The terms “living will”, “health care directive”, and “advance directive”, all refer to the legal document that lets people state their wishes for end-of-life medical care. A living will, despite its name, isn’t at all like the wills that people use to leave property at their death. A living will, also called a directive to physicians or advance directive, is a document that lets people state their wishes for end-of-life medical care, in case they become unable to communicate their decisions. It has no power after death. If you’re helping someone with their estate planning (or doing your own), don’t overlook a living will. It can give invaluable guidance to family members and healthcare professionals if a person can’t express his or her wishes. Without a document expressing those wishes, family members and doctors are left to guess what a seriously ill person would prefer in terms of treatment. They may end up in painful disputes, which occasionally make it all the way to a courtroom. How to Create a Living WillThe requirements for a living will vary by state so many people hire a lawyer to prepare their living will. Most people can create this simple document – along with the other typical estate planning documents – without the high legal fees by using a quality software application that accounts for their state’s laws. If you need to write or update a will or trust, you can take care of your living will at the same time. Making Your Own Living WillYou can create a legally binding health care directive (living will) without paying an attorney by using reputable estate planning software. In addition to a living will, you can create a complete set of estate planning documents including your will, power of attorney, living trust, and more. How Living Wills WorkMany states have forms for advance directives, allowing residents to state their wishes in as much or as little detail as they’d like. For example, it’s common to direct that “palliative care”—that is, care to decrease pain and suffering always be administered, but that certain “extraordinary measures,” like cardiopulmonary resuscitation (CPR) not be used in certain circumstances. To be valid, a living will must meet state requirements regarding notarization or witnesses. A living will can be revoked at any time. The document can take effect as soon as it’s signed, or only when it’s determined that the person can no longer communicate his or her wishes about treatment. Even if it takes effect immediately, doctors will rely on personal communication, not a document, as long as possible. Creating a living will or advance directive• Hire an attorney or do it yourself: An attorney who focuses on estate planning can create an advance directive for you and will know your state’s laws. You can also create one on your own, but you must make sure it meets your state’s requirements. Resources available to you include legal document creation software; a free living will form provided by your physician, local hospital, local senior center, or state’s medical association; and The National Hospice and Palliative Care Organization, which allows you to download a state-specific advance directive form. A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the trustor’s assets, to make sure those assets are distributed according to the wishes of the trustor, and to save time, reduce paperwork and, in some cases, avoid or reduce inheritance or estate taxes. In finance, a trust can also be a type of closed-end fund built as a public limited company. Understanding TrustTrusts are created by settlors (an individual along with his or her lawyer) who decide how to transfer parts or all of their assets to trustees. These trustees hold on to the assets for the beneficiaries of the trust. The rules of a trust depend on the terms on which it was built. In some areas, it is possible for older beneficiaries to become trustees. For example, in some jurisdictions, the grantor can be a lifetime beneficiary and a trustee at the same time. A trust can be used to determine how a person’s money should be managed and distributed while that person is alive, or after their death. A trust helps avoid taxes and probate. It can protect assets from creditors, and it can dictate the terms of an inheritance for beneficiaries. The disadvantages of trusts are that they require time and money to create, and they cannot be easily revoked. A trust is one way to provide for a beneficiary who is underage or has a mental disability that may impair his ability to manage finances. Once the beneficiary is deemed capable of managing his assets, he will receive possession of the trust. Categories of TrustsAlthough there are many different types of trusts, each fits into one or more of the following categories: Living or TestamentaryA living trust – also called an inter-vivo trust is a written document in which an individual’s assets are provided as a trust for the individual’s use and benefit during his lifetime. These assets are transferred to his beneficiaries at the time of the individual’s death. The individual has a successor trustee who is in charge of transferring the assets. A testamentary trust, also called a will trust, specifies how the assets of an individual are designated after the individual’s death. Revocable or IrrevocableA revocable trust can be changed or terminated by the trustor during his lifetime. An irrevocable trust, as the name implies, is one the trustor cannot change once it’s established, or one that becomes irrevocable upon his death. Living trusts can be revocable or irrevocable. Testamentary trusts can only be irrevocable. An irrevocable trust is usually more desirable. The fact that it is unalterable, containing assets that have been permanently moved out of the trustor’s possession, is what allows estate taxes to be minimized or avoided altogether. Funded or UnfundedA funded trust has assets put into it by the trustor during his lifetime. An unfunded trust consists only of the trust agreement with no funding. Unfunded trusts can become funded upon the trustor’s death or remain unfunded. Since an unfunded trust exposes assets to many of the perils a trust is designed to avoid, ensuring proper funding is important. Common Purposes for TrustsThe trust fund is an ancient instrument – dating back to feudal times, in fact – that is sometimes greeted with scorn, due to its association with the idle rich (as in the pejorative “trust fund baby”). But trusts are highly versatile vehicles that can protect assets and direct them into the right hands in the present and in the future, long after the original asset owner’s death. A trust is a legal entity employed to hold property, so the assets are generally safer than they would be with a family member. Even a relative with the best of intentions could face a lawsuit, divorce or other misfortune, putting those assets at risk. Though they seem geared primarily toward high net worth individuals and families, since they can be expensive to establish and maintain, those of more middle-class means may also find them useful – in ensuring care for a physically or mentally deficient dependent, for example. Some individuals use trusts simply for privacy. The terms of a will may be public in some jurisdictions. The same conditions of a will may apply through a trust, and individuals who don’t want their wills publicly posted opt for trusts instead. Trusts can also be used for estate planning. Typically, the assets of a deceased individual are passed to the spouse and then equally divided to the surviving children. However, children who are under the legal age of 18 need to have trustees. The trustees only have control over the assets until the children reach adulthood. Trusts can also be used for tax planning. In some cases, the tax consequences provided by using trusts are lower compared to other alternatives. As such, the usage of trusts has become a staple in tax planning for individuals and corporations. Assets in a trust benefit from a step-up in basis, which can mean a substantial tax savings for the heirs who eventually inherit from the trust. By contrast, assets that are simply given away during the owner’s lifetime typically carry his or her original cost basis. Types of Trust Funds• Credit Shelter Trust: Sometimes called a bypass trust or family trust, this trust allows a person to bequeath an amount up to (but not over) the estate-tax exemption. The rest of the estate passes to a spouse, tax free. Funds placed in a credit shelter trust are forever free of estate taxes even if they grow. Why and How to Transfer Your Assets To Your Revocable Living TrustThese days many people choose a revocable living trust instead of relying on a will or joint ownership in their estate plan. They like the cost and time savings, plus the added control over assets that a living trust can provide. For example, when properly prepared, a living trust can avoid the public, costly and time-consuming court processes at death (probate) and incapacity (conservatorship or guardianship). It can let you provide for your spouse without disinheriting your children, which can be important in second marriages. It can save estate taxes. And it can protect inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending. Still, many people make a big mistake that sends their assets right into the court system: they don’t fund their trusts. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
The post Estate Planning Attorney In Maeser Utah first appeared on Utah Lawyer for Divorce Business Bankruptcy Probate Estates.
4.9 stars – based on 67 reviews
Estate Planning Attorney In Kamas Utah Estate Planning Attorney In Lehi Utah Estate Planning Attorney In Logan Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-maeser-utah/
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The following descriptions of the estate and gift tax systems are for general information purposes only. They should not be relied upon in making estate planning decisions. They are intended only to give a general understanding of how these systems work so that the reader can have a more informed conversation with the estate planning attorney. The reader should consult with an estate planning attorney in Logan, Utah regarding his or her particular circumstances. Estate TaxThe estate tax is a federal transfer tax that is imposed on estates of deceased persons. The estate tax return is due nine months after death, and the tax, if any, is also due at that time. Most estates do not owe any tax because of the large exemptions that exist for each decedent. These exemptions have varied greatly over the years. As recently as 2001, the per person exemption was only $675,000. There was no estate tax at all for persons dying in 2010. In 2020, the per person exemption is $11,700,000. To get a rough idea of how much estate tax will be due in an estate, one would add up all of the property that will be subject to estate tax, as described below. Then, one would subtract all of the exemptions and deductions that are available. If the result is greater than zero, there may be some estate tax due. The tax rates are graduated. The highest marginal rate is currently 40%. What Property Is Subject To Estate Tax?The federal estate tax is imposed on all property owned by a deceased person at the time of death. If the deceased person is a resident of Utah, this would include: When Exemptions And Deductions Are Available?The primary exemptions and deductions are the following: First, property that passes to a surviving spouse is not subject to estate tax. Second, any property passing to charity is not subject to estate tax. Finally, as described above, each person has an $11.70 million exemption, in addition to the marital and charitable deductions. Deductions are also available for funeral and administrative expenses associated with the estate. Thus, if a man dies with a $13.70 million estate, and leaves $1 million to his wife, $1 million to charity and $11.70 million to his children, there would be no estate tax due. The property passing to his wife would have the benefit of the marital deduction; the property passing to charity would have the benefit of the charitable deduction; and the property passing to the children would have the benefit of the $11.70 million exemption. However, if he left $500,000 to his wife, $500,000 to charity and $12.70 million to his children, estate tax would be due on $1 million. The amounts passing to his wife and charity would escape estate tax, and the first $11.70 million passing to his children would escape estate tax, but the next $1 million passing to his children would be subject to estate tax. Note that any property passing to a surviving spouse may be subject to estate tax in the surviving spouse’s estate at her subsequent death. Utah Inheritance TaxUtah does have an inheritance tax, but it is what is known as a “pick-up” tax. This means that the amount of the Utah tax is exactly equal to the state death tax credit that is available on the federal estate tax return. The result is that the total amount of federal estate tax and Utah inheritance tax is no greater than if there were no Utah inheritance tax at all. Thus, if there is no federal estate tax due, there will be no Utah inheritance tax due. A Basic Tax-Smart Estate Plan for a Married CoupleA very basic tax-smart estate plan for a married couple is designed to take advantage of both the husband’s estate tax exemption and the wife’s estate tax exemption. The DilemmaMost couples want the surviving spouse to have the benefit of all of the couple’s property for as long as he or she lives. This is accomplished if all of the deceased spouse’s property passes to the surviving spouse. In that case, no estate tax is due at the first spouse’s death because of the estate tax marital deduction. As described above, when a person dies, any property that passes to a surviving spouse is not subject to estate tax. However, property the surviving spouse receives from the deceased spouse may be subject to estate tax in the surviving spouse’s estate when he or she dies. Thus, all of the couple’s property may be subject to estate tax in the surviving spouse’s estate when he or she dies. It is true that the surviving spouse will have his or her own estate tax exemption, but the first spouse’s estate tax exemption will have been lost. An ExampleConsider the following scenario in which the husband died in 2017, when the estate tax exemption was $5.49 million. Assume that the couple had $30 million of assets, $15 