Disinherited by Ademption. I recently met with a woman and her two brothers to settle their mother's estate. In her trust, the mother had provided for a duplex to be given to her daughter, in addition to an equal share of the estate. The mother, however, had sold the duplex before she died.

The daughter asked, "Don't I get an additional share of the estate to compensate me for the loss of the duplex?" Her brothers were adamant: "No," replied one brother. "If Mother wanted you to receive a replacement asset she would have asked Mr. Loveridge to amend her trust to give you a larger portion." Legally, the property was considered adeemed, and the daughter lost her "bonus" duplex. The point? If you dispose of an asset intended for a specific beneficiary, be sure to consider whether to give that beneficiary another asset or a larger share to replace it.

Stop Unwanted Solicitations. Utah provides a free service for Utah residents to protect their e-mail and other electronic addresses from solicitations for certain adult-oriented products and services. Like the Nation Do Not Call List, once a resident registers an address, senders of messages that advertise adult-oriented products or services are required to remove registered addresses from their mailing lists. You can read more about the Utah's do-not-contact list, as well as register online by visiting: http://donotcontact.utah.gov.

Penalty ("in terrorem") Clauses. Occasionally, clients request that I include a provision in their trust disinheriting any beneficiary who contests the trust, brings an action against the trustee, or otherwise, as they put it, "causes trouble" when the estate is settled. Utah law (UCA 75-7-112) provides that any such clause which penalizes a beneficiary for bringing such an action is unenforceable, as long as “probable cause” exists for instituting the proceedings. However, frivolous actions by a beneficiary (or a non-beneficiary) could, indeed, result in a “penalty” being enforced and that beneficiary being disinherited. What is “frivolous?” Good question! Any estate contest should only be considered after obtaining proper advice from a competent estate planning attorney, and not just because you’re dissatisfied with a decedent’s estate plan or your share.

Settle A Decedent's Estate Promptly! When a loved one dies, it's important to notify us immediately, to insure that various tax benefits are achieved and to insure that the decedent's assets are distributed properly. For example, if you are married, and your estate exceeds $3,500,000, it's important to divide your trust assets between the Marital and Family trusts (assuming your trust contains these provisions!). This will reduce or eliminate death taxes for your survivors. Also, if any of your assets are not titled in your trust at your death, they can be "poured-over" to your trust by your "Pour-over Will." However, Utah requires all wills to be probated within 3 years of the decedent's death. If the decedent's estate is not settled within 3 years, his Will cannot be probated and will not be effective to transfer his probate assets into his trust. The assets will, instead, be transferred to his "heirs at law," who may be different from his trust beneficiaries whom he intended to receive his estate.

Excellent Estate Planning Article! www.nytimes.com/2009/02/26/your-money/estate-planning/26estate.html?em

Rich or Old? You don't have to be "rich" or "old" to plan your estate! Young parents who have few assets need to plan their estates, as do older, more affluent people. What would happen if a young couple with small children (and few assets), perish in a "common accident?" Who would rear their children? Even if the parents make a will naming guardians for their children, how will the guardians (assuming they accept that role!) pay for the health costs, education and support of the deceased couple's children? Accepting the role of guardian means that you have the legal and moral responsibility to provide for your young wards, and if few assets were left for their care, you (as legal guardian) have to pay for it! Here's a simple solution:

Young parents first need to buy sufficient life insurance to insure proper financial care for their children. (If you're in your 20's or 30's, and in good health, you can buy $500,000 of 30-yr., level term insurance for $300 to $600 premium per year.) Next, set up a living trust with your spouse and children as beneficiaries, and specify in the terms of your trust how its assets will be used to care for your family. Then, make the trust the beneficiary of your insurance, which provides the trust the needed liquidity so that its terms can be properly carried out. Finally, name a responsible trustee (i.e., the "money manager") to manage the trust and execute a "pour-over" will naming the guardians who will rear your children. This simple plan allows young parents to financially (and affordably) provide for their family's care and to specify in detail how and by whom their funds will be used for that care.

What about the cost of the estate plan? Most simple estate plans (living trust, will, powers of attorney, etc.) can be established for as little as $500 (much less than what parents spend for recreation!). Please call us for details.

2009 Prepaid Estate Planning Review Service. I recently mailed an invitation to our clients to subscribe to our 2009 Prepaid Review Service. For $69, you can have your estate plan (trust, will, powers of attorney, etc.) reviewed by us (anytime during 2009) to be sure it conforms to your planning objectives (additional charge for document amendments). Most law firms charge $200-300 per hour for this service, and this program is our way of helping you keep your plan updated at minimum cost. To subscribe, or to make a review appointment, please call our office at 801-262-8889.

