Estate Planning 101
Estate Planning is not just for the rich; it is for anyone who owns anything or has dependents (spouse or children. It involves making a plan for who gets your assets when you die, as well as how to minimize taxes and/or legal expenses for your surviving spouse or heirs. At a minimum, you should have a Last Will and Testament to name your desired beneficiaries, and designate a Personal Representative to be appointed by the Probate Court to administer your estate and carry out your wishes. You should probably create and sign a Durable Power of Attorney to designate and appoint someone such as a spouse or adult child to handle your affairs if you become unable to do so due to illness or injury. A Durable Power of Attorney should avoid having to be placed under a Guardianship or Conservatorship if your become incapacitated or develop Dementia or Alzheimer’s. In addition to a Durable Power of Attorney, you should also create and sign a Living Will and Healthcare Power of Attorney, sometimes referred to as a “Medical Directive.” This document designates someone you trust to make medical decision if you are unconscious or otherwise unable to do so. It also allows this person to sign medical consents and releases, and enables your agent to receive HIIPA protected information. Estate Planning can also include creation of a Revocable Living Trust to hold title to your estate and completely avoid the expensive and time-consuming Probate process.
Last Will and Testament
Don't Leave Everything to Chance
A last will and testament is a legal document that dictates who you want to receive your assets after your death. It can also name a guardian for your children, a conservator to handle your children’s inheritances until they reach the age of majority, and an executor to handle your estate through the probate process. Without a will, state law determines who will inherit your assets when you die (see section in Intestate Succession below). A will and last testament instructs the court in the disposition of all assets, including who is to receive them and in what amount
What to Consider
Debts: How outstanding debts, like funeral expenses or any other expenditures that would be left behind by the testator would be paid.
Beneficiaries: The names of every individual who will be eligible to receive the estate.
Assets and property: A list of all valuables and to which beneficiary the assets will be given.
Personal representative (executor): The testator will list a trusted person that is put in charge of paying bills, handling accounts, and distributing property among the beneficiaries. It’s usually recommended that the executor not be a beneficiary and instead be an attorney.
Testator’s signature: In order to be valid, the will must be signed in accordance with state law, and the testator must be of sound mind. If the testator is found to have signed under duress, the will would be considered invalid.
Witness signatures: Most states require two disinterested witnesses to sign the will, but check the state signing requirements.
Can You Write Your Own Will?
Yes, you can write your own last will and testament if your situation is relatively straightforward. However, it is certainly not recommended. It’s important to make sure that the document fulfills a number of legal requirements, or it will not be honored by the court. Under Idaho law, it must be: (1) entirely in your own handwriting; (2) it must state that it is your "last will"; (3) it must provide instructions for the disposition of your property; and (4) it must name an Executor or Personal Representative. A hand-written will is referred to as a "Holographic Will"). If the will is typed, then it must be signed and witnessed by two (2) witnesses.
Hand-Written Wills are Not Recommended!
A Superior Alternative to a Will
A Living Trust is an artificial entity, designed to hold property for the Grantor, outside of his or her personal estate, created to avoid probate. No property included in a Living Trust is available to or through the Grantor’s “estate,” similar to insurance policies and retirement accounts held for the grantor, which will pass to his or her heirs through the beneficiary provisions of those instruments. The money held in those accounts will not be included in a Grantor’s will and are not available for distribution through the probate process.
Managed by Trustee
A Living Trust has a person who is named to manage the Trust, as well as successor persons who will manage the property held in trust after the Grantor’s death. These trustees are appointed by the Grantor and have full authority under the terms of the Trust, as opposed to being “nominated” to that position, and then having to be confirmed/appointed by a Court under a persons will.
No Appointment Required
The Grantor of a Living Trust includes his/her inheriting instructions in the trust, to be carried out by the successor trustee after the death of he Grantor. Since the successor trustee automatically succeeds to his/her full authority over the trust, with no need to be appointed or confirmed by a court. A Living Trust is like a contract and is not State specific.
A significant feature of a Living Trust is confidentiality. With limited exceptions, only the Grantor and his or her trustees are entitled to see or have a copy of the Trust document(s), which are not to be filed with the Court and therefore become a public document, which is what happens when a persons will is filed with the court at the start of the probate process.
We have been preparing Living Trust Documents for Idaho individuals and families since 1990. In fact, we started out by teaching about Living Trusts in Community Education classes in Ada and Canyon Counties. Since that time we have prepared several hundred Living Trusts and saved their families many thousands of dollars by avoiding the drawn out and expensive Probate process. Contact us today for a quote.
What Happens if You Die Without Having a Will or a Trust?
Luckily for you, the State of Idaho has created a law as a backup in case you neglected to create a valid Will before you die. It is called the "Law of Intestate Succession", and it dictates who is entitled to receive your property, as well as who should be appointed to administer your estate. See Title 15, Chapter 2, Idaho Code.
No Probate After 3 Years
Idaho (as well as most Uniform Probate States) does not allow for the filing of probate after 3 years following the date of death, of an unmarried person, or after 3 years following the date of death of a surviving spouse. If no probate is initiated withing such 3 years, then you must file for a Determination of Heirs, as described below.
Likely Same as Your Unwritten Will
For most people, the provisions of this law will likely be pretty much the same as if you had written your Will. Basically it provides that if you are married, 100% of your community property will go to your surviving spouse. If you have no spouse, your estate is to be divided equally among your children; if you have no children, your estate goes to your surviving parents; if your parents are deceased, it is divided equally among your siblings; etc.
The heirs actually entitled to the estate are described under Section 15-2-102 (Surviving Spouse) and or Section 15-2-103 (Heirs other than Surviving Spouse).
Determination of Heirs
If there is any real or personal property remaining after 3 years and no formal or informal probate has been started, they any person claiming to be either a surviving spouse, or an heir, can file with the court a Petition for Determination of Heirs. Notwithstanding this Petition, the court can only make the required Order Determining Heirs if the petitioner is one of the of those entitled to all or a portion of the decedent's estate described Section 15-2-102 (Surviving Spouse) and or Section 15-2-103 (Heirs other than Surviving Spouse).
Other Documents For Estate Planning
Durable Powers of Attorney
A durable power of attorney also authorizes an agent to handle financial and legal matters for you, but it includes unique wording that makes it effective even if you become incapacitated. The purpose of a durable POA is to plan for medical emergencies, cognitive decline later in life, or other situations where you're no longer capable of making decisions. There are two types of durable POAs—one for financial matters and one for medical matters—and they are usually contained in separate documents. Most estate plans include durable POAs along with a last will and testament.
If you Become Incapacitated
If you become incapacitated through illness, accident, or mental decline as you age, a general durable POA allows the agent you have selected to step in and handle your finances right away. If you don't have a general durable power of attorney, your family may have to go to court and have you declared incompetent before they can take care of your finances for you.
Living Wills & Healthcare POAs
A living will, also known as an advance directive, describes your wishes for medical care at the end of your life. It deals specifically with treatments that would prolong your life if you're terminally ill or permanently unconscious with no hope of recovery. The living will only comes into play if you're unable to communicate your wishes yourself.
A living will helps loved ones and health care providers make decisions about treatment. It means your family doesn't have to guess at what you would have wanted. Most states have a standard form for a living will.
Acting as Attorney-in-Fact
If you hold power of attorney for someone else, bring a certified copy of the document with you when you conduct business or communicate with health care providers. If you're signing documents as power of attorney, use your name and then indicate that you're signing as power of attorney. Ask about the preferred format before you sign.