million of which belonged to the husband and $15 million of which belonged to the wife. If the husband left all of his property to the wife, no estate tax would have been due at the husband’s death because his entire estate would have received the benefit of the marital deduction. Suppose the wife died in 2019, when the estate tax exemption was $11.4 million. Assume the value of the couple’s assets was unchanged at $30 million. At the wife’s death, all of the property she received from the husband would have been included in her estate, along with her own property. $11.4 million of the couple’s assets would have escaped taxation because of the wife’s $11.4 million estate tax exemption. But $18.6 million would have been subject to estate tax. The husband’s estate tax exemption would have been, in essence, wasted. The Solution: A Credit Shelter TrustThe husband’s $5.49 million estate tax exemption could have been preserved if his estate plan left $5.49 million to an irrevocable trust for the wife’s benefit, and the balance of his estate directly to the wife. Amounts passing to the irrevocable trust would have escaped estate taxation at the husband’s death because they would have had the benefit of his $5.49 million estate tax exemption. Amounts passing directly to the wife would have escaped estate taxation at the husband’s death because they would have had the benefit of the marital deduction. The terms of such an irrevocable trust typically provide that funds in the trust are available for the wife’s needs. The standards for distributions to the wife are typically generous, but for tax reasons, they may not be unlimited. The wife may even serve as trustee of the trust and may have limited powers to determine who the remainder beneficiaries of the trust will be upon her death. Such a trust is sometimes known as a “By-Pass Trust,” a “Credit Shelter Trust,” a “Credit Trust” or some other title, but regardless of the name of the trust, its function is essentially as just described. At the wife’s subsequent death, amounts in the irrevocable trust would have escaped taxation in the wife’s estate because the trust would have been designed to keep those assets excluded from her estate. Other assets that the wife received from the husband, as well as her own assets, would have been subject to tax in her own estate, but she would still have had her own estate tax exemption, which could be applied to those assets. Without the Credit Shelter Trust, only $11.4 million would have passed to the children free of estate tax, with the other $18.6 million being subject to tax. Use of a Credit Shelter Trust would have enabled an additional $5.49 million of the couple’s assets to pass to their children free of estate tax, while giving the surviving spouse generous use of all of the couple’s funds for the balance of her lifetime. Credit Shelter Trusts under the 2010 Tax LawUnder the tax law enacted in December 2010, the estate tax exemption of the first spouse to die became, for the first time, “portable.” That means that, even if no Credit Shelter Trust is created on the first death, the surviving spouse’s estate may still get the benefit of the deceased spouse’s exemption. On first glance, it may seem that this “portability” feature renders Credit Shelter Trusts unnecessary. However, there are at least four reasons that Credit Shelter Trusts might still be attractive. Two reasons are tax related. Two reasons are not tax-related. First, even though the deceased spouse’s estate tax exemption can be preserved through the new portability feature, it is limited to the amount of the exemption that existed at the time of the deceased spouse’s death. If a Credit Shelter Trust is used, however, all assets in the trust will escape estate taxation at the surviving spouse’s death. Thus, if the value of the trust assets grows between the first spouse’s death and the surviving spouse’s death, that appreciation will also escape estate tax at the surviving spouse’s death. Without a Credit Shelter Trust, the appreciation may be subject to estate tax. Second, Congress and the President gave us portability, and they can take it away. An estate plan that is prepared today should not assume that “portability” will be the law when you die. Third, an irrevocable trust can ensure that the deceased spouse’s assets will pass to his or her children upon the surviving spouse’s death. If the assets are left to the surviving spouse outright, she will be able to leave them to whomever she wants at her death. Fourth, an irrevocable trust can provide a measure of asset protection to the surviving spouse. The Gift TaxIs it possible to reduce the estate tax that will be due at one’s death by making lifetime gifts? For the most part, the answer is “no.” Just as there is a federal estate tax, there is also a federal gift tax, which is imposed at roughly the same rates as the estate tax. (Utah does not have a state gift tax.) However, there are exemptions to the gift tax that, in some circumstances; enable taxpayers to significantly reduce their estate tax liability. The federal gift tax works as follows: Non-Taxable GiftsSome gifts that are made during lifetime have no gift tax or estate tax consequences at all. Each year, each person can give up to $15,000 to any person (and to as many persons as he or she wants) without any estate or gift tax consequences. The recipient of such a gift does not owe income tax on the gift. Thus, a person can give $15,000 to each of a dozen (or a hundred or a thousand) persons every year, year after year, without any tax consequences. Similarly, a married couple can give $30,000 to each such person every year. In addition, a person can pay for the medical and education expenses, without a dollar limit, for as many persons as he or she wants, without any tax consequences, as long as the funds are paid directly to the medical or educational institution. Also, just as property that is left to a spouse or charity is not subject to estate tax, so property that is given to a spouse or charity during life is exempt from gift tax consequences. Taxable GiftsAll gifts other than “non-taxable gifts” are taxable. Taxable gifts reduce the estate tax exemption that the person making the gifts will have remaining at her death dollar-for-dollar. Thus, no gift tax is due on the first $11.70 million of taxable gifts that a person makes during her lifetime. The amount of estate tax exemption that the person will have remaining at his or her death will just be reduced by the amount of the taxable gifts. However, once the taxable gifts a person has made over the course of her lifetime hits $11.70 million, gift tax will be due on any additional taxable gifts the person makes. The gift tax will be due April 15 of the following year. The gift tax must be paid by the person making the gifts, not the recipient. (Even gifts that are subject to gift tax are not subject to income tax.) Retirement PlansA retirement plan will generally have a beneficiary designation. On the death of the owner of the plan, the plan assets will pass to the designated beneficiary. If the owner of the plan is survived by his or her spouse, the spouse will usually be the designated beneficiary. Indeed, in many circumstances, no one else can be the designated beneficiary without the spouse’s consent. Retirement plans may be subject to both the estate tax and income tax. The combined effect of the two taxes can mean that, in a large estate, most of a retirement plan will go to the federal government. Retirement plan assets are included in the decedent’s estate for estate tax purposes. If the deceased person’s estate is large enough, and if it does not pass to a surviving spouse or charity, the retirement plan might be subject to the 40% estate tax. Just as the owner of the retirement plan is required to pay income tax on distributions from the retirement plan during her lifetime, her beneficiaries must pay income tax on amounts they take out of the plan. Retirement plan beneficiaries commonly roll-over the plan and withdraw amounts from the plan over a period of years in order to take advantage of income tax deferral opportunities. The income tax will be payable as amounts are paid out. The beneficiary will receive a deduction on her income tax return for the amount of the estate tax that was previously paid that is attributable to the income reported on that return. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
The post Estate Planning Attorney In Logan Utah first appeared on Utah Lawyer for Divorce Business Bankruptcy Probate Estates.
4.9 stars – based on 67 reviews
Estate Planning Attorney In Hildaale Utah Estate Planning Attorney In Kamas Utah Estate Planning Attorney In Lehi Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-logan-utah/ Picking the Perfect TrustA well-crafted estate plan ensures that a person’s assets will be smoothly passed on to his or her chosen beneficiaries after one passes away. The absence of an estate plan can lead to family conflict, higher tax burdens, and exorbitant probate costs. While a simple will is an essential component of the estate planning process, sophisticated plans should also include the use of one or more trusts. Important Notes• A well-crafted estate plan involves pairing a simple will with the creation of a thoughtfully designed trust, to ensure a benefactor’s assets are transferred to their loved ones. Basic Characteristics of TrustsA trust is an account managed by a person or organization, for the benefit of another. A trust contains the following elements: Common Types of TrustsLiving TrustsA living trust is usually created by the grantor, during the grantor’s lifetime, through a transfer of property to a trustee. The grantor generally retains the power to change or revoke the trust. But after the grantor dies, this trust becomes irrevocable and may no longer be changed. With these vehicles, trustees must follow the rules delineated in the creation documents, relating to the distribution of property and the payment of taxes. Living trusts offer the following advantages: Living trusts also have the following limitations: Testamentary TrustsA testamentary trust, sometimes called a “trust under will”, is created by a will after the grantor dies. This type of trust can accomplish the following estate planning goals: Irrevocable Life Insurance TrustAn irrevocable life insurance trust (ILIT) is an integral part of a wealthy family’s estate plan. The federal government currently affords individuals an $11.7 million estate tax exemption for the 2021 tax year. But any portion of the estate above that amount may be taxed as high as 45%. So, for estates containing more than the $11.7 million applicable exclusion, life insurance can be an invaluable tool in the estate planning kit. ILITs provide the grantor a flexible planning approach and a tax savings technique by enabling the exclusion of life insurance proceeds from both the estate of the first spouse to die and from the estate of the surviving spouse. The ILIT is funded with a life insurance policy, where the trust becomes both the owner and the beneficiary of the policy, but the grantor’s heirs can remain beneficiaries of the trust itself. For this plan to be valid, the grantor must live three years from the time of the policy transfer, or else the policy proceeds will not be excluded from the grantor’s estate. Although trusts were established to allow IRA beneficiaries to receive the required minimum distribution (RMD) each year from the inherited IRA or 401(k), the Secure Act of 2019 states that non-spousal IRA beneficiaries must withdraw all of the funds in the IRA or 401(k) by the end of ten years following the death of the original account owner. Charitable Remainder TrustA charitable remainder trust (CRT) is an effective estate planning tool available to anyone holding appreciated assets on a low basis, such as stocks or real estate. Funding this trust with appreciated assets lets donors sell the assets without incurring capital gains tax. Furthermore, charitable remainder trusts are irrevocable, meaning they cannot be modified or terminated without the beneficiary’s permission. The grantor effectively removes all of her rights of ownership to the assets and the trust upon the creation of its irrevocable status. Qualified Domestic TrustThis special trust lets non-citizen spouses benefit from the marital deduction normally afforded to other married couples. Normally, a surviving spouse is eligible for a 100% marital deduction of any estate taxes owed on assets. This means the surviving spouse pays no taxes on assets with no limit. However, if the surviving spouse is not a U.S. citizen, the marital deduction is not allowable. The qualified domestic trust makes up for this rule. Special Needs TrustA special needs trust is a legal arrangement that lets a physically or mentally ill person, or someone chronically disabled, have access to funding without potentially losing the benefits provided by public assistance programs. Since public assistance programs set up for people with special needs are predicated on certain income and asset restrictions, money put into a special needs trust doesn’t affect their eligibility for public assistance. What Types of Trusts Can Be Set Up for Minor Beneficiaries?There are many different types of trusts that a grantor can use for their minor beneficiaries. A pot trust for example designates certain assets to a couple’s children after the death of the last surviving spouse. Education trusts set aside money for the specific purpose of higher education. There are also generation-skipping trusts. What Type of Investments Are Allowed in Trusts?Trust funds can hold a variety of assets, such as money, real property, stocks and bonds, a business, or a combination of many different types of properties or assets. What Types of Trusts Are Available for People on SSI?There are three types of trusts designed for people receiving Social Security income: third-party special needs trusts, self-settled special needs trusts, and pooled trusts. What Type of Trusts Are Allowed for Shareholders of an S Corporation?The three types of trusts most commonly used by shareholders of an S corporation are grantor trusts, qualified subchapter S trusts (QSSTs), and electing small business trusts (ESBTs). Estate planning is a complex process demanding professional oversight. The structure and dynamic differ in every family, so it’s important the trust(s) you select to care for your loved ones after your death is well-suited to