When people hear the words estate planning, they often picture someone who is retired, wealthy, or owns a large amount of property.
But estate planning isn't just about what happens to a large estate after someone dies. A good estate plan answers some much more immediate questions:
Who will make decisions for you if you can't make them yourself? Who will care for your minor children? Who receives your property? Who will manage your affairs? And how difficult will the process be for the people you leave behind?
For many Utah families, the question isn't whether they are wealthy enough to need an estate plan. It's whether they have people and property they want to protect.
Here are some of the people who should strongly consider having an estate plan.
1. Parents With Minor Children
If you have minor children, estate planning should be a priority.
One of the most important decisions parents can make is identifying who they would want to care for their children if both parents died.
But guardianship is only part of the equation.
You also need to decide how money should be managed for your children. Leaving substantial assets or life insurance directly to a young child can create complications. A properly structured trust can allow you to choose who manages those assets and establish rules for how and when the money can be used.
Your estate plan can address questions such as:
- Who would you want to raise your children?
- Who should manage money for them?
- Should children receive an inheritance immediately at adulthood?
- Should money instead remain protected in trust?
- How should life insurance proceeds be handled?
For parents, an estate plan is often less about wealth and more about making difficult decisions now so your family doesn't have to make them during a crisis.
2. Homeowners
If you own a home, you have an estate.
For many Utah families, their home is their largest asset. Without proper planning, transferring real estate after death can be more complicated and expensive than necessary.
A trust may be useful in allowing property to pass according to your instructions and, when properly established and funded, may help avoid probate for assets held by the trust.
Estate planning becomes even more important if you own multiple properties, rental properties, a cabin, farmland, or real estate in more than one state.
3. Business Owners
Business owners often have additional estate-planning needs.
If you own a business, ask yourself:
What happens to the company tomorrow if something happens to me tonight?
An estate plan may need to coordinate with operating agreements, buy-sell agreements, insurance, succession plans, and other business documents.
Important questions can include:
- Who can operate the business if you become incapacitated?
- Who inherits your ownership interest?
- Should your children inherit the business equally?
- What happens if one child works in the company and the others don't?
- Is there enough liquidity to pay obligations without selling the business?
- Should ownership remain in the family?
- How will the business be valued?
For business owners, estate planning and succession planning should generally be considered together.
4. People With Life Insurance or Retirement Accounts
You may have a larger estate than you realize.
A family may have a $500,000 home, retirement accounts, investments, and a $1 million life insurance policy. Suddenly, the amount passing at death can be substantial.
Life insurance and retirement accounts also involve beneficiary designations, which need to coordinate with the rest of your estate plan.
Simply creating a trust doesn't automatically mean every asset will pass through that trust.
Your attorney should help you think through how your assets, beneficiary designations, and estate-planning documents work together.
5. Blended Families
Second marriages and blended families can create particularly difficult estate-planning issues.
Suppose you want your spouse to be financially secure after your death, but you ultimately want certain assets to pass to your children from a previous marriage.
Without careful planning, those goals can conflict.
A properly designed estate plan can establish rules for how assets are used during a surviving spouse's lifetime and what happens to the remaining property afterward.
When there are children from previous relationships, relying on everyone to "work it out" later can be a risky estate plan.
6. People Who Want to Protect an Inheritance for Their Children
Estate planning doesn't have to mean giving your children a check.
In many situations, an inheritance can remain in a properly designed trust for a beneficiary.
Why would a parent want that?
Because life happens.
A child may someday face a lawsuit, creditor problems, divorce, poor financial decisions, or other circumstances that could threaten an inheritance.
Families with meaningful assets should discuss whether an outright distribution is really the best way to leave property to the next generation.
The goal isn't necessarily to control your children from the grave. It may simply be to give them the benefit of the inheritance while adding appropriate protections around it.
7. Anyone Concerned About Incapacity
Estate planning isn't only about death.
What happens if you're alive but unable to manage your own affairs?
An accident, illness, or other unexpected event can leave someone temporarily or permanently unable to make financial or healthcare decisions.
A comprehensive estate plan may include documents addressing:
- Financial decision-making
- Healthcare decisions
- Access to information
- Management of trust assets
- Instructions concerning medical care
These documents can be important for adults of almost any age.
8. Families With a Child or Beneficiary Who Has Special Needs
Leaving an inheritance directly to a beneficiary with special needs can create significant problems if the person receives or may later need certain means-tested government benefits.
Special-needs planning can be used to structure an inheritance in a way designed to provide additional support while considering eligibility for applicable benefits.
This is an area where individualized legal advice is particularly important.
9. People Who Want to Make Things Easier for Their Family
Sometimes the best reason to create an estate plan is the simplest one:
You don't want to leave a mess.
After someone dies, their family is already dealing with grief. Uncertainty about property, accounts, decision-making authority, and family expectations can make an already difficult time worse.
A thoughtful estate plan can leave clear instructions.
Who is in charge? Where does everything go? What should happen to the house? How should assets be divided?
Clarity can be one of the most valuable things you leave your family.
Do I Need a Will or a Trust?
It depends.
A will can be an important part of an estate plan, but a will and a revocable living trust serve different purposes.
For many families, a comprehensive plan may include a revocable living trust together with a will, powers of attorney, healthcare documents, and appropriate beneficiary planning.
For others, a simpler plan may be appropriate.
The right structure depends on your family, assets, goals, and the complexity of your situation.
When Should I Create an Estate Plan?
The best time is usually before you need one.
Major life events are particularly good times to create or review an estate plan, including marriage, having a child, buying a home, starting or selling a business, receiving an inheritance, divorce, remarriage, or a significant change in financial circumstances.
And estate planning isn't necessarily a one-time event. Your plan should be reviewed periodically as your family, finances, and goals change.
Estate Planning With Allies Law Firm
At Allies Law Firm, we help Utah individuals and families create estate plans designed around what they actually want to accomplish.
That may mean a straightforward plan for a young family, a trust designed to protect an inheritance for children, or more sophisticated planning involving businesses, real estate, asset protection, and substantial family wealth.
The objective is bigger than preparing documents.
A good estate plan should protect your family, preserve what you've built, and provide clear instructions when your family needs them most.
If you don't have an estate plan—or haven't reviewed yours in several years—contact Allies Law Firm to schedule an estate-planning consultation.
This article is provided for general informational purposes only and does not constitute legal or tax advice. Estate-planning strategies should be evaluated based on your individual circumstances. Consult with qualified legal and tax professionals regarding your specific situation.