Step 1: Calling 911 is appropriate. Many, if not most deaths, occur after someone has reached an age that death seemed likely and requires little or no investigation. The police are trained to make this determination for you. In many deaths, there is a contributing factor other than old age. Life is full of errors we can make that result in death, including accidentally taking the wrong medication, or the wrong dosage when not thinking clearly. Let the police sort all of this out. The police will have many answers to give you regarding all of the steps between discovery of the death and burial, including who needs to be informed.
Step 2: When you are ready to start managing the debts and assets of the deceased, call an estate planning attorney. This article will address some of the common issues that come up when someone dies, but even a brief discussion with an attorney will often yield a few unexpected answers that you will need to avoid difficult surprises.
When to call: You can call an attorney when someone is healthy, when they are obviously declining, on the day of death, or much later. If you contact an attorney while someone still has mental capacity to sign estate planning documents, we have almost unlimited options. If that time of full capacity has passed, we still have some options that may surprise you. Heirs can sometimes make agreements that alter distributions stated in the law or even alter some estate plans. Other times, with court involvement, necessary changes to plans can be made.
After someone has passed, I am happy to explain what the law is regarding the debts and assets of the decedent.
The Will: If the decedent left behind a properly executed will, and there are assets that must be probated like real estate, vehicles or bank accounts, the will must then be probated within three years of the death of decedent or it will expire. After three years, a will cannot be enforced in a Utah court.
A Trust: If the decedent left behind a properly executed Trust, this may change everything. If used correctly, a Trust can transfer all assets without the need to go to court. The Trust can choose heirs, put limits on timing of distributions, and hold property for up to 1,000 years in Utah.
Understanding the terms of the Trust can be a challenge on your own. Talk with an estate planning attorney to verify who has authority to manage the Trust and who the heirs are. Sometimes what seemed straightforward is affected by a paragraph or even just one line of text that you missed or didn’t fully understand.
Deeds: Sometimes Deeds will transfer ownership of a property without a Will or Trust, or even court involvement. This should be done with care. Often the county recorder will be willing to record any document you give them that is properly notarized. Unfortunately, many deeds fail later when the county mapper reviews the document in detail to determine what ownership interest has transferred.
When a transfer is rejected by the mapper in Utah County, normally a red line will appear on the abstract just beneath the notation of the recorded deed. This often requires a new deed be signed to correct the old one. If someone has died, this may not be possible.
The law recently changed on how property ownership is passed on with a deed. If a deed was recorded before May 1, 2024, the parties were required to be named joint tenants. After May 1, 2024, any recorded deed with more than one named individual is automatically assumed to be joint tenants unless the deed states otherwise. This is significant as many deeds list people that do not intend to give their share of the property to the others listed on the deed at their death.
Unfortunately for many couples that recorded a deed prior to May 1, 2024, a surviving spouse may find that the old deed did not name them as joint tenants or husband and wife, forcing the surviving spouse to go to probate court to obtain ownership of the remaining half of the property.
Talk to an estate planning attorney about your deeds as soon as possible to avoid surprises.
Life Insurance: Most people are aware that life insurance works best if you name a beneficiary. When you die, the life insurance benefit is owed to whomever you have named as the beneficiary. Sometimes I will see where someone has named their spouse as the primary beneficiary of the life insurance policy, but they did not name a secondary beneficiary. This works fine as long as the spouse does not die first. If this is not the case, and the surviving spouse fails to name a new life insurance beneficiary, then at their death we have no one to give the money to. State law will name who inherits, and that person or persons will be forced to go to Utah Probate court if the total is over $100,000.
Life insurance has many benefits for estate planning beyond simply naming a beneficiary to receive a payment. Life insurance can be used to avoid current taxes on interest and taxes at death. Some insurance policies can be borrowed from by the owner with no approval process necessary. Some policies can be treated as property separate from your own when defending your assets in a lawsuit. If you haven’t explored how life insurance can help with estate planning, you have some surprises waiting.
Bank Accounts: Every bank account you own can be set up to name a beneficiary to inherit that account at your death. In Utah, if more than one person is listed as a signer on an account, this account will normally automatically be owned by the surviving signer.
Many people add a child as a co-signer to help with finances. This can be a mistake. If that child is sued, divorces or goes bankrupt the assets in your account may end up in the calculations of that child’s assets, which can do your child harm. Instead, sign a power of attorney naming that child, and then take the power of attorney to the bank to give the child access without ownership.
I encourage my clients to name a beneficiary on every bank account. The beneficiary can be one person, multiple people, a charity, or your Trust. This simple step of naming a beneficiary on the account will often keep an estate out of probate court.
This advice applies equally to any type of account you may own, including bank accounts, money market accounts, CDs and retirement accounts. Keep in mind that tax deferred accounts used for retirement have unique rules about when taxes must be paid. Strategies to avoid having taxes come due at payment to your heirs can be helpful. Talk to an estate planning attorney or a financial advisor to understand your options and the options your heirs may have at your death.
If you are named as the Successor Trustee of a Trust, or the Personal Representative of an Estate, you will have responsibilities to the decedent and their named heirs. Timing can be important, so make an appointment promptly with an estate planning attorney when someone dies to learn how to give notice that you accept your role and learn what your duties will be.
If you are a named heir in a will or Trust, the Trustee or Personal Representative has a duty to give you a copy. Call an attorney if you feel you are being kept in the dark, or an estate is taking longer than necessary to distribute assets.
Consultations are Prigmore Law are free. Give us a call to discuss your options today!
NOTE: This article discussed general principles of law. Please do not take action based on this article alone. Only an attorney can discuss your specific situation with you and then help you determine your best course of action.Â
