Estate Planning is a general term for the legal process of helping our clients arrange their affairs in such a manner as to ensure that, in the event of injury, illness, incapacity or death, their finances and personal care will be handled in the way they have directed in advance and by those individuals or financial institutions which they wish to entrust with these important tasks.
Generally, the revocable living trust is usually the centerpiece of an estate plan. A common misconception is that trusts are only for the wealthy and are established for the sole purpose of minimizing estate taxes. Consult with our Salt Lake City attorney at the Law Offices of Ryan E. Simpson, P.C., to find out about the benefits of a trust:
- Simplify administration and distribution of a person’s assets upon death.
- Minimize the cost of administration by avoiding the costs of the court proceedings called probate.
- Clearly designate persons or financial institutions to handle a person’s financial and medical affairs upon incapacity or death.
- Tax saving features
Although many other important benefits come from establishing living trusts (a living trust being simply a trust that is established while a person is alive as opposed to a trust that is created at a person’s death, the latter kind of trust being called a testamentary trust) these are the most important features that most of our clients are looking for when setting up their estate plans.
Upon a person’s death, if all that person has is a will, any assets that do not have a joint owner or for which there is no beneficiary named must be administered and distributed through a court-directed legal process called probate. A common misunderstanding is that a will also avoids probate; but in fact, a will is a ticket to the probate court just as much as if the person had died without a will, dying without a will being called “intestacy.”
However, with a living trust, all assets held in the trust can be transferred without court administration, i.e. without probate, to the persons designated as recipients in the trust, those recipients being “beneficiaries.” Because the trust does not die upon the death of the originator of the trust, the assets are not subject to the probate court process and so can pass to the beneficiaries in a much more efficient manner and without the time delays and expense usually associated with probate of a will or with intestacy.
Another important feature of the living trust is that it greatly simplifies the administration of the estate if minor children are named as beneficiaries. Many of our clients may not necessarily have large estates; however, for those who have children, there are usually life insurance policies established for the children and most policies will amount to hundreds of thousands of dollars in benefits to the children in the event of the parents’ deaths.
If a trust is not established, the children will generally receive their inheritances outright upon reaching the age of 18. Most of our clients agree that age 18 is too young to be receiving large estate distributions. The living trust can be established as the beneficiary of the trust to hold the insurance proceeds and other estate assets for the children’s health, education and support until the children reach an age at which they can be entrusted with their full inheritance. Without a trust, the children’s estates will be subject to the ongoing control and reporting requirements of the family court system which can be expensive and cumbersome.
To find out about asset protection and estate planning in Utah or if you have any questions about the services we provide, contact us by Phone at (801) 432-8682 or email at email@example.com.