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SHAILA BUCKLEY LAW
  • Home
  • Estate Planning
    • Who Needs an Estate Plan?
    • What Happens if You Don't Have an Estate Plan?
    • What is a Comprehensive Estate Plan?
    • Is Probate right for you?
    • Benefits of Revocable Living Trusts
    • Resources
  • Probate
  • Our Process
    • What to Expect
    • Initial Consultation
    • Additional Services
    • Pricing Information
  • About
  • Blog
  • Contact
    • Directions
  • Schedule

BLOG

Our blog provides education and information on estate planning issues to help you keep you informed on new developments in this area of law.  Please note that information in this blog and website is informational only and is not legal advice. 
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If you have ideas for blog posts, feedback on current posts, or would like to reproduce and attribute any of these blog posts, I'd love to hear from you. 
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Charitable Giving: A Guide to Leaving Money to Your Favorite Organizations

6/2/2025

 
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There are a variety of creative and tax efficient ways to leave money to your favorite charitable organizations in your estate plan.  Please click here to listen to our recent interview on Boise State Public Radio's Idaho Matters discussing these strategies.  

Make Sure to Add Your Trust To Your Homeowners Insurance Policy

2/20/2025

 
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In the aftermath of California's recent wildfires, social media has been buzzing with an eye-opening insurance issue affecting trust owners.  Several families have shared their stories of unexpected insurance claim denials. These denials occurred not because of insufficient coverage but because, after transferring their homes into their trusts, the families had not taken the next step of naming their trusts on their insurance policies.  This situation is preventable with the right guidance and planning.

A Simple Step That Makes a Big Difference

When you create a living trust, you're taking an important step to protect your family's future. Part of that protection involves ensuring that your homeowners insurance policy and your trust work together effectively. When you transfer your home into your trust, you're changing its legal ownership structure. Although you still live in the home and, as a practical matter, your control of the home does not change, the trust becomes the legal owner of the property.  Your insurance policy needs to reflect this change in legal ownership.

Fortunately, updating your policy is typically straightforward.  Here’s what you need to do:

  1. Contact your insurance agent and inform them that you've transferred your home into a trust
  2. Request that your trust be added as an "additional insured" on your policy
  3. Ensure the trust's name is listed exactly as it appears on your trust documents
  4. Keep a copy of the updated insurance policy with your trust documents
  5. Repeat these steps for any real property you have transferred into your trust and for all insurance policies that cover your property (for example, insurance for rental properties or umbrella insurance policies)

Most insurance companies handle these updates routinely. Usually, all you need to do is call the office or send your agent an email.

Peace of Mind for You and Your Family

Just as your trust provides protection for your family's future, updating your insurance policy to properly reflect your trust’s ownership of your home protects your family's present security. This simple step helps ensure that your careful estate planning works as intended.

How We Help Our Clients Stay Protected

At Shaila Buckley Law, we understand that funding your trust involves many moving parts. That's why we've made it a priority to guide our clients through every necessary step. During your signing meeting, we specifically discuss the importance of naming your trust as an "additional insured" on your homeowners insurance policy. We also include this crucial task on the detailed "Trust Funding To Do List" we prepare for each client.
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If you have questions about your trust or need assistance with any aspect of your estate plan, our team is here to help. We're committed to ensuring your estate plan provides the protection and security you and your family deserve.
 

When to Update Your Estate Plan

1/15/2025

 
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Once you have a well-drafted 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 us a call at 208-995-9224 or shoot us an email - [email protected] - and we’ll get it taken care of. 

What To Do When You Can’t Find Your Loved One’s Will

12/10/2024

 
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The death of a loved one is inherently challenging, but the situation grows more complex when you know they made a Will but you can't find it. Idaho law, however, provides a pathway for handling such scenarios. This post will guide you through the process of probating a lost Will in Idaho.

Idaho’s Approach to Lost Wills

The good news is that, in Idaho, you can still probate (legally process) a Will even if you can't find the original. In fact, even if you can’t find any physical copy of the Will at all, as long as you have strong evidence about what the Will said, you can still submit it to probate.

Overcoming the Presumption of Revocation

The initial hurdle in probating a lost Will is addressing the "presumption of revocation." This legal principle assumes that if a Will was last known to be in the possession of the person who died, but is now missing, the deceased may have intentionally destroyed the Will with the intention of revoking it. Don’t worry, you can overcome this presumption with appropriate evidence.

Establishing Non-Revocation

To counter the presumption of revocation, you'll need to present compelling evidence. This might include:

  • The deceased and the beneficiaries named in the Will were still on good terms
  • The deceased said they hadn’t changed their mind about what was in the Will
  • Someone who didn’t like what was in the Will had access to it and might have destroyed it. But note that courts are generally cautious about inferring unauthorized destruction of a Will, as this would imply criminal activity.

Proving the Will’s Contents

Once you've overcome the presumption of revocation, the next step is to establish the Will’s contents. This process is more straightforward if you have a copy of the Will. In the absence of a copy, you'll need to provide substantial evidence of the Will’s provisions. Statements made by the deceased will not be enough on their own. The most persuasive testimony typically comes from the attorney who drafted the Will or witnesses familiar with its contents.

The Dead Man’s Act: A Potential Complication

An additional factor to consider is Idaho's Dead Man's Act. This statute can limit admissible testimony regarding conversations with the deceased. While this may complicate the process, an experienced probate attorney can help navigate this potential obstacle.