your loved. Whether this means caring for a disabled family member or friend, protecting the security of your spouse, or simply helping to secure the financial futures of your children and/or grandchildren, a properly formatted trust can go a long way in effectively carrying out your wishes. A-B TrustAn A-B trust is a joint trust created by a married couple for the purpose of minimizing estate taxes. It is formed with each spouse placing assets in the trust and naming as the final beneficiary any suitable person except the other spouse. The trust gets its name from the fact that it splits into two separate entities when one spouse dies. Trust A is the survivor’s trust and trust B is the decedent’s trust. Important Notes• An A-B trust is a joint trust created by a married couple; upon one spouse’s death, the trust splits into a survivor portion (the A trust) and a bypass portion (the decedent’s trust, or B trust). Understanding an A-B TrustEstate taxes can bite deeply into a deceased person’s assets. For example, consider a married couple that has an estate worth $20 million by the time one of the spouses dies. The surviving spouse is left with the whole $20 million, which is not taxed due to the unlimited marital deduction for assets flowing from a deceased spouse to a surviving spouse. But then, the other spouse dies, leaving the money to their children. The taxable portion of the estate (the amount that exceeds the current exemption threshold of $12 million) will be $8 million. This means that $8 million will be taxed at 40%, leaving only $4.8 million for the beneficiaries. To circumvent the estate from being subject to such steep taxes, many married couples set up a trust under their last will and testaments called an A-B trust. In the example above, if the couple instead had an A-B trust, the death of the first spouse would not trigger any estate taxes as a result of the lifetime exclusion. However, a sum of money equal to the current exemption amount will be transferred into an irrevocable trust called the bypass trust, or B trust. This trust is also known as the decedent’s trust. The remaining amount, $8 million, will be transferred to a survivor’s trust, or A trust, which the surviving spouse will have complete control over. The estate tax on the A trust is deferred until after the death of the surviving spouse. Advantages of an A-B TrustThe A trust contains the surviving spouse’s property interests, but they have limited control over the assets in the deceased spouse’s trust. However, this limited control over the B trust will still enable the surviving spouse to live in the couple’s house and draw income from the trust, provided these terms are stipulated in the trust. While the surviving spouse can access the bypass trust, if necessary, the assets in this trust will bypass their taxable estate after they die. After the surviving spouse dies, only the assets in the A trust are subject to estate taxes. If the estate tax exemption for this spouse is also $12 million and the value of assets in the survivor’s trust is still valued at $8 million, none of it will be subject to estate tax. The federal tax exemption is transferable between married couples through a designation referred to as the portability of the estate tax exemption. If one spouse dies, the unused portion of their estate tax exemption can be transferred and added to the estate tax exemption of the surviving spouse. Upon the death of the surviving spouse, the property in the decedent’s trust passes tax-free to the beneficiaries named in this trust. This is because the B trust uses up the estate tax exemption of the spouse that died first, hence, any funds left in the decedent’s trust will be passed tax-free. As the decedent’s trust is not considered part of the surviving spouse’s estate for purposes of the estate tax, double-taxation is avoided. Net Worth and A-B TrustsIf the deceased spouse’s estate falls under the amount of their tax exemption, then it may not be necessary to establish a survivor’s trust. The unused portion of the late spouse’s federal tax exemption can be transferred to the surviving spouse’s tax exemption by filling out IRS Form 706. While A-B trusts are a great way to minimize estate taxes, they are not used much today. They were popular in the decades around the turn of the 21st century when the estate tax which hadn’t been adjusted for years—could be triggered on estates as small as $1 or $2 million. Nowadays, each individual has a combined lifetime federal gift tax and estate tax exemption of $11.7 million in 2021, rising to $12.06 million for 2022. So only people with estates valued over $11.7 million will opt for an A-B trust in 2021. With the portability provision, a surviving spouse can include the tax exemption of their late spouse, allowing up to $23.4 million as of 2021 and $24.12 million in 2022, which can be transferred tax-free to beneficiaries. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
Estate Planning Attorney In Herriman Utah Estate Planning Attorney In Hildale Utah Estate Planning Attorney In Kamas Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah OfficeLehi, Utah
From Wikipedia, the free encyclopedia
Lehi (/ˈliːhaɪ/ LEE-hy) is a city in Utah County, Utah, United States. It is named after Lehi, a prophet in the Book of Mormon. The population was 75,907 at the 2020 census,[4] up from 47,407 in 2010. The rapid growth in Lehi is due, in part, to the rapid development of the tech industry region known as Silicon Slopes. The center of population of Utah is located in Lehi.[5] Lehi is part of the Provo–Orem metropolitan area. [geocentric_weather id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_about id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_neighborhoods id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_thingstodo id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_busstops id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_mapembed id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_drivingdirections id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_reviews id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] via Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-lehi-utah/ Probate is the court supervised process of authenticating a last will and testament if the deceased made one. It includes locating and determining the value of the decedent’s assets, paying his final bills and taxes, and, finally, distributing the remainder of the estate to his rightful beneficiaries. Each state has specific laws in place to determine what’s required there to probate an estate. These laws are included in the estate’s “probate codes,” as well as laws for “intestate succession” when a decedent dies without a will. Probate is still required to pay the decedent’s final bills and distribute his estate when he dies without a will. Although the laws governing probate can vary from state to state, the steps involved are generally very similar regardless of whether a will exists. Probate is the official way that an estate gets settled under the supervision of the court. A person, usually a surviving spouse or an adult child, is appointed by the court if there is no Will, or nominated by the deceased person’s Will. Once appointed, this person, called an executor or Personal Representative, has the legal authority to gather and value the assets owned by the estate, to pay bills and taxes, and, ultimately, to distribute the assets to the heirs or beneficiaries. The purpose of probate is to prevent fraud after someone’s death. Imagine everyone stealing the castle after the Lord dies. It’s a way to freeze the estate until a judge determines that the Will is valid, that all the relevant people have been notified, that all the property in the estate has been identified and appraised, that the creditors have been paid and that all the taxes have been paid. Once all of that’s been done, the court issues an Order distributing the property and the estate is closed. Not all estates must go through probate though. First, if an estate falls below a certain threshold, it is considered a “small estate” and doesn’t require court supervision to be settled. Second, not all assets are subject to probate. Some kinds of assets transfer automatically at the death of an owner with no probate required. The most common kinds of assets that pass without probate are: Third, if a decedent had created a Living Trust to hold his or her largest assets, than that estate, too, won’t go through probate, unless the assets left outside of the trust add up to more than Utah’s small estate limit. That, in fact, is why that Living Trust was created, to avoid probate after the death of the trust’s Grantor. But for estates in Utah that exceed the small estate’s threshold, and for which there is either no Will, or a Will (but not a Living Trust), probate will be required before an estate can be transferred to the decedent’s heirs or beneficiaries. The general procedure required to settle an estate via probate in Utah is set out in a set of laws called the Uniform Probate Code, a set of probate procedures that has been adopted, with minor variations, in 15 states, including Utah. In Utah, under the UPC there are three kind of probate proceedings: informal, unsupervised, and supervised formal. Informal ProbateMost probate proceedings in Utah are informal. You can use it when the heirs and beneficiaries are getting along, there are no creditor problems to resolve and you don’t expect any trouble. The process begins when you file an application with the probate court to serve as the “personal representative” of the estate. (This is what most people think of as the “executor”). Once your application is approved, you have legal authority to act for the estate. Usually you’ll get what’s called “Letters Testamentary” from the court. Once you get the letters, you need to do these things: Once the property’s been distributed, you close an informal proceeding by filing a “final accounting” with the court and a “closing statement” that says you’ve paid all the debts and taxes, distributed the property, and filed the accounting. Unsupervised Formal ProbateA formal probate, even an unsupervised one, is a court proceeding. That means that a judge must approve certain actions taken by the Personal Representative, such as selling estate property, or distributing assets, or paying an attorney. The purpose of involving a judge is to settle disputes between beneficiaries over the distribution of assets, the meaning of a Will, or the amounts due to certain creditors. The informal probate process won’t work if there are disputes, so that’s when the court gets involved. Supervised Formal ProbateA supervised formal probate is one in which the court steps in to supervise the entire probate process. The court must approve the distribution of all property in such a proceeding. Most states have laws in place that require that anyone who is in possession of the deceased’s will must file it with the probate court as soon as is reasonably possible. An application or petition to open probate of the estate is usually done at the same time. Sometimes it’s necessary to file the death certificate as well, along with the will and the petition. Completing and submitting the petition doesn’t have to be a daunting challenge. Many state courts provide forms for this. If the decedent left a will, the judge will confirm that it is, in fact, valid. This typically involves a court hearing, and notice of the hearing must be given to all the beneficiaries listed in the decedent’s will as well as his heirs those who would inherit by operation of law if he had not left a will. The hearing gives everyone concerned an opportunity to object to the will being admitted for probate maybe because it’s not drafted properly or because someone is in possession of a more recent will. Someone might also object to the appointment of the executor nominated in the will to handle the estate. The judge will appoint an executor as well, also sometimes called a personal representative or administrator. This individual will oversee the probate process and to settle the estate. The decedent’s choice for an executor is typically included in her will, but the court will appoint next of kin if she didn’t leave a will, typically her surviving spouse or an adult child. This individual isn’t obligated to serve, he can decline and the court will then appoint someone else. The appointed executor will receive “letters testamentary” from the court a fancy, legal way of saying he’ll receive documentation that allows him to act and enter into transactions on behalf of the estate. This documentation is sometimes referred to as “letters of authority” or “letters of administration.” It might be necessary for the executor to post bond before he can accept the letters and act for the estate, although some wills include provisions stating that this isn’t necessary. Bond acts as an insurance policy that will kick in to reimburse the estate in the event the executor commits some grievous error, either intentionally or unintentionally that financially damages the estate, and, by extension, its beneficiaries. Beneficiaries can elect to unanimously reject this requirement in some states, but it’s an ironclad rule in others, particularly if the executor ends up being someone other than the individual nominated in the will or if he lives out of state. The executor’s first task involves locating and taking possession of all the decedent’s assets so she can protect them during the probate process. This can involve a fair bit of sleuthing sometimes some people own assets that they’ve told no one about, even their spouses, and these assets might not be delineated in their wills. The executor must hunt for any such assets, typically through a review of insurance policies, tax returns, and other documentation. In the case of real estate, the executor is not expected to move into the residence or the building and remain there throughout the probate process to “protect” it. But he must ensure that property taxes are paid, insurance is kept current, and any mortgage payments are made so the property isn’t lost and doesn’t go into foreclosure. The executor might literally take possession of other assets, however, such as collectibles or even vehicles, placing them in a safe location. He’ll collect all statements and other documentation concerning bank and investment accounts, as well as stocks and bonds. Date of death values for the decedent’s assets must be