Willow Creek Law, LC
8160 S. Highland Drive, Suite 300
Sandy, Utah 84093
801.233.0606

Estate Planning FAQ’s

Frequently Asked Questions

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What is a will?

A last will and testament is a legal document that sets forth your wishes for the distribution of the assets you have acquired during your lifetime. In your will, you also can name one or more persons to be the guardian of your minor children, if you should die with minor children. Additionally, in your will, you nominate who you want to be the Personal Representative (formerly called Executor) of your estate.

 

If I am married, does my spouse need a will, too?  Or is my will enough?

Because it is impossible to know who will die first, you and your spouse should both have a will. Fortunately, because both the husband and wife often have the same desires for the disposition of their assets, personal representatives, guardians and other provisions, a will for your spouse can be created for no additional cost.

What will happen to my children if I die without a will?

If you have minor children when you die and you do not have a will that nominates a guardian, there be a court hearing in which a judge will determine who will best be the guardian of your children. In a will, however, you can nominate who you want to be the guardian of your minor children after your passing, and if the will is valid, the court must respect your nomination in your will unless someone challenges your nomination.

Will the government take my assets if I die without a will?

As discussed above, should you die without a will, your estate will be distributed according to the manner the Utah State Legislature had determined through statues. However, if you want to be the one to determine how your assets are distributed after your death, then a will is vital. Additionally, in your will, you can nominate who you want to be the guardian of your minor children, if you should die with minor children

What is the difference between a will and a trust?

A last will and testament is a legal document that sets forth your wishes for the distribution of the assets you have acquired during your lifetime. In your will, you also can name one or more persons to be the guardian of your minor children, if you should die with minor children. Additionally, in your will, you nominate who you want to be the Personal Representative (formerly called Executor) of your estate.

Like a will, a trust is often used to distribute assets after death, and a trust is usually created with a legal document. But, unlike a will, a trust can be used to own and hold property. A revocable trust is one that is revocable and amendable by the person(s) making it as long as they are living. A revocable living trust is a revocable trust created by a living person. If all of your assets are owned in a valid revocable living trust, all of your assets can pass to your heirs without any requirement to go through the court process called the probate process.

What is a living trust?

A living trust is a trust that is created during your lifetime, as opposed to a testamentary trust which is created after you die as directed in a will.

What are some of the purposes and benefits of a trust?

In many cases, one purpose of a revocable living trust is to avoid the court process called probate. If all of your assets are owned in a valid revocable living trust, your estate can be divided after your death by your chosen trustee and completely settled in shorter time frame than the typical probate court proceeding. Another common purpose of a revocable living trust is to allow your family to more easily manage your assets while you are living, if you become incapacitated or incapable of caring for yourself. Also, in cases when estate tax may be owed after your death, a revocable living trust can save your estate (and your heirs) thousands of dollars in estate taxes after you have passed. For example, with a properly prepared and funded Revocable Living A-B Trust, married couples can effectively double the amount of their assets that pass to their heirs free of estate tax. Further, a revocable living trust can be used to avoid probate in multiple states, when you own real estate in multiple state. Trusts can be used for many other purposes.

My estate is small so I don't need a living trust, right?

Many of the benefits of revocable living trusts apply regardless of the expected size of your estate. It is true that, for larger estates where estate tax may be owed, certain revocable living trusts can be used to save your heirs thousands of dollars in estate taxes. However, that is not the only benefit of a Living Trust. Even small estates can benefit from Living Trusts. If the trust document is properly drafted and administered and if all of your assets are owned in the trust, your heirs may be able to completely avoid the time and cost of a court probate process after your death. Another common benefit of a revocable living trust is to allow your family to more easily manage your assets while you are living, if you become incapacitated or incapable of caring for yourself.

Can I just write up my own will?

We do not recommend preparing your own will. However, if you follow the proper statutory procedures for preparing and executing a will, it should be a valid will. In order to give yourself and your heirs the best opportunity to have a legally valid will that complies with Utah law, we recommend that an attorney prepare your will and that an attorney supervise its execution.

What is probate?

Probate is the court process that is required so that possessions and property can be passed from someone who died to their heirs and family. A probate action begins by filing a petition with the court to open a new case and to have someone appointed by the court to act on behalf of the estate as the Personal Representative of the estate. The term Executor of the Estate is another term sometimes used and has the same meaning as Personal Representative. Through this process, the Personal Representative obtains the authorization from the court to settle the affairs of the estate. The Personal Representative has certain duties when handling the estate, including:

Paying the final bills

Determining heirs of the estate

Preparing an inventory of the estate

Gathering all of the assets of the estate for distribution

Filing a final tax return for the estate

Determining the validity of claims against the estate and, when necessary, paying those claims

Distributing the assets of the estate to those designated in the will or, when there is no will, to those heirs of the decedent as designated by Utah statutes.

