Why Wills are Important in Utah
The purpose of a will is to protect your beneficiaries, determine how your assets are allocated, and who will care for any underage children. If you should die without leaving a will, the State of Utah can determine who inherits your property. In the case of children, the State can also decide who takes care of them if you haven’t left behind specific, legal directives. In order to be valid in Utah, your will must be signed in front of two witnesses and one of those witnesses must also sign your will. Utah law allows you to name a personal representative to ensure your directives are carried out.
Even if you already have a will, it is helpful to review it periodically especially when a major event happens such as a birth, death, change of economic circumstances, or divorce.
Advantages of a Last Will and Testament
Wills are beneficial because they specifically state how your assets are to be allocated, who will care for your children, and how the terms are to be carried out. Without such a document in Utah, your property will be distributed according to “intestacy” laws. This means the spouse and children are the first people entitled to your assets, followed by parents and increasingly distance relatives including siblings, grandparents, aunts and uncles, cousins and the relatives of the spouse. In cases where none of these potential beneficiaries can be located, the State will take your property.
Self Proving Wills
In Utah, your will does not need to be signed by a notary in order to be considered a legal document. However, it is to your advantage to have it notarized so the Probate Court and easily execute your instructions. A self-proving will means two witnesses observed you sign the will and then it was notarized. If the will is not contested by potential beneficiaries, the Probate Court will accept it without witness testimony or other evidence.
Trusts differ from wills in that they are legal agreements between three parties. These are the following:
Trustmaker — this is the person who creates the trust agreement, also known as a trustor, grantor or
Trustee — the person or entity responsible for managing the property or assets
Beneficiaries — the people or entities who receive the benefits of the property or assets in the trust
A living trust is one that is in effect during the trustmaker’s lifetime. These are called testamentary trusts which are typically formed by the executor of the estate when the last will and testament names the trust as a beneficiary. Basically, this means the will directs the property and assets to be transferred into a trust at the time of death.
Revocable Living Trusts
Generally speaking, with a revocable living trust, the trustmaker, trustee and beneficiary of a revocable trust are the same person. Revocable living trusts are often done to plan for mental disability, or to avoid probate of the assets the trustmaker puts into his trust prior to death.
In cases of mental disability, a successor trustee is appointed to take over the care of the assets. The purpose is to avoid having the Court name a conservator to take over financial affairs when the creator of the trust becomes mentally incapacitated.
Irrevocable Living Trusts
In the case of irrevocable living trusts, assets are moved out of the trustmaker’s name to be given to the next generation. The advantage with irrevocable living trusts are that they can reduce the amount of estate taxes. In most cases, a trustmaker cannot act as trustee if he forms an irrevocable trust.
Trusts for Specific Needs
Each situation is different, so there are a number of ways a trust can be set up to best meet the needs of the beneficiaries. They include the following:
*Special Needs Trust — this provides a disabled beneficiary a way to receive the funds without
compromising Medicaid or Supplemental Security Income benefits
*Spendthrift Trust — This gives the trustee a way to provide assets to a beneficiary who is unable to
be financially responsible, or to safeguard inheritances in the event of divorce.
*Irrevocable Life Insurance Trust — this is a policy owned by the trust which is usually not included
in the gross value of the decedent’s estate for estate tax purposes.
Create Your Will or Trust
The Park Law Firm has successfully helped numerous clients form both simple wills and complex trusts. Remember, it is in your best interest to state how your assets should be allocated. Call The Park Law Firm today to find out how they can create the plan that is best suited for your needs.