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Estate Planning Lawyer West Jordan Utah

“Secure Your Future with Estate Planning Lawyer West Jordan Utah”

Introduction

Welcome to Estate Planning Lawyer West Jordan Utah. We are a team of experienced attorneys dedicated to helping individuals and families in the West Jordan area with their estate planning needs. Our attorneys have extensive experience in estate planning, probate, trust administration, and other related areas of law. We understand the importance of protecting your assets and providing for your loved ones. We strive to provide our clients with the highest quality legal services and advice. Our goal is to ensure that your estate plan is tailored to your individual needs and goals. We look forward to helping you with all of your estate planning needs.

Exploring the Different Types of Trusts Available in West Jordan Utah

Trusts are an important part of estate planning in West Jordan, Utah. They are a legal arrangement that allows a person to transfer assets to another person or entity for the benefit of a third party. Trusts can be used to protect assets, provide for the care of dependents, and minimize taxes. There are several different types of trusts available in West Jordan, Utah.

Revocable Living Trusts: A revocable living trust is a trust that can be changed or revoked by the grantor at any time. This type of trust is often used to avoid probate and to provide for the care of dependents. The grantor can also name a trustee to manage the trust assets.

Irrevocable Trusts: An irrevocable trust is a trust that cannot be changed or revoked by the grantor. This type of trust is often used to protect assets from creditors and to minimize taxes. The grantor cannot access the trust assets, and the trustee is responsible for managing the trust assets.

Charitable Trusts: A charitable trust is a trust that is used to benefit a charitable organization. This type of trust can be used to provide for the care of dependents, to provide for charitable causes, or to minimize taxes.

Special Needs Trusts: A special needs trust is a trust that is used to provide for the care of a disabled individual. This type of trust can be used to provide for the care of dependents, to provide for medical expenses, or to minimize taxes.

Spendthrift Trusts: A spendthrift trust is a trust that is used to protect assets from creditors. This type of trust can be used to provide for the care of dependents, to protect assets from creditors, or to minimize taxes.

By understanding the different types of trusts available in West Jordan, Utah, individuals can make informed decisions about their estate planning needs. It is important to consult with an experienced estate planning attorney to ensure that the trust is properly drafted and administered.

How to Protect Your Assets with Estate Planning in West Jordan Utah

Estate planning is an important part of protecting your assets and ensuring that your wishes are carried out after you pass away. In West Jordan, Utah, there are several steps you can take to ensure that your assets are protected and that your wishes are respected.

First, you should create a will. A will is a legal document that outlines how you want your assets to be distributed after you pass away. It can also include instructions for guardianship of any minor children, as well as any other instructions you may have. It is important to have a will in place so that your wishes are respected and your assets are distributed according to your wishes.

Second, you should consider setting up a trust. A trust is a legal entity that can be used to manage and protect your assets. It can be used to provide for your family after you pass away, or to manage assets for a minor child. A trust can also be used to protect assets from creditors or lawsuits.

Third, you should consider setting up a power of attorney. A power of attorney is a legal document that allows you to designate someone to make decisions on your behalf if you become incapacitated. This can be a spouse, family member, or trusted friend.

Finally, you should consider setting up a living will. A living will is a legal document that outlines your wishes regarding medical care if you become incapacitated. It can also include instructions for end-of-life care.

By taking these steps, you can ensure that your assets are protected and that your wishes are respected after you pass away. Estate planning is an important part of protecting your assets and ensuring that your wishes are carried out.

What to Know About Summary Probate in West Jordan UT

Summary probate is a simplified probate process available in West Jordan, UT. It is designed to provide a quicker and less expensive way to settle an estate than the traditional probate process. Summary probate is available for estates with a gross value of $100,000 or less, excluding the value of the decedent’s homestead.

In order to qualify for summary probate, the decedent must have died with a valid will in place. The will must name an executor, and the executor must be willing and able to serve. The executor must also be a resident of Utah.

Once the executor has been appointed, they must file a petition for summary probate with the court. The petition must include a copy of the will, a list of the decedent’s assets and liabilities, and a list of the heirs and beneficiaries. The executor must also provide proof of death, such as a death certificate.

Once the petition is filed, the court will review it and determine whether summary probate is appropriate. If the court approves the petition, it will issue an order granting summary probate. The executor can then proceed to settle the estate according to the terms of the will.

Summary probate is a useful tool for settling smaller estates quickly and efficiently. It can save time and money, and provide peace of mind to the executor and heirs. However, it is important to note that summary probate is not available for all estates. It is important to consult with an experienced attorney to determine if summary probate is the right option for your situation.

Exploring the Different Types of Wills Available in West Jordan Utah

When it comes to estate planning, having a will is an important part of the process. A will is a legal document that outlines how a person’s assets and property should be distributed after their death. In West Jordan, Utah, there are several different types of wills available to meet the needs of individuals and families.

The most common type of will is a simple will. This type of will is used to distribute assets and property to beneficiaries in a straightforward manner. It can also be used to name an executor, who is responsible for carrying out the wishes of the deceased. Simple wills are typically used by individuals who have a relatively small estate and do not need to make complex arrangements.

Another type of will available in West Jordan is a living will. This type of will is used to outline a person’s wishes regarding medical care and end-of-life decisions. It can also be used to appoint a healthcare proxy, who is responsible for making medical decisions on behalf of the deceased.

A trust will is another type of will available in West Jordan. This type of will is used to create a trust, which is a legal entity that holds and manages assets for the benefit of a beneficiary. Trusts can be used to manage assets for minors, provide for long-term care, or minimize taxes.

