The modern trends of our society are beginning to favor premarital (prenuptial) agreements. Although there was a time when courts disfavored the idea of a contract or prenup based on an expectation of divorce, courts have quickly learned that such agreements do not encourage divorce at all. In fact, the opposite is often true. A premarital agreement encourages communication and disclosure. Financial disagreements can be a very tender part of a marriage. The premarital agreement enables future spouses to make important financial decisions now and hopefully avoid unsatisfactory consequences later.
Premarital agreements are not only important in the event of a divorce, but also the death of either spouse. These agreements help to resolve disputes before they ever arise. Future spouses can enter an agreement regarding almost any matter, including disposition of property upon divorce or death, the rights of each spouse with regard to certain property, spousal maintenance, and even personal obligations. However, many issues such as child support cannot be affected by the premarital agreement.
Should I Setup a Revocable Trust?
People often think of a revocable trust as a substitute for a Will. Although that is true to a certain extent, you will still need to execute a Will. A good estate planning attorney will create a Will that works with the revocable trust, called a Pour-Over Will. This will ensure that the revocable trust achieves all of your estate planning goals. A revocable trust is particularly useful to:
1. AVOID PROBATE. In Utah, this is not a very big concern because probate can be done quickly and easily in most cases. However, some property will need to be handled by courts outside of Utah. Probate in California, for example, can be a disaster. If you own real property in California, then it is subject to probate under some laws. Thus, you may have to deal with more difficult probate requirements if you do not have a revocable trust.
2. RETAIN CONTROL AND FLEXIBILITY. A revocable trust is, well, revocable. That means you can create the trust today, and designate your beneficiary. Tomorrow you can revoke the trust altogether, designate a different beneficiary, remove certain assets, etc.
3. MAINTAIN PRIVACY. If your assets need to be handled through probate proceedings, they become part of public records. That means that anyone will be able to look up how much property was transferred and to whom.
However, there are several estate planning goals that a revocable trust DOES NOT ACCOMPLISH:
1. AVOID CREDITORS. The money in the revocable trust will still be subject to many of your own creditors. We have seen far too many people who believe the revocable trust is insulated from their creditors. That is completely wrong.
2. AVOID INCOME TAXES. As far as the IRS is concerned, your revocable trust does not exist. That means income generated from the trust goes right onto your own personal income tax return.
3. AVOID ESTATE TAXES. The trust can be setup in a way to avoid some estate taxes. But that requires more than just merely creating a revocable trust.
4. AVOID CREATING A WILL. You still need a Will to handle other details, such as property not in the trust, or acquired since the creation of the trust.
The revocable trust has become a big part of the modern estate plan. However, it is important to know that a lot of the hype regarding such trusts is inaccurate. Although we encourage most of our clients to consider a revocable trust, such a trust does not offer the same level of protection as other estate planning tools. A good estate planning attorney in Salt Lake City should be able to help walk you through this process.
Free Initial Consultation with a Prenup Lawyer
When you need a prenup done right, please call the experienced and compassionate lawyers at Ascent Law for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506