Withdrawing Money from Bank Account After Death

Wondering how to legally handle withdrawing money from bank account after death? This critical task requires complying with specific financial and legal protocols. Our concise guide demystifies the authorization process, the importance of legal documents, and the responsibilities of executors, ensuring you are equipped to handle this duty in compliance with the law.

Key Takeaways

• The withdrawal of funds from a deceased person’s bank account is strictly regulated, requiring the appointment of a personal representative and a certified death certificate, and unauthorized withdrawal is illegal.
• Joint bank accounts and Payable on Death accounts facilitate the transfer of assets to the surviving owner or named beneficiary respectively, bypassing probate, but both require a death certificate for the transfer.
• Before heirs can access funds from a deceased person’s bank account, legally mandated debt repayment takes priority, with banks following a sequence prioritizing creditors and requiring claims within a specific timeframe.

Withdrawing Funds After an Account Holder’s Passing

The legal labyrinth surrounding the withdrawal of funds from a deceased person’s bank account primarily centers on the authorization process. When a bank is notified of a customer’s death, the account is typically frozen. This is a protective measure designed to prevent fraudulent activities and ensure that the funds are distributed according to the decedent’s wishes and the law.

The key player in this process is the personal representative, such as an executor named in the will or an administrator of the estate. This individual is typically the only person authorized to close the deceased’s bank account. It’s important to note that taking money out of a deceased person’s bank account without proper authorization is illegal.

The timeline for a bank to release money after a person’s bank account holder’s death can vary significantly. Factors such as the complexity of the estate, necessary financial documents, and the value of the assets all play a role.

The Importance of the Death Certificate

One cannot underestimate the importance of a death certificate in the whole process. Serving as legal proof of death, a certified death certificate is required by financial institutions and banks to proceed with any transactions after an account holder’s death. This includes making changes or closing accounts solely in the deceased’s name.

Even a payable on death (POD) beneficiary must provide a certified copy of the death certificate and identification to claim the funds.

Executor vs. Personal Representative: Roles Defined

The executor or personal representative plays a crucial role in managing a deceased person’s bank accounts. This individual, authorized by the probate court, is responsible for notifying creditors of the death and settling all claims against the estate within a period typically ranging from three to six months.

To access and close the deceased person’s bank account, the executor must provide the bank with proof of their appointment and a death certificate.

Legal Authority to Withdraw Funds

Before any funds can be withdrawn from a deceased’s bank account, a legal process involving the authenticity and validation of the will must be completed. To withdraw money from the deceased’s account, the nominee or claimant must provide the bank with the death certificate and proof of their identity.

If there is no nomination, a copy of the succession certificate or the will must be provided in order to validate the legal process. This is necessary for ensuring the rightful distribution of assets and property as per the legal requirements.

Rights of Surviving Joint Account Holders

Joint bank accounts add another layer of complexity to the process. Often, these accounts are set up with ‘Joint With Rights of Survivorship’ (JWROS) which means that upon the death of one account holder, the assets in the account automatically transfer to the surviving account holder. This automatic transfer of ownership is a significant advantage, as it facilitates bypassing the probate court, thereby streamlining access to the account for the surviving owner after the co-owner’s death.

However, it’s not always smooth sailing. In the event of one of the signers passing away, banks may temporarily freeze joint accounts, potentially impacting the surviving owner’s ability to access funds immediately. This freeze is a standard procedure to prevent unauthorized access to the account.

Understanding Joint Bank Account Rules

The rules surrounding joint bank accounts are crucial to understand. Here are some key points to keep in mind:

1. Joint bank account holders generally benefit from the right of survivorship, which means the surviving account holder automatically becomes the owner of the account funds upon the death of the other holder.
2. Funds in a joint account typically do not go through the probate process, and the surviving owner becomes the legal owner of the funds immediately after the other owner’s death.
3. However, the surviving joint account holder must provide the bank with a death certificate to confirm the death and update the account records.

Automatic Transfer of Ownership

In a joint bank account, most agreements include a ‘right of survivorship,’ an arrangement that provides for the automatic transfer of ownership to the surviving account holder, without the need for probate. This right of survivorship is recognized by law in most jurisdictions and typically overrides any contrary provisions in a will or estate plan. In the case of a joint savings account, the same rules apply.

When a deceased account holder dies, to complete the transfer process after the account holder’s death, the surviving account holder must provide a certified copy of the death certificate, forms of identification, and fill out additional bank forms.

Exceptions and Considerations

While the process generally favors the surviving account holder, there are exceptions and considerations to keep in mind. For instance, if a surviving joint account holder withdraws more than the annual gift tax exclusion amount, they may need to file a gift tax return. Also, if the designated beneficiary is a minor, a legal guardian or custodian must be appointed to manage the funds on behalf of the minor.

Payable on Death Accounts: Accessing Designated Funds

Payable-on-death (POD) accounts provide another avenue for the seamless transfer of funds after an account holder’s death. These accounts, also known as Totten trusts or revocable bank account trusts, allow the owner of an account to name a beneficiary who will automatically inherit the account upon the owner’s death. Checking accounts, savings accounts, and certificates of deposit (CDs) are examples of accounts that can have a payable-on-death designee.

The POD beneficiary is a person designated to take control of the account after the account holder’s death, without the need for probate. The bank releases the funds to the named beneficiary after being notified of the account holder’s death, at which point the bank typically closes the account.

The Role of a Payable on Death Beneficiary

A Payable on Death (POD) beneficiary plays a crucial role in the distribution of funds after an account holder’s death. A beneficiary is the inheritor of particular assets, including bank accounts, who automatically inherits the designated account’s funds upon the signer’s death. However, it’s important to remember that a POD beneficiary has no rights to the funds in the account while the account holder is alive.

Claiming the Deceased Account Holder’s Assets

To claim the deceased’s assets, POD beneficiaries are required to present verification of the nomination along with the original death certificate. If there is a state-imposed waiting period, the POD beneficiary must adhere to it before they can collect the funds from the deceased’s account. This underlines the importance of understanding the specific regulations surrounding POD accounts to ensure a smooth transition of funds.

Avoiding Probate with POD Arrangements

Avoiding the often time-consuming and costly probate process is one of the key benefits of POD arrangements. As mentioned earlier, POD accounts, also known as Totten trusts, informal trusts, or revocable bank account trusts, simplify the process of asset distribution by bypassing probate court procedures.

The account holder of a POD account maintains the flexibility to change the named beneficiary, thus ensuring that they can alter their estate plan as needed.

Settling Debts and Obligations: The Impact on Withdrawals

Before the distribution of assets to heirs, it’s important to understand that banks prioritize creditor repayment. Banks resolving debts of a deceased individual prioritize claims based on legal precedence, ensuring creditors are settled before any distribution to beneficiaries.

When a person passes away, their assets are transferred to their estate and are used to pay off any outstanding debts. After satisfying all valid debts, any remaining amount of the deceased person’s estate will be distributed to the surviving family members. However, creditors are given preference over legal heirs or beneficiaries when it comes to the distribution of assets from a deceased person’s bank account.

Prioritization of Creditors

Banks follow a legally mandated sequence in managing the deceased’s debts. This typically prioritizes creditor repayment before heirs can access funds. In the case of an insolvent estate, debts are prioritized with estate administration costs and taxes being covered first, followed by other obligations such as credit cards and personal loans.

It’s important to note that creditors are required to submit written claims within a specific timeframe, generally three to six months, and cannot make claims after this period expires.

Handling Disputed Claims

Disputed claims on a bank account can arise from various grounds including suspected undue influence, documentation errors, forgery, and fraud. For a disputed claim to advance to legal action, an interested party must file a petition, gather evidence, and may subsequently become involved in litigation, potentially resulting in the freezing of the account in question.

Executors, administrators, and trustees can contest beneficiary designations, and cases of undue influence are often associated with caregivers, fiduciaries, and family members.

Estate Planning Insights: Preparing for Future Certainties

While dealing with the aftermath of a loved one’s death can be overwhelming, the process becomes less daunting with proper estate planning. Establishing a will and power of attorney through estate planning allows individuals to determine guardians for minor children (if applicable) and ensure assets are managed as intended after death.

Estate planning benefits people of all economic classes by potentially:

• reducing or eliminating estate and inheritance taxes
• securing the future care of children
• safeguarding against family disputes over inheritance
• directing asset management during events of mental incapacitation or posthumous circumstances.

The Value of a Will and Power of Attorney

A well-structured will and power of attorney are essential elements of estate planning. These legal documents enable an individual to specify asset distribution and can reduce income tax liabilities for beneficiaries.

It’s crucial to note that a revocable power of attorney becomes invalid after the person who has given the authority dies, demonstrating the importance of having a power of attorney in place before death for handling financial decisions.

The Role of Estate Planning Attorneys

Estate planning attorneys play a pivotal role in handling estate matters, including the management of bank accounts after death. They aid in:

• Drafting key legal documents like wills and trusts, which dictate how a deceased person’s bank accounts and other assets are to be handled.
• Providing comprehensive estate asset management, especially in complex situations.
• Working in collaboration with accountants and financial planners.

Navigating Social Security and Other Governmental Procedures

Navigating Social Security and other governmental procedures is another critical aspect of dealing with deceased person’s bank accounts. Surviving spouses or children are potentially eligible for survivors benefits the month the deceased person died, and there are specific eligibility requirements for surviving divorced spouses and dependent parents.

A surviving spouse can receive Social Security survivors benefits as early as age 60, or age 50 if disabled, with the possibility to switch to their own retirement benefit as early as age 62 if it results in a higher benefit. There are family benefit limits which can cap the total amount paid to all eligible family members between 150% to 180% of the deceased worker’s basic benefit rate.

Reporting to the Social Security Administration

Swiftly notifying the Social Security Administration (SSA) after a person’s death is crucial, which is often facilitated by funeral homes if they receive the deceased’s Social Security number. To report a death or apply for survivors benefits, contact must be made through a phone call to the SSA at their provided number, as online reporting is not available.

Returning Erroneous Payments

Another key aspect to consider is returning erroneous Social Security payments. Benefits received via direct deposit after the death of the account holder must be returned to the Social Security Administration by contacting the financial institution and requesting the funds be sent back.

Social Security benefits received by check for the month of death and any subsequent months should not be cashed and must be returned to the Social Security Administration immediately.

Summary

Navigating the process of withdrawing funds from a deceased person’s bank account might seem complicated, but with a clear understanding of the legal procedures and rights of the parties involved, the path can become more manageable. The key takeaways from this discussion are the importance of a certified death certificate, the roles of the executor and personal representative, the rights of surviving joint account owners, and the benefits of Payable on Death (POD) accounts.

While dealing with the loss of a loved one is never easy, having a structured plan in place can provide some peace of mind. It’s important to remember that every situation is unique, and consulting with an experienced estate planning attorney can provide guidance tailored to your specific circumstances. As Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.”

Frequently Asked Questions

What happens to a person’s bank account when they pass away?

When a person passes away, their bank account is typically frozen and can only be closed by the personal representative named in the will or the estate administrator. This process helps ensure proper distribution of the deceased’s assets.

What is the role of a Payable on Death (POD) beneficiary?

The role of a Payable on Death (POD) beneficiary is to gain control of the account after the account holder’s death, bypassing the need for probate. This allows for a smooth transfer of assets to the beneficiary.

What happens to joint bank accounts when one account holder passes away?

When one account holder passes away, the assets in the joint account automatically transfer to the surviving account holder, as per the ‘Joint With Rights of Survivorship’ arrangement.

What is the role of an executor?

The role of an executor is to notify creditors of the death and settle all claims against the estate within a specified period, usually three to six months. This ensures that the deceased’s debts are properly addressed.

How does estate planning benefit individuals?

Estate planning benefits individuals by potentially reducing or eliminating estate and inheritance taxes, securing the future care of children, providing clarity on assets, and easing the process for beneficiaries. This helps ensure financial security and peace of mind for the individual and their loved ones.

The post Withdrawing Money from Bank Account After Death first appeared on Ascent Law.

from Ascent Law https://ascentlawfirm.com/withdrawing-money-from-bank-account-after-death/

What Happens If You Die Without A Will?

If you die without a will, there are immediate legal ramifications. State intestacy laws kick in, deciding for you how your assets will be distributed, quite possibly contrary to what you might have wanted. This definitive guide helps demystify the probate process, the state’s role in appointing an estate administrator, and how your assets might be dispersed among heirs—or claimed by the state itself. Entering this maze of intestacy without a will can be daunting; let’s explore “what happens if you die without will”, so you can understand the full scope of the consequences and why estate planning matters.

Key Takeaways

• Dying without a will (intestate) subjects the estate distribution to state laws, which prioritize the decedent’s closest relatives, namely spouse and children, but can lead to unintended outcomes for non-traditional family members or partners.
• Probate courts oversee the administration of estates without wills, appointing administrators to manage and distribute the decedent’s assets according to state laws, which may vary significantly depending on the domicile and location of assets.
• Non-probate assets, including life insurance, jointly held properties, and accounts with designated beneficiaries, bypass probate and can be directly transferred to beneficiaries, an important consideration in estate planning to avoid intestacy.

The Consequences of Dying Intestate

Dying intestate triggers the use of state’s intestacy laws, which often favor the decedent’s spouse and children. Intestate succession laws dictate how a deceased person’s assets are distributed among heirs such as the spouse, children, parents, or siblings. If there are no children, the surviving spouse typically receives all the property in many cases. This is a common situation in inheritance laws.

However, intestate succession can lead to unexpected and often unsettling outcomes. Stepchildren, long-term partners, and individuals in a common law marriage often do not automatically inherit under intestate laws without additional legal proof or proceedings. This can result in family disputes, uncertainty for loved ones, and the possibility of unintended beneficiaries receiving the estate.

