Most people religiously pay bills bank, file income taxes, and schedule appointments– all tasks that come with being a responsible adult. However, one task that many people tend to put off is setting up an estate plan to manage their affairs during possible incapacity one after.
Despite good intentions to formalize a plan, many people in Idaho die intestate — that is, without a will or estate plan. In these cases, the court decides who will inherit the assets that remain after debts are settled. At a minimum, everyone should have a will with instructions for the division of property.
In addition to a will, consider whether a trust might benefit your estate. A qualified will and trust attorney can answer questions about estate planning options, but here is an overview of the basics.
What’s the difference between a will and a trust?
Both wills and trusts are legal arrangements for managing assets after your death. Understanding the difference between a will and a trust can help you put together an estate plan that fulfills your goals.
- A will is a legal document affirming your specific wishes about the division and distribution of your estate after your death, such as real property, vehicles, bank accounts, investments, as well as family heirlooms and other possessions. A will can also include plans for the guardianship of minor children and your preferences regarding funeral rites and burial.
- When a trust is funded control of your assets is transferred to a third party, known as the trustee, who then manages the trust for the benefit of designated beneficiaries. The funds can only be utilized according to the terms of the trust.
The most important difference between wills and trusts is that Idaho law requires all wills to be validated by a court administrator in a process known as probate. Probate allows beneficiaries or other parties an opportunity to contest the will. Resolving will disputes is often time-consuming and will likely result in expenses above and beyond the standard fees. The probate process is also part of the public record.
In contrast, the financial transactions in a trust remain private. There are many different types of trusts. Some provide financial benefits to the trustor during their lifetime. Others are created to fulfill the trustor’s wishes posthumously.
Deciding which estate planning tools will provide the greatest level of financial security for you and your family can be a daunting task. Finding an experienced Idaho will and trust attorney who can advise you about the right type of trust for your needs can help with this process.
What are the 4 different types of wills in Idaho?
The state of Idaho recognizes these 4 types of wills:
- Formal Will – A formal will is created with the assistance of an attorney. You must sign this document in front of two impartial witnesses and designate an executor to implement your wishes.
- Stationers Will or Will Kit – You can make a will without a lawyer and utilizing a do-it-yourself template is better than having no will at all. Unfortunately, if your will fails to meet Idaho state legal requirements, your beneficiaries could be embroiled in a lengthy probate process with attendant expenses.
- Holograph Will – Idaho courts will acknowledge a handwritten will that the person making the will, also called the testator, has signed and dated. An impartial acquaintance must testify that the handwriting is that of the testator. Which can be complicated.
- Joint Will – In this type of will, one testator leaves all assets to a co-testator, along with instructions about how these assets will be allocated when the co-testator dies.
Writing your own will might save you money on the front end. However, any seasoned estate planning attorneys are well aware of numerous situations where a do it yourself will fail to be approved in probate court or anything necessary litigation among the beneficiaries because of unclear or inconsistent language. Consulting an Idaho will and trust lawyer is prudent if you want to ensure your last will and testament is valid and to avoid excessive costs and fees.
What are the 4 types of trusts in Idaho?
There are many different types of trusts, but all fall within these 4 main categories:
- Living trust – A financial arrangement that allows a trustor to benefit from assets they transfer to the trust during their lifetime, with instructions about dispersing the assets to beneficiaries after death.
- Testamentary trust – A plan taking effect after the trustor’s death that follows instructions for distributions and is set forth in the trustor’s last will and testament.
- Revocable trust – The trustor can change the terms of a living trust during their lifetime.
- Irrevocable trust – The terms of an irrevocable trust cannot be changed, even while the trustor is still living.
The rules that apply to the different types of trusts may seem complicated, but each trust functions to address a different set of circumstances. An experienced will and trust attorney can give guidance about which estate planning facts would be best to achieve your particular planning.
If I have a will, do I need a trust?
A will is a tool to ensure that beneficiaries receive their portion of your estate. Not everyone needs a trust, but in some cases it can offer asset protection to minimize losing assets to creditors and the state.
Don’t assume that trusts are only for the wealthy. Trusts can be useful for a range of income. Arrange to speak with an Idaho will and trust lawyer who is knowledgeable about trusts that could be advantageous for your particular circumstances.
What are the advantages and disadvantages of trusts?
Before you commit time and money toward adding trust to your estate plan, make sure you weigh the pros and cons with an elder law attorney:
- Avoid probate, which saves time and money
- Keeps estate plan out of the public record
- Control over timing of asset distribution
- Protection from creditors
- Can reduce estate taxes
- Can be tailored to fulfill specific legacy goals
- Costs money to set up
- Trustee fees
- Requires accurate record keeping
- Investment income may be taxable
- Takes time to set up and to fund
Can you draft your own estate plan without hiring an attorney?
There are websites and how-to books for creating your own estate plan, but these often overlook important details that often ended up creating a mess for your heirs and those you left behind.
Your estate plan should include a comprehensive plan for your assets and how you want these dispersed after your death. It should have the flexibility to deal with contingencies. It should address your concerns about the long-term financial security of your beneficiaries and heirs. And, last but not least, it should adhere to the legal requirements in this state.
An experienced Idaho estate planning attorney can help you clarify your goals and customize an estate plan that will optimize your legacy.
Contact an Idaho will and trust attorney.
One of the most responsible actions you can take is to create a solid estate plan with clear instructions about how you want your estate handled after your death or if you become incapacitated. The experienced will and trust lawyers at Evergreen Elder Law have helped many clients achieve peace of mind with estate plans that secure the best interests of their loved ones. Call us at (509) 325-5222 or contact us online today to schedule a free consultation.