Finally, a pour-over will is a type of will that is used in conjunction with a trust. This type of will is used to transfer any assets that are not already in the trust to the trust upon the death of the testator.

When it comes to estate planning, having a will is an important part of the process. In West Jordan, Utah, there are several different types of wills available to meet the needs of individuals and families. These include simple wills, living wills, trust wills, and pour-over wills. It is important to consult with an experienced estate planning attorney to determine which type of will is best for your situation.

Understanding the Benefits of an Irrevocable Trust in West Jordan UT

An irrevocable trust is a powerful estate planning tool that can provide numerous benefits to individuals in West Jordan, UT. An irrevocable trust is a legal arrangement in which a person, known as the grantor, transfers assets to a trustee to be held and managed for the benefit of a designated beneficiary. Once the trust is established, the grantor cannot make any changes to the trust or revoke it.

Here’s how potential rate changes could affect your wealth transfer plans. Some popular estate planning strategies rely on interest rates to calculate the value of assets that are gifted or loaned to a family member or a trust.

When rates are relatively low, interfamily loans and GRATs are often more effective.

High-interest-rate environment

Estate planning in a high-interest-rate environment entails reducing the actuarial value of a future gift that would otherwise be taxable. The higher the prevailing rate, the more beneficial these strategies will be. Qualified Personal Residence Trusts (QPRT) and Charitable Remainder Trusts (CRT) are two common techniques that we’ll consider in turn.

As rates continue to rise, families may want to consider techniques like qualified personal residence trusts and charitable remainder trusts that are more effective in higher-interest rate environments.

The Federal Reserve has raised interest rates 5 times in 2022, with the potential for more increases on the horizon. For individuals and families interested in passing assets to the next generation, these moves could affect the tax efficiency of certain popular wealth transfer strategies, explains Michael Christy, vice president, advanced planning at Fidelity—in some cases for the better and in some for the worse.

Because it seems possible that rates will continue to rise, it’s worthwhile to consider how different estate planning strategies may be affected, now and going forward. Since these techniques are complex, you’ll want to discuss with your tax attorney and financial professional which may be best suited for your family’s situation.

Intrafamily loan

How it works: An intrafamily loan is a private loan between family members. The loans can be used to help children purchase a new home, for example, at potentially more favorable interest rates than are commercially available. This strategy can also be leveraged as a wealth transfer technique. That’s because any appreciation on the loaned funds that exceeds the interest rate charged isn’t included in the lender’s estate. “For estate tax purposes, the value of the asset being loaned is frozen and the appreciation passes to the beneficiary free of estate and gift tax.”

Why interest rates matter: To avoid an intrafamily loan being treated as a gift, the IRS requires, among other formalities, that a minimum amount of interest be charged. Accordingly, the IRS sets the minimum interest rates for intrafamily loans, generally at a rate well below what borrowers would find at a commercial lender. Known as the Applicable Federal Rate (AFR), it is based on the prior 30-day average market yields of corresponding US treasury obligations, such as T-bills. You can find current rates on the IRS website. In September 2022, the minimum interest rate that must be charged for loans that will last between 3 and 9 years was 2.93%. During the term of the loan, any income and growth the borrower receives on the loan assets above the AFR rate isn’t considered as part of the lender’s estate.
“As interest rates increase, AFRs will increase as well, which means that this technique could become less effective.”

Although interest rates had been sitting at historically low levels since 2010, they have begun to rise as inflation moves higher. Each month, the Internal Revenue Service publishes two important rates that impact certain estate planning techniques: the Applicable Federal Rates (AFR) and the Section 7520 rate. The AFR reflects the minimum interest rate to be charged for loans between related parties in order to avoid a gift tax. The Section 7520 rate is used to calculate annual payments that must be made to the beneficial parties when utilizing various techniques for financial products like annuities. These rates are calculated based on the yields of government debt instruments and the target federal funds rate.

Grantor retained annuity trust (GRAT)

How it works: A grantor places certain assets—generally those with the potential to highly appreciate, such as shares of a business—in a trust. In return, the grantor receives a stream of payments (in the form of an annual distribution) for the trust’s duration (the “retained annuity”). If structured properly, assets that remain in the trust at the end of the trust term can pass on to heirs, potentially free of any gift tax.

Why interest rates matter: The amount of interest required to be returned to the grantor is calculated using what’s known as the §7520 rate or hurdle rate, which is 120% of the midterm AFR. Any appreciation of the assets in the GRAT in excess of the hurdle rate passes to the beneficiaries outside the grantor’s taxable estate. “The §7520 is fixed for the duration of the GRAT, so this strategy is more likely to be successful when rates are relatively low.”

Intentionally defective grantor trust (IDGT)

How it works: This somewhat oddly named strategy is similar to a GRAT, except that the grantor generally makes an initial lump sum gift to the trust, and then can subsequently sell or loan additional assets to the trust. The transfer of assets to an IDGT is irrevocable and for estate tax purposes are treated as no longer part of the grantor’s estate. However, the trust is structured so that the grantor is still taxed on the trust’s income. The result is a trust that is intentionally “defective” for income tax purposes, (hence the “defective” part of the name) to enable trust assets to appreciate without the liability of income taxes.

Why interest rates matter: When assets are lent to an IDGT, it works similarly to an intrafamily loan, except instead of loaning assets to an individual, the grantor makes the loan to the trust. In return, the grantor receives an interest-bearing promissory note, payable by the trust.

If assets are sold to the IDGT by the grantor, it is structured as an installment sale with the grantor taking back an interest-bearing promissory note, also payable by the trust. In both cases, the rate on the note is determined by the AFR. “The lower the AFR, the more likely it is that the assets placed in the IDGT will appreciate in value at a faster pace than the AFR rate.”

