While taking care of loved ones financially is often the first reason people create an estate plan, a well-crafted estate plan also can help take care of loved ones emotionally at a time when they are grieving. Final disposition instructions, which name the people you want to oversee your funeral or other disposition arrangements as well as your wishes regarding how you want those arrangements to proceed, can help provide certainty and closure to your loved ones. They can also mitigate conflict around what can be an emotionally-charged decision.

Under Idaho law, you have the right to designate whom you want to control the disposition of your remains. The best way to do so is in a written document separate from your Will or Trust. In the same document, you also may express your wishes regarding cremation or burial, a funeral service or celebration of life, where you wish your ashes to be spread or your remains buried, and any other aspect of your disposition that is important to you and your loved ones. So long as you sign your final disposition instructions in front of witnesses or a notary, your agent designations and your directions are legally binding under Idaho law.

If you do not leave legally binding written instructions, Idaho law dictates who controls your final disposition. In order of priority, those are: (1) a person named as agent under a healthcare power of attorney; (2) a person named as agent under a financial power of attorney; (3) a competent surviving spouse; (4) a majority of competent surviving children; (5) the competent surviving parents; (6) the personal representative of the estate; and (7) a majority of those entitled to inherit. Moreover, the person is not bound to follow any wishes you might have expressed in conversation or otherwise if you did not follow the legal formalities of signing in front of witnesses or a notary public.

Including separate final disposition instructions in your estate plan can avoid the kind of conflict that we have seen when those left behind have different religious beliefs or otherwise disagree about the deceased’s wishes. For example:

After receiving a terminal diagnosis, Amanda prepared powers of attorney naming her son, Charles, as her healthcare agent and her daughter, Donna, as her financial agent. Although Amanda was happily married at the time, she and her wife, Betty, agreed that Betty was not great under crisis and therefore they preferred to name Amanda’s children to make health and financial decisions if Amanda became incapacitated.

Amanda then sat down with her wife and two children and told them that, after her death, she wanted to be cremated and have her ashes scattered in the city where she and Betty had met. Amanda also specifically stated that she did not want to be buried in her family’s historical plot because her parents had shunned Betty. During the conversation, Donna wrote her mother’s wishes down on the back of her copy of her financial power of attorney and Amanda initialed the handwritten notes.

After Amanda died, Charles immediately began making arrangements for Amanda to be buried in the family plot. When Betty and Donna reminded him of Amanda’s wishes, he stated that, as healthcare agent, he had the right to make final decisions and, regardless of what she might have said, it was only right that his mother be buried with her birth family. When a distraught Betty and Donna showed the funeral director Donna’s handwritten notes, the director stated that he was sympathetic but, under the law, he had to follow Charles’s direction.

Don’t put your loved ones through this additional emotional upheaval. Consult with a qualified attorney to properly document your final disposition wishes.

Recently, we’ve had several new matters involving individuals who attempted to revise their estate planning documents without the assistance of an attorney. The results were disastrous for their estates.
 
As we have discussed in this previous post, estate plans are intended to be fluid; we highly recommend reviewing and revising your plan every few years or as new life circumstances arise. When you find that it is time to make changes to your plan, it may be tempting to avoid the cost and hassle of engaging an attorney for what seem like simple little amendments. But trying to modify your documents on your own almost always ends poorly.  In most cases, the desired changes are unenforceable because they do not comply with legal requirements. The unenforceable attempted changes then lead to confusion and potential conflict among your beneficiaries and an estate plan that no longer reflects your wishes.
 
Idaho law requires that individuals seeking to amend a Will, Trust, and other estate planning documents follow certain legal formalities. Primary among these are verification requirements intended to ensure that you – and not someone pretending to be you – are the person making the changes, that you have the mental capacity to revise your documents, and that the changes reflect your wishes. These formalities require more than simply typing up an amendment or initialing a change. By consulting with an attorney, you ensure that your revisions are legally enforceable and achieve your goals.  
 
If you aren’t yet convinced, here are a couple cautionary tales illustrating the perils of trying to revise your documents without the assistance of a qualified attorney:

"James"

James prepared a Will in 2018 that left all of his assets to his three brothers in equal shares.  A week after James finalized his documents, he decided he wanted to leave his house to his younger brother Fred, who did not yet own a home and with whom James had a closer relationship.

James did not want to “bother” his attorney with this change after having just finalized his Will so he decided to make the change on his own. Using the Personal Property Distribution Form, James handwrote: “I leave my house to my brother Fred.” Then he signed and dated the form. 

