James R. Balmforth: Probate Lawyer Magna Utah

When you’re hit by the proverbial train, you want your assets to go where you want them to go when you’ve gone to wherever you hope to go. Since it’s difficult to take your money with you on that last trip, you want to be sure that your assets go to the intended beneficiaries. You also may want to minimize the amount of your assets that stick to the hands of the tax collectors and others. Speak to an experienced Magna Utah probate lawyer to know your options.

One of the two sets of issues involved in estate planning centers on the laws that control the disposition or allocation of the property of the recently deceased, and the other deals with the taxes associated with the transfer of the property from individuals and their estates to relatives and friends. If you try to minimize taxes, you may lose control of your assets. If you try to retain control, you will forgo the opportunity to minimize taxes. A difficult choice.

When you die, the law of Utah, the state where you live—your legal residence—provides that ownership of all your assets is transferred to your estate. This transfer is automatic; there is nothing you can do about it (except to give some of your assets away prior to death so that the estate will be smaller). Your estate is a fictitious person, more or less like a corporation. The next step, established by law, is that someone—the “executor” of the estate—is required by law to write the checks to pay your debts and taxes and to transfer the legal titles to the assets that are now in your estate to the individuals and charities that you have designated.
The transfer of the assets will follow the terms of your will—if you have one. If you don’t have a will, then the transfer will follow the procedures in the state of Utah where you had your legal domicile.

It is important that you speak to an experienced Magna Utah probate lawyer. The lawyer will advise you on what you need to do to ensure that your assets pass on the persons whom you want your assets to pass to. You can have an estate planning solution in place to ensure this or you could let the State of Utah decide which of your relatives gets a share of your estate. When you have an estate planning solution in place, you can give away your estate to your close friend or someone who is not related to you. But the State of Utah has no idea about which of your relatives are close to you. Utah also does not care about letting your close friend or someone else get a share in your estate. Your estate in the absence of an estate planning device will be distributed according to Utah intestate laws.
“Probate” is the name of this transfer process, which means attesting to the authenticity of your will. The probate process starts when someone—a relative, a trusted friend, a creditor—calls the judge of the probate court in the county where you live with the information that you have died. The probate judge is supposed to protect your creditors and heirs and ensure that the instructions in your will about the disposition of your assets are followed. Probate is a big business. About $500 billion in assets goes through the probate process each year—there are 15,000 probate judges in the United States. Each county has a probate judge, although in sparsely populated areas the judge may work part time. An experienced Magna probate lawyer is your best source of information about the probate process in Utah.

Your will is a legal document that identifies who should receive the assets that you owned before they were transferred to your estate. When someone dies, the original copy of the will is forwarded to the probate court. The will identifies an executor—usually a close relative or trusted friend or a lawyer or a bank—who is legally responsible for paying your outstanding bills and debts and income taxes. The executor may sell some of the assets in the estate to get the cash to make these payments. After these payments have been made, the executor is supposed to follow your instructions about transferring the remaining assets to designated individuals and charities. Speak to an experienced Magna Utah probate lawyer before you make your will.

If you don’t have a will, the distribution of the assets will follow the practices of the State of Utah. Generally, all of the assets go to the surviving spouse. The judge of the probate court appoints an administrator to manage the distribution of assets, much as an executor would if you had had a will. The administrator might be a political chum of the judge or a not-so-distant relative (the judge’s relative, not yours)—nice work if you can get it.

All estates are subject to the “estate tax” (sometimes referred to as the “death tax”), which is a tax on the transfer of assets more or less like a sales tax. The law provides a threshold credit against the estate tax liability, so that less than 1 percent of estates pay this tax. Very wealthy individuals often have transferred assets to others in anticipation of their deaths to reduce the bite of the estate tax. Estate tax payments are due within nine months of death.

Trusts and the Control over Assets

Wills and trusts are all about control of assets after death. Consult with an experienced Magna Utah probate lawyer if you want to make a will or a trust. A trust owns assets, receives income on these assets, and pays taxes on the income. Trusts are “ownership vehicles”—fictitious individuals with legal identities. Trusts own assets for the benefit of real individuals.
Trusts differ in their objectives. Some trusts facilitate the management of assets and the transfer of the ownership of assets. These trusts reduce the costs of probate. Other trusts reduce the bite of estate taxes and of capital gains taxes on appreciated assets. Still others extend your control of what had been your assets after you die.