Additionally, potential heirs of the estate must be identified and notified about the probate proceedings. Other responsibilities of the Personal Representative are to notify any known and unknown creditors of the estate. Once they have been notified, creditors have a specified time to make claims against the estate. Generally, if a creditor fails to make a claim within the brief time period allowed by law, that creditor will lose the ability to make a claim. Known creditors must be contacted directly to be informed of probate proceedings.

For unknown creditors, notice of probate proceedings must be published in the newspaper. Creditors' claims are paid according to priority and based on the amount of assets of the estate available to pay claims.

When is probate required? ​

Probate is usually required to transfer assets held in your name after you die. If you own real estate or have a bank account, a probate proceeding is nearly always required to transfer those assets. It may be possible to transfer clothing and other similar personal effects without a probate proceeding, but each situation is different. If your estate is worth less than $100,000 and does not include real estate, a simplied court process can often be used. We can provide advice regarding whether probate is required in your situation.

How long does the probate process take?

The probate process takes a minimum of approximately four months, but often takes longer than that. If there is any dispute as to the validity of a will or the desires of the decedent, a probate case can sometimes take years to fully resolve, depending on the complexity of the dispute.

How is the probate process concluded?

Once the heirs of an estate have all been identified and have received notice and creditors have been notified and their claims have either been paid or denied, and assets have been distributed to the proper heirs, the probate action can then be closed through either an informal or formal court process. With an informal closing, documents are filed with the court and the probate case remains open for one year. If, after that one year period, there are no matters pending with the court, the appointment of the Personal Representative terminates. With a formal probate closing, the court approves the distribution of assets and the probate case is immediately closed and the Personal Representative can be immediately discharged of any further duties.

What is the role of the court?

The court oversees the entire process including authorizing the appointment of the Personal Representative and resolving any disputes that may arise with creditors or heirs of the estate. The court can either have a formal role in a probate matter, or an informal role. If there is no dispute between any of the heirs of the estate or creditors of the estate, the probate matter can be handled informally. With informal probate matters, typically no hearings or court appearances are required and the probate can be fully resolved through filing documents with the court. With a formal closing of a probate matter, a Request for Formal Closing is filed with the court and a hearing is held and a judge authorizes the closing of the estate.

What are the costs involved in probate?

As of 2012, the court charges a filing fee in the amount of $360 to open a probate matter. To publish notice to creditors, newspapers usually charge around $200. Additionally, if you hire an attorney to prepare the court filings and guide you through the probate process, you will pay their hourly fee. Fees for probate can vary widely, depending on what is needed. For a basic, uncontested probate matter, it may be as little as a few hundred dollars. For more complex estates that are contested in court, the fee could be significantly more based on the amount of time required to resolve and administer the estate.

What revocable living trusts ARE:

Revocable living trusts can be thought of as separate legal entities with legal rights and obligations, similar to those of an individual or a corporation. In general, trusts can own and manage property, including both personal property and real estate.

Revocable living trusts are often used to accomplish an individual's or couple's estate planning purposes, such as distribution of their assets after death. Many people are uncomfortable with the public nature and expense of probate (the process by which an estate is administered legally after death). For these people, a living trust can often provide greater privacy and fewer costs after death, as well as a relatively flexible entity for managing assets.

While a last will and testament is an expression of an individual's desires regarding his or her estate and interests (including the care of minor children), a trust can accomplish those goals through a different approach. A trust can be formed while you are still alive and can own and manage all of your assets. You create a living trust by executing a trust agreement while you are living. Usually upon creation of a revocable living trust, you will turn all of your assets over to the trust for management. The trust will remain revocable (i.e. can be terminated) by you. Your assets will then be managed by the trustee of the trust, who is usually you -- the person(s) who created the trust. As such, you remain in full control of your assets to the same degree you would if you did not have a trust. Upon your death or incapacity, your trust is managed by successor trustees that you nominate before you die in the trust agreement. They step into your shoes and follow the instructions you have set forth in you trust agreement, which may include: caring for you during incapacity, paying for funeral expenses, distributing money and other assets to relatives or friends, filing and paying taxes, winding up your affairs, continuing to hold property in trust, etc.

Generally speaking, if all of your assets are owned by your trust, the trust estate does not need to be administered in probate court, which can save considerable time, expense and effort.

What revocable living trusts are NOT:

While it is impractical to attempt to list everything a living trust does not do (such as drive your car for you and feed the dog), it is useful to dispell some common myths.

First, a revocable living trust does not provide asset protection. Transferring your assets to a revocable living trust, with nothing more, does not protect those assets from lawsuits brought against you.

Second, it does not change your obligation to the Internal Revenue Services to pay income and related taxes. Likewise, it is not meant as a vehicle for hiding property, avoiding child support payments and other legal obligations.

In sum, revocable living trusts are not there to avoid legal obligations or to assist in committing fraud or deception.

Willow Creek Law provides revocable living trusts as part of a trust package, which includes: a living trust, wills, general powers of attorney, special health care powers of attorney, living wills, and deeding your personal residence into your trust. We offer the trust package for an affordable flat fee whenever appropriate.

Ready to get started? Contact us today for a free quote!