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.