SB 206: Estate Planning Amendments - Utah

Substitute #2 → Enrolled · 6 edits · Mar 26, 2025

MODERATE

This bill updates Utah's estate planning laws by modernizing definitions, clarifying who can make legal documents like wills and powers of attorney, and introducing new rules for asset protection trusts. It also adjusts the Uniform Transfers to Minors Act to align with updated age standards. These changes aim to provide clearer legal standards for protecting family assets and managing finances for incapacitated individuals.

Scope change

The bill expands the scope of asset protection trusts to include cases where a settlor can be made a beneficiary by another person's action, and it modifies the age threshold for minors in the Uniform Transfers to Minors Act from 18 to 21.

DEFINITION

Updated the definition of 'minor' in the Uniform Transfers to Minors Act from under 18 years old to under 21 years old.

ELIGIBILITY

Clarified the legal standard for testamentary capacity, requiring a testator to understand their family, property, and ability to form a plan for distribution.

REQUIREMENT

Introduced new requirements for asset protection trusts, including mandatory notices to domestic support obligors and restrictions on settlor control to prevent fraud.

ENFORCEMENT

Adjusted the statute of limitations for challenging fraudulent transfers to asset protection trusts, adding specific notice requirements and shorter timeframes for creditors to act.

TECHNICAL

Added provisions allowing trustees to convey trust property to secure financing and requiring reconveyance within 60 days to avoid being treated as a new transfer.

Included coordination clauses to resolve potential conflicts with other pending legislation regarding guardianships and estate planning recodification.

Introduced → Substitute #1 · 6 edits

MODERATE

This bill updates Utah's estate planning laws to modernize definitions, clarify the requirements for making a will, and strengthen protections for asset protection trusts. It also introduces new coordination clauses to ensure consistency if related bills pass simultaneously.

Scope change

The bill expands the scope of estate planning amendments to include specific coordination with other pending legislation and clarifies the rules for asset protection trusts to better protect settlors from creditors.

REQUIREMENT

Modified the legal standard for testamentary capacity to clarify that a testator does not need to understand inheritance laws by intestate succession to make a valid will.

Removed the requirement that an incapacitated person must be physically present at their guardianship hearing, allowing for a waiver of presence under certain conditions.

Modified asset protection trust rules to make the affidavit of solvency optional rather than mandatory and clarified that distributions are considered made from the most recent transfer if multiple transfers occur.

Added provisions allowing trustees to convey property held in an asset protection trust to the settlor or beneficiary to secure financing, provided the property is reconveyed within 60 days.

TECHNICAL

Added coordination clauses to address potential conflicts with H.B. 334 and S.B. 100 if they also become law.

DEFINITION

Modified the definition of 'Asset Protection Trust' to clarify that the settlor may be made a beneficiary by the act or action of another person, not just the settlor themselves.

Substitute #1 → Substitute #2 · 6 edits

MODERATE

This bill amends Utah's estate planning laws to modernize definitions, clarify guardianship standards, and introduce new asset protection trust provisions. Key changes include updating testamentary capacity requirements, allowing trustees to decant trusts in certain circumstances, and establishing specific rules for asset protection trusts to protect settlor assets from creditors while maintaining protections for domestic support obligations.

Scope change

The bill expands the scope of asset protection trusts to include irrevocable trusts where the settlor may be made a beneficiary by another person's action, and introduces new decanting powers for trustees to modify trust terms.

DEFINITION

Updated definitions for 'incapacitated' and 'testamentary capacity' to clarify mental health standards and decision-making abilities.

Created new asset protection trust provisions defining requirements for protecting settlor assets from creditors while ensuring domestic support obligations remain enforceable.

REQUIREMENT

Removed the requirement that an alleged incapacitated person must be present at guardianship hearings, allowing for remote proceedings in certain cases.

Introduced new decanting power allowing trustees to distribute trust assets to a second trust or modify trust terms under specific conditions.

ENFORCEMENT

Established specific limitations periods and notice requirements for creditors seeking to challenge asset protection trust transfers.

TECHNICAL

Recodified and renumbered various sections of Title 75B to improve organization and consistency with other estate planning statutes.

Estate Planning Amendments

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