Salt Lake City 84104 Salt Lake Co. UT estate planning vehicles

Estate Planning Overview, 101

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There are numerous estate planning issues that arise during a separation or divorce. If you're considering divorce, make sure you've adequately addressed these issues and avoid significant consequences.

The first issue is to immediately revoke any powers of attorney that grant your spouse powers over your health care or financial decisions. If you do not revoke these powers of attorney, your ex-spouse will remain your agent despite your divorce. Just imagine your ex-spouse making your health care decisions or continuing to have access to your financial accounts even after your divorce.

If you do not have a health care power of attorney or financial power of attorney, or after you revoke your existing power of attorney, you should create a new one. You may do this before, during, or after your divorce. If your divorce is pending, you probably do not want your soon to be ex-spouse having any type of decision making power over you or your assets. However, if you do not appoint someone else, your spouse will likely serve as the "default" agent if one is needed.

The next thing to consider is your Will. If you already have a Will, revise it. Chances are that your current Will provides for everything to go to your spouse. Once your divorce is final, any bequests to your spouse are nullified. Still, if you do not change your Will, such bequests will be granted if you die before your divorce is final. You cannot completely disinherit your spouse through a Will because State law provides for minimum amounts to a spouse, which is called "taking against the Will". Still you can limit what your spouse receives to the statutory amounts.

Also, there is a good chance that your spouse is named as your Personal Representative (or Executor). Even after your divorce is final, this designation will remain valid. Finally, any bequests made to in-laws will remain valid despite your divorce. Often there is a provision in Wills that provides that in the event your spouse does not survive you and there are no other beneficiaries under your Will, your assets are divided evenly between your heirs at law and your spouse's heirs at law. So, you may have a bequest to your in-laws and not even realize it.

You may also want to consider appointing a guardian for any minor children. In almost all cases, your spouse will continue to have parental rights and will receive full custody of your children upon your death. However, if there is a valid reason, such as abuse or drug addiction, why your spouse should not receive custody you should identify those reasons in your Will and name the person(s) you wish to have custody. Also, if your ex-spouse predeceases you, your Will should control who receives custody.

Also, you should establish a trust through your Will (called a testamentary trust) to control assets left to minor or disabled children. That way, you can decide who makes the decisions over those assets until your children are old enough to receive them outright. If you do not establish a trust and appoint a trustee, your ex-spouse will likely have control over any assets left to your children. And, although the assets are supposed to be used for the children's benefit, there is no practical way of controlling or checking that that is what really happens.

You should also consider a Revocable Trust. If you have one already, revise it to remove powers and gifts given to ex-spouse. Unlike a Will, any gifts given to an ex-spouse through a trust remain valid despite your divorce. Likewise, if your spouse is named as your successor trustee, that appointment remains valid despite your divorce.

There is also a benefit to having a Revocable Trust rather than a Will. In some states, you can completely disinherit a spouse through a revocable trust. The reasoning is that the statutes that grant your spouse a minimum amount of your assets only apply to your probate estate. However, any assets that are placed in trust during your lifetime are not subject to probate. Therefore, if you title all of your individual assets in your trust, you can keep your spouse from receiving anything of yours even if you die before your divorce is final. It can also serve as an ongoing trust after your death to hold assets for your children without your spouse having control or decision making ability.

Additionally, you should review and update any beneficiary designations on life insurance policies, retirement plans, etc. You may not be able to make some of these changes until your divorce is final. For most retirement accounts, your spouse has to sign an authorization for you to appoint someone else as your beneficiary. You may also be prohibited by the court from making changes while your divorce is pending. Just don't forget to make the changes once your divorce is final.

Finally, you should re-title any assets held jointly with your spouse. For many assets (such as house, car, joint investments, etc.), this may need to be done after your divorce is final. However, you can open your own bank and investment accounts at any time.

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Salt Lake City 84103 Salt Lake Co. UT estate planning taxes

Levels of Estate Planning

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In my estate planning practice, it is not uncommon to meet with a new client who wants an estate plan prepared, but is a bit vague as to what should be included in that plan. Quite frequently, the initial conversation begins with the client saying something like, "I would like a will... or should I have a trust? Do I need anything else?" Actually, those are good questions to begin a discussion.

Most folks recognize that their estate plan should provide for the distribution of their assets upon their death. That, of course, is an essential element of an estate plan, but there is more to consider in a well-designed plan. Prior to meeting with your attorney for the first time you should also be thinking about such things as who you want to handle your affairs should you become incapacitated; whether you would want your doctor to keep you alive should you be near the point of death with little chance of recovery; who you want to have the authority to sign important legal papers for you if you are unavailable; and, who you would want to raise your children if you suddenly die. There is a wide variety of personal circumstances which impact estate planning, but let me offer the following as items you should consider even before you meet with a lawyer to discuss your own estate plan.

Should I have a will or a trust?

This is typically among the first questions posed by clients during an initial meeting. Many are aware that a trust will avoid probate, but that is true only if the trust is properly funded, meaning that all of their assets are transferred into the trust. Not every estate plan needs a trust, however, and it may not be necessary for you to incur the additional cost of having your lawyer prepare a trust, when a will is suitable for your needs. And, contrary to what some folks think, having a trust does not avoid estate taxes.

A trust may be the right choice for you, if it is unlikely that you will acquire more assets in the years ahead. What can often happen, however, is that folks will have a trust established and thereafter acquire new assets that they neglect to place in the trust. Then when they die the assets outside of the trust have to go through probate which defeats the intent of establishing a trust in the first place. So, before deciding upon a trust as the main element of your own estate plan, take some time to consider your future investment plans and major acquisitions.

