A will is a written (typed or handwritten) document that directs the disposition of a person’s property after death.
Almost everyone needs a will, even if they don’t have money or own much property. In addition to determining how your property should be distributed, wills allow you to name a “personal representative” (the person who administers your estate) and nominate guardians for your spouse, if your spouse is disabled, or your minor children, upon your death.
If you die without a will (intestate), your property passes according to the laws of Idaho. In general, a surviving spouse receives all of the community property and the spouse and children share the decedent’s separate property. If there is no surviving spouse, the decedent’s property is equally divided among the decedent’s children, with special rules for deceased children. This may require selling assets of the estate in order to create equal shares.
First of all, you decide who the beneficiaries will be, not the state. Secondly, you can name the personal representative (a person or bank to manage and settle your estate).
It is best to secure the advice of an attorney. Something as important as your will should be done with great care, in a document tailored to your needs. Besides, an attorney supervises the signing and witnessing of your will. Without the proper formalities, your will could be invalid.
In Idaho, two people need to witness you signing your will. Preferably the witnesses should not be beneficiaries under the will. Idaho law allows for a “self-proved” will, which requires a notary public. This means your witnesses won’t have to testify as to your proper signing of the will at probate proceedings. You can have your attorney draw up your will to be self-proved.
You can prepare what is known as a holographic will. A holographic will is an instrument, whether or not witnessed, in which the signature and the material provisions are in the handwriting of the testator. Caution should be used since the testator typically does not seek the advice of a competent attorney.
Attorneys usually charge on an hourly basis at rates that vary from attorney to attorney. The estate planning needs of each person will be different; therefore, the cost of a will is affected by the amount of time it takes to review your personal and financial affairs and to prepare the will.
Anyone who is at least 18 years of age and of sound mind can make a will.
A will that is valid in the state where it was executed will be valid in Idaho. However, if your will was prepared in another state it should be reviewed to ensure that the language used in the other state will be given the same interpretation under Idaho law. In addition, death tax and probate laws vary from state to state; therefore, your will should reflect the laws that would apply to your estate when you die. If you move to another state, your Idaho will should be reviewed by an attorney in the new state in order to determine if any changes are necessary or desirable under that state’s laws.
No. In Idaho, one is allowed to make a separate written statement or list, outside of a will, to dispose of items of tangible personal property (Idaho Code 15-2-513). This written statement must be in the handwriting of the person wishing to give the property at death or signed by him/her, and must describe the property with reasonable detail. Often, this type of personal property list is attached to a person’s will for the convenience of the personal representative. To be effective, reference must be made to the personal property list itself within the person’s will.
A will may include specific directions for the disposition of your body and funeral. Because your will may not be reviewed immediately after death, such directions should be communicated to family members so they are aware of your wishes at the time of your death. Additionally, you can prearrange the disposition of your body and funeral with a funeral home. However, you should review carefully any prepaid arrangements offered to you by a funeral home. Idaho has adopted the Uniform Anatomical Gift Act which requires certain formalities regarding any anatomical gift. If you wish to donate your body for research or transplantation, you should also notify family members and carry an organ donor card or note your wishes on your Idaho driver’s license.
You do not have to reveal the contents of your will to anyone while you are alive. After your death, the person who had custody of the will may disclose its contents to family members. The original will must be fi led with the appropriate court where it will be admitted to probate. All beneficiaries named in the will and family members who would receive probate assets, if no will existed, will be notified of the opening of the state upon your death.
A personal representative is the person who will act to settle the estate and distribute the assets to your heirs through a probate (See the question below entitled “What is probate?” for a brief description of the probate process). Many people appoint their spouse or an adult child to be the
personal representative. Consider your selection of a personal representative carefully.
If you are competent, you can change your will at any time by signing a document called a “codicil” or by having a new will prepared. Either a codicil or a new will must be executed with the same formal requirements as the original will. You should not attempt to change your existing will by writing on it.
Review your will periodically. A significant change in personal or financial circumstances may mean that your will should be revised or replaced. For example, births, deaths or a change in marital status warrant a review of your will. Changes in federal or state tax laws may necessitate revisions in your will.
In Idaho, a will is not affected by a subsequent marriage; however, a spouse, and children born after the will is executed, may have some rights under Idaho’s law regarding an omitted spouse and pretermitted children. A divorce automatically revokes the provisions of the will that pertain to your former spouse, but does not affect other provisions of the will. Thus, provisions benefitting family members of your former spouse would remain in force. However, a former spouse may still receive property under a beneficiary designation that was never changed after a divorce. For example, a former spouse named as the primary beneficiary of a life insurance policy, and never changed after a divorce, may still receive the death benefit proceeds from the policy.
A will should be kept in a safe place to avoid accidental loss or destruction. Executed wills may be kept in a safe deposit box or in any other secure location. However, it is important that another person, such as the personal representative named in the will, be authorized to enter the safe deposit box and knows where the key to the safe deposit box is located. Some law fi rms and banks retain clients’ executed wills in their vaults.
Some people have tried “joint ownership with right of survivorship” as a will substitute in order to avoid probate. There are problems, however, with this method of transfer in Idaho. You should consult with an attorney before deciding to title property as “joint property with rights of survivorship.”
Another type of account is a P.O.D. (payable on death) account. If it is a joint P.O.D. account, the account belongs to the original owners during their lifetime in proportion to the net contributions by each. Transfer of ownership to the P.O.D. beneficiaries occurs only after death of all original (lifetime) owners.
