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Idaho Estate Planning and Life Insurance

By Lane V. Erickson, Attorney

So you have completed your Idaho estate planning. Congratulations! You have now accomplished more than 68 percent of adults in America. However, before you get too excited about what you have done, it is a great idea to look over what you have completed and make sure that it actually accomplishes what you want. More importantly, it is wise for you to review your Idaho estate plan including your life insurance to avoid common mistakes that can cause problems. Here’s a list of these mistakes, and if you have made them, a description of the steps you can take to fix these mistakes.

The first and most common mistake found in Idaho estate plans that include life insurance is if you’ve named a minor child or even a young adult as a beneficiary of a life insurance policy, that is a big mistake that needs to be fixed. Under Idaho law it is illegal for a minor to be the recipient directly of life insurance proceeds. Rather, before money can be distributed to the minor, there has to be a legal guardian and or Conservator who is named who will receive those monies and hold them for the benefit of the minor child. If all you have done is named a minor as a beneficiary, there is room for a legal argument to be made by several adults that they should be named as the guardian and conservator of that child. This would leave them in control of the money.

Additionally,  under this scenario the courts will require a annual report to be made by the conservator to the court so that the court can regulate and make sure that the monies are not being used improperly. Again, the reason for this is because the person named as the guardian and/or conservator could be just about anybody.

The fix for this situation is to name Guardians in a last will and testament for your children who are minors. Additionally, your last will and testament you should set up so a Minor’s trust is created which will hold the money in trust by the person name who will be the trustee. This can be the same person named as the guardian but doesn’t have to be. The final step then is to change the beneficiary designation in your life insurance to name the miners trust rather than the minor directly. Ultimately by doing this you are in complete control of who will hold and protect and use the monies for your minor child.

Similarly, most people would agree that an 18 year old, who is considered to be an adult under Idaho law, would not be capable of handling a large sum of money. In fact, most people would agree that giving a large sum of money to an eight-year-old could be a devastating experience and have life-altering consequences for that young adult. Again, a wise person would create a trust in their last will and testament and would change their life insurance beneficiary to name that trust for any individual who is under the age that you believe would make them mature and responsible enough to handle the money.

Through your Idaho estate plan you have the ability of not only naming the original trustee but you can also name successor trustees as well if the first person you choose is unable or unwilling to act as the trustee. This gives you the ultimate ability on choosing both who you want to be named as trustee and how the trustee can and cannot use the money for the benefit of your child.  You have the ability to leave specific Instructions on what the money can and cannot be used for. Most importantly you have the ability of leaving Specific Instructions on the age when a final distribution of any monies that are remaining will be made directly to your child.

So if you have your Idaho estate planning completed that is awesome! Now take the extra step and make sure your life insurance designations are correct and won’t cause you any problems.

If you have questions about your Idaho estate planning, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.

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