James R. Balmforth: Beneficiaries of an Estate

Estate Lawyers often help people with estate planning that involves consideration of many important items. Most people think that planning an estate only applies to the very wealthy and concerns fancy estate tax formulas and trusts that diminish the impact of taxes and preserve assets for future generations.

The fact is that most individuals need to consider and establish a solid plan with the assistance of a Utah estate beneficiary lawyer even though most estates are not subject to estate taxes. Nowadays, the federal estate tax exemption exceeds $5 million and the Utah Estate tax is on its way to exempting the same amount as the federal law.

It is not uncommon when consulting a Utah estate lawyer that a client will inquire as to whether he or she should discuss the proposed plan with other family members. Typically, spouses work together in planning. This is because most spouses own assets together as joint tenants or tenants by the entirety or have named the other spouse as a beneficiary on a retirement account or life insurance policy, Moreover, when the couple has children, they both want to make sure that the provisions in their documents provide for the estate assets to pass to the children upon the death of the last surviving spouse.

It is also a good idea to involve other family members in the process. Of course, discussing advance directives and testamentary dispositions with family members such as children is a personal decision that takes into consideration family dynamics. However, where children or other members of a family or even friends have a solid trustworthy relationship, advising them as to the process may be beneficial. For example, it may be helpful, particularly where the creators are elderly, for beneficiaries to know the location or extent of assets so that the assets can be quickly secured in the event the creator becomes ill, incapacitated or dies. Also, it is helpful that named beneficiaries and fiduciaries such as executors and trustees are aware of their appointment and are familiar with the location of documents such as a Last Will, Health Care Proxy or Power of Attorney so that they can access these papers when needed. An estate beneficiary lawyer can help Utah residents make sure that everything is in order as planned.

It should be pointed out that the current form of the Utah Power of Attorney requires that the agents appointed to use the power also sign the Power of Attorney and have their signature acknowledged by a notary public. The provisions of the Utah law regarding the statutory short form power of attorney are contained in the General Obligations Law beginning at Section 5-1501.

Beneficiary of a Bank Account

A good estate plan requires the selection of beneficiaries and contingent beneficiaries. The selection of beneficiaries will usually reflect a person’s desires and most often will be a person’s spouse, children and other close relatives or friends. Charities and other not-for-profit organizations may also be named as beneficiaries in a last will or Trust. Naming the beneficiaries of an estate is an important aspect of estate planning. A Utah bank account beneficiary lawyer can help you advance your interests.

Once a person has passed away the beneficiaries of an estate will be either those named in the Will or the persons entitled to inherit under the statutes relating to intestacy.

Additionally, beneficiaries can be named on particular assets. For example, a person may have a bank account that is owned in his own name alone. Upon the person’s death this account is subject to the provisions of a Last Will. However, if a beneficiary of a bank account is named, the account passes to the named beneficiary upon death. These types of accounts have been known as Totten trusts or as “FBO” accounts which means “for the benefit of”. Another type of account ownership is a joint bank account where the joint owners have a right of ownership. Upon the death of one owner, the account is owned in its entirety by the survivor.

When creating an estate plan it is important to know who you want to benefit from your asset distributions. It is also imperative that a person know and understand their beneficiary designations so that their Will provisions and asset designations work in harmony to carry out their intentions. A bank account beneficiary lawyer in Utah can explain the designations.

Another consideration regarding beneficiaries can relate to various business agreements. For example, if the decedent owned a business, he may be the owner of shares of stock if the business was a corporation. Ordinarily, a decedent’s interest in stock held in his name would pass to his beneficiaries under his Will. However, the business may be subject to agreements such as a shareholder agreement that requires that the stock be given to the company and that the company would pay a specified sum of money to a named beneficiary. Sometimes this payment is in the form of life insurance proceeds payable to a designated beneficiary.

Additionally, the selection of a beneficiary and the manner in which the beneficial interest is transferred may be influenced by the tax laws. For example, assets given to a spouse or a charity may provide an estate tax deduction.

The estate tax marital deductions allows all assets passing to a surviving spouse to be free of any estate tax. The unlimited marital deduction is available for Federal estate tax and also Utah estate tax. Also, on the Federal level a concept known as “portability” allows a surviving spouse to obtain and use the portion of the estate tax credit exclusion that was unused by a pre-deceased spouse.

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