A living trust in Utah is an estate planning tool that allows you to use and control your assets while you are alive and pass them to your beneficiaries after your death. A revocable living trust (also referred to as an inter vivos trust) provides flexibility and privacy not available with other estate planning options.
Living Trusts in Utah
A Utah living trust is created to manage the assets in the trust for the benefit of the grantor, the person setting up the trust. When you create a trust, it makes sense to place as many assets in it as possible to maximize its benefits. Not all qualify; life insurance and retirement accounts are examples of assets that cannot be owned by a trust. You must choose a trustee to manage the trust. It is common to choose yourself to have as much control as possible. You will also need to name a successor trustee to step in after your death. This trustee continues to protect and control the trust assets and distributes them to the beneficiaries you choose according to your instructions. A revocable trust can be altered or revoked. An irrevocable living trust cannot be changed once created.
A living trust Utah allows you to avoid probate for all of your trust assets. Probate is a procedure in which a court approves and enacts the provisions of a will. Probate can take months and can be expensive when you factor in the costs of an attorney, executor, and court fees. Assets passed by the will cannot be transferred until probate is concluded. A trust avoids all of this and can pass assets immediately upon your death if you like. A trust can help you avoid probate in several states, as long as the assets in those states are included in the trust.
Utah has adopted the Uniform Probate Code, so its procedures are not as complex as other states. In addition, if your estate is worth less than $100,000 and does not include real estate, assets can be transferred at your death with a simple, inexpensive procedure. This is less costly than forming a trust.
Utah gives a surviving spouse a right of election against a deceased spouse’s estate. This means the spouse has the right to receive a certain percentage of the estate, even if he or she has been disinherited. Assets in a revocable living trust are counted among the assets used for this purpose.
Do I Need a Living Trust in Utah?
Living trusts are a valuable option to keep in mind when planning for the future. One of the prime benefits is privacy. While a will must go through probate and become part of the public record, a trust is not made public. Your assets, beneficiaries, and transfers are private. Trusts also offer stepped up security since they are more challenging to contest than wills.
Creating a living trust places you squarely in control of your assets during life and even after death. While you are alive, the assets are owned in the name of the trust, but you have total control over them. You live in your house and use your assets as you normally would without restriction. After your death, all the assets are already in the trust and the successor trustee steps in and continues managing them. The trustee then distributes the assets to your beneficiaries according to your instructions. Unlike a will, which passes assets as soon as probate concludes, a trust allows you to set specific disbursement dates if you choose.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
Living Trusts and Estate Taxes in Utah
A living trust does not hide assets from estate tax. There is no estate tax in Utah, but the federal tax applies when an estate is worth more than $5 million. You can use a specially constructed trust, known as a marital trust (or AB or QTIP trust) to avoid this tax by passing assets from a deceased spouse to a surviving spouse. Medicaid spend down rules apply to assets in a trust and the trust cannot shield your assets from creditors.
How to Create a Living Trust in Utah
To create a living trust in Utah, prepare a written trust document and sign it in front of a notary. The trust is not functional until you transfer assets into it. A living trust can widen your options and allow you to maintain control of your assets now and in the future.
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