Understanding Intestacy

To understand the impact of intestacy, we first need to understand what it means. Intestacy occurs when a person passes away without making a valid will. In the absence of a will, state intestacy laws provide the framework for determining who inherits a person’s assets, which generally prioritizes relatives.

Assets are typically distributed in shares to the decedent’s family members such as a surviving spouse, children, and other relatives. However, the estate may pass to the state if no relatives are located. Furthermore, if the deceased owned real estate in different states, the property is subject to the intestacy laws of the state where it is located. Survivors may even need to outlive the decedent by a certain period to inherit.

State Laws and Variations

Intestacy laws can significantly differ from one state to another, affecting how an estate is divided and distributed after someone’s death without a will. For example, the decedent’s state of domicile is the primary jurisdiction that governs the distribution of personal property under intestacy laws, regardless of where assets are located.

When an individual owns property in multiple states, each state’s intestacy laws apply locally. This can lead to different rules for real estate, intangible personal property, and tangible personal property. Additionally, community property states differ from separate property states in terms of asset distribution.

In the absence of legal heirs, the estate might escheat to the state, meaning the state inherits the assets.

The Role of Probate Court in Intestate Cases

The probate court plays a fundamental role in handling intestate cases. When a person dies without a will, the probate court steps in to process and review the estate assets of the deceased person. In the absence of a last will, the probate court appoints an administrator, providing them with ‘letters of administration’ to act on behalf of the estate.

The probate court supervises the administrator to ensure the proper settlement of debts and distribution of the remaining assets to the legal heirs. The entire process is conducted in accordance with state intestacy laws, ensuring that the decedent’s estate is handled appropriately.

Appointment of Personal Representative

If there is no will, the probate court will appoint a personal representative to oversee the estate. This individual will be responsible for managing and distributing the assets of the deceased. State laws set out a list of eligible people for this role, and the court appoints someone based on the priority list when there is no will specifying an executor. Often, the surviving spouse is the first in line to serve as the personal representative or administrator of the estate.

The appointed administrator oversees the estate, identifies and collects the deceased’s assets, pays off debts and taxes, and distributes the remaining assets to legal heirs. Legal support services assist the personal representative through various tasks including contacting heirs, inventorying assets, paying taxes, and distributing property.

Distribution of Assets

After debts are settled, the probate court directs the appointed administrator to distribute the remaining assets to beneficiaries as per state law. The distribution of assets follows a set hierarchy, prioritizing the surviving spouse, followed by children, and then other relatives.

In probate proceedings for intestate estates, solely owned properties without a named beneficiary are distributed according to state’s intestate succession laws. State laws create a distribution framework for intestate succession, establishing a hierarchical structure of beneficiaries that typically begins with the surviving spouse and direct descendants.

However, if the deceased person leaves no will and has no identifiable heirs, the remaining assets may revert to the state, which is what happens if you die without proper arrangements in place.

Non-Probate Assets and Their Impact on Intestate Succession

In contrast to probate assets, non-probate assets do not pass through probate court when a person dies without a will. These assets include life insurance policies, banking accounts with named beneficiaries, and assets in a living trust. Non-probate assets that bypass probate when someone dies intestate include trusts, life insurance, financial accounts, joint tenancies, and assets with payable on death or transfer on death designations.

When assets have designated beneficiaries, they bypass the probate process and are directly transferred to those beneficiaries without the need for a will. This means that revocable trusts, which can be altered or revoked by the grantor during their lifetime, and irrevocable trusts, which can’t be changed and remove assets from the grantor’s taxable estate, can both help avoid probate.

Life Insurance Policies

Life insurance proceeds bypass the probate process and are directly distributed to the designated beneficiaries. The money paid out through life insurance death benefits is generally not considered taxable income for the beneficiaries. To claim the death benefit, beneficiaries must submit a request to the insurance company along with the necessary documentation such as the death certificate and policy number.

Beneficiaries can choose to receive the life insurance death benefit as a lump sum, annuity payments, or installment payments. The policyholder has the freedom to specify who the beneficiaries are and may include individuals, trusts, charities, or businesses in their life insurance policies. Beneficiaries can be altered, and the policyholder may dictate what percentage of the death benefit goes to each beneficiary. However, any payouts from an Accelerated Death Benefit or remaining balances on loans against the policy’s cash value may decrease the final payout of the death benefit.

Joint Tenancy Properties

Joint tenancy with right of survivorship is another type of non-probate asset. Joint tenants with Right of Survivorship (JTWROS) must be specified when registering or transferring a land title to establish this right. The grantor is the one who transfers a property title and grants the right of survivorship, either by purchasing property jointly or by using a Survivorship Deed to add another joint tenant.

The right of survivorship ensures that upon the death of one owner, their interest in the property automatically passes to the surviving joint owner(s), bypassing probate. Joint tenancy prevents individual owners from transferring their interest in the property to someone else without disrupting the joint tenancy.

The right of survivorship generally applies to residential or commercial properties, including single-family houses, townhouses, duplexes, condos, apartments, pieces of land, and farms.

Intestate Succession and Family Dynamics

Intestate succession laws, including intestate succession law specifics in each state, can significantly impact family dynamics. Here are some key points to consider:

• In states that fully recognize domestic partnerships, a registered domestic partner inherits the same as a married surviving spouse.
• However, even in cases of estrangement, intestate succession laws can lead to a surviving spouse inheriting the entire estate if there are no children.
• In community property states, the surviving spouse may inherit a portion of the estate.

These laws can have complex implications, so it’s important to consult with a legal professional to understand how they apply to your specific situation.

Intestate succession laws incorporate ‘right of representation,’ allowing children or grandchildren to inherit in place of a deceased heir. However, the rules of intestate succession consider various groups differently, including adopted children, stepchildren, and children born through artificial insemination. If someone dies without a will and has no spouse, the children, including those who may be estranged, will receive the estate. Estrangement does not affect the legal right of an estranged spouse or child to inherit from the deceased person’s estate under intestate succession.

Spouses and Children

Surviving spouses and children are usually the first in line to inherit under intestate succession laws. These laws typically grant the first priority of asset distribution to the surviving spouse, followed by the children and other close relatives. A surviving spouse is defined as the individual who was legally married to the deceased person at the time of death. Furthermore, registered domestic partners inherit the same as a married surviving spouse in states that recognize such partnerships.

Other Relatives and Unmarried Partners

Intestate succession laws generally do not provide inheritance rights to unmarried partners, friends, and charities, as they prioritize legal marriages and blood relationships. However, common-law spouses may inherit if they can prove their common-law relationship in states that acknowledge it, and registered domestic partners can inherit similarly to married spouses in states that recognize domestic partnerships.

Yet, without a will or legal adoption, stepchildren are generally not recognized as heirs under state intestacy laws.

Estate Planning Solutions for Avoiding Intestacy

To avoid the challenges of intestacy, it’s essential to engage in estate planning. Estate planning solutions, such as drafting a will and establishing trusts, can help prevent intestacy and ensure personal wishes are fulfilled regarding asset distribution.

Drafting a will allows individuals to determine the distribution of their assets post-mortem, including naming guardians for minor children. It is essential to regularly review and update a will to reflect changes such as marriage, divorce, birth of children, or a significant shift in financial status, ensuring the document accurately represents current wishes.

Drafting a Will

Drafting a will is a critical part of estate planning. A will ensures personal wishes are fulfilled regarding asset distribution, such as who should inherit property or money, and appointing guardians for any minor children. However, adding someone to an account for assistance with management can inadvertently transform probate assets into non-probate ones, thus diverting them from the intended beneficiaries outlined in the will.

When property is held in joint tenancy with right of survivorship, it bypasses the will’s instructions and is transferred directly to the surviving joint tenant, which may not align with the decedent’s desired asset distribution. To ensure assets are distributed according to the will, it is advisable to:

• Create agency accounts, which permit manageability without affecting their classification as probate assets.
• Detail the payment sources for any debts and estate taxes in the will.
• Appoint an executor to administer the estate.

Establishing Trusts

Establishing a trust is another effective solution to avoid intestacy. Trusts can be used to:

• Protect and preserve assets
• Offer a secure way to manage an estate for both current needs and future generations
• Allow for customization and control over the distribution of wealth
• Enable individuals to dictate the terms of asset transfer

Trusts can help minimize federal or state taxes, providing a tax-efficient way to transfer wealth to beneficiaries. For instance, if a life insurance policyholder designates a minor as a beneficiary, a trust may be needed to manage the financial payout until the minor comes of age, avoiding unwanted outcomes such as a minor receiving proceeds outright at age 18.

Legal Support from Ascent Law

Planning your estate can be complex and overwhelming, which is why it’s helpful to have experienced legal support. Ascent Law, an estate planning attorney, specializes in providing legal services for estate planning, addressing the complexities involved in creating wills, trusts, and other estate documents. The firm is dedicated to ensuring that each client’s unique concerns are met with tailored legal solutions, emphasizing a client-centered approach.

Ascent Law’s Services

Ascent Law provides a full spectrum of estate planning services, including:

• Drafting wills and trusts
• Creating powers of attorney and advance healthcare directives
• Assisting with probate and estate administration
• Establishing guardianships and conservatorships
• Planning for business succession

With over two decades of experience, Ascent Law offers a wide range of legal services, highlighting their commitment to addressing client concerns in estate planning and probate matters.

The firm guides personal representatives through responsibilities such as inventorying assets, paying taxes, and distributing property. They assist with the probate proceedings necessary for the orderly transfer of property in the individual’s name at the time of death. For small estates under Utah law, Ascent Law facilitates title transfer using Small Estate Affidavits to bypass probate. They also offer support in resolving disputes between beneficiaries and personal representatives during estate management.

Client-Centered Approach

Ascent Law ensures a personalized approach to legal services, promoting clear communication and understanding with clients. The firm is known for providing extensive support, ensuring clients are well-informed and assisting across varying legal challenges while addressing client-specific concerns.

The firm is dedicated to relieving client stress by adeptly handling the legal intricacies involved with the distribution of a deceased’s assets. Professionalism and heartfelt support during challenging times are among the positive feedback Ascent Law receives from clients.

Summary

To recap, dying without a will or dying intestate can have serious implications on how a deceased person’s assets are distributed. It can lead to family disputes, uncertainty for loved ones, and the possibility of unintended beneficiaries receiving the estate. However, with effective estate planning, including drafting a will and establishing trusts, individuals can ensure their assets are distributed according to their personal wishes.

The importance of having a valid will and undertaking estate planning cannot be overstated. It allows you to control the distribution of your assets, take care of your loved ones, and leave a lasting legacy. By taking steps now, you can provide peace of mind for yourself and your family, knowing that your final wishes will be honored.

Frequently Asked Questions

What are the disadvantages of dying without a will?

Dying without a will can lead to the distribution of assets according to state laws, leaving loved ones with unexpected tax bills and potential conflicts among heirs. It can also result in the need for court administration to unlock certain assets, complicating the process for the family.

Why people don t have a will?

Many people don’t have a will because they either don’t think they have enough assets, are unsure how to create one, want their next of kin to automatically receive everything, or believe they are too young to have one. Ultimately, some just don’t want to have a will.

What happens if you die and have no family?

In the event of no family, the county may provide a burial in a cemetery, often referred to as a “potter’s field.” In the absence of relatives, the estate may go to the state.

What percentage of Americans die without a will?

Roughly 68 percent of Americans pass away without a valid will, indicating a widespread lack of estate planning and legacy preparation. This underscores the importance of creating a will to ensure one’s wishes are carried out.

What does it mean to die intestate?

Dying intestate means passing away without a legal will, resulting in the state’s intestacy laws determining asset distribution.

The post What Happens If You Die Without A Will? first appeared on Ascent Law.

from Ascent Law https://ascentlawfirm.com/what-happens-if-you-die-without-a-will/

Working with a Personal Injury Attorney in Utah: What You Need to Know

Imagine driving home from work on a normal day when suddenly, another driver runs a red light and collides with your vehicle, leaving you injured and facing a mountain of medical bills. In such a situation, hiring a personal injury attorney in Utah becomes essential. This blog post will guide you through the importance of hiring a personal injury attorney, the different types of personal injury cases, the legal process in Utah, how to choose the right attorney for your case, and the costs involved. Let’s dive in and explore the world of personal injury law in Utah!

Key Takeaways

• Personal injury attorneys assess, build and negotiate a strong case to ensure fair compensation for clients.
• The cost of hiring an attorney can vary depending on the payment structure chosen. Contingency fee basis, hourly rates or flat fees may be available.
• When selecting an attorney, consider their qualifications, communication style and client reviews to make sure they are best suited for your case.

The Role of a Personal Injury Attorney

Navigating the often-complicated world of personal injury law can be overwhelming, especially when you’re dealing with the aftermath of an accident or injury. That’s where an experienced personal injury attorney comes in. They are responsible for:

• Assessing your case
• Building a strong case
• Negotiating with insurance companies to ensure you receive fair compensation for your personal injury claims.

Employing a Utah personal injury lawyer furnishes numerous advantages. They can evaluate your situation, construct a compelling case, and negotiate with insurance firms to secure a just recompense for your injuries. Whether you’ve been bitten by a dog, lost a loved one due to someone else’s negligence, or faced an auto accident, a personal injury attorney is essential in ensuring justice and compensation for your losses.

Assessing Your Case

A significant part of a personal injury lawyer’s job involves analyzing your case. This includes scrutinizing the incident’s details, determining liability, and estimating potential compensation you might be eligible for. Your attorney will require medical records, medical bills, and other relevant information to thoroughly evaluate your case and determine the best course of action.