determined and this is generally accomplished through account statements and appraisals. The court will appoint appraisers in some states, but in others, the executor can choose someone. Many states require that the executor submit a written report to the court, listing everything the decedent owned along with each asset’s value, as well as a notation as to how that value was arrived at. The executor can petition the court for permission to distribute what is left of the decedent’s assets to the beneficiaries named in his will. This usually requires the court’s permission, which is typically only granted after the executor has submitted a complete accounting of every financial transaction she’s engaged in throughout the probate process. Some states allow the estate’s beneficiaries to collectively waive this accounting requirement if they’re all in agreement that it’s not necessary. Otherwise, the executor will have to list and explain each and every expense paid and all income earned by the estate. Some states provide forms to make this process a little easier. If the will includes bequests to minors, the executor might also be responsible for setting up a trust to accept possession of bequests made to them because minors can’t own their own property. In other cases and with adult beneficiaries, deeds and other transfer documents must be drawn up and filed with the appropriate state or county officials to finalize the bequests. Breaking Down the Probate ProcessIf you have a will which names an executor, then they will start the process by filing the appropriate paperwork with the local probate court. It is highly recommended that the executor hire an attorney to handle this paperwork, and to help prove the validity of your will. The executor, or their legal representative, will then need to supply the court with a list of your property, debts, and beneficiaries. Once this has all been established, they can begin to pay debts and transfer property. If you do not have a will at the time of your death, the process will be similar however, the executor of your estate will be appointed by a judge. Only after all property, beneficiaries, and outstanding debts and taxes have been established, can the probate court start to pay debts and transfer property to the new owners. Since you did not name beneficiaries, the court will follow state laws to determine who will inherit what, and this can be a very lengthy process. Reasons to Avoid ProbateAnyone with a basic understanding of estate planning knows that one of the primary benefits of having a living trust is to avoid probate. Nevertheless, unless you are an attorney or have been personally involved in a probate proceeding in the past, few people have an understanding of what probate really is and why it is not recommended for most estates. Probate is a court supervised process for administering and (hopefully) distributing a person’s estate after their death. When a person dies leaving property (especially real estate) in their name, the only way to transfer ownership from the deceased owner’s name to the name of their heirs is for a court to order the transfer through the probate process. In other words, since a deceased owner of property is no longer around to execute deeds, only a court can effectuate the transfer of real property after the owner dies, and probate is the legal process by which this would occur. Many people have the misconception that having a will alone avoids the probate process. A will merely informs the world where you want your property to go, but probate is still needed to carry out the wishes expressed in the will (since even with a will, property stays in the name of decedent). Only a trust can avoid probate because once you have a trust, all of your assets are then transferred to the trust during your lifetime thereby avoiding the need for a court to do so. For some estates, probate might be a good alternative, but consider these five reasons why you would want to avoid having your estate pass through probate: Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
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Estate Planning Attorney In Maeser Utah Estate Planning Attorney In Manti Utah Estate Planning Attorney In Millcreek Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-monticello-utah/ This article is for you if you need an Estate Planning Attorney in Millcreek Utah. A pour-over will is a special type of last will and testament used in conjunction with a trust-based estate plan. It can save the day when the grantor of a trust—the person who created it—neglects to transfer all their property into the trust over the years and has no other will to determine which beneficiaries should receive that omitted property.
How a Pour-Over Will WorksInstead of governing the distribution of all your property, a pour-over will state that any assets that have not been funded into your revocable living trust should go there when you die. It effectively names your trust as the beneficiary of any property it does not already hold. That property does not pass directly to a living beneficiary through some other means, such as a beneficiary designation on a life insurance policy or a retirement account. Probate Issues IN Millcreek UtahOne of the beauties of having a living trust is that they avoid probate of the property with which they’ve been funded. Unfortunately, any of your property that isn’t funded into your trust before you die will require probate. Your property will pass to your heirs according to state law if you neglect to fund it into your trust, don’t create a pour-over will, or don’t have any other will in place directing where those assets should go. These are called laws of “intestate succession,” and they can vary somewhat by state. Each state has a list of kin so closely related to a decedent that they inherit from them by law for lack of any other estate plan. The list invariably includes surviving spouses, your parents, and your descendants—children, grandchildren, or great-grandchildren. Siblings and more distant relatives are often left out in the cold. This state-by-state guideline means if you don’t have a pour-over will or other documents that direct property to a specific beneficiary, your wishes may not be followed. Say you forget to fund your new vacation home into your trust. Then that home might go to the son you’ve been estranged from for years—if you’re not married—simply because of your blood tie to him. Your Pour-Over Will Should Be a Safety NetIdeally, you won’t need your pour-over will. You’ll know it’s there in a worst-case scenario, but it won’t have to go into effect because all your property has been transferred into your living trust at the time of your death. Make it a point to sit down with your trust documents at least once a year. Make sure you haven’t acquired any new property over the last 12 months that should be funded into the trust. If you want a particular beneficiary to receive that new asset in the event of your death, you can add this provision to your trust agreement. Revocable living trusts can be changed at any point during your lifetime as long as you’re mentally competent. Dynasty TrustA dynasty trust is a long-term trust created to pass wealth from generation to generation without incurring transfer taxes such as the gift tax, estate tax, or generation-skipping transfer tax (GSTT)—for as long as assets remain in the trust. The dynasty trust’s defining characteristic is its duration. If it’s properly designed, it can last for many generations, possibly forever. A dynasty trust that’s established in the right state can theoretically last forever. How a Dynasty Trust WorksHistorically, trusts could only last a certain number of years. Many states had a “rule against perpetuities” and stipulated when a trust had to come to an end. A common rule was that a trust could continue for 21 years after the death of the last beneficiary who was alive when the trust was established. Under those circumstances, a trust could theoretically last for 100 years or so. Some states, however, have done away with rules against perpetuities, making it possible for wealthy individuals to create dynasty trusts that can endure for many generations into the future. The immediate beneficiaries of a dynasty trust are usually the children of the grantor (the person whose assets are used to create the trust). After the death of the last child, the grantor’s grandchildren or great-grandchildren generally become the beneficiaries. The trust’s operation is controlled by a trustee who is appointed by the grantor. The trustee is typically a bank or other financial institution. • Dynasty trusts allow wealthy individuals to leave money to future generations, without incurring estate taxes. Assets that are transferred to a dynasty trust can be subject to gift, estate, and GSTT taxes only when the transfer is made and only if the assets exceed federal tax exemptions. As a result of the Tax Cuts and Jobs Act passed in 2017, the federal estate tax exemption is $11.58 million for 2020 and $11.7 million for 2021. The amount is adjusted annually for inflation. Of course, Congress could also raise or lower the estate tax exemption in future years, or do away with the estate tax entirely. So, for now, an individual can put $11.58 million in a dynasty trust for his or her children or grandchildren (and, in effect, their children and grandchildren) without incurring these taxes. Moreover, the assets that go into a dynasty trust, as well as any appreciation on those assets are permanently removed from the grantor’s taxable estate, providing another layer of tax relief. A trustee can distribute money from the trust to support beneficiaries as outlined in the trust terms. But because beneficiaries lack control over the trust’s assets, it will not count toward their taxable estates. Similarly, the trust’s assets are protected from claims by a beneficiary’s creditors because the assets belong to the trust, not to the beneficiary. However, income tax will still apply to a dynasty trust. To minimize the income tax burden, individuals often transfer assets to dynasty trusts that don’t produce taxable income, such as non-dividend paying stocks and tax-free municipal bonds. What Is a Grantor Retained Annuity Trust (GRAT)?A grantor retained annuity trust (GRAT) is a financial instrument used in estate planning to minimize taxes on large financial gifts to family members. Under these plans, an irrevocable trust is created for a certain term or period of time. The individual establishing the trust pays a tax when the trust is established. Assets are placed under the trust and then an annuity is paid out every year. When the trust expires the beneficiary receives the assets tax-free. A grantor retained annuity trust is a type of irrevocable gifting trust that allows a grantor or trust maker to potentially pass a significant amount of wealth to the next generation with little or no gift tax cost. GRATs are established for a specific number of years. When creating a GRAT, a grantor contributes assets in trust but retains a right to receive (over the term of the GRAT) the original value of the assets contributed to the trust while earning a rate of return as specified by the IRS (known as the 7520 rate). When the GRAT’s term expires, the leftover assets (based on any appreciation and the IRS-assumed return rate) are given to the grantor’s beneficiaries. Under a grantor retained annuity trust, the annuity payments come from interest earned on the assets underlying the trust or as a percentage of the total value of the assets. If the individual who establishes the trust dies before the trust expires the assets become part of the taxable estate of the individual, and the beneficiary receives nothing. Grantor Retained Annuity Trust UseGRATs are most useful to wealthy individuals who face significant estate tax liability at death. In such a case, a GRAT may be used to freeze the value of their estate by shifting a portion or all of the appreciation on to their heirs. For example, if a person had an asset worth $10 million but expected it to grow to $12 million over the next two years, they could transfer the difference to their children tax-free. GRATs are especially popular with individuals who own shares in startup companies, as stock price appreciation for IPO shares will usually far outpace the IRS assumed rate of return. That means more money can be passed to children while not eating into the grantor’s lifetime exemption from estate and gift taxes. Important Notes• Grantor retained annuity trusts (GRAT) is an estate planning tactic in which a grantor locks assets in a trust from which they earn annual income. Upon expiry, they receive the assets tax-free. Example of a Grantor Retained Annuity TrustFacebook founder Mark Zuckerberg put his company’s pre-IPO stock into a GRAT before it went public. While the exact numbers are not known, Forbes magazine ran estimated numbers and came up with an impressive number of $37,315,513 as the value of Zuckerberg’s stock. Intentionally Defective Grantor TrustAn intentionally defective grantor (IDGT) trust is an estate-planning tool that is used to freeze certain assets of an individual for estate tax purposes, but not for income tax purposes. The intentionally defective trust is created as a grantor trust with a loophole that allows the trustor to continue paying income taxes on certain trust assets, as income tax laws will not recognize that those assets have been transferred away from the individual. Because the grantor must pay the taxes on all trust income annually, the assets in the trust are allowed to grow tax-free, and thereby avoid gift taxation for the grantor’s beneficiaries. Thus, it is a loophole used to reduce estate tax exposure. Important Notes• An intentionally defective grantor (IDGT) allows a trustor to isolate certain trust assets in order to segregate income tax from estate tax treatment on them. Grantor trust rules outline certain conditions when an irrevocable trust can receive some of the same treatments as a revocable trust by the Internal Revenue Service (IRS). These situations sometimes lead to the creation of what are known as intentionally defective grantor trusts. In these cases, a grantor is responsible for paying taxes on the income the trust generates, but trust assets are not counted toward the owner’s estate. Such assets would apply to a grantor’s estate if the individual runs a revocable trust, however, because the individual would effectively still own property held by the trust. For estate tax purposes, though, the value of the grantor’s estate is reduced by the amount of the asset transfer. The individual will “sell” assets to the trust in exchange for a promissory note of some length, such as 10 or 15 years. The note will pay enough interest to classify the trust as above-market, but the underlying assets are expected to appreciate at a faster rate. The beneficiaries of IDGTs are typically children or grandchildren who will receive assets that have been able to grow without reductions for income taxes, which the grantor has paid. The IDGT can be a very effective estate-planning tool if structured properly, allowing a person to lower his or her taxable estate while gifting assets to beneficiaries at a locked-in value. The trust’s grantor can also lower his or her taxable estate by paying income taxes on the trust assets, essentially gifting extra wealth to beneficiaries. Selling Assets to an Intentionally Defective Grantor TrustThe structure of an IDGT allows the grantor to transfer assets to the trust either by gift or sale. Gifting an asset to an IDGT could trigger a gift tax, so the better alternative would be to sell the asset to the trust. When assets are sold to an IDGT, there is no recognition of a capital gain, which means no taxes are owed. Due to the complexity, an IDGT should be structured with the assistance of a qualified accountant, certified financial planner (CFP), or an estate-planning attorney. This is ideal for removing highly appreciated assets from the estate. In most cases, the transaction is structured as a sale to the trust, to be paid for in the form of an installment note, payable over several years. The grantor receiving the loan payments can charge a low rate of interest, which is not recognized as taxable interest income. However, the grantor is liable for any income the IDGT earns. If the asset sold to the trust is an income-producing one, such as a rental property or a business, the income generated inside the trust is taxable to the grantor. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
