Creating a valid trust in Utah can be a strategic move for estate planning, offering benefits such as asset protection, privacy, and potentially avoiding probate. Trusts are versatile legal instruments that can be tailored to fit various needs, from providing for minor children to managing assets for those with special needs. This blog post will guide you through the steps to create a valid trust in Utah and explore common types of trusts used within the state.
Understanding Trusts in Utah
A trust is a fiduciary arrangement that allows a third party, the trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can specify exactly how and when assets pass to beneficiaries. In Utah, as in other states, trusts must comply with specific legal requirements to be considered valid.
Steps to Create a Valid Trust in Utah
Creating a valid trust in Utah involves several critical steps. Each step is important to ensure the trust meets legal requirements and serves its intended purpose effectively.
1. Decide on the Type of Trust
The first step is to decide which type of trust suits your needs. The choice depends on your objectives, such as whether you're planning for preserving assets for minor children, asset protection, or providing for someone with special needs. Luckily, you can use GoGo Estate's Plan Selector tool to help you determine which of our trust-based plans are right for you. Each Standard Plan or Blended Family Plan comes with a Revocable Living Trust, each with unique qualities to help with planning objectives.
2. Select the Trustee
With each Standard Plan or Blended Family Plan, you (or, if you are married, you and your spouse) are considered the initial trustee of the trust. However, you need to think carefully about who you would name as successor trustee in the event of your incapacity or death. The trustee will manage the trust's assets and carry out its terms. You can choose an individual, such as a family member or friend, or a professional, such as a bank or a trust company.
3. Identify the Beneficiaries
While you will be considered the primary beneficiary of the Revocable Living Trusts included in each Standard Plan and Blended Family Plan purchased through GoGo Estate, you must clearly identify who the subsequent beneficiaries of your trust will be after your death. Beneficiaries can include family members or friends. The trust should specify how and when the beneficiaries will receive the trust assets.
4. Draft the Trust Document
The trust document is the legal instrument that outlines the terms of the trust, including its purpose, beneficiaries, trustee powers, and how the trust assets are to be managed and distributed. With GoGo Estate, you do not have to worry about drafting the trust document; we've done it for you. Our trusts are drafted by licensed estate planning attorneys so that you receive the same, attorney-quality planning that you might expect from working with an actual attorney. Our trust documents meet all legal requirements for valid trusts in Utah, plus, we give you the flexibility to accurately reflect your wishes.
5. Fund the Trust
A trust must be funded to be effective. Funding the trust involves transferring assets into the trust's name. This can include bank accounts, real estate, stocks, and personal property. Without proper funding, the trust will not work as intended. Luckily, GoGo Estate includes funding information within the Trust Box & Binder that we ship to you. You can also find information about how to fund your trust on our website.
6. Execute the Trust Document
The trust document must be signed in accordance with Utah law, which typically requires the trustor's signature and possibly notarization. The specific requirements can vary, so it's important to consult with an attorney.
Common Trusts Used in Utah
Several types of trusts are commonly used in Utah, each designed to meet different estate planning goals.
Revocable Living Trust
A revocable living trust is a popular choice for many in Utah. It allows the trustor to retain control over the trust assets during their lifetime and specify how the assets should be distributed upon their death. It can be amended or revoked at any time before the trustor's death. GoGo Estate's Standard and Blended Family Plans currently offer revocable living trusts exclusively, meaning that you will have the same flexibility and control over your assets during the remainder of your lifetime as if you did not have assets in trust at all!
Irrevocable Trust
Unlike a revocable trust, an irrevocable trust cannot be amended or revoked once it's created. This type of trust can offer tax benefits and asset protection but at the cost of losing control over the assets placed in the trust. GoGo Estate does not currently offer irrevocable trusts. Check back in the future, however, and we may have plans available that include irrevocable trusts.
Special Needs Trust
A special needs trust is designed to provide for a beneficiary with special needs without disqualifying them from receiving government benefits like Medicaid or Supplemental Security Income (SSI). Every Standard Plan and Blended Family Plan trust includes a provision to allow beneficiaries to remain on Medicaid or SSI. This provision is considered a third-party special needs trust and allows your loved ones to continue receiving benefits even after they inherit from you. This sets GoGo Estate apart from other online estate planning platforms who do not offer such provisions in their standard form documents.
Spendthrift Trust
A spendthrift trust protects a beneficiary's inheritance from creditors and the beneficiary's own potentially imprudent spending. It grants the trustee the authority to make decisions about how the trust funds are distributed to or for the benefit of the beneficiary. Each GoGo Estate Standard Plan and Blended Family Plan trust includes spendthrift provisions to protect your assets from creditors of your beneficiaries.
Conclusion
Creating a valid trust in Utah requires careful planning and adherence to legal requirements. Whether your goal is to provide for loved ones or protect assets, there's a type of trust that can meet your needs. With GoGo Estate, you can meet all of the objectives outlined above and establish a trust to ensure your assets are managed and distributed according to your wishes. Trusts offer a flexible and powerful tool for estate planning, offering peace of mind and security for both you and your beneficiaries.