James died unexpectedly the next year. When Fred took James’s Will to an attorney to be probated, he was informed by the attorney that James’s revision gifting his house to Fred was unenforceable because it did not meet the legal requirements for amending a Will. 

If James had consulted with an attorney, he would have been told that the Personal Property Distribution Form is only for distributing “personal property” – items you can touch and hold such as jewelry, furniture, collectibles – and not for large assets like a home. An attorney would also have told him that under Idaho law, changes to a Will must be signed in front of two witnesses and a notary public. 

"Carlos"

Carlos had an attorney prepare a Revocable Trust for him in 2004. In 2019, Carlos’s youngest son David asked to borrow $25,000 to start a business. Carlos was happy to loan his son the money but wanted to make sure this amount was deducted from David’s share of the inheritance in order to be fair to his other children. The attorney who had prepared Carlos’s trust had retired. Rather than trying to find a new attorney, Carlos decided he would save some money and make the change himself. On his computer, Carlos typed out a document stating his wish that the loan to his son David be deducted from David’s share of the estate. On this document, Carlos typed his full name. He printed the document but did not sign it in ink.

When Carlos died a few years later, Carlos’s children found his Will and the type-written amendment. The type-written amendment was invalid, however, because the terms of Carlos’s trust stated that any amendments had to be signed, dated, and notarized. Predictably, an argument resulted between David and his siblings, who felt that David should honor his father’s wishes. David did not agree to deduct his loan from his share of the inheritance and his siblings had no legal recourse.

Not only was Carlos’s estate distributed contrary to his wishes but, more importantly, due to the conflict created by the unenforceable amendment, Carlos’s children remain on bad terms, the last thing Carlos would have wanted.

Don’t risk finding yourself in this situation. If you or a loved one want to change your estate planning documents, make sure to consult with a qualified attorney to ensure you make your changes properly.

A Trustee or Executor (sometimes called a Personal Representative) is the person responsible for gathering and distributing your assets after you pass and settling your final affairs. In some cases, this person also may be responsible for managing assets held in trust for your beneficiaries for a certain period of time. Although this may sound simple enough, depending on the nature of your assets, these tasks can be time-consuming, complex, and require a high degree of financial sophistication.   

While many people select friends or family members (often adult children) to serve in this role, for some people it makes more sense to appoint a professional fiduciary. A professional fiduciary is a company, bank, or individual, such as an accountant, who specializes in serving as a trustee or executor. These professionals have years of institutional experience administering estates and have the staff and resources to manage long term trusts.  

A professional fiduciary charges your estate for its services. Charges may include a set minimum fee to settle an estate plus hourly fees for administrative services. Alternatively, the fee may be calculated as a percentage of the value of the estate. If the professional fiduciary is managing the assets held in trust for a period of time, they will also charge asset management fees.  

Paying a stranger to perform tasks you believe your friends or family members could do for free may feel like an extravagance. But there are many situations in which the benefits provided by a professional fiduciary significantly outweigh the costs, including:

• Complex family situations with potential for conflict over distributions. Although a fiduciary’s job is to follow the instructions set forth in a Will or Trust, giving one sibling power the others by appointing that sibling as the trustee or executor can lead to accusations of bias or self-dealing, especially when the trustee/sibling is also a beneficiary of the estate. Professional fiduciaries are impartial and have experience navigating complex family dynamics to minimize conflict. 
  
  
• Holding assets in trust for a beneficiary with substance abuse problems. Managing assets held for a beneficiary who struggles with addiction can be challenging. The trustee must decide whether to distribute assets directly to the beneficiary or make payments on the beneficiary’s behalf to third parties, field what can be emotionally-charged requests from the beneficiary for distributions, and objectively assess the beneficiary’s mental status and financial needs. Professional fiduciaries have experience handling these issues and maintaining clear boundaries with beneficiaries. 
  
  
• Holding assets in trust for an extended period of time, such as for minor children or others who lack financial sophistication or money management skills. Selecting a competent trustee is particularly important for parents with minor children or anyone leaving assets in a long-term trust. The trustee will be responsible not only for making distribution decisions but also for actively managing and investing the trust assets for many years. It is important to consider the emotional toll that imposing such a long-term responsibility on a friend or family member might exact on that person. If your friends or family members do not have experience managing an estate of your size or if they are not good with money, using a professional trustee can ensure that the assets you leave to your beneficiaries will be managed responsibly. 
  