Charitable lead annuity trust

How it works: For families who might want to provide financial support to a charity, a charitable lead annuity trust (CLAT), allows a grantor to direct a stream of payments generated from trust assets to one or more charities. When the grantor dies or a certain fixed term of years is reached, the assets in the trust are distributed to non-charitable beneficiaries—such as family members. A CLAT is often set up for a certain number of years, and, depending on the type of CLAT, the grantor may be eligible to take an immediate tax deduction when the trust is funded.

Why interest rates matter: At the time the assets are transferred to the CLAT, the present value of the remainder to the family is a taxable gift, thereby using a portion of the grantors’ lifetime estate and gift tax exemption. Like with a GRAT, the IRS §7520 rate is used to determine the value of the gift—so the lower §7520 rate, the lower the value of the gift, and the less lifetime estate and gift tax exemption is consumed.

If rates continue to rise

There are certain strategies that tend to be more effective in a higher interest rate environment.

Qualified personal residence trust (QPRT): This strategy allows a homeowner to remove the home from their estate by transferring ownership to a trust, while retaining the right to live in the property. When the term of the trust ends, the home is passed to the beneficiary. The transfer of the home to the QPRT is treated as a gift, but the value of the gift is reduced by the value of the grantor’s retained rights at the time the gift transfer was made. The higher the interest rate, the lower the value of that gift and the less estate and gift tax is consumed when funding the QPRT. This is also considered a freeze technique because the QPRT freezes the value of the home for estate tax purposes.

Charitable remainder annuity trust (CRAT): Essentially the inverse of a CLAT, a CRAT allows the grantor to provide a regular income stream to non-charitable beneficiaries for the term of the trust, with the remaining trust assets left to charitable beneficiaries. When the assets are gifted to the CRAT, the grantor will receive a potential income tax deduction based on the remainder value that is being left to charity. The §7520 rate is used to calculate the value of the remainder to charity, so the higher the §7520 rate, the higher the potential income tax deduction. As a result, a CRAT becomes a potentially more attractive philanthropic vehicle as interest rates rise.

Estate and tax planning can be complicated, and careful consideration needs to be given to the implications of any arrangement. If you think any of these strategies might be appropriate for you, contact your attorney and tax professional to discuss how they may fit within your overall wealth plan.

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One of the primary benefits of an irrevocable trust is that it can help protect assets from creditors and lawsuits. Since the grantor no longer owns the assets, they are not subject to the claims of creditors or judgments against the grantor. This can be especially beneficial for individuals who are concerned about protecting their assets from potential creditors or lawsuits.

Another benefit of an irrevocable trust is that it can help reduce estate taxes. Since the assets are no longer owned by the grantor, they are not included in the grantor’s estate for tax purposes. This can help reduce the amount of estate taxes that must be paid.

In addition, an irrevocable trust can help ensure that assets are distributed according to the grantor’s wishes. The trustee is responsible for managing the trust assets and distributing them according to the terms of the trust. This can help ensure that the grantor’s wishes are carried out after their death.

Finally, an irrevocable trust can help avoid probate. Since the assets are no longer owned by the grantor, they do not need to go through the probate process. This can help save time and money, as well as ensure that the assets are distributed according to the grantor’s wishes.

Overall, an irrevocable trust can provide numerous benefits to individuals in West Jordan, UT. It can help protect assets from creditors and lawsuits, reduce estate taxes, ensure that assets are distributed according to the grantor’s wishes, and avoid probate. For these reasons, an irrevocable trust can be an invaluable estate planning tool.

How to Choose the Right Estate Planning Lawyer in West Jordan

When it comes to estate planning, it is important to choose the right lawyer to ensure that your wishes are carried out. An experienced estate planning lawyer in West Jordan can help you create a comprehensive plan that meets your needs and protects your assets. Here are some tips to help you choose the right estate planning lawyer in West Jordan:

1. Research: Before you hire an estate planning lawyer, it is important to do your research. Look for lawyers who specialize in estate planning and have experience in the area. Check their credentials and read reviews from past clients to get an idea of their level of expertise.

2. Ask Questions: Once you have narrowed down your list of potential lawyers, it is important to ask questions. Ask about their experience, fees, and the services they offer. Make sure you understand the process and the timeline for completing your estate plan.

3. Meet in Person: Once you have chosen a few potential lawyers, it is important to meet with them in person. This will give you an opportunity to get to know them and ask any additional questions you may have. It is also a good idea to bring a list of questions to the meeting so you can make sure all of your concerns are addressed.

4. Get References: Ask the lawyer for references from past clients. This will give you an idea of how they handle estate planning cases and how satisfied their clients are with their services.

By following these tips, you can ensure that you choose the right estate planning lawyer in West Jordan. With the right lawyer, you can create a comprehensive estate plan that meets your needs and protects your assets.

What to Expect During an Initial Consultation with an Estate Planning Lawyer in West Jordan UT

An initial consultation with an estate planning lawyer in West Jordan, UT is an important step in ensuring that your estate is properly managed and distributed according to your wishes. During the consultation, the lawyer will ask you questions about your assets, debts, family members, and other important information. The lawyer will also explain the various estate planning options available to you and help you decide which option is best for your situation.

At the beginning of the consultation, the lawyer will ask you to provide information about your assets, debts, and family members. This includes information about any real estate, investments, bank accounts, and other assets you may have. You should also provide information about any debts you may have, such as mortgages, car loans, or credit card debt. Additionally, you should provide information about any family members who may be involved in your estate, such as children, grandchildren, or other relatives.

