A trust is a legal entity that holds title to and manages assets for an intended beneficiary. A Living trust is distinguishable from other trusts in that you, as the grantor, can make changes to the trust or revoke it entirely during your lifetime. You can also act as the initial trustee of your living trust. Living trusts are most often used to avoid the probate process that comes along with passing property through a will. Because assets are owned by the trust, and not by you, they pass by the terms of the trust upon your death, making probate unnecessary. Trusts are complicated documents and estate planning attorneys can help you navigate through the legal nuances. Attorney’s fees are generally the bulk of the cost associated with creating a trust. The cost for an attorney to draft a living trust can range from $2,000 to $10,500 for individuals or more for married couples. These are only estimates; legal fees vary based on the attorney and the circumstances. Rates may differ depending on the state in which you live. The cost of hiring an attorney to draft a trust can be five to six times that of drafting a will. If you decide that hiring an attorney is the way to go, you will likely get more for your money than just the living trust. Living trusts are most often used as part of a comprehensive estate plan that can include wills, powers of attorney and health care directives. You should find out exactly what is included in the attorney’s fee prior to agreeing to any proposal.
Titling Assets to the Trust
In order to pass through the trust and avoid probate, assets must be re-titled into the name of the trust. For instance, if you want to place your home in the trust, you must change the deed so that the trust is named as owner. Once the deed is changed, it should be recorded with the registrar of deeds, and is subject to the same fees as any real estate transaction. These fees vary by state. You can check with your local registrar of deeds for your state’s fees associated with a deed transfer. Whether or not you choose to hire an attorney to draft your living trust, you will be responsible for the expense of titling assets to the trust. A living trust is an estate planning document created during one’s lifetime. A revocable living trust goes into effect during one’s lifetime and provides a way to manage one’s assets during his/her lifetime and to dispose of assets after they pass away. There are many reasons a living trust is preferable to a last will and testament. For example, when you create a living trust, you can avoid the time and expense associated with probate. While the estate’s assets are in probate, they may be frozen – a living trust avoids this as well. Individuals also choose to make a living trust to minimize tax consequences and for privacy concerns.
Basics Of A Living Trust
A revocable living trust includes the following:
• The name of maker of the trust (known as the grantor, settler and/or trustor);
• The name of the individual responsible for managing the trust and its assets (the trustee – this is typically yourself);
• The name of the individual who will take over the responsibility of managing the trust after you pass away (the successor trustee);
• The names of the individuals or organizations you leave your trust property to (the beneficiaries);
• The name of the individual in charge of managing the assets you leave to minor beneficiaries (also called the trustee).
As long as your living trust contains these basic elements, you can make your own living trust. Some choose to hire a lawyer, and more specifically, an estate planning attorney to prepare their estate planning documents, but this is not always necessary. Many individuals are successful in making a living trust on their own without the use of a living trust attorney. If you are interested in making your own living trust, be sure to sign the trust document you created before a notary public and look up the law in your state as to whether additional witnesses are required. You will then need to fund the trust by transferring your assets into the trust. Some states require real estate deed transfer documents to be prepared by an attorney so be sure to check with your local land records office for this as well.
Why to Set Up a Trust
A trust is set up to achieve certain benefits that cannot be achieved with a will. These can include:
• Avoiding probate
• Avoiding or delaying taxes
• Protecting your assets from creditors of both you and your beneficiaries
• Maintaining privacy regarding your assets
• Exercising greater control over your assets than might be achieved with an ordinary will
• Allowing you to qualify for certain benefits, such as Medicaid for long-term care
• Providing financial support for a person with a disability, while allowing the person to receive government disability benefits
If you are looking to achieve one or more of these goals, you should consider setting up a trust. A will and a living trust do not serve exactly the same function. Depending upon your situation, you may only need a will. But if you decide that you need a living trust, you will also need a will. It’s important to know which choice is better for you.
How to Set Up a Trust
• Creating the Trust Agreement: The grantor creates a trust agreement, which is a legal document that designates the grantor, the trustee, and the beneficiaries, and outlines how the trust assets are to be managed and distributed. Part of this step is deciding who you want to name as beneficiaries, how you want the trust income and assets distributed to them, and who you want to name as trustee (or trustees).
• Funding the Trust: The second step, called funding the trust, is for the grantor to transfer assets to the trust. A trust agreement is worthless unless the trust is funded. How this is done depends upon the nature of the property:
• Real estate: To transfer real estate, the grantor executes a deed that transfers the title to the property to the trust.
• Personal property with a title document: Some assets, such motor vehicles, boats, RVs, airplanes, and mobile homes (also known as modular or manufactured homes) have some type of title document, which can be transferred to the trust. This can also be done with stocks and bonds.
• Other personal property: All other property without a title document can be transferred by simply writing a description of the property on a piece of paper (such as “all of my household goods,” or “my coin collection”), and making a note that it is being transferred to the trust.