  
• Beneficiaries who live out of state and/or do not have time to serve as a fiduciary. Settling even the simplest of estates is time-consuming. The fiduciary has to locate assets, file tax returns, pay debts, make distributions, and, in the case of a Will, commence and manage a probate proceeding.  Professional fiduciaries are familiar with these tasks and can accomplish them more efficiently than an individual who has never served as a fiduciary before.
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• Taxable, or potentially taxable, estates. The trustee of a taxable estate has to file an estate tax return and make important decisions concerning tax compliance and tax planning. Professional trustees have accounting and tax planning experience that most individuals do not have. They can use this experience to ensure that your estate is settled in the most tax-advantaged way.

If any of the above situations apply to you, you should strongly consider using a professional fiduciary to ease the burden on your friends and family and ensure that your estate plan is carried out according to your wishes in the most effective way.

Certain types of assets pass to your loved ones by “beneficiary designation” outside of your estate plan.  This means that when you die, these assets go to whomever you have listed as the beneficiary of your account, rather than according to the distribution provisions in your Will or Trust. 

The most common examples of these types of assets are retirement accounts, life insurance policies, pay on death accounts, and any assets held in “joint tenancy” or titled as “joint.”   When you set up these types of accounts, you designate primary and contingent beneficiaries.  The primary beneficiary is first in line to inherit the asset after you die. The contingent beneficiary will inherit if the primary beneficiary cannot. 

If you are like the majority of people, after you first set up these accounts, you rarely think about who you designated as the beneficiaries.  Because these accounts pass outside of your estate plan, however, it is important to review these designations as part of the estate planning process to ensure they match your current wishes.  Without taking this step, your estate plan may not work as you intended. 

The following examples show how failing to review beneficiary designations can undermine an estate plan:

• Jane’s Will left all of her assets to her husband Jack.  When Jane dies, her 401(k) account, which she set up before she married Jack, lists her sister Sara as the beneficiary.  Because Jane’s 401(k) account held most of her assets, Jane’s sister Sara ends up inheriting the majority of Jane's estate.
  
  
• Bridget’s Trust stated that her partner Bob could live in her house until he died, after which the house would pass to Bridget’s children from her first marriage.  The deed to the house, however, said that Bridget and Bob owned the house as “joint tenants.”  When Bridget died, Bob inherited the house outright under the deed.  When Bob died two years later, the house passed according to Bob’s estate plan and not to Bridget’s children.  
  
  
• Fred designated his wife Ginger as the beneficiary of his life insurance. After Fred and Ginger divorced, Fred did not change his beneficiary designation.  When Fred died unexpectedly, Ginger claimed the life insurance benefits.  Although an Idaho law prohibits ex-spouses from inheriting assets after a divorce, Fred’s family had to bring a lawsuit against Ginger to get back the life insurance proceeds.  By the time the lawsuit concluded, Ginger had spent most of the money and Fred’s family recovered very little.
  
  

In each of these examples, Jane’s, Bridget’s, and Fred’s assets did not end up where they wanted, but instead passed according to outdated beneficiary designations.  To avoid this result with your own assets, make sure you review and update your beneficiary designations.  You can often find out your current beneficiary designations by logging in to your online account.  You can also call your financial institution to request this information. 

Who you should designate as the beneficiaries of your accounts depends on your unique estate plan.  Here are a few examples of how these assets are typically designated:

• Retirement Accounts:  If you are married, your spouse is the primary beneficiary.  If you have minor children, the contingent beneficiary is usually your Trust or Will (specifically, the testamentary trust created by your Will).  If you have adult children, your children are listed as the contingent beneficiaries, unless you are holding your adult children’s assets in trust after you die, in which case you name your Trust.
  
  
• Life Insurance Policies:  If you are married, your spouse is the primary beneficiary.  Your Will or Trust is usually the contingent beneficiary.
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• Pay on Death Accounts:  If you are married, your spouse is usually the primary beneficiary.  Your Will or Trust is usually the contingent beneficiary.

Reviewing these beneficiary designations during the estate planning process and whenever you experience a major life change will ensure that your wishes are carried out both within and outside of your estate plan.
 

A Living Will, sometimes called an Advanced Medical Directive, is a legal document that allows you to state your wishes for the type of end of life care you want if you become so ill or incapacitated that you are no longer able to communicate with your doctor. The Living Will spares your loved ones the burden of trying to guess your wishes, helps avoid conflict among family members advocating different levels of treatment, and protects you from receiving more medical care than you want.

