Category Archives: Estate Planning

Asset Protection, Estate Planning

Do 529 Plans have Tax benefits?

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When you are creating an estate plan, it is important to obtain tax benefits where possible. For general information regarding 529 Plans, please read our blog titled “Saving for College Through a 529 Plan.” This blog will discuss the tax benefits of 529 Plans, such as:

  • Federal tax benefits. Even though your contributions to a 529 Plan are not deductible from your federal taxes, your investment in the education savings account will grow tax-deferred. Additionally, when the beneficiary withdraws money to pay for college, the distribution is federally tax-free.
  • State tax benefits. If you created a 529 Plan in Utah and you reside there, the income is also exempt from state income tax.
  • Control over account. If you are making donations into the account, you retain control over it. For example, a parent that opens the account for the benefit of his or her child. With a few exceptions, the beneficiary has no rights to the funds. The donor/owner of the 529 Plan can decide when distributions should be made and for what purpose.
  • Tax reporting. Until withdrawals are taken from the account, you will not receive a Form 1099 to report taxable or nontaxable earnings.
  • Deposits. Most state 529 plans do not have income limitations or age restrictions. In fact, you can contribute substantial sums if you desire. Many state plans allow more than $300,000 per beneficiary.
  • Simplicity. Establishing a 529 Plan is a simple way to save for college. You can typically arrange for automatic deposits out of your bank account and the investments of your account are handled by the plan. In other words, you have the peace of mind knowing that you’re saving for college without any high maintenance demands.

It should be noted that some people prefer to use an irrevocable trust for education because of the flexibility a trust provides and the ability to control the funds while serving as the trustee. If you are trying to decide whether a 529 or an irrevocable trust would be more beneficial for you and your loved ones, call 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.

Estate Planning

Unmarried Couples Need Estate Plans

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Couples (same-sex or hetrosexual) who are living together, but who are not legally married, have unique estate planning needs. When you are married, the law provides you certain automatic protections. However, without that marriage certificate, you and your loved one are not protected unless you create an estate plan.

If you have an estate plan, you can direct how your assets and property should be transferred upon your death. This can be especially important if you or your loved one have been married before or you have children from a prior relationship. Because an unmarried couple does not have protections under the law, once an estate plan has been created, your loved one should be given a copy of it, be informed of where the original is located and how to access it when it is needed.

In addition to protecting the distribution of your assets, an estate plan can also assist unmarried couples with granting each other the power to make medical and health care decisions for each other. If your unmarried partner becomes incapacitated or otherwise unable to make his or her own medical decisions, there are no assurances that the physicians will include you in any medical decisions regarding your loved one because you are not legally a family member. There are many instances where antagonistic family members will purposely exclude you or your partner in these instances. Thus, it is important that you and your partner appoint each other as a medical care proxy or power of attorney. You and your partner may also want to appoint your loved one as a financial power of attorney to handle your money if you should become incapacitated.

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.

Estate Planning

Choosing YOUR Estate Planning Attorney

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When you are creating your estate plan, one of the most important decisions you can make is selecting the right attorney to assist you. Your estate plan is a personal and private matter, so you want a lawyer that is not only experienced, but one that you trust and makes you feel comfortable.

How do you find a good lawyer? Many people ask family and friends for referrals. However, the best lawyer for them may not be the right attorney for you. Your local Bar Association may also provide you with a list of estate planning lawyers in your area, but there is no assurance that these attorneys are qualifed. They are simply lawyers who signed up with the Bar to receive referrals. The best way to find your attorney is to do your due diligence. That means asking your friends and family how they know the lawyer, what kind of work he or she has done for them, and if they consider the lawyer an estate planning expert. Then do your own research which is easy now via the internet. Other lawyers usually know who the experts are also. But beware the laywer who does divorce or bankruptcy or personal injury or criminal law and says “sure I can help you with that”. You truly want a specialist. However you find your attorney, it is helpful if you are prepared for your initial meeting with him or her.