If the insurance company refuses to pay your claim, your personal injury attorney can provide assistance with your petition for benefits, represent you at any necessary hearings, and help you secure any lump sum settlements to which you are eligible. Proper assessment of your case is crucial in maximizing your compensation and ensuring a successful claim.

Building a Strong Case

After evaluating your case, your personal injury attorney will concentrate on constructing a compelling case for you. This involves gathering evidence, consulting with experts, and developing a legal strategy to prove negligence and causation.

Collecting evidence is crucial, as it helps establish liability and strengthens your case. This may include photographs of the accident scene, witness statements, and any relevant documents. By constructing a solid case, your attorney increases the likelihood of a successful claim, ensuring that you receive the compensation you deserve to cover your medical bills, lost wages, and other damages.

Negotiating with Insurance Companies

One of the most challenging aspects of personal injury cases is negotiating with insurance companies. They often prioritize their own interests and may try to minimize the compensation you receive. Here, an adept personal injury lawyer from personal injury law firms can bring significant value.

Your attorney will advocate for your best interests, ensuring you receive the maximum compensation possible for your injuries and losses. They will handle all communications with the insurance company, present an offer, and engage in informal negotiations, which may result in a settlement. If the insurance company presents a lowball counteroffer or fails to respond, your attorney may be prepared to take the case to trial.

Common Types of Personal Injury Cases in Utah

In Utah, prevalent personal injury cases encompass car accidents, slip-and-fall events, and medical malpractice, all potentially leading to severe injuries or even death. Each type of case presents its unique challenges, and hiring Utah personal injury lawyers with experience practicing personal injury law is crucial in navigating the complexities of the legal system and ensuring the best possible outcome for your case.

Car Accidents

Car accidents can be attributed to multiple causes such as driver negligence, faulty car components, or hazardous road conditions. These accidents can result in a range of injuries, from minor lacerations to severe head and spinal trauma. When faced with such a situation, it’s essential to have a skilled personal injury attorney by your side.

A personal injury attorney at a personal injury law firm can help you seek compensation for your injuries, medical bills, lost wages, and more. Personal injury lawyers will evaluate your personal injury case, determine liability, and develop a legal strategy to prove negligence and causation. With their expertise and guidance, you can focus on your recovery while they handle the legal complexities of your personal injury lawsuit.

Slip-and-Fall Incidents

Slip-and-fall incidents might happen due to property owner negligence, like poor maintenance or dangerous conditions. These accidents can result in a range of personal injuries, from minor bruises to severe fractures and head injuries. In such cases, it’s crucial to consult an experienced personal injury attorney to help you seek compensation for your injuries and losses.

Your attorney will:

• Evaluate your case
• Determine liability
• Develop a legal strategy to prove negligence and causation
• Gather evidence
• Consult with experts
• Work tirelessly to ensure you receive the compensation you deserve

With their help, you can focus on your recovery while they navigate the complexities of the legal system on your behalf.

Medical Malpractice

Medical malpractice cases concern injuries resulting from healthcare professionals’ negligence, including misdiagnosis, surgical errors, or medication blunders. These cases can be incredibly complex, as they often involve intricate medical knowledge and may require expert testimony to prove negligence and causation.

A personal injury attorney with experience in medical malpractice cases can be invaluable in helping you navigate the complex legal process and seek compensation for your injuries. They will gather evidence, consult with medical experts, and develop a legal strategy to prove negligence and causation. With their guidance, you can focus on your recovery while they work tirelessly to ensure the best possible outcome for your case.

The Legal Process for Personal Injury Cases in Utah

The legal procedure for personal injury cases in Utah can be intricate, comprising multiple stages like filing a lawsuit, participating in the discovery phase, and reaching a settlement or proceeding to trial. Understanding the legal process in Utah is essential for ensuring the best possible outcome for your case.

By hiring an experienced personal injury attorney, you can:

• Alleviate the stress and confusion associated with the legal process
• Focus on your recovery while they handle the intricacies of your case
• Have someone who will guide you through each step of the process
• Ensure that your rights are protected
• Receive the compensation you deserve

Filing a Lawsuit

Initiating a lawsuit marks the first stage in the legal procedure for personal injury cases in Utah. This involves submitting a formal complaint to the court, outlining the details of the case and the damages being sought. Your attorney will draft and file the complaint on your behalf, ensuring that all necessary information is included and that the lawsuit is filed within the statute of limitations.

Once the complaint has been filed, the other party will be served with a copy, allowing them the opportunity to respond. This initiates the legal process, and your attorney will continue to represent your best interests throughout the entirety of the case, working tirelessly to ensure you receive the compensation you deserve.

Discovery Phase

The discovery phase serves as a pivotal part of the litigation process, enabling both parties to collect evidence, interview witnesses, and construct their individual cases. During this phase, your attorney will request documents, take depositions, and prepare written questions (interrogatories) for the other party to answer.

This phase is essential for building a strong case, as it allows your attorney to gather crucial evidence and information that will be used in negotiations and potentially at trial. With their expertise in personal injury law, your attorney will ensure that all relevant evidence is collected and analyzed, greatly increasing the chances of a successful claim.

Settlement or Trial

After completing the discovery phase, the ensuing stage in the legal procedure involves either settlement negotiations or trial. Your attorney will advocate for your best interests, attempting to reach a fair settlement with the insurance company or the other party. If a settlement cannot be reached, your case will proceed to trial, where your attorney will:

• Present evidence
• Make arguments
• Call witnesses
• Cross-examine opposing witnesses

All of this will be done before a judge or jury, who will ultimately make a decision on the case.

Whether your case is resolved through settlement or trial, your experienced personal injury lawyer will work tirelessly to ensure you receive the maximum compensation possible for your injuries and losses. With their guidance and representation, you can rest assured that your case is in capable hands.

How to Choose the Right Personal Injury Attorney for Your Case

Selecting the appropriate personal injury attorney for your case requires consideration of various elements such as their qualifications and experience, communication and accessibility, and client testimonials and reviews. By carefully evaluating each of these factors, you can make an informed decision on which attorney is best suited to represent you and help you achieve the best possible outcome for your case.

Credentials and Experience

The qualifications and experience of a personal injury attorney stand as vital considerations when choosing the appropriate legal representation for your case. Your attorney should:

• Be licensed to practice law in your state
• Have experience in personal injury law
• Be familiar with the court system in your area
• Have a proven track record of success in handling cases similar to yours

By choosing experienced personal injury attorneys with the necessary credentials, you can have confidence in their ability to handle your case and provide the highest quality legal representation. This can greatly increase your chances of:

• receiving the compensation you deserve
• navigating the complex legal process
• negotiating with insurance companies
• gathering evidence to support your claim
• advocating for your rights and best interests

Communication and Accessibility

Consideration of communication and accessibility is crucial when choosing a personal injury attorney, as these elements significantly contribute to building a robust attorney-client relationship and keeping you informed throughout the legal process. Your attorney should be readily available to answer any questions you may have and provide prompt updates on the status of your case.

By selecting an attorney from a reputable law firm who prioritizes communication and accessibility, you can foster trust and confidence in their ability to represent your best interests and make informed decisions regarding your legal options.

Client Testimonials and Reviews

Client testimonials and reviews can offer insightful perspective into an attorney’s performance history and the experiences of their former clients. When reviewing testimonials and reviews, it’s important to consider the details provided, such as the attorney’s communication and accessibility, as well as their ability to handle the case.

By taking the time to thoroughly research and evaluate client testimonials and reviews, you can make a more informed decision when selecting a personal injury attorney for your case. This can greatly improve your chances of achieving a successful outcome and receiving the compensation to which you are entitled.

The Cost of Hiring a Personal Injury Attorney in Utah

The expense of employing a personal injury attorney in Utah can differ, with payment options like contingency fee basis, hourly rates, and flat fees being available. Understanding the different payment structures and selecting the most suitable option for your case is crucial to ensuring you receive the best possible legal representation while managing the financial aspects of your personal injury claim.

Contingency Fee Basis

Under a contingency fee basis, the attorney is compensated only if they attain compensation for the client, taking a portion of the awarded sum. This payment structure can be advantageous, as it allows clients to pursue legal action without incurring any initial costs, making it more accessible for those who may lack the financial resources to pay for legal services.

However, there are potential drawbacks to the contingency fee basis, such as the attorney potentially being less incentivized to work on the case if they are not guaranteed payment, or taking a higher percentage of the awarded amount than if the client had opted for an hourly rate.

Hourly Rates and Flat Fees

Hourly rates and flat fees represent alternative payment structures, whereby the attorney bills based on the time invested in your case or a fixed sum, irrespective of the result. Hourly rates for personal injury attorneys in Utah can range from $100 to $500 per hour, while flat fees can vary depending on the specifics of the case and its complexity.

When considering hourly rates or flat fees, it’s important to weigh the potential benefits and drawbacks of each payment structure and choose the one that best fits your financial situation and the specifics of your case.

Summary

In conclusion, navigating the complexities of personal injury law in Utah can be a daunting task, but with the guidance of an experienced personal injury attorney, you can confidently pursue the compensation you deserve. By considering factors such as credentials and experience, communication and accessibility, and client testimonials and reviews, you can make an informed decision on the right attorney for your case. With the right legal representation by your side, you can focus on your recovery while your attorney works tirelessly to ensure a successful outcome for your personal injury claim.

Frequently Asked Questions

What is the difference between personal injury and bodily injury?

Personal injury is a legal claim of harm to an individual caused by another person’s negligence or misconduct, whereas bodily injury refers to physical harm to the body.

What is the meaning of personal injury?

Personal injury refers to physical, mental or property damage caused by another party’s negligence, allowing you to file a lawsuit for compensation.

What is the largest injury law firm in the United States?

Morgan & Morgan Lawyers is America’s Largest Personal Injury Law Firm.

What types of personal injury cases are most common in Utah?

In Utah, the most common personal injury cases involve car accidents, slip-and-fall incidents, and medical malpractice. These types of claims can lead to severe harm or even death.

What are the benefits of hiring a personal injury attorney?

Hiring a personal injury attorney can provide you with the benefits of assessing your case, building a strong case, and negotiating with insurance companies to ensure you get fair compensation.

The post Working with a Personal Injury Attorney in Utah: What You Need to Know first appeared on Ascent Law.

from Ascent Law https://ascentlawfirm.com/working-with-a-personal-injury-attorney-in-utah/

Are Divorce Records Public In Utah?

Utah natives may wonder if their divorce records are public. Before I talk about the divorce records in Utah being public, I would like to talk about divorce records in general and where we are now.

You can start with the Utah Territorial Divorce Records 1852-1859. Researchers need to know an approximate date or time frame in which divorce took place as well as where the partners were living when the divorce occurred. This will enable them find territorial divorce records. Very few of these records are name-indexed.

Due to this, researchers may find their work of researching taking a lot of time if they lack this information. Between 1852 and 1887, two separate courts had simultaneous power over divorce proceedings, the county Probate Court for each individual county and District Court which covered multiple counties.

Individuals seeking a divorce in Utah between 1852 and 1878 had the liberty to file the case anywhere within the region since there were no laws specifying your residence. Majority of the people from Utah filed their cases within the area that is in their county probate court or area district court.

The good thing is that there were no requirements while filing their cases. A residency requirement was initiated in 1878 whereby there were specifications about the location. This was to affect divorce cases from June 1878. Persons filing for divorce had to file in the County Probate Court which occurred through 1878 or the District Court with dominion over their place of residence.

In 1887, the Probate Courts’ power over divorce cases were removed by the Federal government and so all divorces were filed in the District Court only between 1887 and 1896. District courts had power over several counties. Very few records which have territorial divorce proceedings are name-indexed. Actually not all of them have survived.

Consult multiple series for the same agency when researching divorces: while case files series generally provide the largest amount of information about divorce proceedings, occasionally files do not survive when minute book entries do or vice-versa. Also different record types document different aspects of the case.

Divorce Records in Utah, 1896- Present

Divorces must be filed in the county in which at least one of the parties reside at the time the objection is filed. Records of divorces filed since 1896 in many District Courts are still accessed directly through those district courts, though some have made arrangements to store records older than 50 years with the State Archives.

Is Divorce records in Utah?

Yes and No. The Utah State Legislature has made privatized divorce records. This means that if you, as a citizen off the street, takes a stroll down into the Matheson Courthouse down at 450 South State Street, Salt Lake City, Utah and walk into the court clerk’s office and ask for divorce filings, he or she would certainly not agree.

This is to mean that divorce records are private. If you have been divorced for a number of years in Utah, there is a set of data in which you can search or even ask the court clerk to find it for you in the database. In addition to this, it is possible to search and see if someone has documented a divorce or if there is any ruling regarding divorce that has been entered.

It is good to confirm the divorce decrees especially if you are dating a person claiming to be a divorcee. You will be able to see if he or she has divorce records or if they are not being honest with you. This will save you a lot of future trouble in your relationship or marriage especially if the person is lying to you about his or her divorce.

You will be able to make a good decision with all the facts at hand. There is an added advantage to an attorney or guardian ad litem since they can access since they can access court documentations by filing a ‘Notice of Appearance’ or ‘Appearance of Counsel’. Notice of Appearance is a document from an attorney or parties to show the court your involvement in the case.
If you represent one of the parties in court then through the Notice of Appearance you should be allowed to see the information in the court docket which contains both decided and pending cases. It may also contain all pleadings. In addition to that, if the case is yours meaning that you are the one seeking the divorce or the Respondent, you are entitled to see the court file since the case is yours.

Parents, siblings, grandparents or grandchildren may also place a request. Only them can be allowed to make such requests. In Utah, divorce papers are concealed.