In Idaho, the Living Will comes into effect if (1) you are unable to communicate and (2) a doctor certifies that: 

1. You have an incurable or irreversible injury, disease, illness or condition
2. Your condition is terminal
3. Artificial life-sustaining procedures would serve only to artificially prolong your life, and
4. Your death is imminent whether or not artificial life-sustaining procedures are used; OR
5. You have been diagnosed as being in a persistent vegetative state
   ​

Your Living Will lets you decide now which of the following levels of care you want to receive under those circumstances.  Your options in Idaho are:

1. You want to receive all artificial life-sustaining procedures, including artificial and non-artificial nutrition and hydration.
2. You do not want to receive artificial life-sustaining procedures, but you would like to receive nutrition and/or hydration through artificial (such as a feeding tube) and non-artificial procedures.
3. You want all medical treatment, care, and procedures to be withheld or withdrawn, including withdrawal of the administration of artificial nutrition and hydration.
   
   

Regardless of which election you make, your medical providers will continue to provide comfort care, such as pain medication.

The election you make is entirely up to you. It is a personal decision and there is no “right” or “wrong” choice.  And, importantly, you can always change your election if you decide you want to make a different choice.

If you’d like more information on making these decisions, there are several resources available on the web. A few of these resources include:

• Honoring Choices Idaho
• National Institute of Health: Advanced Planning Healthcare Directives
• Compassionate Choices: Advanced Planning Guide
• Cancer.org: Types of Advanced Health Care Directives 
• Mayo Clinic: Living wills and advance directives for medical decisions

 

For small business owners, an important part of the estate planning process is making sure you have your key corporate documents – such as Operating Agreements, Shareholder Agreements, Partnership Agreements, and Employee contracts – organized and in a location where your Trustee or Personal Representative can find them.  This ensures continuity in the business if something unexpected happens and also provides critical documentation of the amount and value of your ownership interest.

One of my clients is unfortunately in the process of learning this lesson the hard way.  Ann’s father Frank died two years ago in California without a Will or Trust.  Without a Trust, Ann’s father’s estate has to go through probate, which in California is a very expensive process.  The bigger problem for Ann and her brother, however, involves Holy Cannoli, a bakery her father owned with a good friend, Sally. 

After Frank’s death, Ann and her brother spent hours looking through Frank’s papers trying to figure out how much of Holy Cannoli Frank owned.  Ann thought her father owned 60% of the bakery, but Ann’s brother thought their father owned only 25%.  Ann found some documents referring to an Operating Agreement for Holy Cannoli – which would list each owner’s interest – but she was unable to find the Operating Agreement itself.

Ann contacted Frank’s  business partner Sally and asked her for a copy of Holy Cannoli’s Operating Agreement.  At first, Sally said she didn’t remember an Operating Agreement.  When Ann told her that she’d found several documents referencing the Operating Agreement, Sally changed her tune and said that she would look for the document in her files.  Months passed and Sally did not produce an Operating Agreement. 

After repeated calls, Sally suggested Ann contact Sally’s attorney to see if he had a copy of the Operating Agreement.  The attorney, after waiting several weeks to respond to Ann’s email, said that he would get back to her after tax season. Tax season came and went, however, and Ann and her brother still do not have an Operating Agreement and still do not know how much of Holy Cannoli belonged to their father.  In addition, Sally has not provided Ann and her brother with access to the Holy Cannoli books nor have they been paid any of the profits since Frank died.  Sally claims she is keeping their “share” in a separate account, but Ann has received no information about how much their “share” is or where this alleged account is located. 

Sally, meanwhile, has offered to “settle” the issue by paying Ann and her brother $200,000 in exchange for Frank’s interest.  Ann’s brother is tired of the whole thing and wants to settle.  Ann, however, thinks it is ridiculous to “settle” when they don’t know how much of Holy Cannoli Frank owned!  Ann and her brother are currently deciding how to proceed.  Frank could have avoided all of this heartache and wasted time by giving Ann and her brother a copy of the Operating Agreement, or, at a minimum, telling them where to locate this critical document.

​Whether you own a bakery, a family business, a rental property, or a large corporation, take the time now to make sure your key corporate documents are organized and someone – other than you and your business partners – knows where to find them.

The trend among estate planners, including myself, is to offer flat-fee estate plans.  I think this a great development for both attorneys and our clients.

A flat fee estate plan allows my clients to know the cost of their estate plan up front.  I provide my clients with a menu of estate plan options, which differ in price based on complexity.  For example, a plan with a simple will as the central organizing document is easier to draft and therefore costs less than if a revocable living trust is the key document.  All of my estate plans also include the other key documents you should have in place, including a durable power of attorney for health care, a living will, a financial power of attorney, and HIPPA waiver.
I like flat fee plans because they simplify the relationship between me and my clients and allow me to spend as much time as needed to understand my clients and their family’s needs.  I also find that my clients like the flat fee model because it lets them call or email me with questions without having to worry about how much each minute is costing them.

