Monthly Archives: December 2014

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Estate Planning Mistakes to Avoid

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OopsCreating a comprehensive estate plan can be a complex process. It requires forethought, strategic planning and an understanding of tax laws. Below are a few common estate planning mistakes that you want to avoid:

Create a Plan

Don’t assume your estate is too small to warrant having an estate plan. Although state law provides a plan for everyone, it likely is not the most beneficial plan for your loved ones.

Beneficiary Designations & Title to Assets

It is important to verify that your estate plan matches your beneficiary designations and how your assets are titled. If there is a conflict, the designations and the titling will control, but you want to avoid confusion in order to eliminate any disputes from arising.

Life Insurance

If you own life insurance at the time of your death, it can be included in your estate. If you choose to transfer ownership of the policy during your lifetime, you can avoid any potential estate tax inclusion. Deciding how to have your insurance policy owned or controlled is a highly individualized decision, but it is important to get professional advice.

Gifts

An effective way to minimize future estate taxes is by giving annual gifts to your loved ones. You can transfer significant amounts of money or assets out of your estate which reduces your tax liability. With strategic planning, you can use your annual gift tax exclusions so each yearly gift can be leveraged into greater sums being transferred out of your estate. To learn more, please read our blog “Estate Planning Tip: Gifting to Grandchildren.”

To learn more about mistakes commonly made in estate planning, please read our blog tomorrow titled “Estate Planning Mistakes to Avoid – Part 2.” The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

 

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Estate Planning Mistakes to Avoid – Part 2

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erase mistakeThis blog is a continuation from our last blog topic titled “Estate Planning Mistakes to Avoid – Part 2.” The following are three more errors in estate planning that you want to avoid:

Failing to Get Help

We live in a world where many things can be done with the help of “do it yourself”guides. The internet is full of websites claiming they will save you money by showing you how to prepare your will or trust. However, there are many problems that can arise from using DIY guides. Many of them are very generalized and were not created to comply with your applicable state law or your unique life circumstances. Additionally, computer programs are often not timely updated to comply with changes in the law, nor will it notify you when the law changes. As a result, a seasoned estate planning lawyer will save you time, money and stress, because you have the peace of mind knowing your plan is done correctly.

Estate Tax Exemption

An attorney can help you minimize your estate taxes by strategically making gifts during your lifetime. Estate tax exclusions routinely change, so it is important to be aware of them and take advantage of the exclusions when they are at their highest.

Outright Inheritances

Even if all of your beneficiaries are adults, you may not want to give outright inheritances. This is especially true of the adult who has poor financial management skills and you want to provide for them over a long period of time. Creating a trust, either revocable or irrevocable, can allow you to take advantage of the asset protection benefits for as long as possible, while also giving you the flexibility to set forth how you want your assets distributed once you are gone. For more information regarding trusts, please read our blog titled “Do You Need a Trust?”

Don’t put your estate or loved ones in jeopardy. Let a professional help you create your estate plan. It will save you money and time in the long run.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

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Why Estate Planning is Crucial for Unmarried Couples

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couple planningCouples who are living together but who are not legally married, whether same-sex or opposite-sex, may have unique estate planning needs. Unlike legally married couples, the law does not currently provide you with automatic protection if one of you dies. Thus, having an estate plan in place is important for you.

Unmarried couples can use their estate plan to ensure that assets are distributed as they want them to be. If either person has been previously married or has children from a prior relationship, having an estate plan is even more important. It is also essential to safeguard your estate plan in a safe place where your loved ones can locate and access it when needed.

Another reason unmarried couples need an estate plan is to grant their loved one the authority to make health care decisions on their behalf. When an unmarried individual is incapacitated or unable to make their own medical decisions, there is no guarantee that their physician will include their partner in any medical decisions because you are not legally a family member. To ensure your loved one can make medical decisions on your behalf, you should appoint him or her as your health care proxy or power of attorney. The power of attorney document can grant your loved one the ability to manage your finances if you are unable to do so for yourself.