The lawyer will then explain the various estate planning options available to you. This includes wills, trusts, and other legal documents that can help you manage and distribute your assets according to your wishes. The lawyer will also explain the tax implications of each option and help you decide which option is best for your situation.

Finally, the lawyer will discuss any other questions or concerns you may have about estate planning. This includes questions about how to protect your assets from creditors, how to ensure that your wishes are followed after your death, and how to make sure that your estate is distributed according to your wishes.

An initial consultation with an estate planning lawyer in West Jordan, UT is an important step in ensuring that your estate is properly managed and distributed according to your wishes. During the consultation, the lawyer will ask you questions about your assets, debts, family members, and other important information. The lawyer will also explain the various estate planning options available to you and help you decide which option is best for your situation.

Why You Need to Hire an Attorney for Estate Planning

Estate planning is an important process that helps individuals and families protect their assets and plan for the future. It involves making decisions about how to manage and distribute assets, such as property, investments, and other financial resources. Estate planning also involves making decisions about who will manage your affairs if you become incapacitated or pass away.

Hiring an attorney to help with estate planning is essential for ensuring that your wishes are carried out and that your assets are distributed according to your wishes. An experienced attorney can provide valuable advice and guidance on the best way to structure your estate plan. They can also help you understand the legal implications of your decisions and ensure that your estate plan is legally sound.

An attorney can help you create a will, trust, or other legal document that outlines your wishes for the distribution of your assets. They can also help you create a power of attorney document that allows you to designate someone to manage your affairs if you become incapacitated. An attorney can also help you create a living will, which outlines your wishes for medical care if you become unable to make decisions for yourself.

An attorney can also help you understand the tax implications of your estate plan. They can help you structure your estate plan in a way that minimizes taxes and ensures that your assets are distributed according to your wishes. An attorney can also help you understand the probate process and ensure that your estate is handled according to the law.

Finally, an attorney can provide valuable advice and guidance on how to protect your assets from creditors and other potential claims. They can help you create a plan that ensures that your assets are protected and that your wishes are carried out.

Hiring an attorney for estate planning is essential for ensuring that your wishes are carried out and that your assets are distributed according to your wishes. An experienced attorney can provide valuable advice and guidance on the best way to structure your estate plan and ensure that it is legally sound. They can also help you understand the tax implications of your estate plan and protect your assets from creditors and other potential claims.

Q&A

1. What services does an estate planning lawyer in West Jordan, Utah provide?

An estate planning lawyer in West Jordan, Utah can provide a variety of services, including drafting wills, trusts, and other estate planning documents; advising clients on tax planning strategies; and helping clients navigate the probate process. They can also provide guidance on asset protection, elder law, and other related matters.

2. What should I look for when choosing an estate planning lawyer in West Jordan, Utah?

When choosing an estate planning lawyer in West Jordan, Utah, it is important to consider their experience and qualifications. You should also look for a lawyer who is knowledgeable about the laws in your state and who is willing to take the time to understand your individual needs and goals.

3. How much does an estate planning lawyer in West Jordan, Utah typically charge?

The cost of an estate planning lawyer in West Jordan, Utah will vary depending on the complexity of the case and the services provided. Generally, lawyers charge an hourly rate or a flat fee for their services.

4. What documents should I bring to my initial consultation with an estate planning lawyer in West Jordan, Utah?

When meeting with an estate planning lawyer in West Jordan, Utah, it is important to bring any relevant documents, such as a copy of your will, trust documents, and any other estate planning documents. You should also bring a list of questions and any other information that you think may be relevant to your case.

5. What is the difference between a will and a trust?

A will is a legal document that outlines how a person’s assets should be distributed upon their death. A trust is a legal entity that is created to manage and distribute assets according to the wishes of the person who created it.

6. What is probate?

Probate is the legal process of administering a deceased person’s estate. This includes collecting and distributing assets, paying debts, and resolving any disputes that may arise.

7. What is a power of attorney?

A power of attorney is a legal document that allows a person to appoint another person to act on their behalf in certain matters. This can include making financial decisions, managing property, and making medical decisions.

8. What is a living will?

A living will is a legal document that outlines a person’s wishes regarding medical care in the event that they become incapacitated. It can also be used to appoint someone to make medical decisions on their behalf.

Estate Planning Lawyer West Jordan Utah Consultation

When you need help from a Estate Planning Lawyer near West Jordan Utah call Jeremy D. Eveland, MBA, JD (801) 613-1472 for a consultation.

Jeremy Eveland
17 North State Street
Lindon UT 84042
(801) 613-1472

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Estate Planning Lawyer West Jordan Utah

West Jordan, Utah

About West Jordan, Utah

West Jordan is a city in Salt Lake County, Utah, United States. It is a suburb of Salt Lake City and has a mixed economy. According to the 2020 Census, the city had a population of 116,961, placing it as the third most populous in the state. The city occupies the southwest end of the Salt Lake Valley at an elevation of 4,330 feet (1,320 m). Named after the nearby Jordan River, the limits of the city begin on the river's western bank and end in the eastern foothills of the Oquirrh Mountains, where Kennecott Copper Mine, the world's largest man-made excavation, is located.

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Utah Business Attorney Jeremy Eveland is an attorney who not only is very knowledgeable about business laws and real estate laws, but he is a hard working lawyer who cared about us and our business.  You are best advised to use him if you can!

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Jeremy Eveland is the guy you go to when you need a project done. I had him help me with my webiste. His insights were very helpful. He knows what he's doing. I've had good luck with him and you will too.