However, the digital era has made it possible to access information online. The information can be obtained in certain websites. You can access if you have viable data concerning the city, county and state.

Divorce records database are maintained by many companies and allow users through the internet access their websites.

It is important to become a member of authenticated and secure website. Free information is also available but is basic and does not provide enough information. It is good to choose the best website to get sufficient information.

Records That Are Essential To The State of Utah

All vital records in the state of Utah concerning the citizen’s’ most important life events are maintained in The Office of Vital Records. These crucial records may include: birth certificates, marriage licenses and death certificates. The records are usually assembled and stored in permanent central registry state entities. These records are used to compile data that is, developing statistical analysis of the population of Utah.

Birth Records

Birth records are contained in a birth certificate. They are usually written when a child is born. A birth certificate can either be the original document showing or confirming the birth or a photocopy of the original birth certificate which still has the information on birth.
The birth records catalogs of the state of Utah are divided into these categories: early-1905 and late-1905. When it comes to early-1905 category, all records were collected from Utah church registers not forgetting the county records of essential statistics which provide the earliest evidence of birth.
Majority of the clerks kept better records in the final years of the 1890s. The records from these times are kept and found at the Utah Family Library History and Utah State Archives. In the second category which is 1905- present day, records are kept and found at the Utah Office of Vital Records and Statistics.

Death Records

When a person dies records are also kept to show that he or she no longer exists. A death record has more or less of the information in the death certificate. Some states such as California have two categories through which death records are managed.
These may include; County records and State records. Collected from Utah counties represents every record contained in the county records. These records contain microfilmed copies of the original records obtained from many counties to the Utah Bureau of Vital Records.
When it comes to the second category, records are collected yearly at the Utah Department of Health.

Marriage and Divorce Records in Utah

The government of Utah issues a marriage or divorce record only after civil registration of the marriage or divorce occurs. The record is usually issued by a government official. Civil registration of marriage was not necessary or was not a requirement in Utah until 1887.
This does not mean that there are no records of marriage prior to 1887. Some of them are in the justice of the peace or probate court records.
These early marriages records were usually interfiled with other court matters. Most of these court records are now at either the county clerk’s office or the the Utah State Archives. The Family History Library has pre-1887 court records for a number of Utah counties. There were over two thousand divorces from 1847 to 1877.

If we take a look during the territorial period, the federal district courts had power over divorce cases from the year 1852 to 1895.
The probate courts also had dominion from 1852 to 1887. After 1896, power over divorce was given to state district courts. Currently divorce records are kept at the Utah State Department of Health. A law by the name the Utah Government Records Access and Management Act in 1991 was passed by the Utah State Legislature.

This law was enabled in 1997 and its aim is to ensure that court records and other public records are disclosed to the public. This law has been of assistance since any citizen can request to see all public records via the assigned specialized offices within the set terms.

For years it has been reported that Utah has a higher than average divorce rate but census data shows that Utah’s men and women are least likely to be divorced. This is the reason why: Utahns get remarried faster and those second or third marriages seem to last.

Due to this, Utah has the fifth- lowest and percentage of divorced men, at 8.2 percent, and the fourth lowest percentage for women at 10.2. The factor that distinguishes Utah from other states is that its residents get married at an earlier age compared to residents of other states in the same nation. Due to that, Utah has slew of young divorced couples who have a higher probability to re-enter the dating world than a person whose marriage breaks later in life.

Age is a great determinant after divorce because it determines if you will be remarried or not. In addition to this, The Church of Latter-day Saints plays a big role in all of Utah’s marriage and divorce statistics. The Mormon faith also encourages marriage at a young age and puts a lot of emphasis on the marriage institution.

This greatly challenges divorced and widowed Mormons to get back into dating. This is a good explanation why Utah has a higher percentage of people who have or are married. According to the information from 2013 census in Utah, 73 percent of Utah women and 68 percent of Utah men have been married at least once, while nationwide, 70 percent of women and 64 percent of men have tied the knot.

Ten Cities In Utah With The Highest Divorce Rates

1. Vernal
2. Washington Terrace
3. Ogden
4. Moab
5. Sunset
6. Murray
7. Price
8. Midvale
9. Roy
10. South Salt Lake

If you can, you should try to avoid divorice. This is because divorce has disadvantages such as:
1. It reduces living standards
When divorce occurs it usually results into two families where there was one family. It is usually said that two are better than one. When there was unity or before the divorce both partners use to support the family using their income but now that the family has split up the living standards will lower since each partner will be supporting himself or herself wherever she is living. If you had a lavish lifestyle you will start watching your budget and being keen on how you spend your money.

2. Divorce changes relationships

It is obvious that your relationship with your ex will change. Apart from the spouse, your relationship with his or her family and relatives will change. Divorce can make you lose people who at one time were the dearest to you.

This usually happens when friends take sides and start viewing you as the worst person. After divorcing, the divorcees find themselves distancing themselves from married people. They mostly stay with single people so as to get a little comfort.

3. Divorce Hurts Children

Children of divorced parents are more likely to have problems such as depression, delinquency, low school performance and social problems. These problems may come as a result of marital conflicts at home or due to the divorce itself.

There are some factors at home that are bad enough that unless they are eliminated a divorce might be better for the children. They may include violence against children or spouse, continuing and open substance abuse, recurring inappropriate expressions of anger for example constantly yelling or destruction of property and continuous involvement of the children between the conflict of the parents. In the absence of one of these factors however, research has found out that in the absence of one of these factors, intact but unhappy homes are on average happier and better than children whose parents have divorced. This is applicable even when parents make all the right decisions to help their children through a divorce.

Free Consultation with Divorce records Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506 for your free consultation. We want to help you.

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

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Trust Dos And Donts

Trust Dos And Don’ts

A trust is the legal relationship between one person, the trustee, having an equitable ownership or management of certain property and another person, the beneficiary, owning the legal title to that property. The beneficiary is entitled to the performance of certain duties and the exercise of certain powers by the trustee, which performance may be enforced by a court of equity. Most trusts are founded by the persons (called trustors, settlors and/or donors) who execute a written declaration of trust which establishes the trust and spells out the terms and conditions upon which it will be conducted. The declaration also names the original trustee or trustees, successor trustees or means to choose future trustees. The assets of the trust are usually given to the trust by the creators, although assets may be added by others. During the life of the trust, profits and, sometimes, a portion of the principal, called the “corpus”, may be distributed to the beneficiaries, and the remainder to is usually distributed upon the occurrence of an event, such as the death of the creator. A trust may be created as an alternative to a will in order to avoid probate and higher taxation. There are many types of trusts, including “revocable trusts”, created to handle the trustors’ assets (with the trustor acting as initial trustee), also called a “living trust” or “inter vivo trust”, which only becomes irrevocable on the death of the first trustor; “irrevocable trust,” which cannot be changed at any time; “charitable remainder unitrust,” which provides for eventual guaranteed distribution of the corpus (assets) to charity, providing a substantial tax benefit. There are also “constructive” and “resulting” trusts declared by a court for equitable reasons over property held by someone for its owner. A “testamentary trust” can be created by a will to manage assets given to beneficiaries.

Types of Trusts

A trust is a legal document that can be created during a person’s lifetime and survive the person’s death. A trust can also be created by a will and formed after death. Once assets are put into the trust they belong to the trust itself (such as a bank account), not the trustee (person). They remain subject to the rules and instructions of the trust contract. In essence, a trust is a right to money or property, which is held in a fiduciary relationship by one person or bank for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust.

Revocable Trusts

Revocable trusts are created during the lifetime of the trust-maker and can be altered, changed, modified or revoked entirely. Often called a living trust, these are trusts in which the trust-maker:
• Transfers the title of a property to a trust
• Serves as the initial trustee
• Has the ability to remove the property from the trust during his or her lifetime

Revocable trusts are extremely helpful in avoiding probate. If ownership of assets is transferred to a revocable trust during the lifetime of the trust-maker so that it is owned by the trust at the time of the trust-maker’s death, the assets will not be subject to probate. Although useful to avoid probate, a revocable trust is not an asset protection technique as assets transferred to the trust during the trust-maker’s lifetime will remain available to the trust-maker’s creditors. It does make it more somewhat more difficult for creditors to access these assets since the creditor must petition a court for an order to enable the creditor to get to the assets held in the trust. Typically, a revocable trust evolves into an irrevocable trust upon the death of the trust-maker.

Irrevocable Trust

An irrevocable trust is one that cannot be altered, changed, modified or revoked after its creation. Once a property is transferred to an irrevocable trust, no one, including the trust maker, can take the property out of the trust. It is possible to purchase survivorship life insurance, the benefits of which can be held by an irrevocable trust. This type of survivorship life insurance can be used for estate tax planning purposes in large estates; however, survivorship life insurance held in an irrevocable trust can have serious negative consequences.

Asset Protection Trust

An asset protection trust is a type of trust that is designed to protect a person’s assets from claims of future creditors. These types of trusts are often set up in countries outside of the United States, although the assets do not always need to be transferred to the foreign jurisdiction. The purpose of an asset protection trust is to insulate assets from creditor attack. These trusts are normally structured so that they are irrevocable for a term of years and so that the trust-maker is not a current beneficiary. An asset protection trust is normally structured so that the undistributed assets of the trust are returned to the trust-maker upon the termination of the trust provided there is no current risk of creditor attack, thus permitting the trust-maker to regain complete control over the formerly protected assets.

Charitable Trust

Charitable trusts are trusts which benefit a particular charity or the public in general. Typically charitable trusts are established as part of an estate plan to lower or avoid the imposition of estate and gift tax. A charitable remainder trust (CRT) funded during the grantor’s lifetime can be a financial planning tool, providing the trust-maker with valuable lifetime benefits. In addition to the financial benefits, there is the intangible benefit of rewarding the trust-maker’s altruism as charities usually immediately honor the donors who have named the charity as the beneficiary of a CRT.

Constructive Trust

A constructive trust is an implied trust. An implied trust is established by a court and is determined by certain facts and circumstances. The court may decide that, even though there was never a formal declaration of a trust, there was an intention on the part of the property owner that the property is used for a particular purpose or go to a particular person. While a person may take legal title to a property, equitable considerations sometimes require that the equitable title of such property really belongs to someone else.

Special Needs Trust

A special needs trust is one that is set up for a person who receives government benefits so as not to disqualify the beneficiary from such government benefits. This is completely legal and permitted under the Social Security rules provided that the disabled beneficiary cannot control the amount or the frequency of trust distributions and cannot revoke the trust. Ordinarily, when a person is receiving government benefits, an inheritance or receipt of a gift could reduce or eliminate the person’s eligibility for such benefits. By establishing a trust, which provides for luxuries or other benefits which otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the trust without defeating his or her eligibility for government benefits. Usually, a special needs trust has a provision that terminates the trust in the event that it could be used to make the beneficiary ineligible for government benefits. Special needs have a specific legal definition and are defined as the requisites for maintaining the comfort and happiness of a disabled person when such requisites are not being provided by any public or private agency. Special needs can include medical and dental expenses, equipment, education, treatment, rehabilitation, eyeglasses, transportation (including vehicle purchase), maintenance, insurance (including payment of premiums of insurance on the life of the beneficiary), essential dietary needs, spending money, electronic and computer equipment, vacations, athletic contests, movies, trips, money with which to purchase gifts, payments for a companion, and other items to enhance self-esteem. The list is quite extensive. Parents of a disabled child can establish a special needs trust as part of their general estate plan and not worry that their child will be prevented from receiving benefits when they are not there to care for the child. Disabled persons who expect an inheritance or other large sum of money may establish a special needs trust themselves, provided that another person or entity is named as trustee.

Spendthrift Trust

A trust that is established for a beneficiary that does not allow the beneficiary to sell or pledge away interests in the trust is known as a spendthrift trust. It is protected from the beneficiaries’ creditors, until such time as the trust property is distributed out of the trust and given to the beneficiaries.

Tax By-Pass Trust

A tax by-pass trust is a type of trust that is created to allow one spouse to leave money to the other while limiting the amount of federal estate tax that would be payable on the death of the second spouse. While assets can pass to a spouse tax-free, when the surviving spouse dies, the remaining assets over and above the exempt limit would be taxable to the children of the couple, potentially at a rate of 55 percent. A tax by-pass trust avoids this situation and saves the children perhaps hundreds of thousands of dollars in federal taxes, depending upon the value of the estate.

Totten Trust

A Totten trust is one that is created during the lifetime of the grantor by depositing money into an account at a financial institution in his or her name as the trustee for another. This is a type of revocable trust in which the gift is not completed until the grantor’s death or an unequivocal act reflecting the gift during the grantor’s lifetime. An individual or an entity can be named as the beneficiary. Upon death, Totten trust assets avoid probate. A Totten trust is used primarily with accounts and securities in financial institutions such as savings accounts, bank accounts, and certificates of deposit. A Totten trust cannot be used with real property. It provides a safer method to pass assets on to family than using joint ownership.

To create a Totten trust, the title on the account should include identifying language, such as “In Trust For,” “Payable on Death To,” “As Trustee For,” or the identifying initials for each, “IFF,” “POD,” “ATF.” If this language is not included, the beneficiary may not be identifiable. A Totten trust has been called a “poor man’s” trust because a written trust document is typically not involved and it often costs the trust maker nothing to establish.

