Wills, individuals’ declarations of how they want their property distributed after their deaths, are the basic form of succession. In general, wills are characterized by three customary requirements: they must be written, they must be signed, and they must be attested to—that is, authenticated by witnesses. Of the three, the most formal—some would say, archaically so—and the most likely to act as an impediment, is the attestation requirement. All states currently dictate that between two and three witnesses formally attest to the validity of a will in front of a third party, often a lawyer, an accountant, or notary public. Under Utah law, there must be two witnesses. If you are making a will, speak to an experienced Lehi Utah probate lawyer. This complex law of succession may sometimes lead to very absurd results. Thus, in all states, if a will is formally typed, failure to abide by proper attestation will most likely invalidate the will in the eyes of the court. At the same time, a number of states including Utah do recognize so-called holographic wills, wills that are handwritten and signed with no witnesses. Regardless of the form of will, or no will at all, when an individual dies, his or her estate is subject to probate. Probate is a court proceeding in which debts are settled, taxes paid, and whatever is left transferred to the decedent’s legal heirs. Like the rules surrounding wills themselves, probate varies according to individual state law. Thus, in some states, if an estate is relatively small and the will uncontested, the probate procedure may be quickly and fairly easily consummated; other states retain more formalized and complicated probate procedures. Utah probate law is complex. Seek the assistance of an experienced Lehi Utah probate lawyer. The lawyer can guide you navigate the complex maze of Utah probate laws. The executor or administrator is then responsible for collecting, itemizing, and appraising all of the assets that are subject to probate. He or she then must pay outstanding debts and taxes, although most states permit a portion of the estate to be set aside for survivors, out of the long reach of creditors. Finally, what is left over is distributed to the estate’s heirs. Where there is no will, state law determines the legal heirs; in most cases, the estate is divided among the surviving spouse and the decedent’s closest blood relatives. Although probate is the most common form of succession, it is not the only form. Property that was placed in a living trust prior to death or property held in joint tenancy may pass to beneficiaries without court supervision. So too may life insurance and retirement account benefits. Using Life Insurance In Your Estate PlanUnder certain circumstances, you can use life insurance policies for estate planning. Speak to an experienced Lehi Utah probate lawyer to know how you can use life insurance policies for estate planning. For most successful family businesses, family members in the business will probably need to rely on life insurance to equalize the value of the business in their bequests to children not in the business. One common approach is for the company to fund insurance that provides a liquid distribution to family members outside the business. There are many ways of doing this, depending on individual circumstances. Split-dollar life insurance can be used to fund an insurance trust. With this type of insurance, the company gets back the premiums it has paid out at the death of the insured, and the beneficiaries of the trust can be the children not in the business. Parents can also buy survivor insurance, which pays only after both parents have passed away. This is probably the most affordable way to purchase life insurance, since the cost is reasonable and this type of policy may require no cash premiums after twelve to fifteen years. If the size of the estate is such that it is necessary to give business real estate to children not in the business, you should consider creating an entity such as a family limited partnership or limited liability company. This partnership can create a lease formula for establishing rental fees under all possible scenarios, and guarantee that the children not in the business will continue to earn an adequate income from the rental fees, while the children in the business retain control of the property. Another solution, if the business is large enough, is to create one column trust that holds nonvoting stock for family members not in the business. Or forget the trust and just give them nonvoting stock. Leaving control of the company to a widow or widower places too great a burden on someone unequipped to make the wide range of decisions needed to run a business. In addition, friction between parent and children is guaranteed if children who are keeping the company alive must go to a parent not in the business for approval of capital improvements. Depending on when the will is being written (i.e., if the founder’s children are still quite young), it can name an interim trustee to vote the stock that remains in the founder’s estate until those in the business reach a certain age. Since the widow or widower will not be inheriting the business, estate plans should provide for that spouse’s welfare though life insurance or — as long as the necessary controls are in place — through rental income from the business real estate. As with making provisions to take care of children not in the business, it’s a good idea to place the business real estate in a family limited partnership that guarantees an adequate income for the spouse if the founder dies first, and passes both equity and control of the real estate to the founder’s children in the business at the time of the spouse’s death. By taking the burden of running the business off the shoulders of surviving spouses, they can go on with their lives, even if this includes remarriage, without disrupting their relationship with their children in the business. One advantage of establishing a trust with assets with large unrealized capital gains is that you avoid paying the capital gains tax. A second advantage is that you receive an immediate income tax deduction for the gift of the assets in the trust to the charity in what may be the distant future year. In effect, the Internal Revenue Service (IRS) looks at the actuarial tables and estimates the year in which you are likely to die and hence the date when the assets in the trust will be transferred to the charity, and then determines the present value of this future gift. A third advantage is that the assets transferred to the trust will not become part of your estate and so your taxable estate is smaller. You also will benefit your favorite charities. A charitable remainder trust provides that the charity receives the gift after your death. A charitable lead trust provides that the income from the assets in the trust goes to a charity for a specified number of years and then the ownership of the assets is transferred to the individuals designated in the trust agreement. One of the major questions in estate management involves the timing of the transfer of ownership of assets to your children. One advantage to transferring ownership before death is that the income on the assets builds up your children’s wealth rather than yours, and so your taxable estate is smaller and hence the estate tax payment will be smaller. But such transfers involve loss of control. Trusts can also be used to control the use of assets by an intended beneficiary. You want to transfer ownership of assets to your children or grandchildren but you’re worried that they might fritter away funds because of immaturity. You leave the funds to a trust that is established to manage the assets for the benefit of these individuals. Stock Redemption AgreementThe sad truth can’t be ignored, however: Some issues cannot be resolved even with the use of a trust. The trustee may side with one party, and the other party may be furious, convinced that this decision will destroy the company. Or he or she may simply be fed up with struggling unsuccessfully to see things done their way. If the person who lost the vote feels bitter and resentful, he or she can turn to another fundamental element in our conflict-resolution plan: the stock redemption agreement. A stock redemption agreement makes it possible for any unhappy working partner to tender their stock and leave the company without disrupting the financial integrity of the business. Any family business that wants to survive for more than a few years after the death or retirement of the founder should develop a stock redemption agreement and require everyone who buys or inherits stock in the company to sign it. The stock redemption agreement is the major device for keeping stock of the family business in the family. It should also bind all owners of stock in the family business to sell their stock only to other family members or to the corporation. It should list situations in which the corporation will buy stock from individual family members, such as an inability to do one’s job because of illness, a wish to leave the company for an extended period of time or permanently (this takes care of the unhappy sibling who has seen too many votes go against him- or herself), and the death of a family member active in the company who leaves no heirs who wish to take over his or her position. Call And Hire Ascent LawEvery will has to pass through probate. The probate process is complex. Disgruntled relatives who have been disinherited can challenge the will during the probate process. That’s why you should hire the services of an experienced Lehi Utah probate lawyer. Free Consultation with a Probate Lawyer in Lehi UtahWhen you need legal help with a probate in Lehi Utah, please call Ascent Law at (801) 676-5506 for your Free Consultation. We will help you.
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Household Debt Near Great Recession Level How To Prepare Your Kids For Divorce How To Get A Good Divorce Settlement If I Can’t Afford A Lawyer via Michael Anderson https://www.ascentlawfirm.com/probate-lawyer-lehi-utah/
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