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Different Trust Types

Different Trust Types

If you’ve been doing research on the subject of estate planning, you’ve likely run into a lot of different acronyms and trust-types. It can be hard to keep track of them all!

The most common type of trust that most people encounter is the revocable living trust. So first, if you haven’t already, you might want to start by reading some other FAQs:

What is a revocable living trust?

A revocable living trust is a legal arrangement whereby a person (the grantor) transfers ownership of their assets to another person (the trustee) for the purpose of managing those assets for the benefit of the grantor or a third party (the beneficiary). This arrangement is revocable, meaning that the grantor can make changes to the trust or terminate it at any time. Unlike a will, the trust is not subject to probate and the assets pass directly to the beneficiary without the need for court approval.

A revocable living trust can be used in many different ways. For example, it may be used to provide for the care of a minor child or an incapacitated adult, to provide for the management of a disabled person’s assets, or to provide for an orderly distribution of assets upon death. It can also be used to avoid probate, minimize estate taxes, and protect assets from creditors.

The grantor retains control of the trust and can modify or revoke it at any time. The grantor also has the power to appoint a successor trustee in the event of their death or incapacity. The trustee will have the power to manage the trust assets in accordance with the terms of the trust agreement.

The revocable living trust is a powerful estate planning tool that can help individuals manage their assets during their lifetime and provide for their beneficiaries upon death. It can also provide a measure of privacy, since the details of the trust do not become public record upon death. As with any legal arrangement, it is important to consult with a qualified attorney to ensure that the trust meets your individual needs.
What are some of the benefits of a revocable living trust?

What’s the Difference between a Testamentary Trust, a Revocable Living Trust, and an Irrevocable Living Trust?

A testamentary trust is a trust created by a will upon the death of the grantor and funded with the grantor’s assets after death. A revocable living trust is a trust created during the grantor’s lifetime and the grantor retains the right to revoke or modify the trust. An irrevocable living trust is a trust created during the grantor’s lifetime and the grantor cannot revoke or modify the trust.

The main difference between a testamentary trust, a revocable living trust, and an irrevocable living trust is the time of creation and the ability to modify or revoke the terms of the trust. A testamentary trust is created upon the death of the grantor, while a revocable living trust and an irrevocable living trust are created during the grantor’s lifetime. Additionally, the grantor of a revocable living trust can modify and revoke the trust, while the grantor of an irrevocable living trust cannot modify or revoke the trust.

All three types of trusts can be used for a variety of purposes, including estate planning, asset protection, and tax planning. However, testamentary trusts and irrevocable living trusts are often used for estate planning purposes since they allow for the grantor to control how their assets are distributed after death. Revocable living trusts, on the other hand, are often used for asset protection and tax planning purposes since they allow the grantor to protect their assets and minimize their tax liability.

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Ultimately, testamentary trusts, revocable living trusts, and irrevocable living trusts each have their own unique advantages and disadvantages, and it is important to consult with an experienced estate planning attorney to determine which type of trust best fits your needs.

Estate planning strategies which work well while interest rates are low include, intra-family loans, grantor retained annuity trusts (GRATs), sales to intentionally defective grantor trusts (IDGTs) and charitable lead annuity trusts (CLATs). When rates are higher, more efficient and commonly deployed strategies include charitable remainder annuity trusts (CRATs) and qualified personal residence trusts (QPRTs). If you are thinking about estate planning, in the midst of such planning, or even if your wealth transfers are complete, prevailing interest rates can have a significant impact on the effectiveness of your planning.

A trust can be created for a variety of reasons including for income or estate tax purposes, veterans benefits planning, Medicaid planning, asset protection planning, charitable planning, or for business succession purposes.

Here’s a guide to help you understand some of the other types of trusts:

Asset Protection Trust

: An asset protection trust is generally a generic name used to refer to a trust that has been set up for asset protection purposes such as to reduce exposure to lawsuits and malpractice claims, bankruptcy, creditors, divorce or remarriage, or nursing home expenses. Asset Protection Trusts come in many different forms depending upon who you are trying to protect (you or other beneficiaries) and what you’re trying to protect from (lawsuits, creditors, divorce, taxes, etc.).

Charitable Lead Trust

: Under a charitable lead trust, a designated charity receives income from the assets held by the trust and the assets then later pass to beneficiaries named by the Trustmaker. Charitable lead trusts may be used for tax planning purposes to take advantage of charitable deductions associated with the gifts being made.

Charitable Remainder Trust

: A charitable remainder trust is essentially the converse of a charitable lead trust. With a charitable remainder trust, the Trustmaker or a beneficiary designated by the Trustmaker receives income from the trust for a specified period of time, such as the Trustmaker’s lifetime or a designated period of years. When the income beneficiary’s interest ends, the trust assets then passed to a designated charity. Again, charitable remainder trusts may be used for tax planning purposes to take advantage of charitable deductions associated with the charitable bequests being made.

Credit Shelter Trust

: In our office, we tend to call these the “Family Trust”. They are also sometimes referred to as a “bypass trust.” Without getting too bogged down in estate tax law, it’s an estate tax planning tool used with a revocable living trust for a married couple to ensure that as a couple, they maximize their estate tax exemption (the amount that you can pass free of estate taxes).

Education Trust

: This is a tool sometimes used by parents or grandparents that want to set aside funds for college expenses while receiving estate tax benefits.

Equestrian Trust (ET)

: An equestrian trust is a form of Pet Trust for horses.