Advantages and Disadvantages of Living Trusts

Regardless of whatever else you may have heard there are only two ways to avoid probate: don’t die and don’t own anything. The living trust attempts to accomplish the second way of avoiding probate, no one having yet discovered how to accomplish the first. As an estate planning tool, a living trust is neither inherently good nor inherently bad. It has certain advantages and certain disadvantages. Whether its use is appropriate depends upon the particulars and is a matter for individual determination. But first, a little background. Probate is simply the procedure for transferring a decedent’s assets, either by that person’s will or by state statute if there is no will. In the overwhelming majority of cases, the system functions smoothly and without undue delay or expense. It is the rare, but sometimes colorful case in which the estate is tied up for years and burdened by enormous legal fees and administrative expenses – whether because of a will contest or other disputes among the heirs or because of disputed claims against the estate – that provides grist for the mill of the “avoid probate” industry. You might not know it from the sales pitches, but a “living trust’ is nothing new as an estate planning mechanism. It has been around for years under the more traditional names “revocable trust” and “inter vivo trust,” literally, a trust “between the living.” If it tells you nothing else, the Latin name tells you that the concept is very traditional. A living or revocable trust is one created by a person while living that may be revoked or modified by that person without the consent of any other person. The creator of the trust, called the “settler” or “grantor,” can be his or her own trustee and can designate a successor trustee or trustees in the event of incapacity or death. The settlor is typically the beneficiary of the trust during his or her life, and designates in the trust document who will be the beneficiaries upon his or her death.

The use of a revocable trust “to avoid probate” requires that the trust be funded with all or substantially all of the settlor’s assets during the settlor’s life. It is in this way that the revocable trust enables the settler to follow the aforementioned advice, “don’t own anything.” The assets have passed from individual ownership to ownership by the trust. Thus, when the settlor dies there is nothing in the estate (assuming no further acquisitions) and nothing to “probate,” even though the settler, as beneficiary, has enjoyed the use of the trust assets during his or her life. There can be additional advantages of such trusts, beyond probate avoidance. For example, if the settler is successful in avoiding probate, the size and distribution of the estate can be kept confidential, unlike probate proceedings which are matters of public record. Also, the assets of a living trust can typically be distributed to beneficiaries sooner than is possible in the probate of an estate. Living trusts also can be an excellent way of keeping records and managing property. Another argument for living trusts is that confidentiality of trust provisions and avoidance of court procedures tend to reduce the likelihood of the equivalent of a will contest.

A major disadvantage of a living trust is the cost associated with its preparation and funding. The paperwork is more complex for a living trust than for a will and the attorney’s fee is typically larger. Property that passes by title, for example, real estate and vehicles, has to be transferred formally from individual ownership to trust ownership. More paperwork and more expense. Beneficiary designations to property such as insurance policies and bank accounts may also need to be changed. For an estate with fairly extensive property and complex dispositions, the cost of preparing and funding a living trust can be two or three times the cost of a will with equivalent dispositions. People who choose a living trust over a will are essentially doing much of their own probate before their death, similar to the way that some people plan their own funerals. As a result, they are paying costs and performing work now that would otherwise be deferred until after death and then paid by their estate and performed by their Personal Representative. There is nothing wrong with this of course, as long as a person realizes that is what he is doing. Additionally, the formalities of setting up and funding a living trust must be observed and records kept to reflect that observance throughout the settlor’s life if the transfer of the assets is to occur smoothly and without probate when the settlor dies.

Again, more paperwork and transaction expenses to keep the trust current. Unfortunately, many people lack the self-discipline necessary to keep their affairs in the order required by a living trust after they have established one. The costs to set up, maintain, and administer a living trust are generally at least the same as the costs of a will plus probate. With a living trust those costs are loaded toward the front end, with a will toward the back end. On occasion, there is a distinct advantage to opening a probate case even where the decedent had a trust and all the decedent’s property had been placed in the trust. The probate process allows for publication of a “Notice To Creditors,” which in effect imposes a very short statute of limitations on claims against the estate. Trust administration procedures do not provide for this, so any claims against the trust are subject only to their ordinary limitations periods.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

Recent Posts

Utah Revocable Living Trusts

Tax Planning Considerations

Creditor Claims Against Retirement Assets

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Divorce Lawyer and Family Law Attorneys

Ascent Law St. George Utah Office

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from Ascent Law https://ascentlawfirm.com/trust-dos-and-donts/

Creditor Claims Against Retirement Assets

Creditor Claims Against Retirement Assets

Creditor claims is defined as written claim filed in federal bankruptcy court by a person or entity owed money by a debtor who has filed for bankruptcy. A written claim filed in probate court by a person or entity owed money by a person who has died. State law sets a deadline, usually a few months, for filing a claim in probate court. If the executor or administrator in charge of the probate denies the claim, the creditor can request a court hearing. A creditor with a secured claim in bankruptcy has two things: a debt that you owe and a lien (also called a security interest) on a piece of property you own. If you don’t pay according to the terms of your contract, the lien allows the lender to recover the property, sell it at auction, and apply the proceeds to the account balance. For instance, a mortgage lender with a lien can recover real estate in a foreclosure action, and a vehicle loan lender with a lien can recover a car through repossession.

Secured claims are often voluntary. For instance, if you agree to pledge an asset as collateral for the loan (a common practice when buying a house or car), you voluntarily give the creditor a security interest in your property. Creditors can also obtain an involuntary lien against your property without your consent. For instance, a credit card company can get an involuntary lien after suing you in a collection lawsuit and winning a money judgement. When you fall behind on your taxes, statutory law gives the IRS the right to a tax lien against your property. Filing for bankruptcy involves disclosing your debts, or “creditor claims,” on official bankruptcy paperwork. But as easy as that might sound, classifying claims can get a bit tricky. First, you’ll list the debt as either a secured or unsecured claim. Then, you’ll divide the unsecured claims into priority and non-priority unsecured claims.

Listing Creditor Claims in Your Bankruptcy Paperwork

A bankruptcy case gets started after you complete and file official bankruptcy forms. The cover document, called the petition, is where you’ll disclose identifying information, such as your name, address, and the bankruptcy chapter you’re filing. You’ll provide details about your income, creditor claims (debts), and assets on forms called schedules.

Creditor claims will appear on one of two schedules:
• Schedule D: Creditors Who Hold Claims Secured By Property. Here you’ll include secured claims, such as a mortgage, car payment, or another collateralized obligation.
• Schedule E/F: Creditors Who Have Unsecured Claims. You’ll list unsecured claims on this form. Priority unsecured claims, such as unpaid taxes and child support, belong in Part 1. You’ll list your non-priority unsecured claims (all remaining debts) in Part 2.
Common examples of secured bankruptcy claims include:
• Mortgages
• car loans
• unpaid real estate taxes, and
• other property liens.

You’ll list all secured claims on Schedule D: Creditors Who Hold Claims Secured By Property.

A creditor with a secured claim is in a good position. A bankruptcy discharge (the order that wipes out debt) won’t get rid of a lien on your property. It only eliminates your liability to pay the debt. Since the lien remains, the creditor can still foreclose or repossess the property if the loan doesn’t get paid. So if you file for bankruptcy and want to keep property securing a loan, you’ll have to continue making payments to the lender until you pay off the debt. However, if there is significant equity in a house or car, a Chapter 7 trustee will likely sell it. But, because of the lien, the trustee must get enough to pay off the loan, return any exemption amount to you (the amount of equity you’re allowed to protect), and use the remaining funds to pay off creditors. If there isn’t enough equity to pay something meaningful to creditors, the trustee won’t sell the property. If a property you’d like to keep has significant equity, a Chapter 13 case will likely be a better option. But you’ll have to have enough income to pay a hefty monthly payment for three- to five-years (you must pay the value of the nonexempt equity in the plan).

Eliminating Liens in Bankruptcy

You can eliminate certain types of property liens in bankruptcy. For instance, you might be able to ask the court to:
• get rid of a judgment lien that impairs your bankruptcy exemptions, or
• wipe out a wholly unsecured junior lien from your property in Chapter 13 bankruptcy.

Unsecured Claims

A creditor with an unsecured claim doesn’t have a lien. There are two types of unsecured claims:
• Priority unsecured claims: These debts aren’t dischargeable in bankruptcy and, if money is available, the claim will get paid before non-priority unsecured claims.
• Non-priority unsecured claims. Most of these obligations are dischargeable in bankruptcy (except student loans). All priority debts must be satisfied before these debts can be paid with bankruptcy funds.

Non-priority Unsecured Claims

The bankruptcy discharge will eliminate most types of non-priority, unsecured claims, but not all. Some of the most common non-priority unsecured claims you can discharge in bankruptcy include:
• credit card debt
• medical bills, and
• personal loans.
Although student loans are unsecured debts, you can’t discharge them unless you can prove that it would be an undue hardship to pay them (which is a difficult standard to prove).

Priority Unsecured Claims

Priority unsecured debts aren’t dischargeable and receive special treatment. Priority creditors get paid before other creditors in bankruptcy.
The following are some of the most common types of priority claims:
• alimony
• child support
• certain tax obligations, and
• debts for personal injury or death caused by drunk driving.

Because you can’t wipe out priority debts in Chapter 7 bankruptcy, you’ll be responsible for paying any balance that remains after your Chapter 7 case (the bankruptcy trustee might sell some of your property and apply the funds to the debt). If you file for Chapter 13 bankruptcy, you’ll have to pay off priority unsecured debts in full through your three- to five-year repayment plan. The bankruptcy code generally exempts certain retirement funds from creditors. It makes sense when you consider why retirement accounts are protected. The government encourages retirement savings by allowing taxpayers to make qualified contributions to retirement accounts on a tax-deferred basis. The tax code is written to ensure that retirement accounts are not used as ordinary savings by penalizing withdrawals from the account until the account owner reaches age 59½. For this reason, the funds held in the account are not accessible and are protected from creditors.

Retirement Accounts

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 offer protection for contributions to and earnings in IRAs, including Roth IRAs, up to $1,000,000. The dollar limit is adjusted every three years and currently is $1,283,025. This applies to all such accounts (not applied per account) and is scheduled to be adjusted again on April 1, 2019. Company retirement plans that are subject to the Employee Retirement Income Security Act of 1974 (ERISA) are excluded from bankruptcy. The Supreme Court ruled1 that ERISA plans are excluded from an individual’s bankruptcy estate as provided under the Federal Bankruptcy Code2. This protection is provided for an unlimited amount of assets held in plans such as 401(k) and 403(b) company sponsored plans. SEP IRAs and SIMPLE IRAs are not subject to ERISA.

However, BAPCPA states these plans are excluded from bankruptcy for unlimited amounts and are not part of the aggregate total which applies to traditional IRAs and Roth IRAs. Rollover IRAs are also exempt from the cap. Since the funds from rollover IRAs originate from ERISA-qualified accounts, such as a 401(k) or employer pension, a rollover IRA is fully protected from creditors in bankruptcy.

No Federal Protection for Inherited IRAs

The courts have set a precedent of protecting assets from bankruptcy for individuals actively saving for retirement. Retirement assets received by other means have not received the same treatment. Federal bankruptcy law does not protect inherited IRAs. The U.S. Supreme Court ruled that an inherited IRA did not fit the meaning of “retirement funds” protected by bankruptcy:
• Beneficiaries of an IRA are not permitted to make contributions to the account, they may only take withdrawals.
• Beneficiaries must begin to take distributions regardless of their age (even though they may be years away from retirement).
• Withdraw the entire balance within 5 years of the original account holder’s death, or
• Take minimum distributions (based on life expectancy) until the fund is depleted.
• Beneficiaries can withdraw some or all of it at any time without a penalty.

It is assumed that the reasoning of the decision also applies to inherited Roth IRAs also note that if the beneficiary is a spouse, he or she may secure federal protection. If the spouse rolls over the account to his or her own IRA (or Roth IRA), the funds likely will be treated the same as if the spouse had funded the account. While there have been no cases or rulings on whether this gives the same protection to a spouse as an owner enjoys, there is a good argument for it.

IRA Asset Protection Planning

Notably, the different federal and state creditor protection given to 401(k) qualified plans and IRA, including Self-Directed IRAs, inside or outside the bankruptcy context presents a number of important asset protection planning opportunities.

For example, if you leave an employer who provides a qualified plan, rolling over assets from a qualified plan, like a 401(k), into an IRA may have asset protection implications. For example, if you live in or are moving to a state where IRAs have no creditor protection or have an excess of $1 million dollars in plan assets and are contemplating bankruptcy, you would likely be better off leaving the assets in the company qualified plan.

That is to say, if you plan to leave at least some of your IRA to your family, other than your spouse, your beneficiaries’ creditors may not be able to protect your assets. Of course, this depends on where the beneficiaries live. IRA assets left to a spouse are likely to receive creditor protection if you re-title the IRA in the name of the spouse. However, you will likely be able to protect your IRA assets that you plan on leaving to your family, other than your spouse, by leaving an IRA to a trust. Consequently, you must name the trust on the IRA custodian Designation of Beneficiary Form on file.

The IRA Asset & Creditor Protection Solution

In summary, by having and maintaining an IRA, you will have $1 million of asset protection from creditors in a bankruptcy setting. However, the determination of whether your IRA will be protected from creditors outside of bankruptcy will largely depend on state law. As illustrated above, most states will afford IRAs full protection from creditors outside of the bankruptcy context. So, IRA Asset Protection is a crucial part of your retirement planning. Most people don’t even consider what might happen to their retirement accounts in the event of an early demise, because most of us plan retirement with the idea that we’ll be around to enjoy it. But, like many aspects of estate planning, we must plan for the worst and hope for the best. Your retirement accounts can end up in probate if the proper steps are not taken prior to death.