If you are an unmarried couple and you would like to learn more about creating an estate plan, contact us to schedule an appointment.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

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When Should I Update my Estate Plan?

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AlarmClockMany individuals think that their estate planning is complete as soon as they have created their estate plan. However, it is important to remember that your estate plan should be updated as your life circumstances change. It is commonly stated that you should have your estate plan reviewed every few years (at a minimum), or when one of the following events occurs:

  • Marriage. Don’t assume that your spouse will automatically be appointed as the executor of your estate. If you die without a will (intestate), the law of the applicable state will determine how your assets are distributed. By regularly updating your estate plan, you can ensure that the person you want to administer your estate is appointed and you can set forth how you want your estate distributed.
  • Children. When you have a child (including adoption), your estate plan should be updated to include the child. An estate plan can appoint a guardian for any minor children in the event both parents die. You can also create a trust as part of your plan and dictate when and how your children will receive their inheritance.
  • Divorce or death. You should review your estate plan if you get a divorce or your spouse dies to determine whether they still reflect your wishes. Most people want to name somebody other than their ex-spouse as their health care proxy, power of attorney, or as a beneficiary of your estate.
  • Remarriage. If you get remarried, your estate plan should be updated to include your new spouse. This is especially important if you or your new spouse has children from prior marriages because you will want to ensure that your children are provided for as you intend.
  • Retirement. When you reach retirement age, it is essential to review all of your finances, including your estate planning documents.
  • Significant financial changes. If your finances undergo a significant change, especially if your estate has dramatically increased in value, it is important to update your estate plan to determine if you need to shelter assets or take action to avoid certain taxes.

The above are just a few examples of events that warrant reviewing your estate plan. If you have an existing estate plan that you have not reviewed in several years, let us help you ensure it still reflects your wishes.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

 

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DIY + Estate Planning = Trouble

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HammerOnNailCreating an estate plan is one of the most important gifts you can give your family. It helps provide them stability and comfort, as well as helping you save money. While you may be tempted to “do it yourself” (DIY), estate planning is not an area where DIY is typically successful.

There are many pitfalls in estate planning that can get you into trouble. For example, many DIY estate planners fail to file a gift tax return with the Internal Revenue Service (IRS). The IRS uses a gift tax compliance initiative allowing the agency to use land records from both state and local governments to locate individuals for gift tax audits. In other words, the IRS conducts searches for real estate transactions that involve little or no money exchanged, which commonly occurs in DIY estate planning.

A common mistake occurs when an individual attempts to save money by transferring real property to their family members by adding their name to the deed instead of creating an estate plan. While this strategy can effectively transfer ownership of the property, it creates serious tax consequences for the person transferring the property. Transferring real estate can constitute a gift and the IRS requires the transferor to file a gift tax return and possibly pay a gift tax.

It is important to note that even if you would not owe a gift tax, your failure to file a gift tax return could result in criminal penalties. In fact, a conviction for failing to file a gift tax return can result in a penalty of up to $25,000 and up to a year in prison.

The IRS has been increasing its enforcement of gift taxes. If you are considering creating an estate plan, let us help. Don’t get yourself into trouble or put your estate in jeopardy. Whatever amount you pay a lawyer to help you will be less expensive than a DIY disaster

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

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What Happens if I Die Without a Will?

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EstateWhen a person dies without a Last Will and Testament, it is called dying “intestate.” Because there is no Will to direct how to distribute your estate, Utah law provides the method of distribution. These laws are referred to as the “laws of intestacy.”

Utah’s laws of intestacy set forth the priority in which your loved ones will inherit from you. If you are married and your spouse is the only surviving heir, your entire estate will go to your spouse. Also, if you are married with children who are all children of the same spouse, your spouse is the sole heir. If you are survived by your spouse and at least one child who is not from your spouse, your spouse will inherit the first $75,000 and half the remaining balance, with half the balance going to your children. In this last scenario, the probate court must add in all other transfers which pass outside the probate action into calculating the inheritances. This includes property held jointly or in a trust.

