Salt Lake Trust Attorneys
Paul J. Barton
What is a living trust?
A trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can be the trustee of your own living trust, keeping full control over all property held in trust.
A "living trust" (also called an "inter vivos" trust by lawyers who can't give up Latin) is simply a trust you create while you're alive, rather than one that is created at your death under the terms of your will.
Do I need a living trust in Utah?
The main advantage of making a living trust is to spare your family the expense and delay of probatecourt proceedings after your death. But do you really need a trust?
Utah uses the Uniform Probate Code, which simplifies the probate process, so making a living trust may be more trouble than it saves.
Utah has a simplified probate process for small estates (under $100,000). If your net worth will be under this amount when you die, the probate process will be straightforward and relatively inexpensive, so you may not need to worry about avoiding it.
In Utah, if I make a living trust, do I still need a will?
Yes, you always need a will. A will provides a backup plan for any property that doesn't make it into your trust. For example, if you acquire new property and don't add it to your trust before you die, that property won't pass under the terms of the trust document. You can use a will to name someone to inherit property that you haven't left to a particular person or entity in your trust.
If you don't have a will, any property that isn't transferred by your living trust or other method (such as joint tenancy) will go to your closest relatives as determined by Utah state law.
Can writing a living trust reduce estate tax in Utah?
It depends on the kind of trust you create. A simple probate-avoidance living trust has no effect on federal estate tax. However, more complicated living trusts, such as an AB trust, can greatly reduce the federal estate tax bill for married people who own a lot of valuable assets. (Most people, though, don't need to worry about federal estate tax -- through 2008, it affects only estates worth more than $2 million.)
How do I make a living trust in Utah?
To make a living trust in Utah, you:
- Create the trust document, which says who will inherit trust property and names you as trustee (the person in charge).
- Sign the document in front of a notary public.
- Transfer your property, such as your house and car, to your name as trustee of the trust.