• Naming the estate as the beneficiary – If for some reason a person wanted the funds from their retirement account to pass through probate then they could simply elect to have their estate be the beneficiary of the retirement accounts. This may be the case if the person wants the funds to pay off debt during the probate process. Usually, this is unlikely.
• Naming the spouse as the primary beneficiary – This is very common and usually the default method when naming a beneficiary. Upon death, the decedent’s retirement accounts would pass directly to the spouse, outside of probate.
• Designating alternate beneficiaries – Another important aspect of estate planning in regards to retirement accounts is being sure to have at least one or more alternate beneficiaries. In the event that the primary beneficiary, let’s say the spouse, for example, does not survive the death of the retirement asset owner, like if a husband and wife died in a car accident, then the retirement account and it’s funds would pass to the alternate beneficiaries. This is why it’s very important to update beneficiaries if there are any pertinent changes to the alternate beneficiaries that would affect the transfer of the retirement account.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

Recent Posts

How Long Does It Take To Rebuild Credit After Chapter 7?

Utah Revocable Living Trusts

Tax Planning Considerations

Business Lawyers

Estate Planning Lawyer

Divorce Lawyer and Family Law Attorneys

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

The post Creditor Claims Against Retirement Assets appeared first on Ascent Law.

from Ascent Law https://ascentlawfirm.com/creditor-claims-against-retirement-assets/

Your Ultimate Guide to Selecting the Right Divorce Lawyer

Divorce is a life-altering decision, fraught with a host of emotional, financial, and legal complexities. Often, it’s a path strewn with tough questions: Who gets custody of the children? How will the assets be divided? Who will pay alimony? All these concerns underscore the importance of having an experienced, skilled, and empathetic divorce lawyer by your side. The right divorce lawyer not only provides expert legal counsel but also becomes your advocate, navigating the labyrinth of legal procedures with you, and helping you secure the best possible outcome for your case.

But, how do you find such a lawyer? With a sea of attorneys out there, each advertising their “expertise” and “success rates,” finding the best divorce lawyer for your specific needs can seem like finding a needle in a haystack. The process can be daunting, but fear not – it’s not an impossible task.

In this comprehensive guide, we’ll walk you through step-by-step on how to choose the best divorce lawyer. We’ll cover everything from understanding your specific needs, beginning your search, evaluating potential lawyers, to making the final decision. Let’s get started, shall we?

Identifying Your Needs: Key Steps Before Starting Your Divorce Lawyer Search

Before you start looking for a lawyer, it’s critical to understand what you need from this divorce process. Not all divorces are the same, and different situations call for different types of legal representation.

If your split is amicable and you and your spouse have reached an agreement on most issues, you might consider mediation. This process involves a neutral third party (the mediator) who helps both parties reach a mutual agreement. However, it’s still wise to consult a lawyer to ensure your rights are adequately protected.

For more complex situations involving high assets, child custody disputes, or situations where there’s a significant power imbalance between the spouses, you’ll likely need a lawyer who specializes in contested divorces. These lawyers are well-versed in litigation and negotiation, helping ensure that your interests are represented in court if necessary.

Also, consider the personality traits you’d like in your attorney. You’ll be sharing personal details of your life with this person, so you want to ensure you’re comfortable with them. The best divorce lawyer for you is someone who understands your goals, communicates effectively, and puts your interests first.

Commencing Your Search for the Best Divorce Lawyer: Where to Look

Once you’ve outlined your needs, it’s time to start searching. Begin with personal recommendations. Friends, family members, or professional acquaintances who have gone through a similar process can provide invaluable insight into a lawyer’s style, strategy, and pricing.

Next, turn to the internet. An online search will yield a plethora of divorce lawyers in your area. Visit their websites to learn about their experience, areas of specialization, and client reviews. As you search, keep an eye out for lawyers who are certified specialists in family law.

Don’t overlook your local bar association. Most have referral services that can direct you to qualified divorce attorneys in your area.

As you build a list of potential lawyers, aim for a variety. Having options allows you to compare and contrast to find the best fit.

Evaluating the Expertise of Your Potential Divorce Lawyer

A crucial factor in your decision should be the lawyer’s expertise. Divorce law is a vast field, and you want an attorney who specializes in the areas most relevant to your case. 

Questions to Determine Expertise

Ask potential lawyers about their experience with cases similar to yours. How many have they handled? What were the outcomes? If your case involves complex financial matters or contentious child custody battles, you’ll want a lawyer with a track record in these areas. 

Also, consider whether the lawyer is familiar with the family law judges in your jurisdiction. This familiarity can help them develop strategies that align with specific judges’ ruling history.

Remember to ask about their courtroom experience too. While it’s true that many divorce cases settle out of court, you want a lawyer who is equally comfortable and effective in the courtroom should your case go to trial.

In the next part of the post, we’ll discuss how to evaluate potential lawyers and prepare for your first consultation.

Assessing Your Options: What to Consider When Evaluating Divorce Lawyers

Choosing the right divorce lawyer is about more than just experience and expertise. You’ll also want to consider the lawyer’s communication style, their fee structure, and past client testimonials.

Communication Style

Firstly, pay attention to how the lawyer communicates. They should be able to explain complex legal concepts in a way that’s easy for you to understand. You should feel comfortable asking them questions, and they should respond promptly and thoroughly.

Fee Structure

Next, let’s talk about fees. During your initial consultation, ask about the lawyer’s fee structure. Some lawyers charge a flat fee, others bill by the hour, and some use a combination of both. Make sure you understand how you’ll be billed and what services are included. Keep in mind that while cost is a crucial factor, it shouldn’t be the only consideration. The cheapest lawyer might not be the best fit for your case, and the most expensive might not provide the best service.

Client Testimonials

Finally, seek out client testimonials. These can provide valuable insights into the lawyer’s style, professionalism, and effectiveness. Look for reviews on the lawyer’s website, but also check independent review sites for a more balanced view.

Navigating the Initial Consultation: Key Questions to Ask Your Potential Divorce Lawyer

The initial consultation is your opportunity to learn more about the lawyer and how they can assist you. Come prepared with a list of questions. Here are some to consider:

– How long have you practiced family law?

– How many cases like mine have you handled?

– What’s your approach to a new case?

– What’s your strategy for my case?

– How will you keep me informed about my case’s progress?

– What’s your fee structure?

– Can you provide references from past clients?

Observe the lawyer’s demeanor during this meeting. They should seem interested in your case, listen attentively, and answer your questions clearly and patiently.

Sealing the Decision: Choosing Your Divorce Lawyer Wisely

After your consultations, take some time to reflect on what you’ve learned. Consider the lawyer’s expertise, communication style, fee structure, and past client testimonials. But also trust your gut – you’ll want a lawyer who you feel comfortable with and who you trust to advocate for your best interests.

Remember, the divorce process can be stressful and emotional. The right lawyer will not only provide expert legal advice but also help you navigate this challenging period with compassion and understanding.

The Road to a Successful Divorce Process: Summarizing the Steps to Choose the Best Divorce Lawyer

Finding the right divorce lawyer may seem daunting, but by understanding your needs, starting your search informed, evaluating potential lawyers thoroughly, and trusting your instincts, you can find a lawyer who is the best fit for you and your situation. 

Remember, the end goal isn’t just to ‘win’ your divorce case, but to emerge from the process feeling that your interests were well represented, and that you were treated fairly and respectfully. 

Reach Out to Ascent Law: Your Companion in the Divorce Process

At Ascent Law, we understand the intricacies of divorce law, and we’re here to help. Our experienced, compassionate team is committed to providing high-quality legal counsel tailored to your unique circumstances. If you’re seeking a divorce lawyer who will put your needs first, we invite you to contact us at (801) 676-5506 to schedule a consultation. We’re ready to stand by your side, every step of the way.

The post Your Ultimate Guide to Selecting the Right Divorce Lawyer appeared first on Ascent Law.

from Ascent Law https://ascentlawfirm.com/your-ultimate-guide-to-selecting-the-right-divorce-lawyer/

Tax Planning Considerations

Tax Planning Considerations

Tax planning is the process of analyzing a financial plan or a situation from a tax perspective. The objective of tax planning is to make sure there is tax efficiency. With the help of tax planning, one can ensure that all elements of a financial plan can function together with maximum tax-efficiency. Tax planning is a significant component of a financial plan. Reducing tax liability and increasing the ability to make contributions towards retirement plans are critical for success. Tax planning comprises various considerations. Considerations such as size, the timing of income, timing of purchases, and planning are concerned with other kinds of expenditures. Also, the chosen investments and the various retirement plans should go hand-in-hand with the tax filing status as well as the deductions in order to create the best possible outcome. Tax planning plays an important role in the financial growth story of every individual as tax payments are compulsory for all individuals who fall under the IT bracket. With tax planning, one will be able to streamline his/her tax payments such that he or she will receive considerable returns over a specific period of time involving minimum risk. Also, effective tax planning will help in reducing a person’s tax liability.

Tax Planning Objective

• Reduce Tax Liability: The main purpose of tax planning is to reduce tax liability imposed on a person. Every individual wants to reduce their tax burden and save that money for their future plans. So an individual can do so by prior planning and can avail all the benefits to reduce his tax.
• Minimization of litigation: Taxpayers want to minimize his legal litigations. After consulting his legal advisor and adopting proper provisions of law for tax planning can minimize the litigation. This can save taxpayers from legal harassment.
• Economic stability: If a taxpayer paid all the taxes without legally due then it will create a more productive investment in the economy. Prior plans help taxpayers as well as the economy.
• Productivity: If a taxpayer is aware of all the tax compliance and does productive investment planning then it will create more tax saving options for him.
• Financial Growth: If tax planning is done in the right manner and is going in the right direction, it will help in financial growth with economic growth.

Features of Tax Planning

• Reduction in tax liability: One of the most important features of tax planning is to reduce tax liability. Every individual has done his financial plan so he can reduce his tax amount and can save for his future plans.
• Advance planning: One has to arrange his tax plans at the beginning of the financial year because no one can plan to reduce his tax liability day before filing an income tax return.
• Investment in the right direction: With the help of tax planning one can invest his money in the right direction by choosing the right policy. Investment in any assets or policy will not help in saving money from taxes, for this right investment should be done.
• Dynamic in nature: Tax planning has to be done every year because of the new implementation of policies introduced by the government. One has to modify his tax plans at the beginning of every financial year.

Tax Avoidance

Tax Avoidance is reducing tax liability in legal ways. Tax avoidance is done by taking advantage of loopholes of the law. Provisions of law interpreted in such a manner that it will avoid payment of tax. No element of mala fide motive present in tax avoidance. Even the Court in the support of the tax avoidance said that tax avoidance is not unlawful and the taxpayer can take its advantages. One can minimize his tax liability within the legal framework even by taking advantage of loopholes in the law.

Essential Features of Tax Avoidance are as follow;
• Legitimate arrangements should be in such a manner that will minimize the tax liability.
• Tax avoidance is in respect of legal provisions and carries no public disgrace with it.

Need of Tax Planning

Tax planning is essential to point in a person’s life. As the government imposed high tax rates so to reduce that tax liability, there is a requirement of tax planning. There are many schemes and offers provided in taxation law. One has to choose the right scheme where he can invest and avail the benefits of those schemes. Many Benefits are provided to assess like;
• Deduction under Section 80C
• Deduction for HRA
• Deduction on education loan
• Investment in senior citizen scheme
• Investment in mutual funds
• Investment in national saving schemes
• Any many miscellaneous schemes.

Tax Planning Benefits

Tax planning should be done to reduce tax liability but what are other benefits of tax planning? Let’s discuss here, a very important factor of tax planning and every individual or company focus on this factor i.e., to save tax. The main purpose of tax planning is to save capital from taxes and use it for the more beneficial purposes like invest in some beneficial scheme. Better to save the money at the beginning of the year by planning better to spend it in paying tax. One should avail the offers as much as he can, so he can spend that money in any other way or save for his future plans.

Methods of Tax Planning

• Short-Range Tax Planning: short-range tax planning involves year to year planning to complete some specific and limited objects. In this type of tax planning, one can invest in PPF or NSCs within the prescribed limit of income.
• Long-Range Tax Planning.- Short range tax planning, long-range tax planning are those activities undertaken by an assesses, which does not pay off immediately. This starts at the beginning or the income year to be followed around the year.
• Permissive Tax Planning: Permissive tax planning are permissible under a taxation law. In Utah, there are many provisions of law which offers deduction, exemption, contribution and incentives.
• Purposive Tax Planning: Purposive tax planning refers to those planning by which taxpayers can avail maximum benefits by applying provisions of law based on national priorities. So, the assessee can plan in such a manner that these provisions do not get attracted and it would increase disposable resources.

Tax planning for New Business

Any person or company can do their financial planning to reduce their tax liability. An individual can plan his tax liability by contribution in government schemes, deduction, subscription or any other exemption provided by law. But how can tax planning be done with reference to setting up of new business, financial management decision, employee remuneration, etc.

Many factors can affect the location of business for the purpose of better tax planning, there are some tax incentives provided by law-
• Free Trade Zone: Provides a deduction to newly established undertakings for which some conditions should be satisfied like- undertaking must begin manufacture/production in Free Trade Zone, the industrial undertaking should not be formed by the splitting up or reconstruction of a business already in existence except those undertakings.
• Hundred percent export-oriented undertakings
• Deduction in respect of profits and gains from certain industrial undertakings like- business of an industrial undertaking, operation of a ship, hotels, industrial research, production of mineral oils, developing and building housing projects, convention theatre, etc.
• Manufactured product under that undertaking
• Venture Capital Companies (VCC)
• Infrastructure Capital Companies
• Tea/Coffee/rubber development account
• Site restoration fund
• Amortization of telecom license fees
• Deduction in respect of expenditure on specified business
• Amortization of preliminary expenses
• Amortization of expenditure on prospecting of certain minerals
• Profits and gains from industrial undertakings other than infrastructure development
• Profits and gains of undertakings in a certain special categories of states
• Profits and gains from the business of collecting and processing of biodegradable waste
• Employment of new workmen

The legal form of Organization

One can decide tax liabilities under different organization forms while comparing other factors and tax incentives like how a person can reduce his tax liability by availing tax incentives provided under the law.