Conclusion

While probating a lost Will in Idaho presents challenges, it's far from an insurmountable task.  The key points to remember are:

  1. You can probate a lost Will in Idaho
  2. You need to show it wasn’t destroyed on purpose
  3. You need to prove what was in it

Every situation is different, so it’s a good idea to talk to a lawyer who knows about Idaho probate law. Our office can  help guide you through the process and help you gather the right evidence to present your case to the court.

Understanding the Difference Between Probate and Non-Probate Assets: The Two Bucket Approach

10/27/2024

 
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When creating your own estate plan or administering the estate of a loved one after they have passed, one of the most crucial distinctions to understand is the difference between probate and non-probate assets. This distinction can significantly impact how assets are distributed after death and whether beneficiaries need to go through the court-supervised probate process.

We have found that understanding how assets transfer after death is simpler when you think of it as two distinct "buckets."

Bucket #1: Assets with Beneficiary Designations

The first bucket contains assets that pass directly to beneficiaries without court intervention. These assets have built-in mechanisms for transferring ownership upon death through beneficiary designations or joint ownership. The transfer process is typically quick and straightforward, requiring only a death certificate and the beneficiary's identification.

Examples of Bucket #1 Assets include:
  • Retirement accounts (401(k)s, IRAs)
  • Life insurance policies
  • Payable-on-death bank accounts
  • Transfer-on-death investment accounts
  • Joint accounts with rights of survivorship
  • Property held in joint tenancy

Bucket #2: Traditional Probate Assets

The second bucket contains everything else, assets that must either go through probate or transfer according to a trust agreement. These assets typically don't have built-in transfer mechanisms and require additional legal steps to pass to beneficiaries.

Examples of Bucket #2 Assets include:
  • Individual bank accounts
  • Personal property
  • Real estate in your name alone
  • Non-retirement investment accounts
  • Business interests

Beneficiary Designations Override a Will or Trust Agreement

A will or trust agreement primarily controls assets in Bucket #2. However, it's crucial to understand that beneficiary designations (Bucket #1) override what a will or trust agreement says. This is one of the most common misunderstandings we encounter and it can lead to disastrous results.

For example, we recently assisted with the administration of an estate in which the deceased mother had named her eldest child as a joint account holder on an investment account that held the bulk of her assets. The only reason she did so was because she wanted that child’s assistance in managing the investments. She did not intend to gift the account to that child alone. In her will, she stated that at her death she wanted all four of her children to share the funds in the investment account equally.

Unfortunately, no one had advised her that the joint account designation would override her will. At her death, the account custodian immediately transferred all of the assets in the joint investment account to the eldest child as the joint account holder. Although in this situation, the eldest child ended up making gifts to her siblings to fulfill their mother’s wishes, not everyone is going to be that magnanimous nor will it always be feasible to make such gifts.

Good Planning Can Clarify Which Assets Are in Which Buckets
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An experienced estate planning attorney can help ensure your estate plan effectively addresses both types of assets and achieves your specific goals for asset distribution. And if you are the one administering an estate that contains assets in both buckets, an experienced estate planning attorney can help you and the beneficiaries navigate the transfers. 

Joint Probate: A Solution When Both Parents Have Passed

10/27/2024

 
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We recently had a client who lost her mother after a long illness. As she sorted through her mother’s papers, she discovered that her father’s name was still on the deed to the family home and several bank accounts. Her father had passed away more than ten years before, and our client’s mother had never formally settled his estate. Panic set in as our client remembered something about a three-year limit for probating estates in Idaho. Her first question when she met with us was: Is it too late to handle her parents’ affairs properly?

Fortunately, it was not too late. Idaho law provides a solution for this situation, and it’s called joint probate.

Understanding Joint Probate

Joint probate is a legal process in Idaho that allows for settling a married couple’s estate after both spouses have died, even if the second spouse took no action to retitle property after the first spouse’s death. For our client, this meant she could still properly settle both her parents’ estates, despite the long gap between their deaths.

When Joint Probate Becomes Necessary

Our client’s situation is not uncommon. Several scenarios might lead to the need for joint probate:

  • The surviving spouse was too grief-stricken to handle estate matters after their partner's death
  • The surviving spouse didn’t realize they needed to retitle property in their name only
  • Children or heirs are unsure how to proceed with property still in both parents’ names

Legal Basis for Joint Probate

Idaho Code 15-3-111 provides the legal foundation for joint probate. For our client, this law meant she could join both her parents’ estates in a single probate proceeding, even though her father died over 10 years ago. The key requirements for joint probate are:

  • The marital community was dissolved by the first spouse’s death
  • The second spouse was entitled to all of the first spouse’s property by law (either under the first spouse’s Will or pursuant to Idaho laws of intestacy)
  • The second spouse died before any probate proceedings were initiated for the first spouse

Overcoming the Three-Year Rule

Luckily, because our client acted promptly after her mother’s death, her initial worry about the three-year limit for probate wasn’t a problem. In joint probate, the three-year limit only applies to the death of the spouse who died last; in this case, our client’s mother. This meant our client could still use joint probate even though it had been more than a decade since her father passed away.
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Conclusion
 
While our client initially felt overwhelmed by discovering her mother hadn’t settled her father’s estate, joint probate in Idaho provided a solution to her problem. If you or someone you know encounters this challenge, we recommend consulting with an Idaho probate attorney to help navigate the joint probate process.