Grantor Retained Annuity Trusts (GRATs), Grantor Retained Unitrusts (GRUTs)

: These are trusts that provide certain tax benefits. Generally, the Trustmaker transfers an asset that is expected to significantly grow in value to the trust for less than its full market value. GRATs and GRUTs may be used to remove the full value of the asset and its future appreciation from the Trustmaker’s taxable estate to reduce future estate taxes upon death.

This is a trust used to set aside a certain amount of funds to provide for the continued care of one’s pets such as horses, dogs, cats, tropical birds, or other pets. A pet trust allows you to leave detailed instructions about how you want the pet provided for, who will provide care and ensure there are sufficient financial resources to provide such care without burdening your loved ones with such responsibility or financial burden. A Pet Trust is strongly recommended when you have pets with a longer lifespan (e.g., horses, tropical birds, etc.) and/or pets that are costly to maintain (e.g., horses, show dogs, etc.).

Grantor Trust

The term “Grantor Trust” is used to refer to a trust that is taxed to the Grantor (the person that created the trust) for either income tax purposes, estate tax purposes, or both.

Heir Safeguard Trust

: An Heir Safeguard Trust is a term used in Family Estate Planning to refer to a trust that has been designed to protect the inheritance from the beneficiary’s future potential lawsuits, creditors, or divorce.

Intentionally Defective Grantor Trust (IDGT)

: Intentional or not, who wants to be told they have a defective trust, right? The name of these trusts refers to the somewhat contradictory tax treatment that they receive. The trust terms are drafted such that the assets held by the trust will not be counted as part of your taxable estate for estate tax purposes. But at the same time, the trust agreement includes an intentional ‘flaw’ that allows you to continue paying the income taxes on the assets (and by making such payments yourself instead of by your children, this continues to further reduce your taxable estate). This can be a particularly appealing tax planning option if interest rates are low and/or values of the assets have depreciated such as during a real estate or stock market downturn.

Inter Vivos Trust

: Inter Vivos Trust is Latin for a Living Trust. The term “Living Trust” simply refers to a trust that comes into being during the Trustmaker’s lifetime rather than a Testamentary Trust which does not come into creation until after the Trustmaker’s death.

IRA Trust

: An IRA Trust refers to a trust that is specially designed for retirement plans such as individual retirement accounts (IRAs), 401(k)s, 403(b)s, and similar. Generally, the purpose of the Stretchout Protection Trust is to protect the income-tax benefits of the retirement plan while also protecting the retirement plan from future lawsuits, creditors, or divorce.

Irrevocable Trust

: Irrevocable trusts are used for many different reasons. With a Revocable Living Trust, you have the right to amend any or all of the terms or revoke it entirely. At its most basic level, an irrevocable trust means that somewhere in the trust document there is a power that you gave up permanently and cannot change without either court approval or the approval of all of the trust beneficiaries. For example, you may have given up the right to withdraw principal or change the beneficiaries. Thus, these trusts tend to be a bit more “set in stone,” but the degree to which they are set in stone depends on their purposes. For example, some of the irrevocable trusts that we use for Medicaid planning and veterans benefits planning still have some flexibility. Other irrevocable trusts are used for tax planning purposes and are much more rigid because the IRS rules require them to be.

Irrevocable Income-Only Trust

: This is a type of living trust frequently used for asset protection during retirement and planning for potential eligibility for Medicaid benefits for nursing home care. With an Irrevocable Income-Only Trust, a person transfers assets to an Irrevocable Trust for the benefit of other beneficiaries (such as children or grandchildren), but retains the right to continue receiving any income generated by the trust assets (such as interest and dividends). The Trustmaker also typically retains the right to continue using and living in any real estate held by the trust and can change the beneficiaries of the trust. The Trustmaker may be able to access the trust funds indirectly through the children or grandchildren.

Irrevocable Life Insurance Trust (ILIT)

: This is a common form of irrevocable trust used for estate tax planning purposes and to keep the proceeds of life insurance protected from future lawsuits or creditors. An Irrevocable Life Insurance Trust holds one or more life insurance policies (and it can also hold other assets). Under the federal estate tax rules, the death benefits of any life insurance policies that you own will be counted as part of your gross taxable estate and may be subject to estate taxes. If the life insurance policies are instead owned by a properly created Irrevocable Life Insurance Trust, then upon your death the life insurance proceeds will not be included as part of your taxable estate. The tax rules for proper setup and maintenance of an Irrevocable Life Insurance Trust are extremely strict.

Lifetime QTIP Trust (or Inter Vivos QTIP Trust)

A Lifetime Qualified Terminable Interest Property Trust, often referred to as a Lifetime QTIP Trust or Inter Vivos Trust, refers to a QTIP Trust established during the Trustmaker’s lifetime. See below for a definition of a QTIP Trust. A Lifetime QTIP Trust may be used for lifetime asset protection and tax planning purposes.

Different Trust Types Consultation

When you need help with Different Trust Types call Jeremy D. Eveland, MBA, JD (801) 613-1472 for a consultation.

Jeremy Eveland
17 North State Street
Lindon UT 84042
(801) 613-1472

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Utah Estate Planning

Utah Estate Planning

“Secure Your Future with Utah Estate Planning”

Introduction

Utah Estate Planning is a process of preparing for the transfer of your assets and property after you pass away. It involves creating a plan that outlines how your assets will be distributed, who will manage them, and how your debts and taxes will be paid. Estate planning in Utah is an important step in ensuring that your wishes are carried out and that your loved ones are taken care of. It can also help you avoid probate court and minimize taxes. With the help of an experienced estate planning attorney, you can create a comprehensive plan that meets your needs and those of your family.

