Estate Planning

Estate planning should be a top priority for most households, yet many people avoid it. Perhaps you’re someone who has put off planning because you find it intimidating, tedious or even unsettling. The good news is that more than ever before, multiple planning options provide increased flexibility and security. A proper estate plan helps you to make choices about your assets and appoint those you trust to carry out your requests.

A will, the legal document that states your wishes at the time of death, is the most common plan and one that works for many. However, another option is a trust, which is established to provide legal protection for your assets or property.

As far as trusts go, the revocable trust is the most flexible. You can amend your plan as much as you want as time goes on. You can even dissolve the trust and start over if your plans change.

The misconception that trusts are designed only for those with large estates is not true. There are many reasons to consider a revocable trust as you plan and prepare for the future. Some key benefits include:

• Your descendants avoid the time and expense of probate after your death.
• Trusts keep the affairs of your estate private (once an estate enters probate, all assets and heir information are made public through court records).
• Unlike a will, which provides post-death benefits only, a revocable trust provides living benefits.

Keep in mind that setting up a trust adds expense and complexity to your estate plan. And although it represents an added cost, a revocable trust does not provide any added income tax benefits. In addition, a revocable trust can become irrevocable, or unchangeable, after death, which is important to note.

One of the main objectives when preparing a will or setting up a trust is to avoid probate, which is the formal legal process of validating an estate plan. For many estates, probate isn’t necessary. Some simple ways to avoid probate are through beneficiary designation, joint ownership or if your estate is worth less than $100,000.

Assets with a beneficiary designation do not require probate, and it is wise to name both a primary beneficiary and contingency. These assets include life insurance, individual retirement accounts and 401(k)s. You can also make a beneficiary designation on bank accounts. These are called Payable on Death accounts or PODs. 

If your assets are titled jointly, a surviving spouse can avoid probate because their name is also on the title. Consider taking an inventory of your assets and examining whether they are titled jointly. Most joint ownership includes a right of survivorship, making the remaining spouse the sole owner of the property.

In Utah and Idaho, if your estate is worth less than $100,000 after debts, you can utilize a small estate affidavit procedure to avoid going to court (see Utah Code 75-3-1201 and Idaho Code 15-3-1201).

State laws and statutes govern how your estate plan is executed, which is why working with an experienced lawyer can be helpful. Many people enjoy the convenience and ease of utilizing online services to prepare a will; however, there are risks associated with these types of websites. Your best bet is hiring a local, licensed estate-planning attorney and getting your estate plan done right. If possible, research three attorneys, price their services and select the one who best fits you and your needs. The goal is a clear and valid estate plan that saves your heirs added time and hassle.