Navigating Overlooked Tasks After Losing a Loved One

10/27/2024

 
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Dealing with the loss of a loved one can be overwhelming. It's easy to overlook certain important estate administration tasks during this difficult time. While concerns over safeguarding bank accounts, managing real estate, and settling debts often take precedence, there are several less obvious responsibilities that require attention in the months following a death.

  • Digital Legacy.  One of the first areas to address is the deceased's digital legacy. This involves closing or memorializing social media accounts, handling email accounts and online subscriptions, and accessing or transferring digital assets such as photos, documents, and even cryptocurrency.

  • Notify Associations.  Additionally, it's crucial to notify less obvious institutions about the death, including the voter registration office, alumni associations, professional organizations or clubs, and companies managing loyalty programs or reward points.

  • Cancel Services.  As you work through these tasks, you'll likely encounter various recurring services to cancel or transfer. These may include streaming subscriptions, gym memberships, recurring charitable donations, and magazine or newspaper subscriptions. It's also important to update or cancel identification documents such as driver's licenses, passports, and professional licenses.

  • Pet Care.  If the deceased had pets, you may have several related tasks to manage, such as updating microchip information, transferring veterinary records, and arranging long-term care.

  • Lesser-Known Benefits.  It's also essential to investigate lesser-known benefits that the deceased may have had, such as unclaimed pension benefits, employer-sponsored life insurance, frequent flyer miles, credit card points, or credit card accidental death benefits. While not all of these benefits are transferrable, some of them may be.

  • Device Security.  In today's digital age, addressing device security is another crucial step. This involves unlocking smartphones or computers, retrieving important data, and wiping personal information if devices are to be donated or sold.

  • Home-Related Tasks.  There are also several home-related tasks that need attention. These may include redirecting or canceling home care services, handling safety deposit boxes, and canceling or transferring home warranties or service contracts. Similarly, don't forget to cancel medical-related items like upcoming doctor's appointments, medical equipment rentals, and prescription auto-refills.
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Each of these tasks, while seemingly small, plays a part in properly settling your loved one's affairs. But it's important to remember that while these tasks are necessary, they don't all need to be addressed immediately. Take things one step at a time and keep in mind that it's okay to take breaks when needed. The grieving process is different for everyone, and it's crucial to take care of yourself during this challenging time. Don't hesitate to ask for help from friends, family, or professionals if you feel overwhelmed. 

With patience and perseverance, you'll be able to navigate this difficult process. Our office is here to help you through this difficult time.
 


Understanding Living Trusts: Key Roles

10/14/2024

 
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A Living Trust involves three key roles.  Often, the same person takes on more than one of the roles.  We like to think of each role as a separate hat.
 
  1. The first hat is the Trustor (also called a Grantor or Settlor). The Trustor is the person or people who create the Living Trust.  The Trustor sets the terms of the Living Trust, including how it should be managed while they are alive and what happens to the assets in the Living Trust after they die.  With a Revocable Living Trust such as we are discussing here, the Trustor retains the right to revise these terms during their lifetime as long as they have the capacity to do so.  When the Trustor dies (or loses capacity), the terms of the Living Trust become irrevocable, meaning they cannot be changed.

  2. The second hat is the Beneficiary.  The Beneficiary is the person or people who are entitled to benefit from the assets in the box, by receiving funds or otherwise enjoying the use of property.  During your lifetime, the Beneficiary of your Living Trust is you.  When wearing your hat as Trustor, you make the rules for how and when the Beneficiary may use the assets.  When wearing your hat as Beneficiary, you use and enjoy those assets.  As Trustor, you can make different rules for different Beneficiaries. For example, you can grant a Beneficiary the right to use as many of the assets in the box as they want, up to depleting all of the assets.  In contrast, you may say that the assets can be used only for expenses related to a Beneficiary’s education or heath care, or that a Beneficiary is only entitled to the income produced by the assets in the box but not the principal. 

  3. The third hat is the Trustee.  The Trustee is the person who manages the assets in the box for the benefit of the Beneficiary according to the terms set by the Trustor.  The Trustee can buy, sell, or distribute assets in the box so long as doing so complies with the terms you set in the Living Trust agreement. 

During your life, you usually wear all three of these hats.  You are the Trustor, Trustee, and Beneficiary of all the assets in your Living Trust.  Placing your assets into the Trust does not diminish your ownership rights or restrict your ability to use or sell the assets.  If you become incapacitated, the person chosen by you would become the successor Trustee and would manage the assets in the Living Trust for your benefit as the Beneficiary.  After you die, the successor Trustee distributes the assets to the successor beneficiaries you have named or holds the assets in the box for the benefit of those beneficiaries if you have so instructed.
 
In the case of married couples, spouses usually, but not always, set up a joint Living Trust. In that case, both spouses wear all three hats during their joint lifetimes.  Depending on the terms of the Living Trust, after the first spouse dies, the surviving spouse may continue wearing all three hats and have the power to change the terms of the Trust.  In other cases, the surviving spouse may not have the right to change the terms of the Living Trust with respect to a portion of the assets in that Trust. 
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“Beneficial Interest” Reporting Requirements for Limited Liability Companies and Other Small Businesses

9/13/2024

 
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Congress has enacted new reporting requirements for limited liability companies that impact almost anyone who has an interest in a limited liability company (“LLC”) or other small business, or who is a senior officer of a limited liability company. 

Congress created the new reporting rules to combat money laundering and terrorism by making it more difficult for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.  The reporting requirements were created by the Corporate Transparency Act (“CTA”), which passed in 2021 with bipartisan support.  