In my practice, the fee I charge reflects how long it takes me, on average, to prepare the plan.  A revocable living trust plan takes me longer to draft, so it costs more.  This is also why the price for couples – in which I have to produce documents for both spouses – is more than for a single person. 
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My goal is to keep my plans affordable while also offering a superior level of service.  For me, the flat-fee model is the best vehicle to achieve this goal.

I was reminded of the importance of keeping your estate plan up to date last month when a client asked me to probate her father’s estate.  Her father, who I’ll call “James”, prepared his estate plan over 15 years ago.  Since that time, one of James’ children passed away, both of the individuals he nominated as his Personal Representative have died, and he purchased an investment property in Sunnyvale, California.  Since James’ estate plan was not updated, none of these changes were addressed in his estate plan, which created significant problems for his beneficiaries.

First, because James owned property in Idaho and California, he should have had a Revocable Living Trust as part of his estate plan.  A Revocable Living Trust would have allowed his estate to avoid probate in both Idaho and California.  Instead, because James only had a Will, his beneficiaries had to hire attorneys in both states and pay probate fees in both states.  California has some of the highest probate fees in the United States, so the amount his beneficiaries inherit will be reduced by tens of thousands of dollars. 

Second, James’ 15-year-old estate plan did not address the fact that one of his children predeceased him.  James’ Will directed that the estate be divided between his “then-living” children, which effectively disinherited his deceased child’s son (i.e. his grandson).  If James had updated his estate plan, he likely would have made provisions for his grandson.

Third, because both people James nominated as his Personal Representative were deceased, this issue had to be addressed during probate, making the process more time consuming and costly.  It also caused a strive between James’ two oldest children, each of whom thought they would make the better Personal Representative.

Finally, because it had been such  a long time since James prepared his estate plan, none of his adult children knew where to find the original copy of his Will, which they needed for the probate proceeding.  The attorney who prepared James' Will had also died, which made it even more difficult to locate the original Will.  

All of the problems encountered by James' beneficiaries could have been avoided if James had updated his estate plan.  By taking the time to review and update your estate plan, you ensure your plan reflects your current wishes and your loved ones are spared unnecessary hassle and expense.
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Once you’ve taken the time to invest in your estate plan, it’s critical that you let your executor and/or trustee (also known as your “fiduciaries”) know where to find your estate plan documents.

When I finish any client’s estate plan, I email them electronic copies of their executed documents in addition to providing them with the original copies of their documents in their Estate Plan Portfolio binder.  I advise sharing the electronic copies of your estate plan documents with whomever you’ve appointed as your executor and/or trustee, and, if you are married, to whomever you’ve appointed as your successor executor and/or successor trustee.  Included in the email should be a note letting them know where to find the originals of your documents. 

If you’re not comfortable sharing the contents of your estate plan documents with your fiduciaries, you should let at least two trusted people, who are not your spouse, know where to find the originals of your documents.

If you have a will-centered estate plan that does not include a trust, the location of the original will is critical information that your executor must have.  This is because a court will only accept the original will for purposes of opening a probate proceeding (the judicial proceeding in which a judge supervises the disposition of a person’s assets after they pass).  If your executor does not know where to find the original of your will, a copy of your will may only be admitted as “probative evidence” of your wishes, but a court is not bound by its terms. 

For some people, this may not be an issue, but, in cases in which there is the potential for discord among your heirs, not knowing the location of the original of your will can create a huge headache. 

A good illustration of the problems caused by not telling someone where to find your will occurred in the estate of the famous Olympic sprinter, Florence "FloJo" Griffith Joyner.

When Ms. Joyner died unexpectedly at the age of 28, she had not told anyone where to find her original will.  This proved a significant issue when Ms. Joyner’s mother claimed that Ms. Joyner promised that she could live in Ms. Joyner’s house until she died.  Ms. Joyner’s husband disputed his mother-in-law’s claim, and the case wound up in court.  Hundreds of thousand of dollars in legal fees could have been avoided had Ms. Joyner told someone where to find her will.

The moral of the story is make sure at least a couple of different trusted friends or family know where to find your original estate plan documents. ​

Why do college students need to think about estate planning?  The short answer is because most college students are over the age of 18.  

When your child turns 18, a significant legal event happens in their lives: they are considered an “adult” under the law.  This means they are responsible for making their own health care decisions, and, under the Privacy Rule of the Health Insurance Portability and Accountability Act (commonly referred to as HIPAA), a  parent can no longer access their adult children’s medical records or other healthcare-related information.  