Trusts are either revocable

or irrevocable. Remember that after you transfer assets to the trust, the trust owns these assets—you no longer own the assets. Nevertheless, the assets owned by the trust remain in the estate when the estate tax liability is determined. The grantor of a revocable trust can change his or her mind and essentially undo the establishment of the trust by asking that the ownership of the assets be transferred from the trust back to the grantor.

You can change your mind with an irrevocable trust, but it won’t do any good. The trust document cannot be undone. The grantor of the trust gives up control of the assets and cannot be the trustee. Once the assets are transferred to the trust, they are no longer in the estate. Irrevocable trusts are used to reduce tax payments. Still, there are tax consequences—the trust may have to pay income taxes, and the transfer of assets to the trust may be subject to the gift tax if the cumulative amount of the annual transfer is larger than the credit against the estate tax liability.
Wills and trusts complement each other. Your will may direct that assets in the estate be transferred to a trust to reduce tax payments and especially estate tax payments. If you want to achieve these tax savings, the instructions in your will must provide that the executor of the estate transfer some of the assets to a trust. Seek the assistance of an experienced Magna Utah probate lawyer to prepare your will.

Do not use a make it yourself will kit that you can buy online. Remember there are certain requirements for a valid will. If your will is not valid, it is you but your near and dear ones who will suffer. Your will becomes operative only on your death and not before that. If you have already made a will by yourself, have it reviewed by an experienced Magna Utah probate lawyer.

A will is advantageous for several reasons. If you die without a will, the cost of transferring assets is likely to be higher than if you had had a will and named an executor, especially if the executor were a member of your family or a trusted friend. (Their fees and charges and expenses are likely to be lower than those of the lawyers appointed by the probate judge.) If you have a will, there is smaller likelihood of significant bickering among your heirs—and the associated costs of lawyers to straighten out the arguments.

The “intervivos” or living trust is usually established to facilitate the management and control of assets of an elderly person. For example, Jack Benny Sr. establishes a living trust and transfers the ownership of some or all of his assets—bonds and stocks, his apartment or home, a checking account—to the Jack Benny Sr. Living Trust. Jack Benny Jr. and Jack Benny Sr. are both trustees; each has the ability to write checks on the trust’s accounts. Eventually Jack Jr. will begin to write checks on this account to pay Jack Sr.’s bills.

When Jack Sr. dies, the assets owned by this trust are not subject to probate, but they are included in Jack Sr.’s estate to determine whether a tax must be paid. Jack Sr.’s will indicates how the assets in the trust should be distributed. The trust is dissolved when it no longer owns any assets.

Trusts can be used

to reduce the payment of capital gains tax. You may have large unrealized capital gains on stocks and other assets. You may own some rental properties and your “tax cost” or “basis” for these properties may be substantially below current market values, perhaps because of the price appreciation or because of annual depreciation. The market value of your home may be substantially higher than the purchase price.

If you sell one of these assets, you will realize a capital gain, and you will probably have to pay the capital gains tax. If you own these assets when you die, then the cost basis of these assets is “stepped up,” and in effect the tax on the capital gain will be avoided.

Rather than sell these assets, you give them to an established charity—your favorite college, university, hospital, or religious institution. The charity sells these assets and uses the proceeds to buy bonds or stocks or some other income-producing assets that will be owned by a trust the charity has established for your benefit. You will receive annual income from this trust. When you (and your designated beneficiary, if you have established one in the trust) die, the ownership of the assets will be transferred from the trust to the charity, and the trust will be dissolved. Before you die, the charity manages the assets owned by the trust for your benefit. The income you receive from the trust is taxable as ordinary income.

Seek the assistance of an experienced probate lawyer

Just because a will has to go through probate in Utah, it does not mean that a will is not the best estate planning solution. When it comes to estate planning, there is no one size fits all solution. Each individual is unique. A will may work for some while it may not work for others. It all comes down to your individual circumstances. An experienced Magna Utah probate lawyer will review your personal circumstances and advise you on your best option. Remember before drafting your will, the lawyer will consider the issue of probate. Never use a fill in the blanks form or use a will made by someone else. It may not work for you. Most valid will go through probate without much trouble. That’s why you should get you will made by an experienced Magna Utah probate lawyer. The lawyer will help get the will probated.

Magna Utah Probate Lawyer Free Consultation

When you need help with a will, trust, power of attorney, health care directive, probate or estate administration, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We want to help you.