Capital Structure

Capital structure is the amount of debt or equity to fund the operation and finance assets of the company. By Capital structure shareholder’s return can be maximized. This structure is known as debt-to-equity or debt-to-capital ratio. Under taxation law, dividend on shares is not deductible; while the interest paid on interest borrowed capital is allowed as deduction.

Dividend Policy

A dividend is part of a profit which is distributed among the shareholders of the company.

Inter- Corporate Dividend

Deduction on the inter-corporate dividend is given where the total income of an assessee being a company includes any income by way of dividend received by it from a company or a company within Utah shall be entitled to a deduction from the income tax.

Bonus Shares

Tax consideration for equity shareholders and preference shareholders are as follow-
For equity shareholders, at the time of the issue of bonus share, there is no tax liability of the company as well as shareholders. But at the time of liquidation of the company bonus shares in the hands of the company will be treated as Dividend distribution and company has to pay dividend tax but that amount will be exempted in the hands of shareholders. In the case of preference shareholders, if the bonus shares issued before June 1, 1997, then there will be no tax liability for the company and for shareholders it will be deemed as dividend, and if bonus shares issued after June 1, 1997, then there will be no tax liability on shareholders and for the company it will be chargeable as dividend tax. At the time of redemption or liquidation, there will be no tax liability on the company and shareholders too.

Tax Planning and Managerial Decision

Tax planning affects managerial decisions too, like-
• Make or Buy- make or buy decision is based on the costing and non-costing considerations. A consideration which affects the decision is –
 Utilization of capacity
 Inadequacy of funds
 Latest technology
 The variable cost of manufacturing
 Dependence upon supplier
 Labor problem
 Other factors

• Own or Lease: if assessee obtains assets on lease then he can claim the lease rental as a deduction, but if he purchases that assets than he can claim depreciation on those assets.
• Purchase by Installment v. Hire: if assets purchased by installment then the deduction can be claimed. If assets are hired then the deduction can be claimed on hire charges.
• Renewal or Renovation: Before claiming a deduction for renewal, renovation, repair or replace, one should keep in mind whether the deduction for these considerations is available. If the deduction for revenue expenditure is allowed then tax liability can be reduced.

Tax Law

Tax attorneys represent clients before federal, state, and local taxing authorities, as well as individuals and businesses that are under audit by the Internal Revenue Service. Other roles of a tax attorney include structuring, negotiating, and documenting business entities, and advising clients regarding the tax implications of certain financing, joint ventures, tax-exempt organizations, taxation of compensation, estates, and gifts, and the U.S. taxation of international transactions.

Duties

Tax attorneys advise corporations and high net worth individuals with respect to all areas of tax law on a day-to-day basis. They monitor legislative developments and advise clients with respect to the potential impact of pending legislation on their businesses and their personal finances. They often work hand-in-hand with corporate in-house counsel. Some tax attorneys work exclusively in estate law. That might sound like a reach, but consider the significant federal estate tax rate, although only very valuable estates are subject to it. A firm understanding of tax law is required to navigate the labyrinth of various trusts, charitable foundations, and other estate-planning tools to avoid or mitigate an estate tax bill that could effectively derail a family business or otherwise leave very little for heirs to inherit. Tax attorneys might appear before federal, state, or local taxing authorities. At the federal level, the IRS is somewhat particular about who can represent a taxpayer should a problem or audit arises. Attorneys make the list of approved counsel, as do certified public accountants and enrolled agents. Enrolled agents are licensed at the federal level and must complete a very strenuous testing and application process. Attorneys are considered to have rights to “unlimited” representation of clients, meaning that they do not necessarily have to prepare the tax return that’s at issue in order to appear before the IRS or in a federal court on someone’s behalf.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

Recent Posts

Utah Boating Accident Attorneys

How Long Does It Take To rebuild Credit After Chapter 7?

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Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

The post Tax Planning Considerations appeared first on Ascent Law.

from Ascent Law https://ascentlawfirm.com/tax-planning-considerations/

Utah Revocable Living Trusts

Utah Revocable Living Trusts

A trust is a legal entity that holds title to and manages assets for an intended beneficiary. A Living trust is distinguishable from other trusts in that you, as the grantor, can make changes to the trust or revoke it entirely during your lifetime. You can also act as the initial trustee of your living trust. Living trusts are most often used to avoid the probate process that comes along with passing property through a will. Because assets are owned by the trust, and not by you, they pass by the terms of the trust upon your death, making probate unnecessary. Trusts are complicated documents and estate planning attorneys can help you navigate through the legal nuances. In order to pass through the trust and avoid probate, assets must be re-titled into the name of the trust. For instance, if you want to place your home in the trust, you must change the deed so that the trust is named as owner. Once the deed is changed, it should be recorded with the registrar of deeds, and is subject to the same fees as any real estate transaction. These fees vary by state. You can check with your local registrar of deeds for your state’s fees associated with a deed transfer. Whether or not you choose to hire an attorney to draft your living trust, you will be responsible for the expense of titling assets to the trust. A living trust is an estate planning document created during one’s lifetime. A revocable living trust goes into effect during one’s lifetime and provides a way to manage one’s assets during his/her lifetime and to dispose of assets after they pass away. There are many reasons a living trust is preferable to a last will and testament. For example, when you create a living trust, you can avoid the time and expense associated with probate. While the estate’s assets are in probate, they may be frozen – a living trust avoids this as well. Individuals also choose to make a living trust to minimize tax consequences and for privacy concerns.

Types of Trusts In Utah

A trust is a legal document that can be created during a person’s lifetime and survive the person’s death. A trust can also be created by a will and formed after death. Common types of trusts are outlined in this article. Once assets are put into the trust they belong to the trust itself (such as a bank account), not the trustee (person). They remain subject to the rules and instructions of the trust contract. In essence, a trust is a right to money or property, which is held in a “fiduciary” relationship by one person or bank for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. While there are a number of different types of trusts, the basic types are revocable and irrevocable.

Revocable Trusts

Revocable trusts are created during the lifetime of the trust-maker and can be altered, changed, modified or revoked entirely. Often called a living trust, these are trusts in which the trust-maker:
• Transfers the title of a property to a trust
• Serves as the initial trustee
• Has the ability to remove the property from the trust during his or her lifetime\

Revocable trusts are extremely helpful in avoiding probate. If ownership of assets is transferred to a revocable trust during the lifetime of the trust-maker so that it is owned by the trust at the time of the trust-maker’s death, the assets will not be subject to probate. Although useful to avoid probate, a revocable trust is not an asset protection technique as assets transferred to the trust during the trust-maker’s lifetime will remain available to the trust-maker’s creditors. It does make it more somewhat more difficult for creditors to access these assets since the creditor must petition a court for an order to enable the creditor to get to the assets held in the trust. Typically, a revocable trust evolves into an irrevocable trust upon the death of the trust-maker.

Irrevocable Trust

An irrevocable trust is one that cannot be altered, changed, modified or revoked after its creation. Once a property is transferred to an irrevocable trust, no one, including the trust maker, can take the property out of the trust. It is possible to purchase survivorship life insurance, the benefits of which can be held by an irrevocable trust. This type of survivorship life insurance can be used for estate tax planning purposes in large estates; however, survivorship life insurance held in an irrevocable trust can have serious negative consequences.

Asset Protection Trust

An asset protection trust is a type of trust that is designed to protect a person’s assets from claims of future creditors. These types of trusts are often set up in countries outside of the United States, although the assets do not always need to be transferred to the foreign jurisdiction. The purpose of an asset protection trust is to insulate assets from creditor attack. These trusts are normally structured so that they are irrevocable for a term of years and so that the trust-maker is not a current beneficiary. An asset protection trust is normally structured so that the undistributed assets of the trust are returned to the trust-maker upon the termination of the trust provided there is no current risk of creditor attack, thus permitting the trust-maker to regain complete control over the formerly protected assets.

Charitable Trust

Charitable trusts are trusts which benefit a particular charity or the public in general. Typically charitable trusts are established as part of an estate plan to lower or avoid the imposition of estate and gift tax. A charitable remainder trust (CRT) funded during the grantor’s lifetime can be a financial planning tool, providing the trust-maker with valuable lifetime benefits. In addition to the financial benefits, there is the intangible benefit of rewarding the trust-maker’s altruism as charities usually immediately honor the donors who have named the charity as the beneficiary of a CRT.

Constructive Trust

A constructive trust is an implied trust. An implied trust is established by a court and is determined by certain facts and circumstances. The court may decide that, even though there was never a formal declaration of a trust, there was an intention on the part of the property owner that the property is used for a particular purpose or go to a particular person. While a person may take legal title to a property, equitable considerations sometimes require that the equitable title of such property really belongs to someone else.

Special Needs Trust

A special needs trust is one that is set up for a person who receives government benefits so as not to disqualify the beneficiary from such government benefits. This is completely legal and permitted under the Social Security rules provided that the disabled beneficiary cannot control the amount or the frequency of trust distributions and cannot revoke the trust. Ordinarily, when a person is receiving government benefits, an inheritance or receipt of a gift could reduce or eliminate the person’s eligibility for such benefits. By establishing a trust, which provides for luxuries or other benefits which otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the trust without defeating his or her eligibility for government benefits. Usually, a special needs trust has a provision that terminates the trust in the event that it could be used to make the beneficiary ineligible for government benefits. Special needs have a specific legal definition and are defined as the requisites for maintaining the comfort and happiness of a disabled person when such requisites are not being provided by any public or private agency. Special needs can include medical and dental expenses, equipment, education, treatment, rehabilitation, eyeglasses, transportation (including vehicle purchase), maintenance, insurance (including payment of premiums of insurance on the life of the beneficiary), essential dietary needs, spending money, electronic and computer equipment, vacations, athletic contests, movies, trips, money with which to purchase gifts, payments for a companion, and other items to enhance self-esteem. The list is quite extensive. Parents of a disabled child can establish a special needs trust as part of their general estate plan and not worry that their child will be prevented from receiving benefits when they are not there to care for the child. Disabled persons who expect an inheritance or other large sum of money may establish a special needs trust themselves, provided that another person or entity is named as trustee.

Spendthrift Trust

A trust that is established for a beneficiary that does not allow the beneficiary to sell or pledge away interests in the trust is known as a spendthrift trust. It is protected from the beneficiaries’ creditors, until such time as the trust property is distributed out of the trust and given to the beneficiaries.

Tax By-Pass Trust

A tax by-pass trust is a type of trust that is created to allow one spouse to leave money to the other while limiting the amount of federal estate tax that would be payable on the death of the second spouse. While assets can pass to a spouse tax-free, when the surviving spouse dies, the remaining assets over and above the exempt limit would be taxable to the children of the couple, potentially at a rate of 55 percent. A tax by-pass trust avoids this situation and saves the children perhaps hundreds of thousands of dollars in federal taxes, depending upon the value of the estate.

Totten Trust

A Totten trust is one that is created during the lifetime of the grantor by depositing money into an account at a financial institution in his or her name as the trustee for another. This is a type of revocable trust in which the gift is not completed until the grantor’s death or an unequivocal act reflecting the gift during the grantor’s lifetime. An individual or an entity can be named as the beneficiary. Upon death, Totten trust assets avoid probate. A Totten trust is used primarily with accounts and securities in financial institutions such as savings accounts, bank accounts, and certificates of deposit. A Totten trust cannot be used with real property. It provides a safer method to pass assets on to family than using joint ownership. To create a Totten trust, the title on the account should include identifying language, such as “In Trust For,” “Payable on Death To,” “As Trustee For,” or the identifying initials for each, “IFF,” “POD,” “ATF.” If this language is not included, the beneficiary may not be identifiable. A Totten trust has been called a “poor man’s” trust because a written trust document is typically not involved and it often costs the trust maker nothing to establish.

Drawbacks of a Living Trust

A living trust does have unique problems and complications. Most people think the benefits outweigh the drawbacks, but before you make a living trust, you should be aware of them. Setting up a living trust isn’t difficult or expensive, but it requires some paperwork. The first step is to create and print out a trust document, which you should sign in front of a notary public. That’s no harder than making a will. There is, however, one more essential step to making a living trust effective: You must make sure that ownership of all the property you listed in the trust document is legally transferred to you as trustee of the trust. If an item of property doesn’t have a title (ownership) document, you can simply list it on a document called an Assignment of Property. Most books, furniture, electronics, jewelry, appliances, musical instruments and many other kinds of property can be handled this way. But if an item has a title document; real estate, stocks, mutual funds, bonds, money market accounts or vehicles, for example; you must change the title document to show that the property is held in trust. For example, if you want to put your house into your living trust, you must prepare and sign a new deed, transferring ownership to you as trustee of the trust.

Record Keeping

After a revocable living trust is created, little day-to-day record keeping is required. No separate income tax records or returns are necessary as long as you are both the grantor and the trustee. Income from property held in the living trust is reported on your personal income tax return. You must keep written records whenever you transfer property to or from the trust, which isn’t difficult unless you transfer a lot of property in and out of the trust.

Transfer Taxes

In most states, transfers of real estate to revocable living trusts are exempt from transfer taxes that are usually imposed on real estate transfers. But in a few states, transferring real estate to your living trust could trigger a tax.

