If you are currently working on your estate plan, you have probably heard a few horror stories about estate plans gone wrong. In such cases, usually a document was not properly drafted or a litigious family member caused a ruckus. Surely you are wondering what the top estate planning mistakes are, and how to avoid them. We have listed a few questions below that you should ask yourself to make sure you avoid these mistakes.

Did You Fund Your Trust?
Not funding a trust is one of the biggest estate planning mistakes. If there are no assets in the trust, the trust may be useless.

Did You Jointly Title Assets?
People sometimes title assets under tenancy by the entirety / joint-tenancy with-right-of-survivorship so those assets avoid probate. Though they will avoid probate, they will be subject to applicable federal and state estate taxes when the second person passes away. Since everything ends up in the hands of the survivor, they could end up in the hands of a new spouse or family. It is better to re-title these properties into the name of your trust. It often surprises people to learn that they have a well drafted trust and estate plan, but because of the way their assets are titled, it doesn’t work.

Do You Own Life Insurance in Your Own Name?
If your life insurance policy is titled in your name, the death benefit may be payable to a beneficiary directly, which may not be the result you want. What if they are a minor child? It will also be included in your taxable estate, possibly causing a large portion of it to be used for estate taxes. This can be avoided by creating an irrevocable life insurance trust.

Have You Left Assets Outright to Beneficiaries?
Assets that are left outright to heirs and beneficiaries are exposed to creditors. It is safer to leave assets in trust for the benefit of your heirs and beneficiaries. Not only that, but if you’ve named your children directly, are they old enough and skilled enough to avoid wasting what you’ve put together?

Have You Done any Mental Disability Planning?
If you do not plan what is to be done in case you suffer a mental or physical disability, the court will order and supervise guardianship and conservatorship appointment if and when the situation arises. You can use a living trust to choose who will decide when you are disabled, who the disability trustee will be, and how you want to be cared for during your disability.

Do You Have a Living Will?
Some people incorrectly assume that because they have a living trust they do not need a living will. A living will is needed to give physicians guidelines to follow in the event you are in a terminal condition or in a persistent vegetative state.

Have You Communicated with Your Trustees and Beneficiaries?
Let the people you have named as representatives, trustees, and beneficiaries in your estate plan know their role to ensure a smooth transition during the settlement of your estate.

Did You Know Where All Your Assets Are?
A scattered estate cay cause some assets to be left uncollected, undistributed, or lost. One client of ours suffered from dementia and it was only through diligent searching of his records (at great expense) that we found an annuity worth over $150,000!

Did You Put All Your Assets into Your Trust?
Remember, forgetting to fund a trust is one of the biggest estate planning mistakes. Do not forget about art, furniture, clothes, and other possessions. These may also be transferred into your trust using a bill of sale. Otherwise, these assets left outside the trust could be subject to probate. You should carefully consider your objectives for each type of asset.

Have You Updated Your Estate Plan?
Finishing your estate plan will feel really great, but you still are never really done! Each year, new laws and regulations are passed and family circumstances change. These things can affect your entire estate plan, so you have to review and update your estate plan with an attorney at least every five years. But you should review it every year. You may want to modify certain will or trust provisions, but do not go about this on your own, as that could have adverse legal affects.

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.

A will or a trust are essential components of your estate plan. A will can be used to appoint a guardian for minor children, create trusts for your minor or young adult children, transfer your personal effects, and distribute your estate. A trust can avoid probate and help manage your property if you become incapacitated. In order for your will to be effective, it needs to be executed in a very particular way. Trying to draft or change your own will or trust can lead to adverse legal effects (see our other blogs on DIY wills and trusts). Therefore, the first important step in the estate planning process is choosing the right attorney.

Experience
Many attorneys are willing to write a will or trust for you, but not very many attorneys actually have the requisite training, expertise, and experience for the task. Experienced and highly trained estate planning attorneys are knowledgeable about tax law, trust law, probate law, property law and business organizations, and can apply these skills to your specific situation. Lawyers do not learn about wills, trusts, probate and tax law in law school unless they specifically focus their education. If an attorney focuses his practice on other types of law, such as criminal law, divorce law, bankruptcy law, patent and trademark law, personal injury, or employment law, he or she probably will not have the focused training and experience of an attorney whose practice is concentrated on estate planning. Having a personal injury attorney write your will or trust is like having an orthopedic surgeon perform brain surgery on you. Would anyone really do that? Many people don’t realize just how specialized the law has become, just like medicine and other disciplines.

Questions to Ask
If your company’s attorney, or a friend or neighbor who is an attorney, offers to draft a will for you, ask them how much of their time is spent doing estate planning for clients and studying tax law. You should also ask them how many wills and trusts they have prepared in the last month. If they have only prepared one or two, or none, estate planning is not the focus of their practice. It is perfectly fine to say that you would like someone who is more specialized, and then ask for a referral.