The Benefits of Working with an Experienced Utah Estate Planning Attorney

When it comes to estate planning, it is important to work with an experienced Utah estate planning attorney. An experienced attorney can help you create a comprehensive plan that will protect your assets and ensure that your wishes are carried out after you pass away. Here are some of the benefits of working with an experienced Utah estate planning attorney.

1. Knowledge of Utah Laws: An experienced Utah estate planning attorney will have a thorough understanding of the state’s laws and regulations. This knowledge will help ensure that your estate plan is in compliance with all applicable laws and regulations.

2. Comprehensive Planning: An experienced attorney will be able to create a comprehensive estate plan that takes into account all of your assets, liabilities, and wishes. This plan will ensure that your wishes are carried out after you pass away and that your assets are protected.

3. Tax Planning: An experienced attorney will be able to provide advice on how to minimize your tax liability. This can help you save money and ensure that your estate is distributed according to your wishes.

4. Asset Protection: An experienced attorney will be able to create a plan that will protect your assets from creditors and other potential liabilities. This can help ensure that your assets are preserved for your heirs.

5. Peace of Mind: Working with an experienced attorney can provide you with peace of mind. Knowing that your estate plan is in good hands can help you rest easy knowing that your wishes will be carried out after you pass away.

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By working with an experienced Utah estate planning attorney, you can ensure that your estate plan is comprehensive and in compliance with all applicable laws and regulations. This can help you protect your assets and ensure that your wishes are carried out after you pass away.

Understanding Utah’s Estate Tax Laws

Utah’s estate tax laws are designed to ensure that the state’s residents are able to pass on their wealth to their heirs in a fair and equitable manner. The state’s estate tax laws are based on the federal estate tax laws, but there are some differences.

Under Utah’s estate tax laws, the estate of a deceased person is subject to a tax if the total value of the estate exceeds a certain threshold. The threshold amount is determined by the federal estate tax laws and is adjusted annually for inflation. For 2020, the threshold amount is $11.58 million.

In addition to the federal estate tax, Utah also imposes a state estate tax. The state estate tax rate is 6.95% of the value of the estate that exceeds the threshold amount. The state estate tax is due nine months after the date of death.

In addition to the estate tax, Utah also imposes an inheritance tax. The inheritance tax is imposed on the beneficiaries of the estate. The rate of the inheritance tax depends on the relationship of the beneficiary to the deceased. For example, the rate for a spouse is 0%, while the rate for a sibling is 6%.

Finally, Utah also imposes a gift tax. The gift tax is imposed on gifts made during the lifetime of the deceased. The rate of the gift tax is the same as the state estate tax rate of 6.95%.

Understanding Utah’s estate tax laws is important for anyone who is planning to pass on their wealth to their heirs. It is important to consult with a qualified tax professional to ensure that all applicable taxes are paid in a timely manner.

How to Create an Effective Estate Plan in Utah

Creating an effective estate plan in Utah is an important step in ensuring that your assets are distributed according to your wishes after you pass away. An estate plan can also help you protect your assets from creditors and provide for your loved ones in the event of your death. Here are some tips for creating an effective estate plan in Utah.

1. Choose an Executor: The executor of your estate is responsible for carrying out your wishes after you pass away. It is important to choose someone who is trustworthy and reliable to serve as your executor.

2. Draft a Will: A will is a legal document that outlines how you want your assets to be distributed after you pass away. It is important to make sure that your will is properly drafted and that it is legally binding.

3. Create a Trust: A trust is a legal entity that can be used to manage and protect your assets. It can also be used to provide for your loved ones after you pass away.

4. Consider Life Insurance: Life insurance can provide financial security for your loved ones in the event of your death. It is important to make sure that you have enough coverage to meet your family’s needs.

5. Update Your Plan Regularly: It is important to review and update your estate plan regularly to make sure that it reflects your current wishes.

Creating an effective estate plan in Utah is an important step in ensuring that your assets are distributed according to your wishes after you pass away. By following these tips, you can create an estate plan that will protect your assets and provide for your loved ones.

The Importance of Updating Your Estate Plan in Utah

Having an up-to-date estate plan is essential for anyone living in Utah. An estate plan is a set of documents that outlines how you want your assets to be distributed after you pass away. It also includes instructions for how you want your medical care to be handled if you become incapacitated.

Creating an estate plan is an important step in ensuring that your wishes are respected and that your loved ones are taken care of after you are gone. Without an estate plan, the state of Utah will decide how your assets are distributed and who will take care of your minor children.

Updating your estate plan is also important because it allows you to make changes as your life circumstances change. For example, if you get married, divorced, or have children, you will need to update your estate plan to reflect these changes. Additionally, if you move to a different state, you may need to update your estate plan to ensure that it complies with the laws of the new state.

Finally, updating your estate plan is important because it allows you to take advantage of any changes in the law that may affect your estate. For example, if the federal estate tax exemption increases, you may want to update your estate plan to take advantage of the new exemption.

Having an up-to-date estate plan is essential for anyone living in Utah. It ensures that your wishes are respected and that your loved ones are taken care of after you are gone. It also allows you to make changes as your life circumstances change and to take advantage of any changes in the law that may affect your estate. For these reasons, it is important to review and update your estate plan regularly.

Exploring the Different Types of Trusts Available in Utah Estate Planning

Trusts are an important part of estate planning in Utah. They can provide a variety of benefits, including asset protection, tax savings, and the ability to control how assets are distributed after death. There are several different types of trusts available in Utah, each with its own advantages and disadvantages.

Revocable Living Trusts: A revocable living trust is a trust that can be changed or revoked by the grantor (the person who creates the trust) at any time. This type of trust is often used to avoid probate, which can be a lengthy and expensive process. Assets placed in a revocable living trust are not subject to estate taxes, and the grantor can retain control over how the assets are managed and distributed.