The CTA requires most limited liability companies and other small businesses to submit a Beneficial Ownership Information Report (“BOIR”) to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  The most important take-aways are: (1) almost everyone who owns or controls a limited liability company must report their “beneficial interest” to FinCEN; (2) there are potential significant civil and criminal penalties for not reporting; and (3) reporting must be done by the following deadlines:


  • January 1, 2025, if the LLC was in existence prior to January 1, 2024
  • Within 90 days of establishing the LLC with the Sectary of State for entities formed on or after January 1, 2024
  • Within 30 days of establishing the LLC with the Sectary of State for entities formed on or after January 1, 2025
  • Within 30 days if at any time the LLC discovers an inaccuracy in a previously filed report or if there is a change to previously reported information, including a change in beneficial ownership, or a change in the contact information of beneficial owners

Although this sounds ominous, the beneficial interest reporting process is relatively simple and can either be done online at https://boiefiling.fincen.gov/or by completing a PDF and uploading it on the FinCEN website.  The information you are required to provide includes basic information about the limited liability company, such as the name of the LLC, state of formation, tax identification number, and address of the company, and basic information about yourself (the beneficial owner), such as your name, date of birth, and residential address.  The beneficial owner is also required to upload a photo of an “identifying document” such as a driver’s license or passport. 

If you have an interest in more than one limited liability company, you can obtain a “FinCen ID,” which enables you to simplify the reporting process.  You input your beneficial owner information once and then obtain a unique identifying number (a FinCen ID) that you can report instead of completing the beneficial owner information for each LLC.

Some limited liability companies and small businesses are exempt from the new reporting requirements. Exempt entities include: (1) large companies with 20 or more full-time employees; (2) companies with more than $5 million in revenue; and (3) certain types of entities that are already subject to significant government regulations such as banks or other financial institutions.  Here is a link to the full list of exempt companies.

For more information, please refer to FinCEN’s Small Business Compliance Guide. FinCEN’s website has an excellent Q&A section on the new reporting requirements.

Choosing the Right Trustee

3/25/2024

 
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Choosing the right successor Trustee is an important step in establishing a Living Trust. Your successor Trustee is responsible for gathering and distributing your assets and settling your final affairs after you pass.  If you become incapacitated, your successor Trustee will manage the assets in the Living Trust for your benefit during your lifetime.  In some cases, the successor Trustee also may be responsible for managing assets held in trust for your beneficiaries for a certain period of time.  Depending on the nature of your assets, these tasks may be time-consuming, complex, and require a high degree of financial sophistication.
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  • Example: Jefferson is named as the successor Trustee of his father’s Living Trust.  After his father dies, Jefferson is responsible for locating all of his father’s financial accounts and other assets, selling his father’s house in Meridian, and then distributing the proceeds from the Living Trust equally between himself and his brother James according to the terms of the Trust. 
  • Example: Bethany is named as the successor Trustee of her sister Julie and her brother-in-law Steve’s joint Living Trust.  Their Living Trust provides for assets to be held in further trust for their son, Michael, until he reaches certain ages.  Julie and Steve die when Michael is 16.  Bethany is responsible for managing the assets Julie and Steve left in trust for Michael.  Pursuant to the terms of the Living Trust, Bethany can make distributions to pay for Michael’s college expenses and other living expenses.  Bethany can distribute 25% of the assets in the Trust to Michael when he reaches age 25 and can distribute the rest of the assets to him when he reaches age 30.

When selecting a Trustee, you should pick someone you trust, who is organized, fair, levelheaded, and comfortable discussing and managing financial affairs. We also recommend that you select at least one alternate successor Trustee who could step into this role if your first choice is unable or unwilling to do so.

Other considerations when choosing a successor Trustee include:

Age of your successor Trustee 

It is important to take into consideration the age of your Trustee.  If you are older, it’s fine to select a peer, such as a sibling or a good friend, but you also should select at least one successor Trustee who is from a younger generation than you.  If the terms of your Living Trust will require your successor Trustee to manage a Trust for the benefit of a loved one for many years—for example, for the benefit of a minor child, or a person who is not good managing money or who has substance abuse issues—you should consider how old the Trustee will be when the Trust ends.  You should not name your 80-year-old mother as the successor Trustee of a Trust that would not terminate for 20 years.  On the flip side, you should also avoid selecting a Trustee who is younger than 25, as they may not have the maturity to handle the task.

Potential for family conflict

It also is important to consider family dynamics.  If you have two children who do not get along, it may be better to choose a close friend to be your Trustee rather than one of the children.  Some clients in this situation try to solve this problem by appointing both children as co-Trustees.  However, naming successor co-Trustees often complicates matters, even when the co-Trustees get along well, because they must agree on all actions and may both be required to sign certain documents. 

Many parents automatically name their oldest child as their successor Trustee.  If this child is well-suited to the task, this is a good decision.  But relying solely on birth order without taking other traits into consideration can be problematic. 
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  • Example:  Tom named his son George, who was easily overwhelmed and not good with money, as his successor Trustee because George was the oldest child and Tom did not want to offend George.  After Tom dies, George becomes Trustee.  George is overwhelmed by everything that he has to do.  He forgets to file Tom’s tax return on time, which results in penalties owed by Tom’s estate, and agrees to sell Tom’s house in Eagle to one of his friends without using a real estate agent.  George’s siblings become irritated with how long George is taking to distribute the estate and his mismanagement of funds, creating a rift between the siblings.

