A client recently described the difficulty of wrapping up her deceased father’s affairs.  Although her father was not wealthy, he had stashed what money he had in a number of banks and financial institutions, leaving nothing more than folders full of paperwork for her to sort through.  With no will or plan to guide her, she felt that the burden left for her was as difficult and painful as facing her father’s death twice.  The increasing difficulties and complexities surrounding death make it important for people of average means to educate themselves about the complexities they and their families could face when they pass away.

The first thing that you should learn is that under Utah law, in order to legally distribute assets from a deceased person’s estate with a net value greater than $100,000, your family will need to file a probate in Utah’s public courts where your finances and family affairs will become public record.  While planning with trusts and other designations can allow your family to bypass the probate process, for those with no planning, the Utah Legislature has developed “intestate” probate provisions.

The intestate provisions provide that if you haven’t written a will, the Probate Judge can appoint anyone of his choosing, including one of your creditors, to administer your estate and distribute it as the judge sees fit.  This could mean that all your assets be sold and converted to cash.  If you don’t have any debts – and nearly everyone does (think final utility bill or hospital bill), married people have other considerations to worry about.

If your spouse survives you, the Court will direct that all or a large share of your property be paid to your spouse, even if you were hoping to pass it onto your children.  In cases of second marriages, this can mean that your children are deprived of much of their inheritance.  Even worse, what is paid to your children will be paid to them equally, in cash.  This can be particularly detrimental to a minor child or grandchild, whose share will be held by a court-appointed guardian until the child turns 18.  At this point the money gets paid to them, likely while they are in high school, and you can only guess what a high school kid will do with a sudden influx of money.

For those without a spouse or children, the court will give everything to your parents, and if they don’t survive you, to your brothers and sisters, or your closest blood relative if you have no siblings.  The difficulties of finding your closest blood relatives, whoever they may be and wherever they are, can be a great expense and inconvenience to your estate, and if the Court cannot find any blood relatives then the Court will give your property to the State of Utah for the benefit of the state school fund.  With no family member to step forward, you can also expect that some public official charged with the disposition of deceased persons will make all arrangements for the final disposition of your remains.

Fortunately, wills and trusts give you many options to develop a plan that is uniquely fitted to your circumstances and your family.  While I have outlined probate proceedings as they apply to people with no plan at all, you should keep in mind that even if you have a will, Utah law still requires that you go through probate.  This means that your executor under your will must file a lawsuit against your estate and disclose information about my family, finances, and other personal affairs.  This information will be published in newspapers and documented and recorded in a public court for anyone to see.  Because the probate process can be time-consuming and expensive, you might consider drafting a simple, revocable family trust or living trust which allows you to bypass the probate process.  In any case, a well-planned will or trust can make all the difference between leaving our family a legacy instead of a mess.

For additional reading:

What is a Revocable Trust?

The Heartache of Poor Estate Planning


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