When searching online for an estate planning attorney, look for someone who focuses their practice on estate planning and tax law. Membership in certain bar associations or estate planning organizations can indicate a level of dedication to the estate planning field and a commitment to keeping up to date on the law. Call a few different attorneys and ask them the same specific questions about their experience and qualifications before scheduling an appointment. You should also search online for any complaints that have been made against them. One client recently complained to me about his first estate planning attorney. While we were sitting there I “googled” the individual and found that he had two suspensions by our Bar Association against him. If the client had done that homework before he engaged his services, he could have avoided a lot of grief.

Also look at services where attorneys are rated by their peers. Martindale-Hubble is a peer review rating system. Lawyers are asked anonymously what they think of their peers so it’s a good system. Having an “AV” rating is the highest. Avvo is another online rating system that has become popular.

It is critical to use a competent estate planning attorney who is skilled in wills, trusts and tax law to advise you on your will and estate plan. Most importantly, it is important to choose an attorney you have confidence in and are comfortable with. 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.

Creation of a trust and funding a trust are two entirely different matters. If your trust has been created properly, your efforts may be wasted if the trust is not properly funded.

“Funding” is the term used to describe all the different kinds of things that have to be done to get assets titled in the name of a trust. It is an essential part of the process, and usually is part of the job taken on by the lawyer who drafted the trust.

Some assets are fairly easy. The house title, at least for Utah properties, is easy to prepare. If there is out-of-state real property, we may need to involve a lawyer from the state where the property is — but even that is usually a fairly modest cost. A lawyer in, say, Indiana might transfer Indiana property to the Utah trust at a low cost, hoping that we will return the favor the next time she has a Utah property to transfer into an Indiana trust.

Other assets can be more complicated. Your bank, credit union, or brokerage house may resist or refuse to change accounts into the trust’s name. You need to closely follow up with them, because sometimes it will appear they have done it right, but then later you might find the title has not actually changed.
Assets that get changed after the trust is signed can be tricky. If you have refinanced your home mortgage, purchased a certificate of deposit from a new financial institution, or talked to your “personal banker” about accounts, you might have signed new title documents. You often will not even realize this is happening, and it if does, you need to make sure the new documents are titled in the name of the trust.

There are also beneficiary designations to consider. Life insurance, IRAs and other retirement accounts and annuities almost always have beneficiary designations. Constantly changing beneficiaries can actually disconnect assets from the rest of your estate plan.

In addition to all these funding issues, assets frequently get overlooked. Both large and small assets such as mineral rights or old life insurance policies can be easily forgotten.

It would be best to address all of these possible funding issues while you are still alive. 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.

We get certain reoccurring questions from clients, and there appears to be a lot of confusion about the basic terms commonly used in estate planning. We thought maybe we could do a service by collecting some of the more common ones and defining them. Please feel free to suggest additional terms!

Will: A will is the document by which you declare who will receive your property, and who will be in charge of handling your estate.

Living Will: A living will defines what you want done to preserve your life. This does not distribute property. A living will is usually a standard form that can be signed and filled out. It can be replaced or combined with an Advanced Health Care Directive.

Personal representative: A personal representative, also referred to as an executor or administrator, is the person you put in charge of probating your estate. Your personal representative has no authority until you have died and your will has been admitted to probate.

Devisee: A devisee is a person named in your will and who will receive a distribution upon your death.
Heir: An heir is a person who will inherit from you when you die.

Intestate succession: Intestate succession is the set of rules governing inheritance when you die without a will.

Pourover Will: If any assets accidentally do not get put into your Trust before you die, a Pourover Will transfers those assets to your Trust.

Trust: A trust is a separate entity, providing who is to receive the benefit of your assets or income during your lifetime and upon your death, or upon the happening of specified events./p>

Testamentary trust:A testamentary trust is a trust created by a will. It will not exist until your estate has been probated, so it will not avoid probate.

Trustee: A trustee is the person who is in charge of a trust.

These are just a few very brief descriptions of some very complicated terms and documents. It is highly recommended that you seek the help of a qualified and experienced estate planning attorney to advise you on any of these matters. 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.

An advanced care directive is a relatively new type of document. It is authorized by State law, and allows you to appoint an agent to make health care decisions for you when you can’t make them for yourself. It also contains end of life care directives.

The advanced care directive takes the place of the traditional Health Care Power of Attorney and Living Will. Many doctor’s offices and hospitals will hand you hundreds of confusing forms and ask you to sign them, so it is important to remember that most doctors and health care administrators do not really understand all the legal implication. It is therefore important to talk to your lawyer about these forms.

There is a second level of an Advanced Health Care Directive that can be signed which directs emergency care providers, such as EMTs and First Responders, not to provide emergency care like CPR, oxygen, fluid, etc. There are a few tragic cases where individuals unknowingly signed this type of form. An advance directive requiring health care providers not to provide help should only be signed after careful consideration and at the end of life. If you have a debilitating illness or your health has declined to a point that you don’t want any further care, this may be something you want to consider. However, it is not necessarily appropriate for a healthy person to sign one. Always consult an attorney before signing forms relinquishing health care options.

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.

A revocable trust, sometimes called a “living trust” or “family trust,” is one of the best tools for transferring property from one generation to another. The proper use of a revocable trust can provide safety and security during a person’s lifetime, so that if they are incapacitated, there is already a person and structure in place to take care of their financial affairs.