It is better to run the risk of potentially offending a child who is not suited to the demands of serving as a Trustee/Personal Representative than to leave this critical task to someone who is underqualified.

Family dynamics are also relevant if you are holding assets in trust for an adult beneficiary.  In many cases, it is not a good idea to put one child in charge of another child’s assets. 

  • Example: Kent’s father named him as the Trustee of his sister Mallory’s trust.  Because Mallory has a history of cocaine abuse, their father left Mallory’s inheritance to her in trust.  Mallory is very angry when she learns that she has to ask Kent for distributions from her Trust.  She calls Kent numerous times a week to ask him for money from her Trust and gets belligerent if he refuses to give her what she asks.

For clients who do not feel that any of their loved ones are suited to the role of Trustee or who do not wish to ask their loved ones to take on these responsibilities, using a professional fiduciary can be a good option.

Funding Your Trust

2/23/2024

 
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A Living Trust is a like a box.  You put your assets into the box during your lifetime and, after you die, those assets are distributed according to your wishes, either outright to your loved ones or held in the box for their benefit.  Assets in the box do not need to pass through probate.

There are three ways to put your assets into a Living Trust, also known as funding the trust. 

First, you can title an asset in the name of your Living Trust.  For real estate, this means changing the owner of the property from yourself to your Living Trust.  Financial accounts work the same way: you change the owner of the account from yourself to your Living Trust.  Any property titled in the name of your Living Trust is in the box.
 
Second, you can direct your assets into the Living Trust after you die.  For example, you can name your Living Trust as the “pay-on-death beneficiary” of your checking or savings account or the “transfer-on-death” beneficiary of your brokerage accounts.  You can also name your Living Trust as the beneficiary of your life insurance policies or retirement accounts.  When you die, the assets in any account that names your Living Trust as beneficiary will be transferred into the box. 

Finally, if you forget to put an asset into the Living Trust during your lifetime or direct it into the Living Trust by beneficiary designation, the asset will be added to the box through something called a Pour Over Will.  A Pour Over Will is part of a complete estate plan alongside a Living Trust.  It is called a Pour Over Will because it “pours” any forgotten assets into your Living Trust after you die.  The downside is that, if the assets that you forgot to put into the Living Trust include real estate or have a cumulative value exceeding $100,000, to “pour” the assets in, your Personal Representative must initiate a probate proceeding. Having to go through probate undermines one of the primary benefits of creating the Living Trust in the first place!  The good news is that you now know how important it is to fund your Living Trust during your lifetime and can ensure that all of your assets make it into your Trust. 
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"The Gentle Art of Swedish Death Cleaning" Book Review

6/14/2023

 
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“The Gentle Art of Swedish Death Cleaning” by Margareta Magnusson is a witty and engaging book that offers an approachable guide to reducing clutter and unneeded belongings from your home so that others do not have to do this for you.  

The author, who describes herself as age “somewhere between eighty and one hundred years old,” matter-of-factly dispenses advice on why death cleaning, called dostadning in Swedish, is both a gift to your family, as “we want to save precious time for our loved ones after we are gone,” and to yourself by making life “easier and less crowded.”  

The book is short enough to read in an afternoon.  And Ms. Magnusson’s tone – warm, frank, humorous, and a little salty – combined with charming stories about her life in Sweden make a challenging task feel doable.  Whether you’re in your forties and want to declutter your home or in your eighties and downsizing, giving some thought to how to lighten the burden of your belongings is worthwhile.  

For me, it inspired a long-put-off garage clean out.  I’ll admit that two hours into the task, with the entire contents of our garage spread on the driveway, I was not feeling particularly pleased with dear Ms. Magnusson.  However, a few hours and two trips to the donation center later, I was grateful to have a much cleaner and better organized garage. 

For others, it may be an opportunity to make sure sentimental possessions are placed with the right person.  Or to ensure items with a monetary value (but perhaps less sentimental ties) are sold to a collector who appreciates the item and its value.    

Although your loved will do their best, the task of sorting through your belongings after you’ve died can overwhelming or time consuming, and items of true emotional or economic value may be overlooked.  Setting aside some time now to downsize your possessions will lighten your loved one’s load at an already difficult time.  

If this sounds like a project you’re ready to take on, “The Gentle Art of Swedish Death Cleaning” will provide just the inspiration you need!

How Do Assets Get to My Beneficiaries When I Die?

3/9/2023

 
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There are two basic ways a person’s assets pass after they die. You can think of this as two buckets.

Bucket #1: Assets that Pass via Beneficiary Designation

The first bucket holds assets that pass by beneficiary designation.  Perhaps the best-known example of this type of asset is a retirement account. When you open a retirement account, the financial institution or your employer asks you to name one or more people or charitable organizations who will receive the funds in that account after your death, as well as a secondary beneficiary in case the primary beneficiaries predecease you. When you die, the retirement account is transferred directly to whomever you have designated. 

Another example of assets that pass via designation is property you own jointly with another person, such as a joint bank account or real estate you own in joint tenancy.  In these cases, the person you own the property with is the automatic beneficiary of that property on your death.  

Assets with a beneficiary designation do not need to pass through probate to be distributed to your beneficiaries.  The beneficiary simply needs to provide the financial institution or other entity with documentation of the asset-holder’s death, usually a death certificate and social security number.  After receiving sufficient documentation, the assets are transferred directly to the named beneficiaries. 

