Estate planning concerns-Top 2
Updated: Nov 24, 2020
Attorneys get a lot of mileage out of some estate planning concerns that have permeated our culture. While there is truth to each one, the reality is that neither is likely to occur for most people. I know there are quite a few myths that people think about when it comes to estate planning, but I’m only going to call out the two that I have heard the most: the government takes your assets, and death taxes.
1. The government can take your stuff if you don’t have a plan.
If an heir, devisee or claimant cannot be found, the personal representative shall distribute the share of the missing person to his conservator, if any, but otherwise to the state treasurer for the benefit of the state school fund.
Basically, if someone is still alive or has descendants that are related to the person who passed without a will, that person will get the assets, not the government. It doesn’t even have to be descendants, but can go to siblings, parents, grandparents, aunts, uncles, and cousins. The law establishes the order by which a person inherits from someone who doesn’t have a will, and you can find generally it in Utah Code Annotated 75-2-101-103. Long story short, there are a lot of people standing in front of the government in line.
2. The government taxes your property when you die.
This, like the first one, is true in the sense that there is an estate tax or death tax. However, the vast majority of us will not have any tax liability under the current tax structure. The current federal estate and gift tax exemption amount is $11.4 million per individual and $22.8 million for a married couple. If you are close to any of these numbers, you NEED to do some planning to avoid the tax (which is 40%). But if you are like the majority of Americans, you can likely sleep better knowing that you are not going to trigger a death tax on your property.
State taxes are a little different. In Utah, if there is no federal estate tax due, there won’t be any state estate tax due either.
Now just because the majority of us won’t have to worry about these two issues, doesn’t mean you shouldn’t do some planning. Creating a will or will substitute (like a revocable living trust) will help alleviate some of the stress associated with the future. My goal is to do the right estate planning for each client. That means understanding what phase of life you are in and creating a plan for you that works with your current situation and can adapt to changes in the future.
For more information, please contact me at 435-777-4740 or email@example.com for a free consultation and we’ll figure out what’s best for you!