Utah does not have a state inheritance or estate tax. However, there is still a federal estate tax that applies to estates above a certain value. And like all states, Utah has its own unique rules and laws that apply to various aspects of the estate planning process. In this article, we break down Utah inheritance laws, including what happens if you die without a valid will. Note, though, that estate planning is a complicated process, and many people choose to work with a professional. Whether you’re planning your own estate or deciding how to invest your inheritance, it’s a good idea to find a financial advisor in your area who can help.
Does Utah Have an Inheritance Tax or an Estate Tax?
Utah does not collect an estate tax or an inheritance tax. However, state residents must remember to take into account the federal estate tax if their estate or the estate they are inheriting is worth more than $11.18 million. And if you inherit property from another state, that state may have an estate tax that applies. You may also have to file some taxes on behalf of the deceased.
Other Necessary Tax Filings
When you die, there are many federal and estate tax situations that need to become a priority for those who survive you. Besides the state estate tax, you need to look out for the following:
- Final individual federal and state income tax returns – the federal and state tax returns are due by Tax Day of the year following the individual’s death.
- Federal estate/trust income tax return – due by April 15 of the year following the individual’s death
- Federal estate tax return – due nine months after the individual’s death, though an automatic six-month extension is available if asked for prior to the conclusion of the nine-month period
- This is required only of individual estates that exceed a gross asset and prior taxable gift value of $11.4 million
The Internal Revenue Service requires each estate to have its own employer identification number (EIN) to represent itself in any tax-related matters. To apply for an EIN, visit the IRS website or apply by fax or mail.
Dying With a Will in Utah
There are some basic requirements to make a will legitimate in Utah. For starters, you must sign or acknowledge your will in front of two witnesses, and the witnesses must sign your will within a reasonable time after you signed or acknowledged it. You do not need to notarize your will to make it legal. However, you can make your will “self-proving” and you’ll need to go to a notary if you want to do that. Self-proving speeds up probate because the court can accept the will without contacting the witnesses who signed it. You can make your will self-proving by going to a notary and having your witnesses go to the notary and sign an affidavit that states who you are and that each of you knew you were signing the will.
If the will is determined to be valid, the next step is the probate process. Utah is one of the states with the Uniform Probate Code, which means there’s a standard set of rules that applies to Utah and other states. Probate proceedings are usually only required if the deceased person owned any assets in their name only. Other assets, also known as “non-probate” property, can generally be transferred to the other owner without probate. Probate is also when creditors of the decedent make their claims for repayment.
Utah offers simplified probate procedures for smaller estates. Inheritors can skip probate completely if the value of the entire estate, after liens and encumbrances are subtracted, is worth $100,000 or less. All an heir has to do is prepare a short affidavit which states that they are entitled to a certain asset. The affidavit is signed under oath. When the person or institution holding the asset gets the affidavit and a copy of the death certificate, it releases the asset to the inheritor. This procedure can also be used to transfer up to four boats, motor vehicles, trailers or semi-trailers if the value of estate subject to probate, except for the value of the aforementioned vehicles, is $100,000 or less. There is a 30-day waiting period.
There is another simplified probate procedure for smaller estates. You can use this process if the value of the entire estate, after liens and encumbrances are subtracted, does not exceed the homestead allowance, exempt property, family allowance, costs of administration, reasonable funeral expenses, and reasonable medical expenses of the last illness. The executor must file a written request with the local probate court asking to use the simplified process. They must also file a sworn statement that says the estate financially qualifies for this simplified probate process and describes the estate assets. The sworn statement musts also declare that the executor has distributed assets to the inheritors, and sent the inheritors and known creditors a closing statement. If the affidavit procedure is used, there’s no need to use the simplified probate procedure.
Dying Without a Will in Utah
Dying without a will isn’t ideal if you care about estate planning, or deciding where your assets will end up after your death. Utah inheritance law labels these types of estates “intestate,” which means there is no valid will. The court then follows intestate succession laws to determine who inherits your property and how much of it they get. If there isn’t a will, the probate court will appoint a personal representative to take care of the estate of the decedent.
Although there are usually extenuating factors when someone dies intestate, it’s best to avoid putting your loved ones through that kind of stress if possible. If you’re not sure what kind of estate plan you want to make, you can seek the help of a financial advisor specializing in legacy planning.
Spouses in Utah Inheritance Law
If you die intestate in Utah, which is an equitable distribution state, and leave a surviving spouse, your spouse’s inheritance depends on whether or not you have living descendants. Descendants can be children, grandchildren, or great-grandchildren. Your spouse will inherit all of your intestate property if you die without descendants, or if all surviving descendants are from you and your surviving spouse. If you have a spouse and no descendants, your spouse will inherit everything.