How do you prepare for your first meeting with an estate planning lawyer? First, ask them to verify that they are an expert in estate planning. Ask them how many trusts they prepared that week or how many clients they met with for estate planning purposes that week, that month, or in a year. If they can’t tell you they have had at least three appointments each week for estate planning work, they are not a specialist.

If you’re comfortable with the lawyer, then you want to focus on your problems. You should make a list of the questions you really want answered. This will help ensure you don’t forget to ask them. Also, if you have your records organized, it will assist the attorney in getting a general idea of your financial and family situation. Finally, think about what you want to accomplish with your estate plan. If the lawyer has a clear idea of what your goals are, he or she will be able to make suggestions for the type of estate plan your should consider creating. Your lawyer should help you identify your goals.

Below are a few things your attorney is likely to ask:

  • Who do you want your beneficiaries to be?
  • Who you want to appoint to serve as the trustee or personal representative of your estate?
  • What is your estimated net worth?
  • What are your most significant assets?
  • If you have minor children, who you would appoint as their guardian?
  • Are there any details about your beneficiaries or your estate that may affect the way your estate planning should be handled (such as a family member with special needs)?

Spending time preparing for your initial consultation will not only expedite the estate planning process (which saves you money), it also helps ensure that you end up with an estate plan that accomplishes all of your goals. Remember, this is your life, your family and your estate plan. Don’t let your lawyer make all the decisions – stay active in the process and make sure it is done the way you want it done. Finally, find out how long it will take to be completed. For most estate plans, we can complete the work within 3-4 weeks from start to finish. Any longer and things just don’t get done.

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.

Estate Planning

5 Tips for Getting Your Estate in Order

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If you want to make things easier on your surviving family members, it is important to organize your estate. The time you spend taking care of things now will help your loved ones deal with the difficulty of losing you. It will also ensure that your wishes will be carried out. Below are a few tips on ways you can organize your estate:

  1. Create an estate plan. Having a will, trust, and other estate planning documents allows you to ensure that your loved ones are protected and your estate doesn’t go to pay taxes and is not subject to unnecessary expense. Your estate plan should include a living will that sets forth your medical wishes if you are unable to make those decisions for yourself. It should also include a power of attorney that allows a trusted individual to make personal, legal or financial decisions on your behalf if you become incapacitated.
  2. Designate beneficiaries. If you have bank accounts or other types of accounts that allow you to name a “pay on death” beneficiary, it is imperative that you designate beneficiaries for each account.
  3. Draft a letter of instructions. It is extremely helpful for your loved ones to have instructions regarding your funeral wishes, people you want notified of your death, and where your important financial records can be located. It is important to list any passwords or other information necessary to access your financial records. You may want to consider preplanning your funeral so the process is less stressful for your family.
  4. Life insurance. It is important to obtain or update your life insurance, which provides your loved ones with an immediate source of funds. Be very careful about the beneficiary designations so that the life insurance is included in your estate plan.
  5. Review pensions, 401(k)s or IRAs. You want to make sure you have taken care of beneficiary arrangements so your survivors receive the benefits they are entitled to. These beneficiary designations must be part of your estate plan and your estate planning attorney should guide you in these decisions.

There are many other items that must be taken care of, but the above tips will give you a starting place. To learn more about estate planning or asset protection tools, contact us to schedule your 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.

Estate Planning

What is the Difference Between a Guardian and a Conservator?

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The terms “guardian” and “conservator” are often used interchangeably because they are related concepts, but they have two different and distinct meanings in Utah. It is important to understand these differences when making plans for the care of your loved ones or for yourself.

Guardian

The appointment of a guardian allows that person to make decisions about another person’s or the “ward’s” well-being. As a result, the guardian should be somebody you trust to act in the ward’s best mental and physical interests. A guardian is often appointed by parents who wish to provide for their children’s care in the event they both should die. A guardian can also be appointed to assist a ward who cannot take care of themselves due to age or disability. The guardian is responsible for taking care of the ward’s daily living needs. A guardianship can be limited if the ward is able to take care of themselves partially but not completely.