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Estate Planning Attorney In Logan Utah Estate Planning Attorney In Maeser Utah Estate Planning Attorney In Manti Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Office
Millcreek, Utah
From Wikipedia, the free encyclopedia
Millcreek is a city in Salt Lake County, Utah, United States, and is part of the Salt Lake City Metropolitan Statistical Area. The population as of the 2020 Census was 63,380.[2] Prior to its incorporation on December 28, 2016, Millcreek was a census-designated place (CDP) and township. [geocentric_weather id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_about id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_neighborhoods id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_thingstodo id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_busstops id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_mapembed id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_drivingdirections id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] [geocentric_reviews id=”9db34c92-6a74-4004-b759-d14beeb6bf90″] via Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-millcreek-utah/ A living will, also known in some states as a health care directive or directive to physicians, is a document that allows you to state your wishes for end-of-life medical care. This is done in case you become unable to communicate your own health care decisions. A durable power of attorney, on the other hand, is another type of medical care directive. It is a document that allows you to name a person to oversee your medical care and make health care decisions for you if you ever become unable to do so. A living will, despite its name, isn’t at all like the wills that people use to leave property at their death. If you’re helping someone with their estate planning (or doing your own), don’t overlook a living will. It can give invaluable guidance to family members and healthcare professionals if a person can’t express his or her wishes. Without a document expressing those wishes, family members and doctors are left to guess what a seriously ill person would prefer in terms of treatment. They may end up in painful disputes, which occasionally make it all the way to a courtroom. How to Create a Living WillThe requirements for a living will vary by state so many people hire a lawyer to prepare their living will. How Living Wills WorkMany states have forms for advance directives, allowing residents to state their wishes in as much or as little detail as they’d like. For example, it’s common to direct that palliative care that is, care to decrease pain and suffering always be administered, but that certain extraordinary measures,” like cardiopulmonary resuscitation (CPR) not be used in certain circumstances. To be valid, a living will must meet state requirements regarding notarization or witnesses. A living will can be revoked at any time. The document can take effect as soon as it’s signed, or only when it’s determined that the person can no longer communicate his or her wishes about treatment. Even if it takes effect immediately, Doctors will rely on personal communication, not a document, as long as possible. Living wills are often used with a document called a durable power of attorney (DPOA) for healthcare. In some states, in fact, the two documents are combined into one. A DPOA appoints someone to carry out the wishes about end-of-life treatment that are written down in a living will or medical directive. The person named is called the agent, healthcare proxy, or attorney infact of the person who makes the DPOA. Living Wills After DeathAny authority granted by a living will ends when the person who made the document dies, with the single exception that some living wills or powers of attorney give healthcare agents the power to make decisions about organ donation or autopsy. But because those decisions must be made very soon after death, the authority is not long-lasting. Again, this is in sharp contrast to a regular last will and testament, which has no effect when the will-maker is alive but becomes legally binding at death. Finding and Filing the WillThe executor of the will the person they will names to take charge of the person’s affairs when the time comes is the person who should take custody of the will. But there’s a Catch-22 if you don’t know who the executor is until you find the will and read it. Generally, the people who were the closest to the deceased person look for the will and take responsibility for it once it’s found. But it shouldn’t matter who actually finds the will. If you don’t know where the will is, start your search in the places that seem like good bets to house important documents: file cabinets, desk drawers, and boxes of papers at home and work. If you don’t find anything, consider these possibilities: Filing the WillWhether or not a probate court proceeding is planned, the person who has possession of the original will must file it with the probate court after the will maker dies. (Make a few copies before you do; the court will keep the original.) This isn’t an optional step. By law, most states require that you deposit the original will with the probate court in the county where the person lived within 10 to 30 days after it comes into your possession. Lots of Americans more than half, by some estimates don’t leave a will. So if you can’t find one, the reason may simply be that the deceased person never made a will. It’s not a cause for worry. Whether or not there is a will doesn’t change the need for probate. State law will determine who inherits property that would have passed under the will. And a lot of valuable property isn’t affected by the terms of a will, anyway. For example, property held in a living trust, pay-on-death bank account, or retirement account usually goes directly to the beneficiaries named to inherit it, without probate. Similarly, property owned with someone else, such as a house owned in joint tenancy, generally goes to the surviving co-owner and isn’t affected by the will. Things can be a little more complicated if you find only a copy of the will, not the signed original. Probate courts want the signed document itself, not a copy. A court may, however, be willing to hear arguments about why the copy should be accepted as if it were an original for example, a good explanation of why the original document isn’t available and evidence that the deceased person had not changed his or her mind about the terms of the will. If you can’t find any will, or you find only an old one that you’re sure was revoked, you may be able to prove that the will in effect at the time of death has been lost. If you can also prove what it said—perhaps with testimony from the lawyer who drew it up, or the surviving spouse the court may accept its terms. You’ll need help from an experienced probate lawyer. If you have reason to believe that someone has the will but doesn’t want to produce it, you can ask the probate court to order that person to deposit the will with the court. But talk to a lawyer before you go to court or mention the idea to anyone you suspect of hiding the will. When people draw up their last will and testament, they often store the document in a lockbox or a secured filing cabinet to ensure the will is readily available upon their death. However, the will maker called the testator can also file a copy of his will prior to his passing, ensuring the will becomes a matter of public record and thus far more difficult to dispute. After the testator dies, the individual he has appointed as his executor is responsible for filing the will with the jurisdictional court to begin probate procedures and administer the testator’s final wishes. A testator is not required by statute to file her will during her lifetime. Some testators choose to file anyway, to ensure their will is a part of the public record before they pass. In some states, the testator can file an original copy of her will with the appropriate court and receive a docket number in advance so her appointed executor merely has to notify the court of her death to begin probate. However, most states suggest filing the will with the local Office of the County Recorder, which will not initiate any legal proceedings but does make the will a part of public record. To make a will a part of public record prior to passing, the testator can file a copy of his signed will with his local Office of the County Recorder. The testator will probably incur a nominal filing fee typically, between $10 and $50 for filing his will. After submission, the office will provide the testator with a filed copy, which he should store, somewhere secure for safekeeping. He can also provide a copy of the filed will to his executor and his family attorney for additional security. While any subsequent will the testator executes automatically voids the filed version, the testator should consider filing a new copy of his will each time he amends the on file version with a codicil and when he executes an entirely new will to prevent potential confusion during probate. When the testator passes, the appointed executor should file a copy of the will to initiate probate procedures. While not statutorily required for any will, probate is the process during which the court will review and verify the veracity of the testator’s will, oversee administration of the estate and handle any outstanding claims against the testator or her estate. The executor should file the original copy of the will with the appropriate court immediately following the testator’s passing. In most states, the court with jurisdiction is called Probate Court; however, some states have a Surrogacy, Surrogate’s or Estate Court, all of which serve the same function as Probate Court. The correct court to file with is the court located in the same county as the decedent’s estate typically, the same county as the decedent’s primary residence. The executor will need to pay a filing fee at the time of submitting the will, which averages between $100 and $500, depending on the rules of the specific court. However, the executor should use funds from the estate’s bank account to cover these costs, as the estate is financially responsible for any attorneys’ fees, court costs and other legal expenses related to probating the estate. A will needs to be filed with a court after the death of the testator. This filing begins the probate process which ensures that the will meets legal requirements and gives out the estate according to the instructions in the will. Though not a requirement, a will may also be filed with the court before the testator’s death for safekeeping. Most states have separate courts that handle wills known as probate courts. If your state has a probate court, you must file the will with this court in order to open the estate for probate. Some probate courts accept a will before the testator’s death, but will not initiate probate until the testator dies. In states that do not have probate courts, you can file the will with the branch of the state courts that handles wills, such as the superior or district court. Courts that accept a will filing before the testator has passed away may ask the testator to leave a list of people who are permitted to pick up the will from the court after the testator dies. If no one picks up the will, the court may open the will and initiate the probate process under its own power. When the testator passes away, a living relative or the executor must file the will with the probate court in order to begin probate. The will cannot be acted upon until probate has begun. The executor may request the court to begin probate if the will is filed with the court for safekeeping. If the will is not filed with the court, the executor or another relative must bring the original will to the court to file it and begin probate. When a will is filed with the court after the testator’s death, it has to be accompanied by several additional filings. The most common is the petition to open the probate estate, which asks the court to start the probate process. An executor may also need to file a petition for Letters Testamentary, which a power is given to the executor by the court that allows her to do the things required to probate the estate. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