A revocable trust can be changed at any time. A revocable trust does not offer creditor protection if you are sued. All of the trust assets will be considered yours for government benefit purposes, and all assets held in the name of the trust at the time of your death may be subject to state estate taxes, federal estate taxes, and state inheritance taxes.

There are many advantages to a revocable trust. For one thing, it allows you to plan for mental or physical disability. Assets held in the name of a revocable trust at the time a person becomes mentally or physically incapacitated can be managed by their designated trustee instead of by a court-supervised guardian or conservator. Assets held in a revocable trust also avoid probate. At the time of a person’s death, they will pass directly to the beneficiaries named in the trust agreement. Finally, by avoiding probate, your trust agreement will remain a private document and avoid becoming a public record for all the world to see and read. This will keep the details about your assets and who you have decided to leave your estate to a private family matter.

The Astill Law Office has provided high quality legal services for over 25 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.

One of the most overlooked aspects of the Medicaid program is the 5-year look-back period. A basic understanding of Medicaid is needed before you can understand the look-back period.

Medicaid is different from Medicare (although many people, by mistake, refer to the two programs interchangeably.) Medicare is an entitlement program paid for through payroll withholding. Medicaid is a form of social welfare designed to help people in need. Medicaid is a federally subsidized program administered by each state and the rules and benefits can and do often vary by state. So if you read something about the Medicaid program in California, the chances are it could be different in Utah.

As a social welfare program Medicaid is designed to help pay for long-term care (in home or in a nursing facility) once an individual’s funds and assets are used up. In simple terms, if you have $200,000 in savings, you are expected to use those savings to pay for your care – once your savings are gone, then Medicaid will kick in. In Utah, you can only have about $2000 in the bank to be eligible for Medicaid. Medicaid will look at all of your assets, including your house (for which there are special rules) in deciding your eligibility.

Many people try to become eligible for Medicaid by giving away all or part of their money and property. Federal and State governments are wise to this and they created a penalty so that you can’t give everything away to your family and shift the burden for your care to the government. The penalty is that you could be ineligible for a period of up to five years, if you give away money or property. This is the 5-year look-back period. If you give everything away in 2014, you might not be eligible for Medicaid until 2019! That’s a pretty stiff penalty!

Here’s an example: if you had $100,000 in the bank and you gave it to your children just as you were checking into the nursing home, you would not be eligible to receive Medicaid benefits to pay for your care for up to 5 years. This is a horrible result and therefore a horrible strategy! Who will pay if Medicaid won’t? You can hope that your children will, but if you really gave your money away, they wouldn’t have to.

I have several clients a month call asking about this very thing. They tell me they want to give their house, car and cash to their children so they will be eligible for Medicaid. I always give the same answer – DON’T DO IT!

The good news is that there are some planning techniques using trusts and other tools you can use to avoid this period of ineligibility and to be able to pay for your care. But in all cases, it’s difficult for people because you truly have to give up ownership or control of your money or property.

REMEMBER THIS: If you give away your money and property so that you can get Medicaid, you will be subject to the look-back penalty for up to 5 years. You should always consult with a lawyer specializing in Estate Planning and Medicaid transfers before doing anything that could impact your eligibility for Medicaid.

The Attorneys at Astill Law Firm have been specializing in Estate Planning, Trusts and Wills and Medicaid planning for over 30 years. If you have questions about Medicaid or Estate Planning in general, call our offices at 801-438-8698.

Below, we have addressed a few common misconceptions about estate planning. We have seen these misconceptions cause damaging effects in estate planning, and we encourage individuals to work with an experienced estate planning attorney to learn more about estate planning and avoid costly mistakes. Specifically, here we clarify a few things about taxes, joint ownership, and powers of attorney.

TAXES
Many people believe that the State and Federal government have some automatic right to take a part of your estate at death. The state and federal governments actually do not have an automatic right to come in and tax or take part of your estate at death. In fact, in the State of Utah, there is no inheritance tax of any sort. Additionally, the Federal government now exempts all estates from any gift or estate tax if they are under approximately $5.3 Million. That means that you can probably pass all of your assets to your designated heirs without tax, unless your estate exceeds $5.3 Million. Even then, if you are married and properly plan, this amount can be increased to $10.6 million.

JOINT OWNERSHIP AND CHILDREN
Many people have placed their children’s names on bank accounts or even their homes in an effort to try to pass their property on without tax or probate. The legal effect of this can be disastrous for two reasons. First, when the children or young adults come into possession of the property, they might do something disastrous. Second, if the children have and judgments against them or file for bankruptcy, their creditors have the right to satisfy their debts from jointly titled assets. That means you could end up purchasing your property back from your children’s creditors. You should never place your property or accounts in joint ownership with children.

POWER OF ATTORNEY
Some people believe they do not need a will or trust because they have a power of attorney. This is simply untrue. A power of attorney is not valid after someone dies, it does not dispose of property, and if it is not properly written, it might not even be valid if a person becomes 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.