There is a widely held perception that having one’s estate go through probate is undesirable. In Utah, probate is probably not as bad as many people think. But there are still reasons to try and avoid the probate process, including keeping the estate private, streamlined administration of the estate, savings of attorney fees and time, and ongoing administration of assets by a fiduciary for the benefit of beneficiaries by means of a trust.

The key to avoiding probate is to ensure that there are no assets in your name that do not automatically transfer to someone else at your death.

There are different ways to achieve this, including:

 Outright gifts during one’s lifetime
 Beneficiary designations (such as on a 401(k), an IRA, or a Roth IRA
 Joint Ownership with rights of survivorship
 Affidavit Procedures
 Revocable Living Trusts

Lifetime gifts reduce the value of an estate and can be an effective estate planning tool. However, it is important to remember that only a certain value can be transferred without incurring gift tax liability. This amount is $15,000 per person per recipient for the year 2018.

A jointly owned home with rights of survivorship allows the surviving spouse to automatically receive title upon the death of the first spouse. However, when the second spouse passes away, there will still be a need for probate in order to clear title for the second spouse’s beneficiaries.

A small estate affidavit is a useful tool in Utah for estates with a value of less than $100,000. A probate may be avoided entirely if the entire estate is under this value and there is no real estate. A total of four motor vehicles, boats, trailers or semi-trailers registered under Utah law. Personal property, such as money in a bank account, jewelry, or furniture, may also pass to a person’s beneficiaries under this streamlined procedure.

A Payable on Death (POD) account allows the money in a bank account to pass to the beneficiary upon the primary account holder’s death. These are sometimes referred to as a “poor man’s trust.”

A Transfer on Death (TOD) account allows ownership of the account to pass to the beneficiary after the primary owner’s death.

A Revocable Living Trust (RLT) allows assets held inside the trust to pass to beneficiaries outside of probate. In order for an RLT to be effective, the trust must be funded; that is, title to assets must be transferred into the trust. Any assets that are not transferred to the trust may still need to go through the probate process in order to clear title. It is important to note that retirement accounts, such as qualified 401 (k)s and IRAs should not be transferred into a Revocable Living Trust because this will create severe tax consequences. Because of the small estate affidavit procedure, title to motor vehicles also does not need to be transferred to the RLT. Likewise, bank accounts with small amounts, such as a checking account used for day-to-day purposes, need not be transferred into the trust because of the small estate affidavit procedure.

If avoiding probate is one of your goals, it is wise to consult with a professional advisor with respect to which tools work best for your particular needs and goals.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.