Estae Planning Attorney In Lehi Utah Estate Planning Attorney In Logan Utah Estate Planning Attorney In Maeser Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-manti-utah/ The terms “living will”, “health care directive”, and “advance directive”, all refer to the legal document that lets people state their wishes for end-of-life medical care. A living will, despite its name, isn’t at all like the wills that people use to leave property at their death. A living will, also called a directive to physicians or advance directive, is a document that lets people state their wishes for end-of-life medical care, in case they become unable to communicate their decisions. It has no power after death. If you’re helping someone with their estate planning (or doing your own), don’t overlook a living will. It can give invaluable guidance to family members and healthcare professionals if a person can’t express his or her wishes. Without a document expressing those wishes, family members and doctors are left to guess what a seriously ill person would prefer in terms of treatment. They may end up in painful disputes, which occasionally make it all the way to a courtroom. How to Create a Living WillThe requirements for a living will vary by state so many people hire a lawyer to prepare their living will. Most people can create this simple document – along with the other typical estate planning documents – without the high legal fees by using a quality software application that accounts for their state’s laws. If you need to write or update a will or trust, you can take care of your living will at the same time. Making Your Own Living WillYou can create a legally binding health care directive (living will) without paying an attorney by using reputable estate planning software. In addition to a living will, you can create a complete set of estate planning documents including your will, power of attorney, living trust, and more. How Living Wills WorkMany states have forms for advance directives, allowing residents to state their wishes in as much or as little detail as they’d like. For example, it’s common to direct that “palliative care”—that is, care to decrease pain and suffering always be administered, but that certain “extraordinary measures,” like cardiopulmonary resuscitation (CPR) not be used in certain circumstances. To be valid, a living will must meet state requirements regarding notarization or witnesses. A living will can be revoked at any time. The document can take effect as soon as it’s signed, or only when it’s determined that the person can no longer communicate his or her wishes about treatment. Even if it takes effect immediately, doctors will rely on personal communication, not a document, as long as possible. Creating a living will or advance directive• Hire an attorney or do it yourself: An attorney who focuses on estate planning can create an advance directive for you and will know your state’s laws. You can also create one on your own, but you must make sure it meets your state’s requirements. Resources available to you include legal document creation software; a free living will form provided by your physician, local hospital, local senior center, or state’s medical association; and The National Hospice and Palliative Care Organization, which allows you to download a state-specific advance directive form. A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the trustor’s assets, to make sure those assets are distributed according to the wishes of the trustor, and to save time, reduce paperwork and, in some cases, avoid or reduce inheritance or estate taxes. In finance, a trust can also be a type of closed-end fund built as a public limited company. Understanding TrustTrusts are created by settlors (an individual along with his or her lawyer) who decide how to transfer parts or all of their assets to trustees. These trustees hold on to the assets for the beneficiaries of the trust. The rules of a trust depend on the terms on which it was built. In some areas, it is possible for older beneficiaries to become trustees. For example, in some jurisdictions, the grantor can be a lifetime beneficiary and a trustee at the same time. A trust can be used to determine how a person’s money should be managed and distributed while that person is alive, or after their death. A trust helps avoid taxes and probate. It can protect assets from creditors, and it can dictate the terms of an inheritance for beneficiaries. The disadvantages of trusts are that they require time and money to create, and they cannot be easily revoked. A trust is one way to provide for a beneficiary who is underage or has a mental disability that may impair his ability to manage finances. Once the beneficiary is deemed capable of managing his assets, he will receive possession of the trust. Categories of TrustsAlthough there are many different types of trusts, each fits into one or more of the following categories: Living or TestamentaryA living trust – also called an inter-vivo trust is a written document in which an individual’s assets are provided as a trust for the individual’s use and benefit during his lifetime. These assets are transferred to his beneficiaries at the time of the individual’s death. The individual has a successor trustee who is in charge of transferring the assets. A testamentary trust, also called a will trust, specifies how the assets of an individual are designated after the individual’s death. Revocable or IrrevocableA revocable trust can be changed or terminated by the trustor during his lifetime. An irrevocable trust, as the name implies, is one the trustor cannot change once it’s established, or one that becomes irrevocable upon his death. Living trusts can be revocable or irrevocable. Testamentary trusts can only be irrevocable. An irrevocable trust is usually more desirable. The fact that it is unalterable, containing assets that have been permanently moved out of the trustor’s possession, is what allows estate taxes to be minimized or avoided altogether. Funded or UnfundedA funded trust has assets put into it by the trustor during his lifetime. An unfunded trust consists only of the trust agreement with no funding. Unfunded trusts can become funded upon the trustor’s death or remain unfunded. Since an unfunded trust exposes assets to many of the perils a trust is designed to avoid, ensuring proper funding is important. Common Purposes for TrustsThe trust fund is an ancient instrument – dating back to feudal times, in fact – that is sometimes greeted with scorn, due to its association with the idle rich (as in the pejorative “trust fund baby”). But trusts are highly versatile vehicles that can protect assets and direct them into the right hands in the present and in the future, long after the original asset owner’s death. A trust is a legal entity employed to hold property, so the assets are generally safer than they would be with a family member. Even a relative with the best of intentions could face a lawsuit, divorce or other misfortune, putting those assets at risk. Though they seem geared primarily toward high net worth individuals and families, since they can be expensive to establish and maintain, those of more middle-class means may also find them useful – in ensuring care for a physically or mentally deficient dependent, for example. Some individuals use trusts simply for privacy. The terms of a will may be public in some jurisdictions. The same conditions of a will may apply through a trust, and individuals who don’t want their wills publicly posted opt for trusts instead. Trusts can also be used for estate planning. Typically, the assets of a deceased individual are passed to the spouse and then equally divided to the surviving children. However, children who are under the legal age of 18 need to have trustees. The trustees only have control over the assets until the children reach adulthood. Trusts can also be used for tax planning. In some cases, the tax consequences provided by using trusts are lower compared to other alternatives. As such, the usage of trusts has become a staple in tax planning for individuals and corporations. Assets in a trust benefit from a step-up in basis, which can mean a substantial tax savings for the heirs who eventually inherit from the trust. By contrast, assets that are simply given away during the owner’s lifetime typically carry his or her original cost basis. Types of Trust Funds• Credit Shelter Trust: Sometimes called a bypass trust or family trust, this trust allows a person to bequeath an amount up to (but not over) the estate-tax exemption. The rest of the estate passes to a spouse, tax free. Funds placed in a credit shelter trust are forever free of estate taxes even if they grow. Why and How to Transfer Your Assets To Your Revocable Living TrustThese days many people choose a revocable living trust instead of relying on a will or joint ownership in their estate plan. They like the cost and time savings, plus the added control over assets that a living trust can provide. For example, when properly prepared, a living trust can avoid the public, costly and time-consuming court processes at death (probate) and incapacity (conservatorship or guardianship). It can let you provide for your spouse without disinheriting your children, which can be important in second marriages. It can save estate taxes. And it can protect inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending. Still, many people make a big mistake that sends their assets right into the court system: they don’t fund their trusts. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
Estate Planning Attorney In Kamas Utah Estate Planning Attorney In Lehi Utah Estate Planning Attorney In Logan Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-maeser-utah/ The following descriptions of the estate and gift tax systems are for general information purposes only. They should not be relied upon in making estate planning decisions. They are intended only to give a general understanding of how these systems work so that the reader can have a more informed conversation with the estate planning attorney. The reader should consult with an estate planning attorney in Logan, Utah regarding his or her particular circumstances. Estate TaxThe estate tax is a federal transfer tax that is imposed on estates of deceased persons. The estate tax return is due nine months after death, and the tax, if any, is also due at that time. Most estates do not owe any tax because of the large exemptions that exist for each decedent. These exemptions have varied greatly over the years. As recently as 2001, the per person exemption was only $675,000. There was no estate tax at all for persons dying in 2010. In 2020, the per person exemption is $11,700,000. To get a rough idea of how much estate tax will be due in an estate, one would add up all of the property that will be subject to estate tax, as described below. Then, one would subtract all of the exemptions and deductions that are available. If the result is greater than zero, there may be some estate tax due. The tax rates are graduated. The highest marginal rate is currently 40%. What Property Is Subject To Estate Tax?The federal estate tax is imposed on all property owned by a deceased person at the time of death. If the deceased person is a resident of Utah, this would include: When Exemptions And Deductions Are Available?The primary exemptions and deductions are the following: First, property that passes to a surviving spouse is not subject to estate tax. Second, any property passing to charity is not subject to estate tax. Finally, as described above, each person has an $11.70 million exemption, in addition to the marital and charitable deductions. Deductions are also available for funeral and administrative expenses associated with the estate. Thus, if a man dies with a $13.70 million estate, and leaves $1 million to his wife, $1 million to charity and $11.70 million to his children, there would be no estate tax due. The property passing to his wife would have the benefit of the marital deduction; the property passing to charity would have the benefit of the charitable deduction; and the property passing to the children would have the benefit of the $11.70 million exemption. However, if he left $500,000 to his wife, $500,000 to charity and $12.70 million to his children, estate tax would be due on $1 million. The amounts passing to his wife and charity would escape estate tax, and the first $11.70 million passing to his children would escape estate tax, but the next $1 million passing to his children would be subject to estate tax. Note that any property passing to a surviving spouse may be subject to estate tax in the surviving spouse’s estate at her subsequent death. Utah Inheritance TaxUtah does have an inheritance tax, but it is what is known as a “pick-up” tax. This means that the amount of the Utah tax is exactly equal to the state death tax credit that is available on the federal estate tax return. The result is that the total amount of federal estate tax and Utah inheritance tax is no greater than if there were no Utah inheritance tax at all. Thus, if there is no federal estate tax due, there will be no Utah inheritance tax due. A Basic Tax-Smart Estate Plan for a Married CoupleA very basic tax-smart estate plan for a married couple is designed to take advantage of both the husband’s estate tax exemption and the wife’s estate tax exemption. The DilemmaMost couples want the surviving spouse to have the benefit of all of the couple’s property for as long as he or she lives. This is accomplished if all of the deceased spouse’s property passes to the surviving spouse. In that case, no estate tax is due at the first spouse’s death because of the estate tax marital deduction. As described above, when a person dies, any property that passes to a surviving spouse is not subject to estate tax. However, property the surviving spouse receives from the deceased spouse may be subject to estate tax in the surviving spouse’s estate when he or she dies. Thus, all of the couple’s property may be subject to estate tax in the surviving spouse’s estate when he or she dies. It is true that the surviving spouse will have his or her own estate tax exemption, but the first spouse’s estate tax exemption will have been lost. An ExampleConsider the following scenario in which the husband died in 2017, when the estate tax exemption was $5.49 million. Assume that the couple had $30 million of assets, $15 million of which belonged to the husband and $15 million of which belonged to the wife. If the husband