You also do not need a Will or Living Trust to pass these assets to your loved ones, as the beneficiary designation specifies whom you want to inherit these assets.  Indeed, beneficiary designations supersede any instructions included in your Will or Living Trust. Accordingly, it is important to make sure these designations align with your overall estate plan, which we will discuss in more detail below.

Examples of assets that pass via beneficiary designation include:
  • IRAs, 401(k)’s, and other Retirement Accounts
  • Annuity Accounts
  • Payable on Death Accounts
  • Transfer on Death Accounts
  • Life Insurance Benefits
  • Accounts Held as Joint Tenants with Rights of Survivorship
  • Real Property Held in Joint Tenancy
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 Example: Janine set up a 401(k) account when she started her new job.  She listed her daughter Roberta as the primary beneficiary of the account.  When Janine dies, Roberta notifies the financial institution managing Janine’s 401(k) account of Janine’s death.  The financial institution then transfers Janine’s 401(k) to Roberta.
 
Example: Peter and Penelope are married and have a joint checking account.  When Peter dies, Penelope provides the bank with a copy of Peter’s death certificate and his social security number.  The bank removes Peter’s name from the account and the assets in the account pass to Penelope.
 
Bucket #2: Assets that Pass via Probate or a Trust

The second bucket holds everything else! That includes:
  • Bank Accounts
  • Non-Retirement Investment Accounts
  • Real Property
  • Tangible Personal Property
  • Business Interests

When you die, the assets in the second bucket pass to the people you designate in your Will or Living Trust or, absent such documents, according to Idaho’s intestacy laws.  These assets are commonly known as “probate” assets, because, absent a Living Trust, they must go through the probate process to pass to beneficiaries after your death. If you use a Living Trust to designate beneficiaries, however, your beneficiaries can bypass the probate process, even with respect to the assets in Bucket #2.
 
Example: Arthur owns a home in Boise and has a Will.  When Arthur dies, his children hire an attorney to probate Arthur’s estate according to the terms of Arthur’s Will.  Arthur’s house is distributed to Arthur’s children in equal shares according to his wishes after the probate is concluded, a process that takes about six months.
 
Example: Abe owns a home in Lewiston and has a Living Trust.  When Abe dies, the successor trustee of his Living Trust reviews its terms and distributes the home to Arthur’s children in equal shares within a month after Abe’s death.


Planning for Assets in Both Buckets

Some people with very simple estates only have assets in Bucket #1.  In this case, these people may be able to direct all of their assets to their loved ones by beneficiary designations.  Most people, however, have assets in both Bucket #1 and Bucket #2.   An important part of the estate planning process is making sure that you properly direct the assets in both buckets in a way that achieves your goals.  

For more information on planning for assets in both buckets, check out our blog post on The Importance of Aligning Beneficiary Designations With Your Estate Plan.

Leaving Final Disposition Instructions

9/30/2022

 
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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.

Don’t Try This at Home: The Risks of Trying to Revise Your Will or Trust Without an Attorney

8/8/2022

 
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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.

The Seven Steps in Idaho's Informal Probate Process

4/14/2022

 
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Probate is the judicial process in which a Court oversees the distribution of person’s assets after they die.  In Idaho, probate can proceed “informally” if the original signed Will is available or if the decedent did not have a Will and the Estate is uncontested, or “formally” if the original Will is missing or the Estate is contested.  As the names suggest, informal probate involves the least amount of judicial supervision and does not involve appearing before the Court whereas formal probate includes direct involvement by the Court and attendance at Court hearings.

Although it is possible to initiate a probate proceeding without using an attorney, known as proceeding “pro se”, the highly technical nature of the probate process is best navigated with the assistance of an experienced attorney.  The probate process can take anywhere from six months to more than a year to complete depending on the size of the Estate and whether the Estate is contested.

Informal probate is the most common type of probate proceeding.  Typically, there are seven steps in Idaho's informal probate process:

  1. Initiate the Probate Proceeding.  An informal probate proceeding is started when the Application for Informal Probate is filed on behalf of the Personal Representative of the decedent’s Estate.  The Personal Representative (also known as the Executor) is either the individual nominated to be Personal Representative in the decedent’s Will or, if there is no Will, an individual who has priority to serve as Personal Representative, such as a surviving spouse or child. 

  2. Acceptance of the Application and Issuance of Letters.  If the Court is satisfied with the Application for Informal Probate, the Court issues a Statement of Informal Probate opening the probate, and Letters Testamentary or Letters of Administration, which allow the Personal Representative to transact business on behalf of the Estate. 

  3. Notice to Heirs and Devisees.  After the Statement of Informal Probate is issued by the Court, formal notice that probate has been opened must be provided to all of the decedent’s legal heirs – for example, their spouse, children, and grandchildren – as well as any other person or organization that inherits under the terms of the decedent’s Will.

  4. Notice to Creditors.  Next, a Notice to Creditors is published in the local newspaper for three consecutive weeks.  The Notice to Creditors provides all creditors, known or unknown, with an opportunity to present claims against the Estate.  Any unknown claims not presented within four months after publication of the Notice to Creditors are barred.  After the Notice to Creditors has been published for three consecutive weeks, an Affidavit of Publication is filed with the Court certifying that the Notice to Creditors was properly published. 

  5. Inventory of Estate.  Within three months after issuance of the Letters Testamentary or Letters of Administration, an Inventory of all of the assets in the Estate, i.e. a list of everything the decedent owned when they died, must be prepared by the Personal Representative and filed with the Court.