Conservator

A conservator is appointed to handle a ward’s finances and assets. When you appoint a conservator, you want to select somebody who will act prudently in handling the ward’s estate. A conservator can be appointed to manage the estate of a minor who is too young to handle it, or because the ward is not mentally capable to do so. Unfortunately, you may not be able to select the person who acts for you if you are already incapacitated. Further, you don’t have the right to select a Conservator for a minor child.

A professional institution or an individual can be appointed by a court to serve as a guardian or conservator. In many cases, the person or institution can serve in both roles and take care of the ward’s daily living needs and their financial needs. Depending on the circumstances, this may or may not be advisable.

While guardians and conservators are important tools for protecting persons who are underage or have disabilities, when it comes to protecting assets, the use of a trust is far superior to use of a conservatorship. You retain control because you choose who becomes your trustee and how assets are managed.

If you have questions regarding appointing a guardian or conservator for a loved one or for yourself, contact us to schedule an initial consultation.

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.

Estate Planning

Funding a Revocable Trust

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You have probably heard that it is smart to create an estate plan that includes a trust. Having a revocable trust provides a way to avoid probate, but only if the trust is “funded.” In other words, the trust only protects the property that it holds when you die. Property that is not owned by the trust may be subject to the probate process, or worse, it passes outside of the documents you provided because of beneficiary designations.

Failure to properly fund your trust will defeat the purpose of creating it. Thus, as soon as your revocable trust is created, you should start transferring your assets to the trust. We can provide you guidance in how to accomplish this task. For real property, you will need to execute a deed that transfers the property from your individual name to your name as the trustee of the trust. We typically prepare deeds for real property at the same time we execute your trust. Other assets such as your bank accounts and brokerage accounts should also be transferred in the same way. We provide documents to you that give clear instructions to the account holders.

It is also important to remember that any assets or property that is acquired after the revocable trust has been created should be titled in your capacity as the trustee of the trust, not in your individual name. Also, your assets that are currently held jointly with another party or that have a beneficiary designation should be transferred to or payable at death to the revocable trust. If they aren’t, your estate plan has a hole and becomes unpredictable. There are a few exceptions to this rule, but your estate planning attorney should help you figure out the best approach for you.

If you are interested in learning more about creating a revocable trust or you need assistance with funding your trust, contact us for an initial consultation.

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.

Estate Planning

Is Probate Necessary if my Estate is Small?

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Many people believe that they do not need an estate plan because their estate is small. However, it is important for everyone to have an estate plan. It doesn’t have to be complex, but it is important to have one. The truth is, if you don’t consciously create a plan, there is one that applies anyway.

That being said, in Utah, if an individual dies with an estate that is less than $100,000 and none of the individual’s assets include real property (house, time share, rental property or a building lot), a probate will not be needed. The deceased’s assets can be distributed to the individuals who are entitled to receive it by submitting an affidavit to the banks or other entities who hold the property. This method can be used whether the individual died with or without an estate plan.

If your estate is eligible for the affidavit process, you do not need a revocable trust in order to avoid probate. However, at the very least, you should still have a will, power of attorney, healthcare directive and other estate planning documents. Additionally, if there is a possibility that your estate will increase over time or the value is more than $100,000, it becomes more compelling to create a revocable trust anyway. A trust can also be beneficial for an elderly individual who wants to avoid a court-supervised conservatorship in the event he or she becomes incapacitated.

In short, you should never assume that your estate is too small to warrant creating an estate plan. Let us review your individual circumstances and help you understand whether you need a plan and what type of estate planning would be most beneficial for you and your loved ones.

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.

Estate Planning

What is an Estate Tax?

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Estate taxes can be complex and difficult to understand, especially since the law is frequently changing in this area. If you have estate tax planning concerns, you should seek the advice and guidance of a knowledgeable estate planning attorney. Below are a few pointers for a general understanding of estate taxes.

The estate tax is a federal tax on transfers that is imposed on the estate of a deceased person. Nine months after an individual dies, the estate tax return and the payment of taxes, if any, is due.