left all of his property to the wife, no estate tax would have been due at the husband’s death because his entire estate would have received the benefit of the marital deduction. Suppose the wife died in 2019, when the estate tax exemption was $11.4 million. Assume the value of the couple’s assets was unchanged at $30 million. At the wife’s death, all of the property she received from the husband would have been included in her estate, along with her own property. $11.4 million of the couple’s assets would have escaped taxation because of the wife’s $11.4 million estate tax exemption. But $18.6 million would have been subject to estate tax. The husband’s estate tax exemption would have been, in essence, wasted. The Solution: A Credit Shelter TrustThe husband’s $5.49 million estate tax exemption could have been preserved if his estate plan left $5.49 million to an irrevocable trust for the wife’s benefit, and the balance of his estate directly to the wife. Amounts passing to the irrevocable trust would have escaped estate taxation at the husband’s death because they would have had the benefit of his $5.49 million estate tax exemption. Amounts passing directly to the wife would have escaped estate taxation at the husband’s death because they would have had the benefit of the marital deduction. The terms of such an irrevocable trust typically provide that funds in the trust are available for the wife’s needs. The standards for distributions to the wife are typically generous, but for tax reasons, they may not be unlimited. The wife may even serve as trustee of the trust and may have limited powers to determine who the remainder beneficiaries of the trust will be upon her death. Such a trust is sometimes known as a “By-Pass Trust,” a “Credit Shelter Trust,” a “Credit Trust” or some other title, but regardless of the name of the trust, its function is essentially as just described. At the wife’s subsequent death, amounts in the irrevocable trust would have escaped taxation in the wife’s estate because the trust would have been designed to keep those assets excluded from her estate. Other assets that the wife received from the husband, as well as her own assets, would have been subject to tax in her own estate, but she would still have had her own estate tax exemption, which could be applied to those assets. Without the Credit Shelter Trust, only $11.4 million would have passed to the children free of estate tax, with the other $18.6 million being subject to tax. Use of a Credit Shelter Trust would have enabled an additional $5.49 million of the couple’s assets to pass to their children free of estate tax, while giving the surviving spouse generous use of all of the couple’s funds for the balance of her lifetime. Credit Shelter Trusts under the 2010 Tax LawUnder the tax law enacted in December 2010, the estate tax exemption of the first spouse to die became, for the first time, “portable.” That means that, even if no Credit Shelter Trust is created on the first death, the surviving spouse’s estate may still get the benefit of the deceased spouse’s exemption. On first glance, it may seem that this “portability” feature renders Credit Shelter Trusts unnecessary. However, there are at least four reasons that Credit Shelter Trusts might still be attractive. Two reasons are tax related. Two reasons are not tax-related. First, even though the deceased spouse’s estate tax exemption can be preserved through the new portability feature, it is limited to the amount of the exemption that existed at the time of the deceased spouse’s death. If a Credit Shelter Trust is used, however, all assets in the trust will escape estate taxation at the surviving spouse’s death. Thus, if the value of the trust assets grows between the first spouse’s death and the surviving spouse’s death, that appreciation will also escape estate tax at the surviving spouse’s death. Without a Credit Shelter Trust, the appreciation may be subject to estate tax. Second, Congress and the President gave us portability, and they can take it away. An estate plan that is prepared today should not assume that “portability” will be the law when you die. Third, an irrevocable trust can ensure that the deceased spouse’s assets will pass to his or her children upon the surviving spouse’s death. If the assets are left to the surviving spouse outright, she will be able to leave them to whomever she wants at her death. Fourth, an irrevocable trust can provide a measure of asset protection to the surviving spouse. The Gift TaxIs it possible to reduce the estate tax that will be due at one’s death by making lifetime gifts? For the most part, the answer is “no.” Just as there is a federal estate tax, there is also a federal gift tax, which is imposed at roughly the same rates as the estate tax. (Utah does not have a state gift tax.) However, there are exemptions to the gift tax that, in some circumstances; enable taxpayers to significantly reduce their estate tax liability. The federal gift tax works as follows: Non-Taxable GiftsSome gifts that are made during lifetime have no gift tax or estate tax consequences at all. Each year, each person can give up to $15,000 to any person (and to as many persons as he or she wants) without any estate or gift tax consequences. The recipient of such a gift does not owe income tax on the gift. Thus, a person can give $15,000 to each of a dozen (or a hundred or a thousand) persons every year, year after year, without any tax consequences. Similarly, a married couple can give $30,000 to each such person every year. In addition, a person can pay for the medical and education expenses, without a dollar limit, for as many persons as he or she wants, without any tax consequences, as long as the funds are paid directly to the medical or educational institution. Also, just as property that is left to a spouse or charity is not subject to estate tax, so property that is given to a spouse or charity during life is exempt from gift tax consequences. Taxable GiftsAll gifts other than “non-taxable gifts” are taxable. Taxable gifts reduce the estate tax exemption that the person making the gifts will have remaining at her death dollar-for-dollar. Thus, no gift tax is due on the first $11.70 million of taxable gifts that a person makes during her lifetime. The amount of estate tax exemption that the person will have remaining at his or her death will just be reduced by the amount of the taxable gifts. However, once the taxable gifts a person has made over the course of her lifetime hits $11.70 million, gift tax will be due on any additional taxable gifts the person makes. The gift tax will be due April 15 of the following year. The gift tax must be paid by the person making the gifts, not the recipient. (Even gifts that are subject to gift tax are not subject to income tax.) Retirement PlansA retirement plan will generally have a beneficiary designation. On the death of the owner of the plan, the plan assets will pass to the designated beneficiary. If the owner of the plan is survived by his or her spouse, the spouse will usually be the designated beneficiary. Indeed, in many circumstances, no one else can be the designated beneficiary without the spouse’s consent. Retirement plans may be subject to both the estate tax and income tax. The combined effect of the two taxes can mean that, in a large estate, most of a retirement plan will go to the federal government. Retirement plan assets are included in the decedent’s estate for estate tax purposes. If the deceased person’s estate is large enough, and if it does not pass to a surviving spouse or charity, the retirement plan might be subject to the 40% estate tax. Just as the owner of the retirement plan is required to pay income tax on distributions from the retirement plan during her lifetime, her beneficiaries must pay income tax on amounts they take out of the plan. Retirement plan beneficiaries commonly roll-over the plan and withdraw amounts from the plan over a period of years in order to take advantage of income tax deferral opportunities. The income tax will be payable as amounts are paid out. The beneficiary will receive a deduction on her income tax return for the amount of the estate tax that was previously paid that is attributable to the income reported on that return. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
Estate Planning Attorney In Hildaale Utah Estate Planning Attorney In Kamas Utah Estate Planning Attorney In Lehi Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-logan-utah/ Picking the Perfect TrustA well-crafted estate plan ensures that a person’s assets will be smoothly passed on to his or her chosen beneficiaries after one passes away. The absence of an estate plan can lead to family conflict, higher tax burdens, and exorbitant probate costs. While a simple will is an essential component of the estate planning process, sophisticated plans should also include the use of one or more trusts. Important Notes• A well-crafted estate plan involves pairing a simple will with the creation of a thoughtfully designed trust, to ensure a benefactor’s assets are transferred to their loved ones. Basic Characteristics of TrustsA trust is an account managed by a person or organization, for the benefit of another. A trust contains the following elements: Common Types of TrustsLiving TrustsA living trust is usually created by the grantor, during the grantor’s lifetime, through a transfer of property to a trustee. The grantor generally retains the power to change or revoke the trust. But after the grantor dies, this trust becomes irrevocable and may no longer be changed. With these vehicles, trustees must follow the rules delineated in the creation documents, relating to the distribution of property and the payment of taxes. Living trusts offer the following advantages: Living trusts also have the following limitations: Testamentary TrustsA testamentary trust, sometimes called a “trust under will”, is created by a will after the grantor dies. This type of trust can accomplish the following estate planning goals: Irrevocable Life Insurance TrustAn irrevocable life insurance trust (ILIT) is an integral part of a wealthy family’s estate plan. The federal government currently affords individuals an $11.7 million estate tax exemption for the 2021 tax year. But any portion of the estate above that amount may be taxed as high as 45%. So, for estates containing more than the $11.7 million applicable exclusion, life insurance can be an invaluable tool in the estate planning kit. ILITs provide the grantor a flexible planning approach and a tax savings technique by enabling the exclusion of life insurance proceeds from both the estate of the first spouse to die and from the estate of the surviving spouse. The ILIT is funded with a life insurance policy, where the trust becomes both the owner and the beneficiary of the policy, but the grantor’s heirs can remain beneficiaries of the trust itself. For this plan to be valid, the grantor must live three years from the time of the policy transfer, or else the policy proceeds will not be excluded from the grantor’s estate. Although trusts were established to allow IRA beneficiaries to receive the required minimum distribution (RMD) each year from the inherited IRA or 401(k), the Secure Act of 2019 states that non-spousal IRA beneficiaries must withdraw all of the funds in the IRA or 401(k) by the end of ten years following the death of the original account owner. Charitable Remainder TrustA charitable remainder trust (CRT) is an effective estate planning tool available to anyone holding appreciated assets on a low basis, such as stocks or real estate. Funding this trust with appreciated assets lets donors sell the assets without incurring capital gains tax. Furthermore, charitable remainder trusts are irrevocable, meaning they cannot be modified or terminated without the beneficiary’s permission. The grantor effectively removes all of her rights of ownership to the assets and the trust upon the creation of its irrevocable status. Qualified Domestic TrustThis special trust lets non-citizen spouses benefit from the marital deduction normally afforded to other married couples. Normally, a surviving spouse is eligible for a 100% marital deduction of any estate taxes owed on assets. This means the surviving spouse pays no taxes on assets with no limit. However, if the surviving spouse is not a U.S. citizen, the marital deduction is not allowable. The qualified domestic trust makes up for this rule. Special Needs TrustA special needs trust is a legal arrangement that lets a physically or mentally ill person, or someone chronically disabled, have access to funding without potentially losing the benefits provided by public assistance programs. Since public assistance programs set up for people with special needs are predicated on certain income and asset restrictions, money put into a special needs trust doesn’t affect their eligibility for public assistance. What Types of Trusts Can Be Set Up for Minor Beneficiaries?There are many different types of trusts that a grantor can use for their minor beneficiaries. A pot trust for example designates certain assets to a couple’s children after the death of the last surviving spouse. Education trusts set aside money for the specific purpose of higher education. There are also generation-skipping trusts. What Type of Investments Are Allowed in Trusts?Trust funds can hold a variety of assets, such as money, real property, stocks and bonds, a business, or a combination of many different types of properties or assets. What Types of Trusts Are Available for People on SSI?There are three types of trusts designed for people receiving Social Security income: third-party special needs trusts, self-settled special needs trusts, and pooled trusts. What Type of Trusts Are Allowed for Shareholders of an S Corporation?The three types of trusts most commonly used by shareholders of an S corporation are grantor trusts, qualified subchapter S trusts (QSSTs), and electing small business trusts (ESBTs). Estate planning is a complex process demanding professional oversight. The structure and dynamic differ in every family, so it’s important the trust(s) you select to care for your loved ones after your death is well-suited to your loved. Whether this means caring for a disabled family member or friend, protecting the security of your spouse, or simply helping to secure the financial futures of your children and/or grandchildren, a properly formatted trust can go a long way in effectively