The combination of these two factors – your child turning 18 and HIPAA – means that as a parent, you are no longer able to make health care decisions for your child nor are you able to access their medical records.  Practically speaking, this makes it difficult – if not impossible – to intervene and assist if your child needs medical help, especially if you are trying to do so from a distance.  And while this may come as a surprise, this is the case even if your child is still on your medical insurance.

For example, if your child is injured in a car accident while away at school and arrives at the emergency room unable to communicate with the doctors, you as their parent cannot automatically step in and help.  In fact, in some instances, the hospital may not even be willing to tell you if your child has been admitted to the hospital, let alone give you information on the extent of their injuries.

This is an awful position to find yourself in as a parent.  Fortunately, it can be easily avoided with three simple, easy to prepare estate planning documents.

Power of Attorney for Health Care
A Power of Attorney for Health Care allows your child to appoint an agent (typically one or both parents) to make health care decisions for them if they are incapacitated and cannot make such decisions for themselves.  With a Power of Attorney for Health Care in place, there are no legal barriers preventing you from obtaining information about your child and making decisions for them if they cannot do so themselves.

HIPAA Authorization
A HIPAA Authorization allows your child to designate who can access information about their medical records and health condition.  It is important to have a HIPAA Authorization in place because a Power of Attorney for Health Care only comes into effect if you child is incapacitated, but does not allow you to access their medical records if they are not incapacitated.  If your child has a complicated or long term health condition, access to their medical records is important if you’re helping them make appointments with specialists or identifying the best course of treatment.

Springing Power of Attorney for Finance
A springing Power of Attorney for Finance allows your child to designate someone to access their financial accounts and undertake other important activities, such as filing a lawsuit on their behalf, if they become incapacitated.  The word “springing” means that this document is only effective in the event of an incapacity.  This strikes a nice balance between allowing your child to be financially independent while also making sure they are protected in the event of an emergency.  

Without these three documents in place, a parent’s only choice is often to petition a court to be appointed as their child’s guardian or conservator.  This is an expensive process and involves dealing with attorneys and courts, the last thing a parent wants to worry about during an emergency.

If you have children heading off to college this fall, or if you have a child over 18 who you want to be able to assist in the event of an emergency, take the time to put these three documents in place.  Hopefully, you’ll never need to use them, but it’s always better to prepared in case some doesn’t go as planned.
 

We work hard to build up the assets that compromise our estate and the last thing we want to happen is for one of these assets to be missed by our loved ones. 

Years ago, when someone passed away, the executor of their estate would spend several days at the decedent’s home carefully reviewing every document they could find – bank statements, credit card statements, files, paperwork, bills, etc.  It was a labor-intensive process, but by the end, the executor could feel reasonably confident they had located all the assets.

These days, however, things aren't as simple.  Take a minute to think about how many of your financial statements have gone paperless.  If you’re like me, it’s the majority of your accounts.  Indeed, as more of our financial statements and communications move online – each with its own separate user name and password – the harder your executor’s job becomes and the more likely an account gets missed. 

The solution is to leave a detailed list of your financial accounts, including financial institution, account numbers (the last four digits of the account number are enough), and approximate values, so your executor knows how much you have and where to find it.  It's also helpful to include the contact information of your accountant, financial advisor, life insurance agent, and estate planning attorney. 

Obviously, it goes without saying that this document should be kept somewhere secure, like a locked fire proof box.  And although you’ll have to update it from time to time, once you invest the time to make your initial inventory, it’s fairly easy to keep up to date.

Given the importance of this issue, I provide my clients with an Asset Inventory to fill out and record this critical information, and include this document as part of the Estate Plan Portfolio they receive from my office.  ​

During a divorce, there are five essential changes you should make to your estate plan to protect yourself and your assets.  In Idaho, after a divorce is final, your ex-spouse is prohibited by law from inheriting your assets.  However, if you die while your divorce is pending, these protections are not available and your spouse would likely inherit all of your assets, either under the terms of your current estate plan or under state law if you do not have an estate plan.  This is probably that last thing you want to happen.  Here are five steps to take when you file for divorce (or if you are contemplating filing for divorce) to exercise as much control as possible.  

1.  Update Your Will or Trust.  In a typical estate plan, most spouses leave everything to each other.  Your Will or Trust should be updated as soon as possible leaving your half of the community property, and all of your separate property, to someone other than your spouse.  If you don’t have a will or trust, you should prepare one.  Otherwise, your spouse will inherit all of your assets under state law.

2.  Create a Children’s Trust if You Have Minor Children.  If you have minor children, you should have a trust that names someone you choose as trustee to manage the assets your children inherit from you.  If you don’t have an estate plan designating a trustee, your spouse will control these assets if something happens to you.  

