Mary worries about the “what ifs.”
Mary (age 74) is a widow in good health. Her home in paid for and she never wants to leave her neighborhood. She has sufficient savings and retirement income to enjoy many more years. But she worries constantly about “what ifs.” What if she causes a wreck and her car insurance isn’t enough? What if someone gets hurt in her house and sues her? What if her retirement fund fails and she doesn’t have enough income to pay the bills?
New Utah law in 2013
In the past, Utah’s asset protection laws were weak against many “what if” creditors. On May 14, 2013, the Utah Legislator enacted a new Utah law (Utah Code §25-6-14) which allows a more powerful asset protection trust called a “Domestic Asset Protection Trust” (UDPT). We think Utah’s new asset protection laws are among the strongest in the nation.
The new law gives strong protections against future and some claims by current creditors, so long as the transfer doesn’t leave the creator of the trust broke (insolvent) and he or she has no reason to believe the transfer will “hinder, delay, or defraud a known creditor.”
The new law allows Mary to be both a trustee (manager) of the trust and also a beneficiary so long as another co-trustee decides whether or not to give Mary money from the trust. She can live in her home and (if the lawyer writing the trust knows how to do this) retain her tax benefits in the home.
Revocable trusts don’t protect.
Mary and her late husband created a family revocable trust before he died, and like most people Mary mistakenly believed a revocable trust protected her assets from future creditors. A revocable trust does not protect against creditors. The new Utah Domestic Asset Protection Trust must be irrevocable by those who create it.
UDPT’s are not for everyone.
The new Utah trust, sometimes called a UDPT, is not for everyone. People who are contemplating bankruptcy or who are being threatened by creditor lawsuits cannot use them.
If you worry about “what if” creditors, you might want to ask our Utah trust attorneys if you could benefit from a Utah Domestic Asset Protection Trust. We offer free consultations and house calls to older Utahns.
(Names and details have been changed to protect the worried.)
By Jack Helgesen