Unauthorized Filings with Utah Division of Corporations

The Utah Division of Corporations is a good-faith filing office, which essentially means that almost anyone with a Utah-ID account who logs onto the Division's Business Registration System can file any document with any entity, including a Statement of Dissolution. Unauthorized filings can be reported but not undone, and depending on the filing type, an unauthorized filing may not be able to be reversed. For example, if a dissolution was filed more than 120 days previously, the opportunity to file a Revocation of Dissolution is lost. This could potentially have real-world tax impacts, interruptions to banking services, etc.

The Division's process for preventing unauthorized online filings is by associating an entity with an online account. By default, the online account responsible for forming new entities is the only account authorized to submit online filings with respect to that entity. Entities formed prior to the new Business Registration System rollout in late 2024 can be associated with an online account by request of the account user. The account user can request authority from either another account holder or, if no other account is associated with the entity, directly from the Division by filling out an Affidavit to Request Entity Authority, which must be notarized.

After emailing the Affidavit to Request Entity Authority to the Division, the Division will reply with an Invitation for Filing Authority that contains an authorization code. The designated user can enter that code in the Manage Entities and Authority section of their account, after which the entity will be added to the user's list of authorized businesses. Businesses formed prior to the new Business Registration System should take these steps in order to prevent unauthorized filings.

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Trust Decanting Now Authorized by Statute in Utah

Pursuant to S.B. 206 (2025) - Estate Planning Amendments, Utah became the thirty-seventh state to statutorily authorize decanting a trust. Decant means “[t]o distribute (the assets of an irrevocable trust) to the trustee of a new trust with different provisions, often to correct drafting errors or to account for new circumstances.” Utah's decanting statute appears in the Utah Uniform Trust Code, Part 8 - Duties and Power of Trustee, section 75B-2-812.5.

Under this new law, unless the terms of the trust instrument expressly prohibit the trustee from doing so, "the trustee may: (i) distribute part or all of the income or principal to a trust governed by a trust instrument that is separate from the trust instrument of the first trust; or (ii) modify the terms of the trust instrument of the first trust." This assumes that the trustee "has discretion under the terms of a trust instrument to distribute income or principal to, or for the benefit of, a beneficiary of a trust..." and provides twenty days written notice to all of the trust beneficiaries. The trustee must also determine whether distribution or modification is necessary, and the beneficial interests in the trust cannot fundamentally be changed through the decanting.

Various other provisions of Utah Code 75B-2-812.5 restrict a trustee's decanting power (1) if a beneficiary can name themself as trustee or remove and replace the trustee with a related or subordinate party, (2) if the trustee is also a beneficiary, or (3) to protect the integrity of certain types of trusts or gifts to trusts. While decanting a trust was arguably within the trustee's common law power in Utah prior to Utah Code 75B-2-812.5, this statute serves as a valuable clarification and authorization of the decanting power.

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Pros and Cons of Utah's Joint Tenancy Presumption Amendments

In the estate planning context, the most important implication of owning property in joint tenancy with another person is the fact that the surviving joint tenant will automatically inherit the interest of the first deceased tenant, irrespective of any last will or trust agreement of the first deceased tenant. For this reason, part of the estate planning process is a careful evaluation of how property is owned and often a change of ownership from joint tenancy to ownership by a trust.

It is very common for spouses to own their personal residence in joint tenancy unless they have completed an estate plan that includes the execution and funding of a trust. Importantly, joint tenancy ownership can be presumed even if the vesting deed for the residence does not specify joint tenancy ownership. For many years in Utah, "an ownership interest in real estate granted to two persons in their own right who are designated as spouses in the granting documents is presumed to be a joint tenancy interest with rights of survivorship..." Utah Code 57-1-5(a)(1)(i).

However, pursuant to H.B. 37 (2024), an ownership interest granted on or after May 1, 2024 to two or more persons in their own right is presumed to be joint tenancy even without the designation as spouses. This will have the benefit of avoiding the need to probate the estate of a first deceased spouse who owns their home or other real estate with the surviving spouse but without any reference to the marriage or joint tenancy on the deed.

On the other hand, this new law could create a problem where business partners take title to an investment property in their individual names without specifying their respective ownership interests in the property. It is unusual for a business partner to be the intended heir of another business partner's assets, but H.B. 37 would create exactly this result if the deed only lists the individuals' names and does not specify that ownership is to be as "tenants in common" or make a similar distinction. The obvious solution is to always specify what kind of tenancy is intended when taking title to real estate, and H.B. 37 makes this even more important for many co-owners of property.

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