Frequently Asked Questions about Estate Planning in Utah
Q: What is estate planning and why is it important?
Estate planning is planning for death or mental incapacity. More advanced estate planning is planning for asset protection in the event of a lawsuit or implementing strategies to save on taxes. Estate planning isn’t just legal paperwork; it’s about protecting the people you love and the values you hold dear. A solid plan can prevent family conflict, avoid unnecessary court involvement, and ensure your wishes are carried out.
Q: What documents are included in a basic estate plan?
Most plans include four key documents:
Last Will and Testament – directs distribution of your assets and names guardians for minor children.
Revocable Living Trust – avoids probate, keeps your affairs private and manages assets if you become incapacitated.
Financial Power of Attorney – designates someone to handle your finances if you can’t.
Healthcare Directive and Medical Power of Attorney – outlines your medical wishes and appoints a decision‑maker if you cannot speak for yourself.
Q: What’s the difference between a will and a revocable living trust?
A will only takes effect after you die and doesn’t necessarily avoid probate. A revocable trust is effective immediately; it lets you manage assets during life and passes them to beneficiaries without probate. Trusts provide more privacy and flexibility.
Q: Do I need a revocable living trust?
A trust is recommend to anyone that owns real estate such as a home, land, or rental property. Real property triggers probate court at death unless it is titled (owned) in the of a trust. A trust is also recommended for anyone with minor children, as it allows you to outline how their finances will be managed and supported until they’re mature enough to handle their own finances.
Q: Do I need a will if I have a trust?
Yes, in all cases. A will — often called a “pour-over will” — is still important because it transfers any assets not titled in your trust into it after your death. It also lets you name guardians for minor children, something a trust can’t do.
Q: What happens if I die without a will?
When someone dies intestate (without a will), Utah law decides who inherits. Typically, your spouse and children take priority. If there are no direct heirs, more distant relatives may inherit. The court will also decide who cares for any minor children.
Q: What is probate and is it always required?
Probate is the court‑supervised process of validating your will, paying debts, and distributing your property. Informal probate is quicker and used when the will is uncontested, while formal probate involves hearings and is used when disputes exist. Having a revocable trust can help you avoid probate altogether.
Q: What is a power of attorney and why do I need one?
A power of attorney authorizes someone to act on your behalf. A financial (or general) POA allows your agent to pay bills, manage investments, and conduct transactions; without it, loved ones may need to seek court‑ordered conservatorship. It’s crucial for uninterrupted financial management if you become incapacitated.
Q: What is a healthcare directive?
A healthcare directive lets you appoint a medical decision‑maker and specify treatment preferences if you can’t communicate. It works alongside your medical power of attorney so doctors and family know your wishes.
Q: How often should I update my estate plan?
Review your plan every three to five years or after major life events (marriage, divorce, birth or adoption of a child, significant purchases, a move to another state). Laws and personal circumstances change, so keeping documents current is important.
Q: How much does a complete estate plan cost with an attorney?
Costs vary widely by location, complexity, and attorney experience. Basic estate plans for one person, drafted by lawyers, start around $1,000 to $2,000 and complex plans can range from $3,000 to $10,000 or more. Estimated fees for individual documents are:
Will: $300–$1,000.
Living trust: $1,000–$3,000.
Power of attorney: $150–$500.
Healthcare directive: $150–$500.
Expect Utah fees to be at or slightly below these averages. Costs rise if your estate includes a business, blended families, property in multiple states, or advanced tax planning.
Q: Are trusts only for the wealthy?
No. Trusts benefit people with modest estates who want to avoid probate, plan for incapacity, or protect privacy. They’re also useful for blended families, special‑needs dependents, and those owning property in more than one state.
Q: What is a Utah Domestic Asset Protection Trust (DAPT)?
A Utah DAPT is an irrevocable trust designed to shield assets from most creditors while still allowing you, as the trust creator, to be a discretionary beneficiary. It’s a valuable tool for professionals, business owners, or anyone seeking the peace of mind knowing that certain assets cannot be touched by creditors.
Q: Should I use online forms or hire an attorney?
Online DIY kits can be inexpensive ($100–$500), but they often miss state‑specific laws and complex family circumstances. Legal experts caution that DIY plans can lead to costly mistakes. An attorney can tailor documents to your unique situation, incorporate tax strategies, and provide ongoing guidance.
Q: How can I minimize capital gains tax, income tax, or estate taxes?
There are strategies to reduce all three. For capital gains and income taxes, timing the sale of assets, using tax-advantaged accounts, harvesting losses, or structuring income through trusts or business entities can help. Most Utah residents won’t face estate taxes due to high exemptions, but if your estate is large, tools like irrevocable trusts, charitable trusts, gifting, or family partnerships can further reduce the tax burden. Consult a professional to find the best approach for your situation.