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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?
  • SERVICES
    • What to Expect
    • Initial Consultation
    • Additional Services
    • Flat Fee Estate Plans
  • About
  • Blog
  • Contact
    • Directions
  • Schedule

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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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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 Living Will

6/6/2021

 
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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
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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

 


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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Make Sure You Tell Your Executor and/or Trustee Where to Find Your Estate Planning Documents

10/7/2020

 
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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. ​

The Three Estate Planning Documents Every College Student Needs

9/3/2020

 
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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.
 

Making Sure Your Heirs Can Located Your Assets

7/24/2020

 
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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.  ​

Five Essential Estate Plan Changes To Make During A Divorce

6/25/2020

 
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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.  

Understanding Medical Powers of Attorney

5/22/2020

 
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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.    

The Bare-Minimum:  What You Need to Protect You and Your Loved Ones In Times of Crisis

4/24/2020

 
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While most of us have thought about putting together an estate plan, it is not usually at the top of our “to do” list given the many things we juggle on a daily basis: work, taking care of kids or elderly parents, managing households, keeping up the house or garden, planning vacations, trying to exercise, seeing friends. . . and the list goes on. 

As a result, many people now find themselves in the midst of a lethal and unpredictable global pandemic wondering what would happen to them and their loved ones if they became ill.  Estate planning has suddenly become a top priority, but, given shelter in place orders and social distancing, putting together an estate plan right now can feel overwhelming. 

Here is a short list of the bare-minimum estate planning documents that everyone should have in place as we move through this pandemic:
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  1. Simple Will Designating a Guardian.  If you have a child under 18, it is critical that you have a Will designating a guardian for your children.  Without a Will setting forth your wishes, if you die unexpectedly, this important decision will be left to a Judge.  And although Judges do their best to pick the right person, they do not know your children or your family like you do.  Judges also almost always pick a family member, which may not be what you want.  For you and your children's peace of mind, you should decide now who should raise them if you cannot.

  2. Will Protecting Your Loved Ones.  In Idaho, if you die without a Will, your assets are distributed according to state law.  Under these laws, your assets go first to your spouse, who gets all of the community property and ½ of your separate property (the other half is divided equally between your children).  If you do not have a spouse, your property is divided equally between your children.  If you do not have children or a spouse, your property goes to your parents, and if they are not alive, to your siblings.  If you want any of your assets to go to a non-family member, a charity, or divided another way – perhaps one of your children is less financially secure than his siblings and you want to leave more to him or maybe you are caring for your parents and want to ensure they are provided for if you pass – you need to have a Will setting forth these wishes. 

  3. Power of Attorney for Finance.  Some of the sickest Covid-19 patients can be placed on ventilators for as long as 21 days, during which time they are often heavily sedated and unable to communicate.  If this were to happen to you, you need to have a Power of Attorney for Finance in place designating someone to manage your finances for you while you are incapacitated.  A Power of Attorney for Finance allows a trusted friend or family member, chosen by you, to ensure your loved ones and your financial obligations – such as bills, mortgage payments, health insurance premiums – are taken care of.  Without a Power of Attorney for Finance in place, someone would have to ask a Judge to be appointed as your conservator, a slow-moving legal proceeding not designed to respond to a temporary emergency.

  4. Power of Attorney for Health Care.  A Power of Attorney for Health Care allows you to choose someone to make medical decisions for you if you are too sick to communicate with your doctors.  This person should be calm during times of crisis and be able to digest complex medical information.  For many people, this is not always their closest family members, such as their parents, but instead may be a level-headed sibling or a dear friend.  Without a Power of Attorney for Health Care, you have no way of communicating who you want making these decisions for you.

These documents deal with only the most basic situations and cannot replace a comprehensive estate plan that is tailored to you and your loved one’s unique needs.  However, in times of crisis, having the bare-minimum is essential and can alleviate one source of anxiety. 

If you want more information on preparing these essential documents or estate planning in general, give me a call at 208-995-9224 or shoot me an email - shaila@shailabuckley.com

Document Wrangling: What Records To Keep And For How Long

4/3/2020

 
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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. 

