creates a living trust and thereby transfers the ownership of his home, cars, and investments into his living trust. John also names himself as trustee of the living trust and the bank as the successor trustee. John then names his wife and children as the beneficiaries (or recipients) of all of the trust property.

While still living, John does not personally own the home, cars, and investments (they are owned by the trust) but he can still manage and control this property. Upon his death, the bank becomes the trustee and transfers ownership of trust property to John's wife and children (the beneficiaries). However, unlike a will, the transfer of all of this property does not have to go through probate, which saves a lot of time and money.

For this reason, some attorneys recommend that everyone create a living trust. While there are certainly major benefits to a living trust there are also some circumstances in which a living trust may not be the best choice. There are other options to avoid probate and sometimes there may actually be some benefits to going through probate. This is why it is beneficial to talk with a local estate planning attorney to determine what is the best fit for you. To set up a free consultation with J.Cutler Law, click on the link below.