Probate is the process in which a court legally recognizes a person’s death and oversees the payment of a deceased person’s debts and the distribution of his or her assets. The court’s role is to facilitate this process and protect, when necessary, the interests of all creditors and Beneficiaries of the estate. The role of the Utah probate court and all persons hired by the court to facilitate this process is known as probate administration. If the deceased, known as the decedent, dies with a drafted will, the executor or the personal representative in the will typically must file for probate. In Utah, state and local court rules govern the various time periods that the executor must follow in probating a will. The general rule in Utah is that the executor has four years from the date of death of the testator (person who drafted the will) to file for probate. Generally, if the executor does not file the will within that prescribed time period, the laws of intestacy (when there is no will) will govern how the estate’s assets are distributed. For a simple estate, the entire probate process can be completed within six months. However, expect probate to go on for a year or more if the original will cannot be located or the will is contested. This makes procedures more complicated and will take more time due to the increased involvement and supervision by the court. It should be noted that although it takes several months to probate an estate, Beneficiaries don’t have to be left without funds while an estate is being probated. Certain assets are not distributed during probate but are transferred in some other way. These assets are called the non-probate estate. These can include insurance policies, IRAs, KEOGHs, pensions, profit sharing, and 401(k) plans. These assets are transferred directly from the company or bank holding them to the beneficiary who is named in the policy or account documents.
Without a probate attorney to guide you, the Utah probate process can be a daunting experience. To begin with, certain Courts will not allow non-lawyers to file applications to probate a will or an estate nor will they allow non-lawyers to represent an estate in Court. Also, it can be particularly difficult if there are multiple beneficiaries, or a decision must be made regarding the type of probate that should be filed. The easier probate process falls under independent administration procedures. In this situation, the court appoints an Administrator who submits an inventory of all assets and a list of people who owe money to the estate. After the inventory is filed, the administration of the estate continues without the probate judge’s approval. More than 80 percent of the estates probated in Utah are independently administered. Utah law allows the person writing a will to include a provision in the will for independent administration of the estate upon his or her death. A dependent administration procedure refers to the court being much more involved and appointing a dependent administrator who must get the probate judge’s approval in every step of the probate process. This usually happens when beneficiaries fight over the will or the estate assets of the person who died. The purpose of dependent administration is to protect the rights of the beneficiaries, the people who will receive the assets. However, the necessity of a dependent administrator writing reports and seeking constant judicial approval drives the costs of probate administration up a lot. Depending on the size of the estate, it can cost thousands of dollars more to go through dependent administration, money that would have gone to the beneficiaries under independent administration procedures.
Duties of a Probate Attorney
All the steps involved in probating an estate depend on the probate laws where the decedent lived at the time of death, as well as any other states where the decedent might have owned property. The steps required for settling an estate will differ based on whether the decedent died testate with a valid last will and testament or intestate, without leaving a valid will or other estate plan. A probate lawyer will be well-versed in both situations. A probate lawyer can also be hired to advise beneficiaries of an estate on legal and other matters presented by the personal representative during the course of the probate process. This can become necessary when the beneficiary doesn’t get along with or trust the personal representative. Some probate lawyers specialize in separate lawsuits related to the decedent’s estate. This might happen when a beneficiary challenges the validity of the decedent’s last will and testament through a will contest. These types of attorneys are known as estate litigators, probate litigators, or estate and trust litigators.
Additionally, a probate attorney may be responsible for performing any of the following tasks when advising an executor/administrator:
• Collecting and managing life insurance proceeds
• Getting the decedent’s property appraised
• Finding and securing all of the decedent’s assets
• Advising on how to pay the decedent’s bills and settle debt
• Preparing/filing documents as required by a probate court
• Managing the estate’s checkbook
• Determining whether any estate taxes are owed
Terms to Know
• Decedent: When probating a will in Utah, you will likely encounter the term “decedent” often. This is the legal term for the person who has died and whose estate is in the probate process.
• Will: This is the legal document in which a decedent has outlined how he or she would like assets distributed among their loved ones.
• Estate: In Utah, an estate consists of all the decedent’s assets. These include, but aren’t limited to, cash, real estate holdings (homes, land, etc.), stocks and bonds, life insurance policies, retirement accounts, vehicles and personal belongings.
• Beneficiaries: These are the loved ones named in a will, or determined by the court if there is no will, who will receive assets from the decedent’s estate.
• Executor: When a person dies with a valid will in place, the document typically names a person to serve as executor of the estate. The chief duties of the executor will be to inventory and catalogue the decedent’s assets; pay debts of the estate; pay taxes of the estate; file lawsuits for claims owed to the estate; and distribute assets from the estate to the beneficiaries as named in the decedent’s Last Will and Testament.
• Administrator: When the decedent has passed on without leaving a valid will and no executor has been named, Utah law requires that an administrator be named to carry out the duties of an executor. The court will often appoint one of the primary heirs to act in this capacity.
Trust and Estate Lawyer
When you need a trust and estate probate lawyer in Utah, please call Ascent Law LLC 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