Updated January 25, 2024
The Utah living trust is a legal document into which a person transfers their assets while they are alive. A Trustee is appointed by the Grantor (creator) who will have control over all assets within the trust and will distribute or use these assets at the Grantor’s behest (usually Grantor appoints themselves the Trustee.) If the Grantor becomes disabled, the Trustee (or Successor Trustee if Grantor and Trustee are one and the same) can continue to manage assets within the trust in order to benefit the Grantor without the need for court approval. Transferring property and other financial assets into a trust means avoiding probate court at the death of the Grantor. Any property owned by the Grantor in other states not included in the trust will go through this lengthy, and often costly, legal procedure.
Laws – Chapter 7 (Uniform Trust Code) – PDF Version
Will (Last Will and Testament) – This document should contain any assets that have not been mentioned in a person’s living trust. After the executor’s death, the assets are then distributed through probate to the executor’s heirs (instead of privately, which is the case for distribution of assets in a living trust.)
Types
Irrevocable – This type of trust cannot be amended (except under special circumstances) once the grantors have signed the agreement. The benefits include possibly minimizing estate taxes and protecting assets within the trust from creditors and potential lawsuits.
Revocable – A revocable trust can be altered or nullified at any point during the Grantor’s lifetime. The assets placed within it are still considered to be the Grantor’s property, meaning the property is still subject to death taxes and the possibility of creditor claims.
Individual Roles
Grantor – Individual creating the trust.
Trustee – Individual appointed by the Grantor to manage the contents of the trust. Grantor often appoints themselves as Trustee.
Successor Trustee – Individual appointed by the Grantor to distribute assets within the trust to the beneficiaries in the event of death. If the Grantor becomes mentally incapacitated and is also the Trustee, the Successor Trustee assumes control of the trust.
Beneficiary – Individual(s) appointed by the Grantor to inherit assets within the living trust upon the death of the Grantor. The grantor is often one of the beneficiaries to gain continued use of the contents within the living trust during their lifetime.
How to Make a Living Trust in Utah
Following § 75-7-402, a living trust can be created in Utah by any individual 18 years of age or older who is of sound mind and is doing so under their own free will. On the written agreement, the Grantor (creator) will appoint a Trustee (often themselves) to govern the contents of the trust. A Successor Trustee must be chosen as well in situations where the Grantor and Trustee are the same person. Beneficiaries are named to which the assets of the living trust will be distributed upon death of the Grantor. The Grantor usually names themselves one of the Beneficiaries in order to take advantage of the property and funds within the trust. Once the Grantor signs the agreement in front of a notary public (recommended, but not legally mandatory), they may begin transferring funds, accounts, stocks, bonds, property, and any other assets into their living trust.
Real Estate – In order to retitle any property in the name of a living trust, the Grantor must transfer ownership of said property using a General Warranty Deed or a Quit Claim Deed.
Financial Accounts – Ownership of the Grantor’s accounts can be retitled to the trust by producing a copy of the trust document to the financial institution. Some institutions will ask that the Grantor open a new account in the name of the trust and close the old one, whereas others will allow a simple name change on the account.
Motor Vehicles – The vehicle’s title should be transferred to the trust and the Grantor’s insurance company should be notified so the policy can reflect the change of ownership. The appropriate Utah Bill of Sale Form must be produced in order to make the transfer.
Stocks and Bonds – Regardless of the type of stock, the Grantor should check with their broker or issuer and find out if specific forms are required for the transferring of stocks and bonds to a trust. Typically, the transferring of these types of assets can be accomplished by getting new stock certificates drawn up in the name of the trust and setting up a brokerage account in the name of the trust as a depository for all stocks and bonds.
Do I Need a Living Trust in Utah?
When deciding whether or not to create a living trust in the State of Utah, it’s important to consider the size of one’s estate. Young couples or those with smaller estates could get by with a will instead of a living trust. In Utah, if a person’s estate is worth $100,000 or less, heirs can claim ownership using a Utah Small Estate Affidavit in accordance with § 75-3-1201.
The main reasons for creating a living trust are to avoid probate and to keep one’s assets out of public record. The probate process in Utah could be costly and could take a long time depending on the size of the estate, potential family disputes, and potential creditor claims. Furthermore, property in any other state will have to go through probate in the state in which it is located, unless it has been transferred to a living trust. There are significant fees attached to creating and maintaining a living trust as well; an attorney will be able to provide helpful insight on which avenue to choose.