Difficulty Refinancing Trust Property

Because legal title to trust real estate is held in the name of the trustee, a few banks and title companies may balk if you want to refinance it. They should be sufficiently reassured if you show them a copy of your trust document, which specifically gives you, as trustee, the power to borrow against trust property. In the unlikely event you can’t convince an uncooperative lender to deal with you in your capacity as trustee, you’ll have to find another lender (which shouldn’t be hard) or transfer the property out of the trust and back into your name. Later, after you refinance, you can transfer it back into the living trust. Most people don’t worry that after their death, creditors will try to collect large debts from property in the estate. In most situations, the surviving relatives simply pay the valid debts, such as outstanding bills, taxes and last illness and funeral expenses. But if you are concerned about the possibility of large claims, you may want to let your property go through probate instead of a living trust. If your property goes through probate, creditors have only a certain amount of time to file claims against your estate. A creditor who was properly notified of the probate court proceeding cannot file a claim after the period — about six months, in most states expires.

Benefits of a Revocable Living Trust

A living revocable trust serves as far more than just where assets are to go upon your death and it does that in an efficient way. Here are some of the reasons a revocable trust should be part of your estate plan.
1. Revocable trusts are changeable and flexible: Revocable living trusts allow you to make amendments at your own discretion. That can prove invaluable if your circumstances change or if you just aren’t sure who you want to name as your beneficiaries. That flexibility also makes these trusts a popular option if you are starting your estate planning young.
2. Revocable trusts cover your assets before your death: As outlined above, a living trust covers grantors during three phases of life. If you become incapacitated, your trustee can take over and manage your affairs. (Don’t worry: This person has a fiduciary duty to act in your best interest.) This happens automatically. You do not need to go through court proceedings or appointed conservators. Revocable living trusts also account for guardianship. You can stipulate living situations and spending habits for minor children in the terms of your trust.
3. Revocable trusts avoid probate: If you have a will when you die, your assets will go through probate. That is a court proceeding where your assets are distributed per your stipulations. Probate is a relatively slow process that that can take up to several months. If you own property in more than one state, your beneficiaries may have to go through multiple probates. The costs of going through probate can also cut down what your beneficiaries inherit. With revocable living trusts, probate is not necessary. Your successor trustee will be able to pass your assets on to your beneficiaries without the need to wait for a court order. That usually means a quicker and more affordable process for your beneficiaries.
4. Revocable trusts incur less cost and hassle down the line: Drafting a living trust usually requires more funds and effort up front because it’s a more complex legal document than a regular trust or will. So that means you will need to spend some time and money to properly set up and maintain your trust. However, that work can save you the headache and higher expenses associated with probate. Living trusts also tend to hold up better if someone contests a provision, potentially saving more money and time.
5. Revocable trusts provide privacy: After your death, wills and their requisite transactions enter into public record. Anyone can see what stipulations are in your will, who your beneficiaries are and what each beneficiary is inheriting. Estates in a living trust are distributed in private. No one can search the public records to see where your assets went. This protects the privacy of your assets as well as your beneficiaries.
6. Assets in revocable trusts receive FDIC protection: The FDIC (Federal Deposit Insurance Corporation) typically protects money in a bank account up to $250,000. However, that coverage amount goes up with revocable living trusts. According to the FDIC, the owner of a revocable trust account receives insurance of up to $250,000 per each beneficiary. The maximum insured amount you can have is $1,250,000, equal to $250,000 for the owner and each of four beneficiaries.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

Ascent Law LLC

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How Long Does It Take To Rebuild Credit After Chapter 7?

How Long Does It Take To Rebuild Credit After Chapter 7?

Chapter 7 is also called straight bankruptcy or liquidation bankruptcy. It’s the type most people think about when the word “bankruptcy” comes to mind. In a nutshell, the court appoints a trustee to oversee your case. Part of the trustee’s job is to take your assets, sell them and distribute the money to the creditors who file proper claims. The trustee doesn’t take all your property. You’re allowed to keep enough “exempt” property to get a “fresh start.”

Advantages of Chapter 7 Bankruptcy

Chapter 7 bankruptcy is an efficient way to get out of debt quickly, and most people would prefer to file this chapter, if possible. Here’s how it works:
• It’s relatively quick. A typical Chapter 7 bankruptcy case takes three to six months to complete.
• No payment plan. Unlike Chapter 13 bankruptcy, a filer doesn’t pay into a three- to five-year repayment plan.
• Many, but not all debts get wiped out. The person filing emerges debt-free except for particular types of debts, such as student loans, recent taxes, and unpaid child support. You can protect property. Although you can lose property in Chapter 7 bankruptcy, many filers can keep everything that they own. Bankruptcy lets you keep most necessities, and, if you don’t have much in the way of luxury goods, the chances are that you’ll be able to exempt (protect) all or most of your property.
• You can keep a house or car in some situations. You can also keep your house or car as long as you’re current on the payments, can continue making payments after the bankruptcy case, and can exempt the amount of equity you have in the property.

Who Should File for Chapter 7 Bankruptcy

Chapter 7 works very well for many people, especially those who:
• own little property
• have credit card balances, medical bills, and personal loans (these debts get wiped out in bankruptcy), and
• whose family income doesn’t exceed the state median for the same family size.

You’ll take the means test to see if your income qualifies for this chapter. If your income is below the average income for a family of the same size in your state, you’ll automatically qualify. If your income is higher than the median, you’ll have another opportunity to pass. However, if after subtracting allowed expenses, including payments for child support, tax debts, secured debts such as a mortgage or car loan, you have income left over to make a significant payment to your creditors, you won’t qualify to file for Chapter 7 bankruptcy.

Chapter 7 Bankruptcy Requirements

Some debtors cannot file for Chapter 7 bankruptcy leaving Chapter 13 bankruptcy as the only option. You cannot file for Chapter 7 bankruptcy if both of the following are true:
• Your current monthly income over the six months before your filing date is more than the median income for a household of your size in your state.
• Your disposable income, after subtracting certain expenses and monthly payments for debts you would have to repay in Chapter 13 bankruptcy, exceeds certain limits set by law. These calculations are referred to as the “means test.” They determine whether you have the means to repay a certain amount of your debt through a Chapter 13 repayment plan. If you do, you flunk the test and are ineligible for Chapter 7 bankruptcy. The means test can get fairly complex, and, to make matters worse, uses unique definitions of “disposable income,” “current monthly income,” “expenses,” and other important terms, which sometimes operate to make your income seem higher, and your living expenses lower, than they are.

Bankruptcy laws were enacted to provide you with relief from your creditors by giving you a fresh start. This fresh start usually comes with a high price, namely, a major hit to your credit. But there are ways that bankruptcy can actually help your credit in the short and long term. This will depend on your credit score, financial circumstances, and other factors. A credit score is a number that supposedly summarizes your credit history and predicts the likelihood that you’ll default on a debt. Lenders use credit scores to decide whether to grant a loan and at what interest rate.

FICO scores—the most common type of credit score—range from 300 to 850. A FICO score is based on the information in your credit report, including:
• your debt payment history
• how much debt you currently have (including your debt-to-credit ratio)
• your different types of credit
• how long you’ve had credit, and
• whether you have new credit.

A high FICO score generally means that you’re good at managing your finances, while a low FICO score usually means that you have been delinquent with credit payments, have high unpaid debt balances, gone through a foreclosure, filed for bankruptcy, or experienced other problems repaying debt.

How Bankruptcy Affects Your Credit Score

When you file bankruptcy, your credit score can be negatively impacted almost right away. In fact, many consider bankruptcy as the worst impact to your credit score, compared to foreclosure and other debt collection actions. But no one knows exactly how much damage certain events, like bankruptcy, foreclosure, a short sale, or deed in lieu of foreclosure will do to your credit. This is due to many factors, such as:
• Credit scoring systems change over time.
• Credit scoring agencies do not make their formulas public, and your score will vary based on your prior and future credit practices and those of others with whom you are compared.
• Creditors use different criteria in evaluating consumers for credit, and these also change over time.
If you have a good credit score, but file bankruptcy anyway, you will probably suffer the most. That is because the higher your pre-bankruptcy score, the bigger the drop in your score after you file bankruptcy. On the other hand, if you already have a low credit score, bankruptcy won’t hurt your score that badly. According to FICO, a person who has a credit score of 680 prior to a bankruptcy loses 130 to 150 points following a foreclosure. But a person who has a credit score of 780 prior to a bankruptcy loses 220 to 240 points. So, if you already have a low score and file for bankruptcy, this could potentially make it easier for you to improve your score post-bankruptcy.

How Bankruptcy Can Help You Anyway

If you find yourself in a position where you must file bankruptcy, then your credit score is not as important as the reasons for having to file bankruptcy. Getting a new loan or credit card is not as pressing as, for instance, a pending wage garnishment or mortgage foreclosure. Nevertheless, after you have obtained bankruptcy relief, you may find that the bankruptcy may actually help your credit. This is so even though the bankruptcy will remain on your credit report for up to ten years.

Short-Term Positive Effects

In some cases, you might see immediate results on your credit after bankruptcy. Getting rid of “delinquent” account reports. If your credit report contained late payments and high credit balances, this is where a bankruptcy discharge can serve the greatest good. A bankruptcy will essentially wipe those debts clean. This is because debts that are discharged in bankruptcy must no longer be reported as “delinquent.” Instead, they will typically be reported as discharged or included in your bankruptcy. In some instances, this could even boost an already low credit score.
Improving your debt-to-credit ratio; the amounts you owe on accounts makes up roughly 30% of your FICO credit score.

An important factor in this analysis is the percentage of your available credit that you’re using. Bankruptcy might help improve your debt-to-credit ratio. This ratio is a comparison of your outstanding debt to your available credit balance. The lower your debt compared to your available credit, the higher your potential FICO score. If you have credit accounts with high credit limits, they are normally closed or frozen when you file bankruptcy. But if you reaffirm debts with low balances and good credit limits, or obtain new credit accounts after your discharge, this can potentially boost your FICO score. That is because you have little to no outstanding debt compared to available credit limits, which results in a favorable debt-to-credit ratio.

Long-Term Positive Effects

By wiping your debt history clean, bankruptcy gives you the opportunity to start over. You have another chance to get your finances right. If you budget properly and are disciplined with your money, you can lay the foundation for building good credit history. Following the bankruptcy, it’s a good idea to start re-establishing your credit as soon as possible. By not being burdened with the outstanding debt that you discharged in the bankruptcy, you should have more disposable income to make credit payments on time. If you establish a good track record of paying your new, post-bankruptcy debts on time, you can increase your credit score over time. This might happen as early as six months to a year after bankruptcy.

Budgeting After Chapter 7 Bankruptcy

Many people file for bankruptcy due to no fault of their own after experiencing an unexpected event, such as an illness, job loss, or divorce. Even so, everyone can benefit from cutting unnecessary costs and building a nest egg to fall back on; not just those who filed for bankruptcy to wipe out credit card balances. Reviewing your spending habits and making a comfortable budget is a commonsense place to start. Avoid buying items on credit that you can’t afford to pay for in cash. If you take out new credit cards, pay off most, if not all, of your account balance each month so that you don’t accrue interest.

Credit Scores After Chapter 7 Bankruptcy

Filing for bankruptcy comes with a downside; it can hurt your credit initially. Although a Chapter 7 bankruptcy will usually stay on your credit report for ten years, the impact goes down with time. Your bankruptcy won’t prohibit you from obtaining new credit and moving on with your life. If you’re like most, your case will move through the process in about four months, and you’ll be able to begin rebuilding your credit after receiving your bankruptcy discharge. In fact, most debtors start receiving new credit card offers shortly after they receive their discharge. Credit card companies realize that your discharge will free up money for other bills, so you’re more likely to pay back your debts after bankruptcy. Plus, you won’t be able to wipe out debt again using the bankruptcy process for several years.

Rebuilding Credit After Chapter 7 Bankruptcy

Keeping your available credit high is a factor that drives up your credit score, along with maintaining a mix of credit types, such as a home loan, car loan, and credit card accounts. So when you begin using credit again, you’ll want to keep balances below 30%. You will typically begin to receive new offers for credit after bankruptcy. However, be aware that many new credit card offers will have low limits, high-interest rates, and high annual fees. Reviewing the offer terms carefully before signing up for a new credit card after bankruptcy is essential. The goal is to accept a credit card with the highest possible limit because credit reporting agencies rate you based on your total available credit. Not only can lower limits can harm your score, but you’ll want to pay off the majority of your balance each month. If you don’t qualify for a typical, unsecured credit card, you might want to start rebuilding your credit by getting a secured credit card from your bank. You’ll deposit a certain amount of money in the bank as collateral for the card. In exchange, you have a line of credit equal to the amount in the account. A secured credit card rebuilds credit because the creditor typically reports payments on your credit report—you’ll want to be sure that will happen.

Also, it’s essential to examine your credit report for mistakes after your discharge. If you notice an error, correct it promptly so that it doesn’t derail your efforts to rebuild your credit. You can check your credit report for free using annualcreditreport.com (use the official site, not a lookalike). You’re entitled to one free copy per year from each of the three reporting agencies. Requesting a report from one of the three agencies every four months is an excellent way to keep track of changes. Also, all of the three reporting agencies allow you to file a dispute online. Your payment history, on-time payments, and recent credit reporting can all affect how lenders work with you. Once you file bankruptcy and businesses see your credit report’s negative information, you may have concerns about:
• Getting a car loan
• Buying a house or renting an apartment
• High-interest rates on financing
• Low credit limits on unsecured credit cards
• Student loan repayment schedules
• Penalties for late payments
• Credit utilization for anything but necessities
• Getting large cash deposits
• Getting loans without a qualified co-signer
• Adding authorized users to some credit cards
• Security deposits and returns of safety deposits

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

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Utah Adult Protective Services Lawyer

Utah Boating Accident Attorneys

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The post How Long Does It Take To Rebuild Credit After Chapter 7? appeared first on Ascent Law.

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