It seems nobody likes to talk about estate planning. I get it. It’s not fun to think about death and what will happen to your belongings when you pass away; however, every time we hear about another family being torn apart and fighting in probate court because mom and dad failed to create an effective estate plan, we realize that it is important and something we need to address. But for whatever reason, no matter how many times people hear probate horror stories and see how drastically lives can be changed and adversely affected by not having a solid estate plan in place, people generally determine that estate planning is something that can be put on the back burner and “get to” another day.
Although there are many different types of estate plans, this article will focus on the Last Will and Testament and the Living Trust. A Last Will and Testament (“Will”) is a basic and simple estate plan that can ensure your assets are distributed the way you want. Perhaps the biggest “pros” to having a Will is that it is simple, straight forward and very affordable. Another benefit of a Will is the ability to list a guardian over minor children in the event the parents pass away. This is a tremendous benefit for younger families that gives them the peace of mind of knowing that upon their passing, their children will go to families they select, rather than leaving such an important decision up to the courts. Perhaps the biggest “con” to having a Will as an estate plan is the likelihood that your estate must be probated as discussed below.
Contrary to common belief, you do not have to be a Kennedy to have a trust. Indeed, under Utah’s current laws, many non-millionaires will find great benefits in creating a trust. Perhaps the greatest “pro” in creating a trust is the ability to avoid probate courts. For example, if you do not have a trust set up and your estate is valued in excess of $100K, OR if you own real estate, Utah’s laws require that your estate be submitted to the probate court prior to your executor making any distributions from your estate. That means that if you own your house at the time of your death and do not have a trust set up, your loved ones will be required to submit your estate to the probate court. Additional “pros” to having a Trust as an estate plan include: tax savings; privacy; and the ability to protect children or loved ones with special needs.
Every family is different and has different needs; as such, there is no “one-size-fits-all” approach to estate planning. Prior to creating any estate plan, it is best to consult with a licensed estate planning attorney. Many attorneys offer a free consult to discuss your individual needs and answer any questions or concerns you may have. Unfortunately, numerous studies show that over 50% of Americans do not have even the most basic estate planning tools in place. Hopefully, with a little bit of research and education, you will make 2015 the year you decide to get out of that 50% and create a solid estate plan to protect your family.