carrying out your wishes. A-B TrustAn A-B trust is a joint trust created by a married couple for the purpose of minimizing estate taxes. It is formed with each spouse placing assets in the trust and naming as the final beneficiary any suitable person except the other spouse. The trust gets its name from the fact that it splits into two separate entities when one spouse dies. Trust A is the survivor’s trust and trust B is the decedent’s trust. Important Notes• An A-B trust is a joint trust created by a married couple; upon one spouse’s death, the trust splits into a survivor portion (the A trust) and a bypass portion (the decedent’s trust, or B trust). Understanding an A-B TrustEstate taxes can bite deeply into a deceased person’s assets. For example, consider a married couple that has an estate worth $20 million by the time one of the spouses dies. The surviving spouse is left with the whole $20 million, which is not taxed due to the unlimited marital deduction for assets flowing from a deceased spouse to a surviving spouse. But then, the other spouse dies, leaving the money to their children. The taxable portion of the estate (the amount that exceeds the current exemption threshold of $12 million) will be $8 million. This means that $8 million will be taxed at 40%, leaving only $4.8 million for the beneficiaries. To circumvent the estate from being subject to such steep taxes, many married couples set up a trust under their last will and testaments called an A-B trust. In the example above, if the couple instead had an A-B trust, the death of the first spouse would not trigger any estate taxes as a result of the lifetime exclusion. However, a sum of money equal to the current exemption amount will be transferred into an irrevocable trust called the bypass trust, or B trust. This trust is also known as the decedent’s trust. The remaining amount, $8 million, will be transferred to a survivor’s trust, or A trust, which the surviving spouse will have complete control over. The estate tax on the A trust is deferred until after the death of the surviving spouse. Advantages of an A-B TrustThe A trust contains the surviving spouse’s property interests, but they have limited control over the assets in the deceased spouse’s trust. However, this limited control over the B trust will still enable the surviving spouse to live in the couple’s house and draw income from the trust, provided these terms are stipulated in the trust. While the surviving spouse can access the bypass trust, if necessary, the assets in this trust will bypass their taxable estate after they die. After the surviving spouse dies, only the assets in the A trust are subject to estate taxes. If the estate tax exemption for this spouse is also $12 million and the value of assets in the survivor’s trust is still valued at $8 million, none of it will be subject to estate tax. The federal tax exemption is transferable between married couples through a designation referred to as the portability of the estate tax exemption. If one spouse dies, the unused portion of their estate tax exemption can be transferred and added to the estate tax exemption of the surviving spouse. Upon the death of the surviving spouse, the property in the decedent’s trust passes tax-free to the beneficiaries named in this trust. This is because the B trust uses up the estate tax exemption of the spouse that died first, hence, any funds left in the decedent’s trust will be passed tax-free. As the decedent’s trust is not considered part of the surviving spouse’s estate for purposes of the estate tax, double-taxation is avoided. Net Worth and A-B TrustsIf the deceased spouse’s estate falls under the amount of their tax exemption, then it may not be necessary to establish a survivor’s trust. The unused portion of the late spouse’s federal tax exemption can be transferred to the surviving spouse’s tax exemption by filling out IRS Form 706. While A-B trusts are a great way to minimize estate taxes, they are not used much today. They were popular in the decades around the turn of the 21st century when the estate tax which hadn’t been adjusted for years—could be triggered on estates as small as $1 or $2 million. Nowadays, each individual has a combined lifetime federal gift tax and estate tax exemption of $11.7 million in 2021, rising to $12.06 million for 2022. So only people with estates valued over $11.7 million will opt for an A-B trust in 2021. With the portability provision, a surviving spouse can include the tax exemption of their late spouse, allowing up to $23.4 million as of 2021 and $24.12 million in 2022, which can be transferred tax-free to beneficiaries. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
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Lehi (/ˈliːhaɪ/ LEE-hy) is a city in Utah County, Utah, United States. It is named after Lehi, a prophet in the Book of Mormon. The population was 75,907 at the 2020 census,[4] up from 47,407 in 2010. The rapid growth in Lehi is due, in part, to the rapid development of the tech industry region known as Silicon Slopes. The center of population of Utah is located in Lehi.[5] Lehi is part of the Provo–Orem metropolitan area. [geocentric_weather id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_about id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_neighborhoods id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_thingstodo id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_busstops id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_mapembed id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_drivingdirections id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] [geocentric_reviews id=”8440dcdc-aa0a-43ba-b1e8-6552d3eceb3c”] via Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-lehi-utah/ As the old saying goes, you cannot take it with you when you die. However, a probate attorney can assist surviving family members settle your debts and distribute your property after you’re gone, with or without a will. Additionally, they might also help with estate planning, which includes the drafting of wills or living trusts, give advice on powers of attorney, or maybe serve as an executor or administrator. If an individual dies with a will, a probate attorney can be employed to advise parties, which includes the executor of the estate or a beneficiary, on various legal matters. For example, an attorney may additionally evaluate the will to make sure the will wasn’t signed or written under duress (or against the exceptional interests of the individual). Aged people with dementia, for instance, may be prone to undue influence via individuals who need a cut of the estate. What probate attorney do avoid most of the time; PROPERTY CLEANUPHandling a residence after a loved one dies may be emotionally hard; however the responsibilities can save business, time, and cash, and even make way for connection from another source. Bear in mind to observe important steps whilst emptying a house and getting it ready to put in the marketplace. The post office will forward priority, express, and programs for one year and publications for two months, however you may annually replace the new address for a few years to maintain the forwarding from expiring. Receiving the mail will assist you figure out who creditors are, too, and whether payments have been current, in addition to seeing if you need to cancel any subscriptions However, it isn’t always impossible to undergo cleaning up the deceased person’s house relatively smooth. Consider the ones portions of advice to ensure you’re handling it the first-class viable; INVENTORY SERVICEOne of the most vital jobs someone can be given by a loved one is the task of being the property representative. Property representatives need to account for the decedent’s non-public property, determine their fee, and talk that information to the court. Each state approaches this obligation barely differently, including using specific forms and having extraordinary timelines. What is uniform throughout the states is the estate representative’s duty to fully and fairly account for the belongings of a decedent’s property. Here is the step to observe, if you want to do inventory service on probate assets; ESTATE SALESOnce the grant of Probate has been given, the executor is capable to control the property. If this property includes their home, and its sale has been stipulated in the will, then the executor becomes the seller of the property and is liable for allocating the balance to the named beneficiaries. If there’s no sale of the estate stated within the will, this means it is up to the executor whether to sell the property or not after the acquiring the grant of Probate document as they have the responsibility to govern assets owned by the deceased. Keeping the property is frequently the most contentious decision as without an on-market sale its value becomes subject to dispute. Sale by using auction commonly requires a 4-week marketing period to attract interested buyers and generate competition. If the house does sell, settlement takes between 60–90 days — which may be a long wait if you need prompt closure on your loved one’s affairs. A successful agreement can also be delayed or fall through if the buying party has problems with their financing. Executors have a year to distribute an estate to avoid capital profits tax implications. If the executors suppose that the successful sale of the property should take longer than one year, then in search of additional tax and financial recommendation is highly recommended. RE-HOME ANIMALIf the pet owner lives alone with the pet they might be moved to a new home. In these cases, the owner should plan for the care of the pet after the owner’s demise. The owner’s desires can both be a part of a will or really included in written instructions left with a trusted friend or family member. For the most part, even oral instructions may be enough to make sure the pet’s well-being. However, only a will can offer legal assurance that an owner’s desires for the pet will be observed. In rare cases, a dispute over where a pet should go after an owner dies could arise. A will could resolve such a dispute. Some pet owners may also want to create a trust to make sure the care in their pet by allocating cash especially for the care of the pet after the owner’s death. An estate attorney could want to be consulted to create a trust on this situation. Every state has special legal guidelines regarding pet trusts. A trust offers the maximum guarantee that a pet may be cared for in accordance with an owner’s wishes. No matter how much we like our pets and treat them as family, within the eyes of the court they are assets. This means that, unless you include a clause for your pet in your will, there is no legal requirement to your heirs to take care of the pet. The pet will both be included as a part of the property and legal ownership will be transferred to the beneficiary, or it will be sent to a shelter. All property that does not automatically transfer ownership to another after the loss of life of the owner must undergo probate. Pets essentially fall under the category of personal belongings of an individual. If formal probate proceedings occur, all the non-public assets are required to be accounted for and would be dispensed according to the need, if there is one. If there is no will, the formal proceedings follow intestate inheritance law. SECURING PROPERTYThe first step in cleaning a house is to secure the premises. You have no idea how many people may have keys to the residence—friends, cleaners, delivery people, house sitters. Rather than try to collect all the spare keys, simply exchange the locks. You may sleep better at night. Securing agreement on estates isn’t only a project to jump at in the face of legitimacy or choice as a personal representative; it calls for some cautiously spelled out technique which will be discussed subsequently. To persuade that a particular asset belong to a deceased person is the first step closer to securing it, and without which acquisition could be quite hard. For one seeking to secure a deceased asset until a duly authorized individual is proposed by means of the clerk of a court of competent jurisdiction within the decedent sphere of residence, creating an inventory of the decedent properties may additionally grow to be quite important. This could be carried out using the decedent non-public records, mails, files and documents assisting the intended properties to be claimed. BENEFIT OF OUTSOURCING THESE TASKSCleaning up a decedent’s property is an essential obligation of the non-public representative. Much like whilst you promote, a personal representative have to take steps so that it will increase the value of the property assets by means of an amount that might exceed they would cost to complete. This likely means at least cleaning the property, if not updating it or renovating it, as recommended by means of a real estate professional. The personal consultant may charge a reasonable amount for time spent doing this, or get reimbursed for reasonable charges of having someone else do it. If the amount which you are paying your spouse to address the cleanup is cheap, that need to be fine. Price levels vary broadly however expect to pay around $700 or much less for a complete truckload with hard work included. Dumpsters can be an answer. Prices vary substantially, however many 30 yard (ca. 27 m) containers range from $400 — $900 each and lots of charge daily rental quotes and extra rates according to ton of material removed. Some other viable problem entails county regulations of what sort of material can move into the container, which comes with fines when violated. Taking objects to a nearby dump can save much money, as many dumps are unfastened to residents of the county, but can take a very long term and frequently have limits on what residents can dump. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
Estate Planning Attorney In Gunnison Utah Estate Planning Attorney In Herriman Utah Estate Planning Attorney In Hildale Utah Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Utah Lawyer for Divorce Business Bankruptcy Probate Estates https://ascentlawfirm.com/estate-planning-attorney-in-kamas-utah/ |
Probate LawyerProbate Lawyer in West Jordan Utah. If you need probate lawyer, trust attorney, inheritance counsel, living trust, last will and testament, call 801-676-5506 now for a free consultation. Archives
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