The good news is that the majority of estates do not owe taxes because of the various exemptions that are available for each decedent. The amount of the applicable exemption changes fairly frequently, so it is important to be aware of the current amount allowed. In 2002 and 2003, the exemption amount was $1 million. It was increased to $1.5 million in 2004 and 2005, $2 million in 2006 through 2008, then up to $3.5 million in 2009. There was no estate tax at all for individuals who died in 2010. In 2011, the exemption was raised to $5 million per person in 2011, it was $5,120,000 per person in 2012, and in 2013 it was $5,250,000. In 2014, it was $5,340,000 and the 2015 estate-tax exemption is $5.43 million per individual. This means that if your estate does not exceed the exempt amount, now $5.43 Million, your estate will not pay an estate tax!

In order to get an estimate of how much estate tax will be due, you should add up all of the property in the estate that is subject to an estate tax. Essentially, this is everything you own or control, including pension plan assets, IRA’s, 401(k)’s, and life insurance you have control of. From this total, you subtract all of the applicable exemptions and deductions (this isn’t intuitive, so if your total assets add up to $5.43 Million or more, you need to see counsel to review this with you). If the end result is more than zero, there may be some estate tax due.

A qualified estate planning attorney should be able to advise you about this and help you understand whether you are subject to the estate tax or not. Surprisingly, there are attorneys that claim to be estate planners who do not understand the estate tax. Ask those specific questions to the attorney you are working with. If he or she is the least bit unclear about this area of law, they are not the estate planning attorney for you!

To learn more about what property is subject to estate taxes or what exemptions and deductions may apply, contact us to schedule an initial consultation.

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.

Estate Planning

Should I Transfer My Home While I’m Alive?

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For many Utah residents (and for most people in general), their most significant asset is their home. In an effort to avoid the probate process, or save the money required to create an estate plan, many people transfer title to their house while they are still alive. In most instances, a parent transfers title to their home to an adult child, believing this is an inexpensive and simple answer. Sadly, this can lead to serious complications for you and your loved ones.

Two important factors to consider are that by transferring title to your home, (i) you lose your homestead exemption for protection from creditors, and you are no longer entitled to a reduced property tax because it is not an owner occupied primary residence. This can cost you thousands of dollars.

Another concern is that you lose control over the rights to your home. If you should have a dispute with your child, you could potentially lose the ability to live in your own house! Your child (or children) owns the house, and without providing more, he or she does not have a legal obligation to let you continue living there (unless otherwise provided by contract). Additionally, you have no control over what can be done to your property, such as renovations, but also with your home being used as collateral for loans. What happens more often is a child has creditor problems of their own and their judgment creditors then have liens on your home!

Finally, you should also consider whether transferring title to a child will cause problems at your death amongf your other children. The child that owns your home has no legal obligation to share it with his or her siblings. What happens at death when that child faces the other children and simply states that he doesn’t intend to share?

To remedy this, some people put the names of all of their children on a deed to their home. However, if you put all of your children’s names on the title to your house, it can make the documentation very complicated and it leaves the home more vulnerable to attack by creditors and even more complicated. For example, what happens if one of your children dies before you do? Who then owns their share of the house? And even if your children cooperate with you, will your inlaws or grandchildren? What happens if you want to sell the home and use the proceeds to buy a smaller home or for your support in old age? One holdout can jam up the works and you can’t sell your house! You can see that this creates serious complications and is never a recommended plan.

More often than not, the arrangement that sounded so simple becomes seriously complicated and costly and results in litigation in your estate. It is far more costly than preparing a sound estate plan. And the worst thing is, it doesn’t carry out your wishes.

Creating an estate plan is a safer, more efficient and less costly means for transferring all of your important assets. If you want to avoid the probate process, you can create a revocable living trust. This type of trust provides you with flexibility to decide when and how your estate is distributed. A trust can actually save your family a significant amount of money, time and disputes in the long run and you can be assured that your intent is carried out under all circumstances.

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.