3.  Revoke and Update Power of Attorney for Finance.  A Power of Attorney for Finance allows you to nominate someone to manage your finances if you become incapacitated.  Most spouses nominate each other as their agents and, in many cases, this power is immediate, meaning your spouse can access all of your accounts and assets, even if they are in your name alone.  You want to revoke these powers as quickly as possible and provide notice to your spouse of your revocation.  You also want to choose someone else to act as your agent.  

4.  Modify Medical Power of Attorney.  You also likely have a medical power of attorney empowering your spouse to make health care decisions on your behalf.  Given the current situation, your spouse is probably not who you want making these decisions.  Revoke any medical powers of attorney naming your spouse, nominate a new agent, and notify your health care providers of this change.    

5.  Update Your Retirement Plan Beneficiary Designations.  Your spouse is likely listed as the primary beneficiary of your retirement plan.  Update your beneficiary designations to name someone other than your spouse.  Although your spouse is probably entitled to a portion of your retirement account as part of the divorce, changing this designation now protects your interest in your retirement account.

At Shaila Buckley Law, we specialize in helping clients with this process to ensure your estate plan protects you during, and after, your divorce.  Questions?  We’d love to help.  Give us a call at (208) 995-9224 or send an email to shaila@shailabuckley.com.  

One of the most important documents in an estate plan is the Durable Power of Attorney for Health Care, which allows you to nominate a Medical Agent to make decisions on your behalf. 

What Is a Medical Agent?
A medical agent (also called a healthcare agent, healthcare surrogate, a healthcare proxy, or a medical proxy) is a person you authorize in a medical power of attorney to make decisions about your medical care if you are too ill to make them yourself or are otherwise unable to communicate your wishes.

Why is it important to choose a medical agent now?
The Covid-19 pandemic has rendered an unusually high number of patients in critical condition, with some on ventilators and under heavy sedation.  Although the majority of people who get sick have mild symptoms and recover quickly, since no one knows exactly how they will be affected by the virus, it’s best to plan for the worst and hope for the best. Part of that planning is making sure someone can make healthcare decisions for you if you fall ill and are unable to make those decisions for yourself.

Factors to Consider in Choosing Your Medical Agent
A medical agent is an important role, and the person you choose will have the power to make critical healthcare decisions—like consenting to a treatment plan, whether to accept or refuse medical treatment, and which healthcare providers or hospitals to use for your care. As a result, it is crucial to think carefully about who you choose to fill this role. Many people simply assume that their spouse or their oldest child should take on this role, but they are not always the best suited. Here are some factors to consider when selecting an agent:

1. Ability to Handle Stress and Understand Complex Medical Issues. People handle stress differently, and not everyone is able to set aside their emotions and make level-headed decisions when someone they love is suffering.  You should choose someone who is able to think rationally in emotionally difficult circumstances, even if that means you must look outside of your family to find the best person for the job.  You also want to choose someone who is able to understand potentially complex medical issues, and who is assertive enough to act as a strong advocate for your and your wishes.
2. Location. The person you choose to act as your medical agent should be someone who lives close by and is able to act on your behalf very quickly in the event of a medical emergency or if you need your agent to serve in that role for an extended time period.  This is especially true now, when many people might be under a mandatory or recommended stay-at-home order, or may not be available or willing to travel to another city or state.  Consider naming several alternate agents to account for someone’s potential unavailability.
3. Is willing/able to serve.  Be proactive and check that the person you want to name as your agent is willing to take on that role. Keep in mind that if you are elderly, you may want to name at least one agent who is from a younger generation than you to ensure that there is someone who can serve as your advocate when the time comes.
4. Will honor your wishes no matter what. Your medical agent has a duty to make decisions on your behalf that you would have made to the extent that he or she is aware of your wishes. This is the case even if your medical agent disagrees with your choices. As a result, your medical agent needs to be someone your trust to carry out your wishes.

 
Need help?
Medical directives may be among the most important legal documents you prepare - especially in light of COVID-19. Picking a medical agent can be tricky.  If you need help thinking through your options, or if you need help with any other estate planning needs you may have — whether that’s setting up a financial power of attorney, last will and testament, or a trust — please give me a call 208-995-9224 or shoot me an email at shaila@shailabuckley.com.    

Most people I know have years of old papers tucked away in filing cabinets, piled up on desks, or stored in the infamous “To Be Filed” folder.  In the world of estate planning, these troves of documents are often left for heirs to sort through after a loved one’s passing.  A big reason for this is that we don’t know what records to keep or for how long.   

Here’s a list of the types of documents you should hang on to and the amount of time to keep these records. 