Estate Planning After a Divorce

2/25/2020

 
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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. ​

Taking Care of Pets In Your Estate Plan

1/5/2020

 
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Did you know there is such as a thing as a Pet Trust?  The most famous example of a Pet Trust may be the one set up by the hotel heiress Leona Helmsley.  When Ms. Helmsley died, she left most of her $5 billion estate to charity, but also created a $12 million trust for her beloved Malatse dog, appropriately named Trouble.  Further complicating matters was the fact that Ms. Helmsley cut two grandchildren out of her Will completely.  As you might imagine, years of costly litigation resulted. 

Formal Pet Trust are just one of many ways to provide for your pet in your estate plan.  Here are some things I recommend considering when planning for your pet. 

Who do you want to care for you pet? 
Pets are considered “personal property” and will pass to whomever inherits your other assets unless you designate someone specific.  Give some thought to your pet’s needs – health, activity level, disposition – when choosing who should care for them after you die.  It’s also a good idea to check with that person and make sure they’re up for the job. 

Do you want to leave money to care for your pet? 
You can’t leave money directly to your pets.  If you do so, those funds will simply be added back to the “residue” of your estate and distributed to your heirs.  However, there are many options for providing financially for your pet. 

Pet Trusts are one vehicle for doing so.  Most Pet Trusts aren’t funded to the tune of millions of dollars.  Instead, the average Pet Trust holds a modest amount of money set aside to help cover the cost of feeding and caring for your pet.  And, as with all trusts, the terms are entirely up to you.  Some people like to designate a trustee who is different from the person caring for the pet to manage the funds and make sure they are being used for the benefit of the pet. 

A more informal option is to simply gift a certain amount of money to the person who becomes the guardian of your pet.  Setting a little something aside to defray costs and thank the person who will care for your pet is a thoughtful gesture that is often unexpected but much appreciated.

Will your pet be hard to place?
If you have an exotic pet or one that may be hard to find a home for, it’s good to consider this in your planning.  There are several organizations that can help, such as the ASPCA and private rescue organizations.  In some cases, you can leave money to an organization to care for your pet during its lifetime and also to support the organization. 

These are just a few of the many resources and options available to provide for your pet after you're gone.  If you have questions or would like to discuss options, Shaila Buckley Law can help.  Give me a call at 208-995-9224 or shoot me an email – shaila@shailabuckley.com – to discuss.    
You can also click here to schedule an appointment.

When to Update Your Estate Plan

1/5/2020

 
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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.    

Choosing The Right Guardian For Your Children

11/14/2019

 
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Choosing a guardian is often one of the most difficult choices my clients have to make.  It’s terrible to imagine not being able to care for your children as they grow up, especially if your children are very young.

But not choosing someone is a much worse option.  If you don’t designate a guardian for your children, a court would make the decision for you.  And although Judges do their very best to decide what would be in the best interest of your children, they don’t know your children, or you family, like you do.  As hard as it might be, it’s much better for you, your children, and, quite frankly, your entire family, to make this decision yourselves rather than leave it to someone else.

That said, what should you look for in a guardian?  The first advice I give my clients is to think about people who share your values and parenting style.  This may mean looking outside of your family.  This is okay.  There’s no rule that says your guardians have to be blood relatives, and some people find they have much stronger bonds with the family they chose rather than the family they’re born into.

Second, think about your children.  Is their sense of place and home very important to them, or are they free spirits up for an adventure?  Do they have a strong support network where you live?  When my husband and I talked through our options, we felt that we wanted to pick a person who lived in Boise so that our children wouldn’t have to be uprooted from their friends and their community.  For other people, however, this may not be an important consideration.

Third, talk to whomever you’ve chosen to make sure they’re up for the job.  Perhaps your younger sister who is still single and living on her own in San Francisco isn’t ready to take on the responsibility and sacrifice that comes with raising children.  Or, maybe your dearest friends are having problems in their marriage and aren’t able to manage anything more.  In most cases, people are honored to be asked and happily agree.  But it’s much better to know now that they are unwilling than to put someone in a difficult position down the road.