  6. Distribution of Estate assets.  When four months have passed from the date of publication of the Notice to Creditors, the Personal Representative can begin paying any known debts of the decedent from the assets of the Estate. If the decedent died without enough assets to cover their debts, the Court can decide which creditors get paid or the Personal Representative can try to negotiate with the creditors to reduce the debt.  Importantly, the Personal Representative and the decedent’s family do not have to pay the decedent’s debts using their personal funds.  Assuming there are assets remaining after all debts are settled, the Personal Representative is free to begin distributing the Estate’s assets according to the terms of the Will, or according to the laws of intestacy if there is no Will.  In an uncontested estate, a Receipt and Release will be signed by anyone receiving a distribution, acknowledging receipt of their distribution, and releasing the Personal Representative from any liability associated with distributing the assets and from the duty to file an Accounting with the Court.  If a beneficiary is not willing to waive their right to an Accounting, the Personal Representative must file an Accounting with the Court cataloging the expenses of the estate, and the distributions and recipients of the distributions from the Estate. 

  7. Informal Verification Statement of Personal Representative Closing Estate.  Once all the assets have been distributed, the Personal Representative files the Informal Verification Statement of the Personal Representative with the Court formally closing probate.

Five Life Events to Discuss with Your Estate Planner

1/21/2022

 
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We recommend reviewing your estate plan every five to seven years to ensure it reflects your current wishes and to address any changes in the value of your estate or in the tax laws. But sometimes, life can surprise you with a major event in between those regular reviews. The following life events can have a significant impact on your estate plan and merit scheduling an appointment with your estate planning attorney right away.

1.  Your Marital Status Changes

  • After you get married, you should update your estate plan to account for your new spouse.  Although your spouse may have certain rights by law, if you don’t update your estate plan, your assets will for the most part go to whomever you designated in your Will or Trust before you were married.  You also will likely want to add your spouse as your agent to make health care decisions for you and manage your financial affairs if you cannot do so yourself. 
  • After a divorce, you’ll want to update your estate plan to remove your ex-spouse as a beneficiary under your Will or Trust and as an agent for health care and financial decisions.  If you have minor children, you’ll want to appoint someone other than your ex-spouse to manage any assets they inherit from you. 

2.  The Value of Your Estate Increases Significantly
  • If your net worth increases significantly – perhaps you’ve received a large inheritance, sold a company, or won the lottery – you and your estate planner should review your estate plan to determine whether any changes are needed to mitigate potential estate tax liability. 

3.  Your Spouse Dies
  • When your spouse dies, it is imperative that you meet with your estate planning attorney to discuss settling your spouse’s estate.  If you have a Will-based estate plan, you will likely need to initiate a probate proceeding to transfer joint assets into your name only.  If you have a Trust-based plan, the terms of your Trust may require that the assets in the Trust be placed into two new trusts.  You will also want to discuss with your estate planning attorney whether you should file an estate tax return for your deceased spouse electing “portability,” which would enable you to receive the benefit of your spouse’s estate tax exemption.  Most spouses also typically appoint each other as agents so you’ll want to update your powers of attorney to name new agents.

4.  One of Your Beneficiaries Develops Special Needs
  • If one of your current beneficiaries or a potential future beneficiary (such as a grandchild) develops special medical needs and is receiving needs-based federal assistance (or may do so in the future), you should update your estate plan to include a special needs trust.  A special needs trust holds assets left to a beneficiary with special needs in a trust for that beneficiary which is managed by a third party and structured so the beneficiary will not lose their eligibility for federal assistance.  Without a special needs trust in place, any assets inherited by the beneficiary may cause them to lose their needs-based federal assistance until they spend down all of their inheritance.  Not only that, but once the beneficiary has accomplished the spend down, they will have to undertake the arduous and time consuming process of re-applying for federal aid. 

5.  Someone You Picked as a Fiduciary (Trustee, Personal Representative, Guardian, Agent) Is No Longer Your Choice
  • Your fiduciaries play a critical role in your estate plan.  Your Trustee or Personal Representative is charged with settling your estate and distributing your assets after you die.  Your Guardian will care for your children if you die when they are minors.  Your agents for health and finance will manage your affairs and make decisions for you if you are incapacitated.  Whether it’s because your children have grown up, someone you’ve appointed as a fiduciary has moved, passed away, or is no longer able to serve in the role, or your own needs have changed, if you want to change who you’ve chosen as a fiduciary, you should discuss this as soon as possible with your estate planning attorney. 

If life surprises you with any of these events, or with any other significant life events that affect your wishes, please call our office to schedule an appointment to review your estate plan.  

When to Consider a Professional Trustee or Executor

11/18/2021

 
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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.

The Importance of Aligning Beneficiary Designations with Your Estate Plan

9/21/2021

 
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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.
 

Estate Planning for Unmarried Couples

7/10/2021

 
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If you have committed to a long-term life partner but don’t plan to get married, you are not alone. According to recent U.S. Census Data, the number of adults in cohabiting, unmarried relationships is up 29% since 2007.

Although many people think estate planning is only for married couples, the opposite is true.  Couples in unmarried relationships who do not set up an estate plan are more vulnerable than married couples when it comes to making end-of-life decisions for each other and passing property after death.  In addition, without legal documents entitling them to information about their partner’s health status or allowing them to remain in the couple’s residence after one of them dies, unmarried partners may find themselves literally shut out in the cold.