There are some other advantages to a trust, which might make it the right choice for you. For example, should you become incapacitated, your trustee will be able to step in and manage your assets without having to seek a court appointed conservator. In that sense, a trust document is more all-encompassing and flexible than an ordinary will.

What else should I consider in my estate plan?

Estate planning isn't just about deciding who gets your wealth when you die. It is also about making decisions as to what you want to happen should you become seriously ill or incapacitated.

Every estate plan should include an advance directive, which used to be called a living will. This document allows you to appoint a health care representative to make health care decisions for you, including end of life decisions, when you are unable to do so.

Similarly, we recommend that you give a durable power of attorney to a family member or trusted friend in order to allow your appointed agent to manage your financial and business affairs when you are unavailable or otherwise incapacitated. A durable power of attorney remains in effect so long as you are alive and should provide that it will be effective even in the event of your incapacity.

What about my bank accounts, life insurance and investment accounts?

Careful estate planning should include a review of all of your assets, including checking the beneficiary designations you have listed in your retirement plan and in regard to your investment and bank accounts. With such beneficiary designations, these assets will be transferred outside of the probate process to those persons you have previously designated as beneficiaries on these accounts. It is important that you review your beneficiary designations to ensure that your choice of beneficiaries is in accordance with your current intentions as to disposition of your estate.

A thorough review of your portfolio and consideration of the issues described above before meeting with your estate planning attorney will allow you to realize the maximum benefit from your meeting. It will also help your attorney to focus his or her discussion with you on aspects of the process that are most relevant to your goals and needs.

© Call today for your free initial consultation.

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Salt Lake City 84102 Salt Lake Co. UT estate planning s corporation shareholders

Estate Planning: What to Think About Before Meeting Your Lawyer

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Estate planning is not solely about planning for your death. It also involves planning for your life in the event you're mentally incapacitated. Having an estate plan in place is very important because it reflects your wishes for your children, family, property and assets.

Is Estate Planning Often Overlooked?

Despite its extreme importance, estate planning is often overlooked and neglected. Many people work hard throughout their lives to provide for their families and build their estates, only to have the very things they've worked for and people to protect in disarray because they didn't invest time in a comprehensive plan that reflects their wishes.

Statistics show that more than 50% Americans do not have an estate plan in place at the time of their death. This is likely due to the average person's unfamiliarity with the estate planning process itself. Because they do not understand its importance and how it works, many Americans forego wills, trusts and other estate documents.

Why do you Need an Estate Plan?

Without the proper documentation in place at the time of your death or incapacity, you are leaving it up to a judge you don't know to decide how to distribute your assets throughout your family, who will care for your minor children, and who will care for you if you're ever unable to care for yourself.

Five Questions to Answer in your Plan

In your plan, you want to proactively answer questions that may arise in the event of your death or incapacity. Generally, these questions will involve your assets, minor children, inheritances, health care directives and sometimes more.

Here are 5 questions you should answer in your plan:

  • Who do you want to care for your minor children?
  • Who will be responsible for managing your estates?
  • How will your assets and property be distributed?
  • Who will care for you if you're unable to care for yourself?
  • How will inheritances be distributed to beneficiaries?
Five Documents to Include in your Plan

A comprehensive estate plan is not a mere document. It's actually a combination of several documents that reflect your wishes regarding your minor children, your health care, and distribution of your assets, property and inheritances in the event of your death. It also covers your health care wishes if you're ever incapacitated and unable to make your own decisions.

Here are the minimum five (5) documents you should include in your estate plan:

  • Will
  • Power of Attorney
  • Trust
  • Living Will and Advantage Directives
  • Guardianship Plans for Minor Children

Many of us get uncomfortable when we think about dying and our family's life without us. It's not a topic anyone wants to consider more than once. However, it is critical that you take time now, while you're healthy and in a good state of mind, to invest time in getting your estate, health and other affairs in order, and create an estate plan that reflects your wishes upon your death or incapacitation.

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Estate Planning - Major Aspects of Personal Finance Management

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Appropriate estate planning can only be possible with proper appreciation of the major aspects involved in personal finance management process. Efficient estate planning attorney makes it a point realizing these aspects perfectly while making the plan.

Appropriate estate planning involves understanding various aspects of personal finance management well. Multiple aspects of such financial management are involved in the estate planning process. An efficient attorney therefore will always look at these aspects before preparing the estate management. People who are looking for inheritance, insurance and property transfer managements with efficiency will find understanding these aspects extremely useful for the purpose of preparing an all comprehensive estate planning.

Setting goals is extremely essential for preparing the perfect plan. Without the goals clearly determined it may not be possible to prepare plan that would meet all the requirements of the client. Retirement plans are examples of such goal setting. One could plan buying a house for residence after retirement at 25% of the gross income while keeping the residual portion of the income away for future investments, maintenance of the family, and other pursuits. People who are concerned with setting up multiple goals at one time may obtain the assistance of professional expert trust planning attorney that would balance the financial planning with goals set by the client for benefit optimization.

Goals that the client set up for achievement could either be long or short term. In any case setting such financial goals help direct planning. Processes like these involve adequate assessment of the financial and all other aspects of the estate and resources of the estate owner. Experienced and professional estate planning attorney would take care to prepare simplified versions of all the financial statements and legal documents so that there is no room for any confusion in the minds of the clients involved. Ordinarily balance sheets and income statements would be a couple of financial documents that helps the proper assessment of the estate to be planned.

Despite best goal setting and near perfect assessments by the estate lawyer proficient in these deals, best results could only accrue with perfect execution of the plans. One has to be careful about it.

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