Fourth, and perhaps most important: you can change your mind.  Pick someone and see how you feel about it.  If you’re still worried about your decision a month after signing your will, you may not have picked the right person.  Also, people and children change over time.  Perhaps your parents were the right choice when your children were young, but may not be suited to raising teenagers.  Or perhaps your younger sister has settled down and is now in a position to be a guardian.  Regardless of the reason, changing your guardian is a simple (and inexpensive) thing to do.

So . . . hire a babysitter, go out to dinner, and have a long discussion about what feels right.  Then make your decision, check your estate plan off your to do list, and devote your energy to something more  pleasant!

For more information on Estate Planning for Parents, please click here.  

Why You Need a Children's Trust in Your Estate Plan

10/25/2019

 
A Children’s Trust is a trust that you create in a will, by means of a “testamentary trust”, or in a revocable living trust, to manage a child’s inheritance if something were to happen to you.   In its most simple form, a Children’s Trust appoints a “Trustee” – a trusted adult picked by you – to manage your children’s assets until your children reach an age when they are mature enough to manage their assets on their own.

For example, a typical Children’s Trust structure I often recommend to my clients provides that a Trustee will manage the children’s assets until they reach the age of 23, at which point they will be able to request distribution of up to 25% of the principal of the trust.  At age 25, they’ll be able to request up to 50% of the principal, and, at age 28, they’ll be able to control all of the funds in their trust.

I like this structure because it allows children to “practice” managing their own money while a majority of their assets are kept safe under the watchful eye of the Trustee.  If they run through the first 25% in a matter of weeks, they’ll hopefully take note and do a better job the next time they receive a distribution.

In many cases, the amount of assets your children would inherit if you were to die is much greater than you might imagine.   A lot of our assets are tied up in our homes, our retirement accounts, and in life insurance policies.  None of these assets are “liquid” so you may not feel like you have a lot, but when everything is added up, you may end up with a much bigger number than you expected.  
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Imagine how you would have felt if you were given a substantial sum of money when you turned 21?  I don’t know about you, but I thought I was invincible at that age and, quite frankly, had a pretty limited understanding of how to manage money.  A Children’s Trust accounts for the exuberance and naivete of youth by protecting your children’s assets until they have the life experience to do so themselves.

Estate Planning When You Own Property In Different States

9/4/2019

 
Many of my clients own property in more than one state.  They may have condos in a large city where they once lived which they now rent.  Some own vacation houses some place warm and lovely.  Others simply have real estate investments across multiple states.  Whatever your circumstances, if you own property in more than one state, you will be subject to “ancillary probate” when you die unless you have an estate plan in place that avoids this process. 

Typically, when the average person dies, their estate goes through probate in the state where they live.  Probate is the process in which a court supervises the distribution of a person’s estate:  attorneys must be hired, executors must be appointed, assets must be identified and valued, creditors notified, bill and taxes paid, and assets distributed to beneficiaries.  However, if a person owns real estate in multiple states, a probate proceeding has to be filed in every state in which they own property. 

As you might imagine, this can be a huge headache for their heirs.  Attorneys have to be found and hired in every state, and attendance may be required at court hearings in multiple locations.  In addition to the administrative hassle, however, are the significant costs involved.

Unsurprisingly, much of the cost comes in the form of attorney’s fees.  In Idaho, it typically costs $3,000 to $5,000 in attorney’s fees to probate an estate.  However, other states have much higher mandatory fees.  California is one of the most expensive states.  For example, in California, it costs $34,000 to probate a home worth $700,000.  In Florida, probate costs are $3,000 plus 3% of the value of the estate between $100,000 to $1,000,000.  So, a $700,000 house in Florida will cost $24,000 to probate.

You can see how costs can quickly add up!  Fortunately, all of these costs and hassles can be avoided with thoughtful estate planning.  If you create a living trust and transfer all of your real estate holdings, wherever they are located, into your trust, you can avoid ancillary probate.  In fact, by placing all of your assets into a living trust, you can avoid probate all together and ensure your estate will be distributed in an expeditious and cost-effective way.
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