The Federal Estate Tax. It's 2009, and the most significant estate planning news is that the exemption from Federal Estate Tax is now $3,500,000! This means that only estates with a total net worth (assets minus debts, such as mortgages, etc.) greater than the exemption will be subject to estate tax. Current law provides for the estate tax exemption to become unlimited in 2010 (no tax for anyone!), but decrease to only $1,000,000 in 2011. However, current bills in the House and Senate propose keeping the exemption permanently at $3,500,000. We'll keep you posted when the law is finalized.

How does this affect you? If your living trust contains "marital deduction" language (designed to eliminate or reduce estate tax), and your estate net worth is below the $3,500,000 exemption, it is critical that you have your trust amended to reflect current law. Call us for an appointment to see whether your estate plan is affected.

New Estate Planning Course. We're pleased to offer Mr. Loveridge's 200-pg. course on estate planning basics, "How To Avoid Probate, Death Taxes, and Family Civil War!" This easy-to-understand course contains all the information you need in order to understand this complex topic and plan your estate effectively. Unlike other estate planning books written in dry "legalese," the topics in our course are illustrated by dozens of "real-life" case studies (some humorous, some touching, all interesting!) from Mr. Loveridge's 35-yr. estate planning practice.

Topics include: "You Can't Take It With You!" which explains the importance of creating a written estate plan to control how your estate will pass at your death. "How To Title Assets and Not Disinherit Heirs," stresses the critical importance of titling assets properly. "Keep It In Your Pocket, Not Theirs!" reveals how to reduce or eliminate income tax, estate tax, and estate settlement costs at your death. "Long-term Care" teaches how you can protect yourself and your assets if you become incapacitated. "My Spouse Didn't Prepare Me For This!" discloses how to organize all your important documents, titles and personal and financial information to help your heirs settle your estate easily, quickly and inexpensively. Finally, the Appendices section addresses proper ways to insure estate liquidity, problems faced in "second marriages," and other important topics.

Learn from the true experiences of others! Avoid the planning mistakes most Americans make! If you've ever been confused about how to protect your loved ones, or been inundated by the many planning choices available, this course will facilitate your understanding and simplify the planning of your estate. Cost: $19.95 + $4.00 s/h. To order, email us at: emarel@comcast.net or call us at (801) 262-8889.

New rating system sizes up nursing homes in Utah. The U.S. Department of Health and Human Services has a new web site (through its Centers for Medicare and Medicaid Services which compares nursing homes for quality through a 5-star rating system. The site has been added in an effort to make choosing a nursing home easier and more informed. All ratings are available at Medicare's Nursing Home Compare Web site www.medicare.gov/nhcompare.

Dangers of Joint Tenancy. One of my clients died and, under the terms of her living trust, left her assets "equally to my children." However, when I met with her children to settle her estate, I learned that she had left a $100,000 CD that was titled jointly in her name and the name of a daughter.

I told the daughter, "The CD passes automatically to you, 'by right of survivorship.' It is NOT part of the trust or subject to its terms."

One of her brothers asked, "Aren't you going to share the CD with the rest of us?"

She replied, "No! Mother wanted ME to have that CD!" (The temperature in the office then dropped about 50 degrees!)

I don't know why my client titled the CD jointly with her daughter, but the law was clear: jointly-titled assets pass independently of the terms of a will or trust! The daughter was entitled to keep the CD AND an equal share of the trust assets!

Perhaps my client wanted her daughter to have a "bonus" asset in addition to her share of the trust. Or, perhaps someone at the bank suggested that another name ought to be added to the CD's title for convenience in accessing the money at my client's death. We'll never know for sure, because my client is dead and can't explain her action. But, this story illustrates this important "doctrine" of estate planning:

The way your assets are titled at your death determines who will inherit them. Be sure that the way YOUR titles are worded conforms (not conflicts) with your estate planning objectives!

If you're unsure that your own assets are titled correctly, please call us (801-262-8889) for a complimentary opinion, and we'll help you correct any errors.

"Do-it-yourself" planning? Because of the high cost of (some, not all!) lawyers, some people purchase or download "self-help", fill-in-the-blank legal forms, including will and trust documents, or "do-it-yourself" planning kits. Although less expensive than fees of larger law firms, these methods can’t replace competent, professional help.