Luckily, there are a few simple steps unmarried couples can take to protect against this bleak scenario.

Ensure That Your Children Are Taken Care Of

The first most important step for all couples with minor children, whether those couples are married or not, is to create a Will naming guardians. Without a Will setting forth your wishes, if you die unexpectedly, this important decision will be left to a Judge.  Although Judges do their best to pick the right person, Judges almost always pick a family member, which may not be what you want.  Naming a guardian is particularly critical, however, when your partner is not the children’s biological or adoptive parent but has become a trusted primary caregiver.  If you want your partner to be your children’s guardian or remain active in their lives if something unexpected happens, you need to state your wishes in a Will. 

Ensure That Your House and Property Pass According to Your Wishes

If you die without an estate plan, your assets will pass according to state intestacy laws.  For married couples, the surviving spouse usually inherits a significant portion of the deceased spouse’s estate. For unmarried couples, however, this is not the case.  Your unmarried partner is entitled to none of your estate unless you have a Will or a Trust leaving your assets to them.  Even worse, if your home is in your name only, if you die, your spouse will not inherit your home and will have no right to live in the home even if they contributed to mortgage payments while you were together.  

Ensure That You Have Named the Proper Beneficiaries for Accounts that Pass Automatically on Your Death

Unmarried couples also should ensure that they have updated the beneficiaries for all accounts that pass automatically upon death, which typically include life insurance policies and retirement accounts.  If you want your partner to inherit these accounts, you must name them as the beneficiary because the beneficiary designations in these accounts take precedence over a Will or a Trust.

Ensure That Your Partner Is Involved in Health Care and End-of-Life Decisions

Health care decisions are also a critical area for unmarried couples to plan proactively. Whereas spouses have the right to make healthcare decisions for an incapacitated spouse and can obtain medical information related to their spouse, unmarried partners do not share these rights.  If you want your partner to make health care decisions for you or have access to your health care information if you are not able to communicate with your doctor, you must have a Power of Attorney appointing your partner as your agent for health care decisions, and a HIPAA authorization allowing that your partner to access your healthcare records.

Understanding Idaho's Advanced Care Directive

6/6/2021

 
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Idaho's Advanced Care Planning Document allows you to appoint someone to make health care decisions for you if you become incapacitated, and state your wishes for the type of end of life care you want if you are no longer able to communicate with your doctor. Stating your end-of-life wishes 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, your end-of-life wishes become relevant 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
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The Advanced Care Planning Document provides you with three options for your end-of-life care: 

  1. Comfort Care: which means you want all artificial life-sustaining treatment and artificial nutrition and hydration be withheld or withdrawn but that you be offered food and water by mouth for as long as you are able to chew or swallow voluntarily, and that you be given comfort care, such as pain medication, to relieve pain or distress.
  2. Continuation of Artificial Life-Sustaining Treatment: which means you want all medical treatment, care, and procedures necessary to sustain your life be provided, including artificial life-sustaining treatment and artificial nutrition and hydration.
  3. Other: which is a place for you to write your own wishes.

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.

Estate Planning for Small Business Owners: Securing Critical Corporate Documents

4/6/2021

 
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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.

Who Gets the Grand Piano?  Addressing Sentimental Items in Your Estate Plan.

3/2/2021

 
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One of the many benefits of putting together an estate plan is minimizing potential disputes between your loved ones after you die.  By clearly stating your wishes about who inherits your assets, in what amounts, and when your beneficiaries receive their assets, you significantly decrease the likelihood of disagreement between your loved ones. 

One important, but often overlooked, part of this process is deciding how your personal property should be distributed.  Personal property – which is tangible items you can touch such as your furniture, jewelry, collectibles, guns, art, family photos and other sentimental items – can be a major point of contention.  This is a particularly vexing problem for parents, as sibling dynamics can result in significant strife over items of sentimental, but little monetary, value.

Earlier this month, this issue came to mind when one of my clients told me about her family’s grand piano.  This beautiful musical instrument has been in her family for several generations.  My client is a musician so her siblings understood why their parents left the grand piano to her.  However, my client now has three grown sons of her own – all of whom are musicians and all of whom want the piano!  My advice to her was to hold a family meeting with the boys to reach a consensus on what happens to the piano when she dies.  Although this may be a challenging conversation, it is much better to take on this problem now rather than leaving it to your heirs.  

When considering what to do with your personal property, think long and hard about your loved one’s personalities and relationship.  For example, I have two daughters who are 9 and 11 years old.  Given their current willingness to invest 20 minutes arguing over whose turn it is to set the table, I know that at some point I need to sit down and divvy up certain artwork and sentimental items to avoid future conflict.  

There are many ways to approach this issue.  For unique items that many loved ones desire, you can draw straws for the item now so the matter is settled for the future.  Some of my older clients choose to give away such items during their lifetime which has the dual benefit of resolving the problem and giving them the pleasure of seeing their gifts enjoyed.  Other clients elect to include specific procedures for distributing personal property in their estate plans, such as setting the order in which beneficiaries choose items.   

Every person and family is different.  What makes sense for a family with an only child is likely very different than a family with five children or a couple with no children.  The most important thing is to give some thought to the disposition of your personal property with an eye towards minimizing the potential for conflict.  And rest assured, we’re here to help you find the best solution for you and your loved ones.

 

Why I Charge Flat-Fees

1/16/2021

 
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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.

The Importance of Keeping Your Estate Plan Up to Date

1/6/2021

 
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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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