The “Planning” Part of Estate Planning in Utah

Stephen Howard — Stone River Law

Real People. Real Solutions.

The “Planning” Part of Estate Planning in Utah

“Planning” is the most important element of the estate planning process. It cannot be done after the fact. It has to be done before it is needed. Wait too long and you may be too late.

Estate planning does not have to be painful. There are many things to consider when putting together an estate plan. Taking on just a few topics can make the planning process easier. This page presents a brief overview of some of the topics to consider.

Estate Taxes – Good News & Bad News

The good news and the bad news are all the same here, depending on a person’s perspective. The good news is that most people in Utah will not have to worry about estate taxes, at either the federal or state levels. The bad news is that most people will not have to worry about estate taxes.

Not having to pay taxes is generally seen as good news. The bad news is that the reason most people will not have to pay an estate tax is that most people will not have an estate large enough to require the payment of any estate taxes.

As of 2021, the federal estate tax exemption for an individual is set at $11.7 million (or $23.4 million for a married couple). Utah law governing estate tax tracks the federal exemption. In other words, if no federal estate tax is owed then no Utah estate tax is owed.

If there is a real possibility that the size of your estate may exceed the federal exemption limits, there are important steps you can take to avoid or minimize estate taxes. For most, however, estate taxes are nothing to worry about.

Children and People with Special Needs

Young children and people who have special needs may need special consideration in making distributions under an estate plan. A common distribution strategy under a will or trust is to make a single lump-sum distribution which terminates the administration of the estate or trust. In families that include young children or people with special needs, more careful planning of distributions is necessary to ensure that the estate or trust assets are used most effectively to provide for these individuals.

For young children, relatively simple trust provisions that allow for the continued administration of trust assets on behalf of a child are often sufficient. If a person with special needs, disabilities, or other concerns is included as a beneficiary under a trust, other provisions may be required to ensure that the person does not lose eligibility for government benefits and that the trust assets are protected from creditors, taxes, and bad decisions by a beneficiary.

Blended Families

Blended families can be a wonderful part of life. They can also present serious complications if a parent or spouse passes away without leaving a carefully made estate plan.

A new spouse, step children, and biological children may have divergent interests or conflicting needs. These differences should be considered carefully in determining distributions under an estate plan.

Consideration should also be given to questions of how any given distribution plan may require a new spouse or a trustee to interact with an ex-spouse or with the other parent of the deceased’s children. For example, administration of a child’s education trust might require regular contact with a deceased partner’s ex establishing a good estate plan. Such contact might be uncomfortable, awkward, or a serious source of conflict. Such possibilities should be considered in establishing an estate plan.

Avoiding Conflict

Take whatever level of conflict is common in a family today, then amplify it by the emotional effects of losing a loved one. This can lead to significant disputes among family members in the processes of administering an estate or trust assets or in the probate process.

Disputes may involve monetary value and the perceived “fairness” of distributions. Disputes can also arise over items that have significant sentimental value.

Careful planning can reduce the possible points of contention and can also reduce the intensity of potential disagreements by making clear the intentions of the deceased. A little planning now can help avoid significant conflict in the future.

Getting It Done

Death is inevitable. We may like to think that it will not happen today or anytime soon. But no matter how healthy a person may be and no matter how remote the possibility of a premature death may seem, death is a necessary part of life.

The process of considering one’s mortality can be uncomfortable. But making appropriate plans can provide significant peace of mind and can help to ensure that loved ones are not unnecessarily saddled with family disputes or burdensome legal processes.

Easier Than You Think

Ending on a brighter note . . . the estate planning process may be easier than you think (or maybe just not as painful as you may have feared). Contact us now to see how we can help you.