What are the Biggest Benefits of Establishing a Trust in Utah?

When people embark on estate planning, they have many options to consider. Although most people understand that a will is the foundation of their plan, there are many other tools that serve other purposes a will alone cannot. One of these options is to establish a trust. Below, our Utah estate planning attorney outlines some of the biggest benefits of establishing a trust.

Avoiding Probate

The probate process in Utah can cause additional delays and costs. Probate is a court-supervised process that administers and distributes a person’s estate after they pass away. There are many problems involved in the probate process. Creditors can file claims against the estate and this, combined with court costs, can reduce the total assets available to beneficiaries. The lengthy process can also result in beneficiaries waiting longer to receive their inheritance.

When you establish a trust, you fund it with property such as real estate, bank accounts, vehicles, and even business interests. Trusts are separate legal entities from decedents and so, any property in a trust can bypass the probate process. Instead, the property is distributed immediately to the beneficiaries of the trust. Funding a trust simply means reassigning ownership or retitling property in the name of the trust.

Minimizing Taxes

On its own, a revocable trust does not reduce estate tax liability. While Utah does not impose an estate tax at the state level, federal law does impose a tax for estates that meet a certain threshold. Still, a revocable trust is useful when coordinating advanced tax strategies. On the other hand, an irrevocable trust can remove property from the taxable estate and utilize yearly gift exclusions. The outcome will depend on the structure of the trust, integration and timing with your overall estate plan.

The tax consequences of a trust arise under federal transfer tax provisions and depend on whether a grantor, or person who creates the trust, maintains control over the property within a trust. State law in Utah defines the authority and obligations of the trustee but does not create tax advantages on its own.

Protecting Property from Creditors

The Uniform Trust Code in Utah allows for domestic asset protection trusts (DAPT). These trusts are irrevocable and give a co-trustee control over distributions and future creditors are limited by statutory periods. Fraudulent transfer rules and existing creditor claims still apply.

Our Estate Planning Attorney in Utah Can Help with Your Plan 

Establishing a trust is about far more than simply signing a document. The trust must be funded, managed, and updated so it continues to operate as intended. The structure you choose for your trust will depend on your property, family, and long-term goals. At AGS Law, our Utah estate planning attorney can create a trust that reflects your goals and wishes and provide the protection you and your family need. Call us now at 801-477-6144 or chat with us online to schedule a consultation and to get the legal help you need.

Source:

le.utah.gov/xcode/Title75/Chapter7/C75-7-P6_1800010118000101.pdf