Yes, non-probate transfers to designated beneficiaries can be achieved with other agreements such as life insurance policies, bonds, mortgages, promissory notes, pension plans, or other written contracts. These types of transfers have a place in estate planning. Prior to making these decisions, check with an attorney to make sure that you have properly considered the gift and estate tax consequences, and that you have not included property that can only be passed by use of a will.
A trust is a legal arrangement whereby property interests are held by one person for the benefit of others. The trust will be managed by a trustee, either an individual, trust company or bank trust department, who holds, administers, and distributes the income and principal of the trust as directed in the trust document. A trust might be entered into for tax advantages, to train your beneficiaries in the management of your property, or as a will substitute.
A trust can be either a testamentary trust or an intervivos trust (also known as a living trust).
A testamentary trust is one created under an individual’s will. A testamentary trust has no effect until death and the admission of the will to probate. A testamentary trust is generally used when your beneficiaries are minors, or when you do not want your beneficiaries to inherit your estate (or portions thereof) outright.
An intervivos (living) trust is a form of contract entered into during the lifetime of the person making the trust. An intervivos trust may also have provisions that only take affect at the death of the grantor.
A living trust can be either revocable or irrevocable. If the trust is irrevocable, the party creating the trust relinquishes all control over the disposition of the property placed in the trust and the income from it. However, in a revocable trust, the person creating the trust retains the right to use the property and reserves the power to revoke or change the terms of the trust.
Generally, no. The decedent is considered the owner of the assets in a living trust. Therefore, the assets in the living trust will be included in the taxable estate of the decedent. However, a properly drafted will or trust can minimize the amount of federal and state taxes owing.
Yes. A trust created under the Uniform Custodial Trust Act (UCTA) is helpful for people whose estate does not require extensive estate and tax planning under traditional trust law. It allows for the creation, administration, and termination of a trust without complicated documents.
Under this type of trust, an adult beneficiary who is not incapacitated may execute a simple statement that certain property is being placed in trust under the UCTA. Once your trustee accepts the trust property or an event designated in the statement occurs, the trust is created. The UCTA itself governs all aspects of the trust relationship (thus avoiding elaborate trust documents). You make basic decisions about the trust. For example, you decide whether payments of income go to you or others, how to invest and manage trust property, etc.
Should you become incapacitated, a court supervised conservatorship may be voided because the trust continues on with the trustee acting as your fiduciary. If you want the trust to continue after your death, you can instruct your trustee how to distribute your property, and thus avoid probate.
This type of trust is designed for persons who want to make sure they control who manages their property should they become incapacitated. It also may be used for people who go on long trips to assure proper management while they are gone or who want protection if they become incapacitated while traveling.
Generally, trusts are used for control or protection of assets, for convenience, or for tax and financial planning purposes. For example, you may want one person to have the income from your property during his or her lifetime and another person to have the property itself at a later date. Other means are available, however, to accomplish this purpose; for example, the use of a life estate.
In addition, you may want to protect your beneficiary from his or her own inexperience with money management by giving only the income from the investment and not the property itself until the beneficiary reaches a certain age. You can even arrange to have a trust continue after the death of your first beneficiary.
Even if someone sets up a living trust, he or she still should have a will to transfer any assets that have not been transferred to the trust before death. In addition, he or she still should have a durable general power of attorney. In the event of incapacity, the durable general power of attorney would allow someone else to manage assets that have not been transferred to the trust before the incapacity. Some living trust proponents argue that a living trust saves the cost and time involved in getting a conservator appointed. Nevertheless, a durable general power of attorney can be used to manage the financial affairs of an incompetent person in lieu of a living trust or a conservatorship.
Probate may result in the terms of a will, as well as the decedent’s assets, becoming public knowledge. This is not necessarily the case, however, in states that permit unsupervised probate. Furthermore, living trusts do not always guarantee that a person’s assets will remain free from public scrutiny. For example, to open an account for the trust, a bank or brokerage fi rm may require that the grantor provide a copy of the trust agreement.
You determine who will be the trustee. You can designate yourself (for a living trust), a third party, or a professional trustee (the trust department of a bank or other professional trustee).
Many people do not want the responsibility of management. That is the reason for considering a professional trustee, such as a bank. Professional trustees are in the business of trust management. They afford the advantage of the expert over the amateur.
Professional trustees can protect trust securities from fire, theft, and accidental loss. Details of buying and selling are clearly recorded with comprehensive reports sent to you. Should the terms of the trust allow, a professional trustee could draw on the trust fund for your benefit to pay household bills and taxes. This is a great benefit to those who wish to travel extensively and it can become an even greater benefit if one has a prolonged illness and cannot cope with personal business.
The exemption from the Federal estate tax for 2013 is 5.25 million dollars, under the American Taxpayer Relief Act of 2012 (enacted at the beginning of January, 2013). The exemption is now indexed to inflation, and so should increase in the future. Idaho itself does not now have an estate or inheritance tax.
In addition to a custodial trust, another very simple option to consider is a durable general power of attorney. A durable general power of attorney is a document by which one person gives legal authority to another to act on his or her behalf. The word “durable” means that this power shall continue after the onset of incapacity. A durable power of attorney for health care and a living will (declaration as to end of life medical care) should also be considered.
CAUTION: A person must have the requisite mental capacity to execute those documents. The same requirements apply to the making of a will. Time is of the essence. If you wait too long, a guardian (of the person) or a conservator (of the funds) will have to be appointed by the court.
You should learn about both state and federal legislation to prevent spousal impoverishment. Legislation exists that protects income and resources of a couple when one of them has been found eligible for medical assistance. The valuation, the exemptions, and the formulas should be carefully worked out with an experienced professional. Use of this legislation can go a long way toward preventing catastrophic medical costs from depleting your financial resources.
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