I discourage using these forms because each estate is different and some planning objectives require intricate solutions. Even though it’s fairly easy to fill out standard legal forms, that’s only the beginning of the full planning process. Without expert legal help, most people, for example, would fail to retitle some or all of their assets correctly to coordinate with the terms of their will or trust, which could have disastrous consequences for their heirs. Improper titling of assets can cause assets to pass to unintended heirs or cause them to pay unnecessary taxes. People in a "second" or blended marriage are particularly at risk if they use the wrong documents or title assets improperly, because incorrect planning and titling can cause children from one or both of their previous marriages to be disinherited. Using an experienced estate planning lawyer gives you access to a seasoned "mentor," to whom you can turn regularly to learn the latest changes in the law or for advice about difficult planning decisions.

To further tempt (and confuse) the public, I’ve heard some very influential radio and TV personalities recommend that you purchase legal forms from companies which sponsor their programs. Sadly, an influential radio or TV host with knowledge about political or other subjects (but with no knowledge about estate planning) can mislead millions of listeners to plan incorrectly.

I remember watching a "home shopping" program on TV, where a prominent woman financial planner and author was promoting her own "do-it-yourself" estate planning kit, complete with trust, will, powers of attorney, etc. for $49.95. She repeated her sales pitch over and over, proclaiming, "I know the legal forms in my kit are the very best, because they’re identical to the documents my own lawyer, who has many years of estate planning expertise, drafted for me for a large fee!" The implication in her presentation was that you don’t have to pay thousands of dollars like she did — only $49.95 — to get the very same, professional estate plan. Her offer was ludicrous on its face.

Although the documents she was selling may have been included in her own estate plan, her situation differs greatly from that of the millions who trust her advice. Her hypocrisy (as well as that of the other media personalities who recommend "self-help" solutions) is obvious: She relied on expert help to accomplish her own planning, not a do-it-yourself kit! Is the motive of these "document snake-oil salespersons" to really help you or is it to promote these products for a cut of the purchase price? (If you think I’m exaggerating, in the 45 minutes I watched this woman’s "pitch," she racked up "call-in" orders of almost $500,000 for her legal kit!)

The "disclaimer" of one web site purveying self-help documents states (in very, very fine print at the bottom of the home page):

"_____ is not a law firm, and the employees of _____ are not acting as your attorney. . . Instead, you are representing yourself in any legal matter you undertake through _____’s legal document service. _____’s document preparation service includes a review of your answers for completeness, spelling and grammar. . . At no time do we. . .provide legal advice or apply the law to the facts of your particular situation. This website is not a substitute for the advice of an attorney.

"Furthermore, the legal information on this site is not legal advice and is not guaranteed to be correct, complete or up-to-date. . .The law is different from jurisdiction to jurisdiction. . . (and) is a personal matter. Therefore, if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our tools, you should consult a licensed attorney in your area.

"_____ is not responsible for any loss, injury, claim, liability, or damage related to your use of this site. . . In short, your use of the site is at your own risk." (Italics added)

Pretty reassuring, eh? In short, to be SURE your estate is planned correctly, consult an experienced estate planning attorney and not some document "snake oil" salesperson!

New Utah Health Care Directive. On January 1, 2008, the Utah Legislature made effective the new Utah Health Care Directive. Previously, it was advisable to have both a Living Will (to prohibit the use of "heroic" medical procedures to prolong life if you became terminally ill) and a Health Care Power of Attorney (to name an agent to make medical decisions for you if you were unable to do so).

Now, the new Utah Health Care Directive combines the Living Will and Health Care Power of Attorney into one document. It's easy to complete and needs to be signed in front of only one witness (who is not related to you nor a medical provider, such as a doctor, etc.).

For a free copy, please email us at emarel@comcast.net.

The EstatePlanner is our comprehensive estate planning documents organizer system. It consists of 150 pages of tabbed forms, planning checklists, and estate planning information, all housed in a deluxe 3-ring binder. Comes with an instructional CD recorded by Mr. Loveridge to help you use it effectively. $79.95 + s/h.

Free Bonus when you order The EstatePlanner: "How To Avoid Probate, Death Taxes, and Family Civil War!", Mr. Loveridge's 200-pg. course on estate planning basics. Includes dozens of "real-life" case studies from the author's 35-yr. estate planning practice to help you plan your estate effectively. To order, email us at: emarel@comcast.net, or call us at (801) 262-8889.