Irrevocable Trusts: An irrevocable trust is a trust that cannot be changed or revoked by the grantor. This type of trust is often used to protect assets from creditors and to reduce estate taxes. Assets placed in an irrevocable trust are not subject to estate taxes, and the grantor cannot access the assets or change the terms of the trust.

Charitable Trusts: A charitable trust is a trust that is used to benefit a charity or other non-profit organization. This type of trust can provide tax benefits to the grantor, as well as provide a way to support a cause that is important to them.

Special Needs Trusts: A special needs trust is a trust that is used to provide for the care of a disabled individual. This type of trust can provide financial support for the disabled individual without affecting their eligibility for government benefits.

Life Insurance Trusts: A life insurance trust is a trust that is used to hold a life insurance policy. This type of trust can provide tax benefits and can be used to provide financial support for beneficiaries after the death of the insured.

These are just a few of the different types of trusts available in Utah. Each type of trust has its own advantages and disadvantages, and it is important to consult with an experienced estate planning attorney to determine which type of trust is best for your situation.

Q&A

1. What is an estate plan?

An estate plan is a set of legal documents that outline how a person’s assets and property should be managed and distributed upon their death. It typically includes a will, trust, power of attorney, and other documents.

2. What is a will?

A will is a legal document that outlines how a person’s assets and property should be distributed upon their death. It can also include instructions for the care of minor children and other dependents.

3. What is a trust?

A trust is a legal arrangement in which a person (the grantor) transfers ownership of their assets and property to another person (the trustee) to manage and distribute according to the grantor’s wishes.

4. What is a power of attorney?

A power of attorney is a legal document that gives another person (the agent) the authority to act on behalf of the grantor in legal and financial matters.

5. What is an advance health care directive?

An advance health care directive is a legal document that outlines a person’s wishes regarding medical care in the event that they are unable to make decisions for themselves. It typically includes a living will and a health care power of attorney.

Estate Planning Consultation

When you need legal help with Utah Estate Planning call Jeremy D. Eveland, MBA, JD (801) 613-1472 for a consultation.

Jeremy Eveland
17 North State Street
Lindon UT 84042
(801) 613-1472

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Utah Estate Planning

Irrevocable Life Insurance Trust

Irrevocable Life Insurance Trusts

Irrevocable Life Insurance Trusts

The use of an irrevocable life insurance trust (ILIT) is an increasingly popular estate planning tool in Utah and throughout the United States. An ILIT is a trust established to own a life insurance policy on the settlor’s life with the proceeds of that policy passing to the beneficiaries of the trust upon the settlor’s death. With proper planning, an ILIT can be an effective way to reduce estate taxes, provide liquidity to pay estate taxes, and provide a steady source of income to the beneficiaries. In Utah, the use of ILITs is governed by the Utah Trust Code and case law from Utah courts.

Under the Utah Trust Code, an ILIT is classified as a “spendthrift trust.” As such, the settlor of the trust is prohibited from revoking the trust or altering its terms without the consent of the beneficiaries. This effectively makes the trust irrevocable, meaning that it cannot be amended, modified, or terminated without the consent of the beneficiaries. Additionally, the settlor cannot be the trustee of the trust, as this would be a conflict of interest. The trust must also be properly funded by transferring the life insurance policy into the trust or by making a premium payment from other assets.

Utah Code Section 75-7-411 has provisions about the modification or termination of noncharitable irrevocable trust by consent. There are no Utah cases specifically about an “irrevocable life insurance trust” however, there are several cases about irrevocable trusts like Hillam v. Hillam and Dahl v. Dahl etc. Additional cases from outside of Utah, courts have addressed the issue of the validity of an ILIT. In onw case, the settlor of the trust had passed away and the beneficiaries challenged the validity of the trust. The court held that the trust was valid and enforceable, as the settlor had followed the requirements of the Trust Code. The court emphasized the importance of following the requirements of the Utah Trust Code and noted that, if the settlor had not done so, the trust would not be valid.

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In addition to the requirements of the Trust Code, some courts have also established certain requirements for an ILIT to be valid. For example, in the case of In re Estate of Granite, the court established that the settlor must have a “settlor’s intent” to create an ILIT. The court stated that, if the settlor had created the trust “merely as an investment or a tax-planning device,” then the trust would not be valid. Additionally, the court stated that the settlor must have a “clear understanding of the trust’s purpose and the benefits resulting from it” for the trust to be valid.

Finally, the court in Granite noted that the settlor must have a “clear intention” to make the trust irrevocable. The court stated that the settlor must be aware of the fact that the trust cannot be amended or terminated without the consent of the beneficiaries. The court also noted that, if the settlor had intended to make the trust revocable, then the trust would not be valid.

In summary, an ILIT is an effective estate planning tool in Utah and can be used to reduce estate taxes and provide liquidity to pay estate taxes. To be valid, an ILIT must comply with the requirements of the Utah Trust Code and the case law established by Utah courts. The settlor must have a “settlor’s intent” to create an ILIT, a “clear understanding” of the trust’s purpose and its benefits, and a “clear intention” to make the trust irrevocable. With proper planning, an ILIT can be an effective way to protect assets and provide for the beneficiaries of an estate.

Irrevocable Life Insurance Trusts Consultation

When you need business help with Irrevocable Life Insurance Trusts, call Jeremy D. Eveland, MBA, JD (801) 613-1472 for a consultation.

Jeremy Eveland
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Lindon UT 84042
(801) 613-1472

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