Children in Utah Inheritance Law
If you die intestate in Utah, your children will receive an “intestate share” of your property. How much each child inherits depends on how many children you have, whether or not you are married and whether your spouse is also your children’s parent.
If you have descendants who are not the descendants of your surviving spouse, such as children or grandchildren from another relationship, they will get some of the intestate property. Your spouse will inherit the first $75,000 of your intestate property, and half of what remains of your intestate property after that. Your descendants will then inherit everything else.
In Utah, the value of non-probate transfers count as part of the intestate estate. That means the non-probate transfer is legally considered an “advancement,” which means that its value will be deducted from the intestate share of the beneficiary. If the amount of the advancement exceeds what the beneficiary is entitled to under intestate succession laws, the beneficiary will not have to pay anything back, but will not inherit anything more.
Intestate Succession: Spouses and Children Inheritance Situation Who Inherits Your Property Children but no spouse – Children inherit everything Spouse but no descendants – Spouse inherits everything Spouse and descendants from you and that spouse – Spouse inherits everything Spouse and descendants from someone other than that spouse – Spouse inherits the first $75,000 of intestate property, and half of the remaining balance
– Descendants inherit the other half of the remaining balance
Only those who are considered to be your children legally can inherit from you under Utah’s intestacy laws. Legally adopted children have just as much right to their intestate share as biological children do. In addition, if the decedent placed their child up for adoption and that child was adopted by another family – other than your spouse – they are not legally eligible to receive intestate inheritance from the decedent. Foster children and stepchildren that were never legally adopted by the decedent are not eligible to receive a share as the decedent’s child.
Any child born to the decedent’s wife during their marriage is assumed to be his child. Children born outside of marriage still receive their share as long as paternity was acknowledged by the decedent or otherwise established under Utah law. The decedent’s children can still receive their share if they are born after the decedent’s death, as long as the child survives at least 120 hours after birth. Grandchildren will receive a share only if their parent is not alive to inherit.
Unmarried Individuals Without Children in Utah Inheritance Law
Intestate succession in Utah if there is no surviving child or spouse is arranged as in the chart below:
Intestate Succession: Extended Family Inheritance Situation Who Inherits Your Property Parents – Parents inherit everything Siblings but no parents – Siblings inherit everything
If you leave a spouse, children, grandchildren, parents, grandparents, siblings, nieces, nephews, aunts, uncles or cousins, they will inherit in the order laid out in the charts.
Even with this extensive intestate process ready to back you up and ensure that your family inherits your estate, it’s still highly recommended that you build your own testate will so that you remain in full control of your property’s disposition. That way you can ensure that all of your property ends up in the hands you want it in.
Non-Probate Utah Inheritances
Since probate process can be difficult and expensive, you’ll want to know about the non-probate options you have in Utah. Listed below are some of the assets that will not have to go through probate and instead go directly to the beneficiaries. However, keep in mind that in Utah, non-probate transfers are considered to be advancements on a relative’s share of the estate. If you don’t account for this in a valid will, your property may not end up being distributed the way you intended it to.
- Any property in a living trust
- Life insurance policies
- 401(k)s, IRAs, other retirement accounts
- Securities in transfer-on-death accounts
- Pay-on-death bank accounts
- Real estate held by a transfer-on-death deed or beneficiary deed
- Joint tenancy real property
Other Situations in Utah Inheritance Law
Utah has a survivorship period. To inherit under Utah’s intestate succession law, the heir in question must survive the decedent by at least 120 hours. In addition, relatives conceived before you die but born after the decedent’s death are eligible to inherit as if they had been born while the decedent was alive. However, posthumous relatives must survive at least 120 hours after birth in order to be eligible for their inheritance.
Immigration status is irrelevant when it comes to inheritance. If a relative of yours is entitled to a share of your assets, they can inherit no matter what their citizenship status is. Half-relatives inherit as much as “whole” relatives. For example, your half-sibling would get the same share as any other sibling.
Utah considers non-probate transfers to be advancements on a relative’s share of the estate. That means if an heir receives life insurance proceeds or funds from a payable on death account, those amounts are calculated as part of that heir’s share. In addition, if you make a gift to a future heir while you are alive, and put in writing that this should be an advancement on their inheritance, or if the inheritor puts it in writing, the value of the gift is subtracted from their share.
Resources for Estate Planning
Managing your own estate, or managing money you inherited money from the estate of a loved one, can be a complicated endeavor. That’s why many people choose to employ the services of a financial advisor. SmartAsset’s financial advisor matching tool can match you with up to three financial advisors in your area. If you’re ready to get matched with advisors in your area, get started now.
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