If you die without leaving a spouse or any children, Utah law defines your next of kin in ranked order as (i) descendants (such as grandchildren), (ii) your parents, (iii) your siblings, (iv) other descendants of your parents, and then (v) other relatives. While it is a comfort to know that your estate is not automatically given to the state if you die intestate, dying without a Will often leads to results you would not have wanted. In order to fully protect those you love, it is important to create a comprehensive and effective estate plan.

Don’t leave your loved ones’ inheritance in jeopardy, contact us today. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

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Undue Influence versus Lack of Capacity

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815507_sThere are many legal terms used in the world of estate planning and probate, so it can get quite confusing. Two common reasons the validity of an estate plan may be challenged is that the decedent was the victim of undue influence or lacked the capacity to properly sign the will or trust document. It is important to understand the differences between these two terms.

Undue influence is alleged if the decedent suffered a weakened state of mind and another party took advantage of it. It commonly occurs when a caregiver influences the elderly person into signing a will or trust leaving a significant amount of the estate to the caregiver as “payment” for his or her services. It also occurs when someone is in a special position of trust in relation to the elderly. This can include a caregiver or someone who helps the elderly person do their banking and pays their bills. Undue influence can occur in a variety of forms ranging from threats to simply making the elderly person feel guilty. The key to proving undue influence occurred is establishing the weakened state of mind of the decedent at the time the estate planning documents were signed. If this can be proven, the burden of proof may shift to the other party.

Lack of capacity occurs if the decedent did not understand the document or the consequences of it when it was signed. In order to have sufficient capacity, the signor should know the extent of their estate, the nature of their relationship to the beneficiaries and they must understand that he or she is executing estate planning documents. Medical evidence is often necessary to prove lack of capacity. Any other evidence establishing the signor’s true intent can be extremely beneficial.

If you have questions regarding estate planning, we are here to help. We will walk with you every step of the way and ensure that you are never left wondering what should be done next. Contact us today for the answers you need.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

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How Much Does a Utah Probate Cost?

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piggy bank question mark 600pxOne of the most common questions we get from our clients is “how much?” The simple answer is “it depends.” Whether it is creating an estate plan or filing a probate case, no two matters are identical. Let us review your individual circumstances and help you get an idea of what your matter will cost. Regardless, having us by your side to ensure everything is handled correctly will save you and your loved ones a significant amount of money in the long run.

Attorney’s fees

Every law firm has its own method for billing clients. Most probate lawyers charge either an hourly rate or a set fee for their services. It is possible for an attorney to combine these two fee methods. You should never retain a probate attorney until you understand how you will be billed and what services will be provided.

You may be wondering if a Utah probate lawyer can be paid a percentage fee based upon the value of the estate. The answer is “no.” Percentage fees are not allowed for filing or administering a Utah probate. However, an attorney may agree to a percentage fee in certain probate-related lawsuits. For example, if a lawyer represents you in attempting to recover assets of the estate or a lawsuit claiming financial abuse during the probate, a percentage fee may be allowed.

Other probate costs

Depending on your probate action, below are a few additional costs that may be incurred:

  • Filing fees to initiation the probate action
  • Fees associated with providing notice to creditors of the probate action in a newspaper
  • Appraisal fees if certain assets of the estate must have their value determined
  • Accountant’s fees
  • Mediation costs if a dispute arises during the probate case
  • Additional filing fees if lawsuits are filed
  • Witness fees and expert witness fees if a related lawsuit is filed

If you are worried about the costs associated with creating an estate plan or filing a probate action, call us for help. Don’t let your fears about cost stop you from administering the estate promptly and properly. The only thing that happens with delay is that things get more complicated and more costly.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.