Keep indefinitely in a safe place (such as a fireproof box or safe)

• Birth certificates
• Adoption papers
• Marriage licenses
• Death certificates
• Divorce decrees
• Social Security cards
• Passports
• Military discharge papers
• Estate-planning documents (Wills, Trusts, Powers of Attorney)
• Life-insurance policies
• Deeds, mortgages and bills of sale
• Title to your current vehicles
• Tax returns (but not the supporting documents – see below for when to discard those)
• Year-end statements for investments
• Medical records
• Pension plan records
• Retirement plan records
  
  

Keep for seven years

• Supporting documents for your tax returns (note that the IRS can audit you for three years after you file a tax return; for six years if they think you’ve under-reported your income; and indefinitely if you didn’t file a return at all – click here for the IRS guidelines on record retention)
• Receipts for large items (such as large home appliances)
• Home purchase or sale and improvement records
• Medical bills/claims
  
  

Keep for one year

• Bank and credit card statements (unless the information supports your tax returns)
• Paycheck stubs 
• Utility bills
• Checkbook ledgers
• Monthly mortgage statements
• Investment statements (discard after you receive your year-end statement)
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Lastly, keep in mind that when discarding records, you should shred or otherwise destroy them to protect your confidential information. 

Divorce stinks.  It’s awful for everyone and usually involves paying seemingly (and often actually) exorbitant sums of money to attorneys.  Undoubtedly, the last thing you want to do after your divorce is meet with yet another attorney to discuss – of all things – estate planning.

But the period after a divorce is a critical time to address your estate plan.  Under an Idaho law passed in 2018, an ex-spouse is treated as if they predeceased their spouse for the purposes of a will or trust.  In simple terms, this means that if the will you created when you were married left everything to your spouse, then after you die, your assets would go to whomever you designated in your will after your spouse.

Given this law, why should you redo your estate plan?  First, with your ex-spouse out of the picture, you should think about how you want your estate distributed.  You may find that your feelings now are quite different than when you were married. 

Second, an important part of a comprehensive estate plan includes designating who you want to make medical and financial decisions for you if you become incapacitated (in the form of a durable power of attorney for health care and a power of attorney for finances).  For some couples, the only person they designate is their spouse.  Without a backup listed, and with your ex-spouse prohibited by law from assuming this role, you have no one to make these decisions.  This is not a desirable result.

Third, in my experience, most people don’t want their ex-spouse to play any role in managing their assets if they die. But, if you have children and don’t have an estate plan designating a trustee to manage the assets your children inherit from you, there is a high likelihood that a Court would appoint your ex-spouse to this role. 

Fourth, redoing your estate plan ensures the least amount of hassle for your family.  Although Idaho law prohibits an ex-spouse from inheriting your assets, the financial institution holding your retirement account and life insurance company may not know you were divorced.  These types of assets pass outside of probate directly to whomever you named as your beneficiary (on forms you likely filled out years ago).  The last thing you want is for your heirs to have to try to collect funds improperly paid to your ex-spouse, especially if your divorce did not end on good terms.

Last, unlike the attorney fees accrued in your divorce – which undoubtedly were hard to predict and multiplied at unsettling rates  – redoing your estate plan, at least in my office, involves a flat fee.  You’ll know the cost up front and will be able to ask questions without worrying about how many billable minutes just went by. ​

When to Update Your Estate Plan
 
Once you have a well-drafted, personalized estate plan in place, the hardest work is done and you should congratulate yourself on checking this critical item off your “To Do” list. 

Nonetheless, every couple of years, you’ll want to review your plan and make sure it still reflects your family’s needs and wishes.  Life happens: children grow up, people move, you buy or sell a house.  You want your estate plan to keep up with these changes. 

Life changes that should be addressed in your estate plan include: 

• You have children or more children
• You have grandchildren
• You get married, divorced, or remarried
• Your financial situation changes
• You receive an inheritance
• You purchase or sell a home
• Your children get older and can serve as trustees or executors
• Your spouse dies
• You or your spouse’s parents die
• Changes happen in the lives of people you’ve nominated as trustees, executors, agents, or guardians – they move, get married or divorced, or your relationship with them changes
• You have recently moved to Idaho and your estate plan was prepared in another state
  
  

Most of these events can be addressed through an amendment to your existing estate plan documents.  Some of these events, such as getting divorced or remarried or having a significant change in your financial situation, may merit a full overhaul. 

If you’ve experienced any of these life changes, or something else you think should be addressed in your estate plan, give me a call at 208-995-9224 or shoot me an email - shaila@shailabuckley.com - and we’ll get it taken care of.