We offer a variety of estate planning options and have the experience necessary to advise you on which of these options will best help you accomplish your goals. Contrary to popular belief, estate planning is not just for the elderly. Having an estate plan can be especially important for those parents with minor children, too. Additionally, adequate planning for nursing home care, social security, Medicaid, and other end-of-life health care options can significantly increase the value of your estate.
What is Estate Planning?
When someone dies, they leave behind what is called an “estate.” An estate consists of all the assets an individual accumulated during their lifetime. Many individuals have specific ideas and wishes as to what will happen with their property after their death, such as who will receive certain items of property, when a given person will receive the property, and what the property will be used for. The primary goal of estate planning is to ensure that the decedent’s (the individual who has died) property is distributed and managed as they have directed and at the smallest possible financial and emotional cost.
What does a basic estate plan look like?
When we create a basic estate plan at Red Law, we typically include the following:
- A revocable living trust;
- A pour-over will;
- A durable power of attorney for asset management;
- Health care directives; and
- An Assignment of Assets that places assets into the trust.
In Utah, a person with an estate valued under $100,000 may not need this type of estate plan and may be better off creating a traditional will. As you can imagine, every estate is different and therefore your documents should be tailor-made for your unique circumstances. Nevertheless, this list provides a good starting point.
What’s the Difference Between a Will and a Trust?
A will is a document that states what will happen with property immediately upon a person’s death. A will must be probated after a person’s death—that means that children or other beneficiaries must file an action with the probate court and have the probate court determine whether the will is valid. Conversely, a Trust can determine what happens with property long after a person dies. This can be very valuable in many circumstances. Here are two examples of how trusts can be used to protect property for children:
- Parent dies and leaves a 10 year old child behind. If the parent only has a will then all of parent’s money and property will be immediately transferred to the child upon the parent’s death and it will be controlled by the child’s guardian. This money is not subject to many restrictions and therefore can be used much more freely by the guardian than with a trust. With a trust, the parent can put various restrictions on this money and have a designated person (called a trustee) protect this money to ensure that it benefits the child in the most valuable way.
- Parent dies and leaves a 20 year old child behind. If Parent has a will then all of Parent’s property and money will be immediately transferred to Child. For many 20 year olds, a sudden influx of spending money can cause more problems than it solves. If Parent has a trust in place, this money can be set aside and controlled by a person the parent chooses. This money can be used to pay for the child’s school, healthcare, work-related training, or other things the parent designates. Many parents will set out a plan that the child will receive the remaining lump sum of money upon a certain age (i.e. 30 years old).
Are there advanced estate planning techniques that can be used to protect my assets?
Yes. There are numerous advanced estate planning techniques that can be used in a variety of situations to plan for more complex scenarios. These include things like family partnerships, LLCs that hold family assets, grandchildren’s trusts, college savings plans, irrevocable trusts, buy-sell agreements, and more. Some of these tools can get quite complex and are better explained by your attorney with your specific circumstances in mind.
Do I need healthcare directives?
A health care directive is a document that instructs medical doctors and family members how to make difficult medical decisions for you if you’re unable to do so yourself. If you’ve been in a terrible car accident and need surgery, if you’ve suffered a permanent brain injury, or if the treatment needed may have severe and permanent side-effects, what decisions do you want made on your behalf? A healthcare directive seeks to answer these types of questions. Hopefully you’re never in one of these scenarios, but in the event that you are, you can protect yourself and your assets by having a plan in place. A person can easily spend $100,000 on medical bills waiting on a family member to make a medical decision on their behalf. Additionally, giving family members guidance on how to make these crucial decisions for you helps to alleviate the immense weight placed on their shoulders.
When should I get started?
There is no hard and fast rule, but many parents feel the need to get an estate plan in place once they have children. An estate plan can be created in a way that addresses any future-born children, too. Just like car insurance, you need your estate plan in place before you actually need it.
Contact an Estate Planning Lawyer in Ogden Today!
If you would like to learn more or would like to discuss your Utah estate planning options, please call our office to schedule a consultation.