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Is it a Gift or an Advancement?

By Matthew Stucki

Recently I have seen an increase in clients that come to my office and declare that they have made a gift to one or more of their children as part of their Medicaid planning or for some other reason. However, in most of these cases, the individual that has made the gift has not considered the potential conflict the gift may cause among their children.

In Idaho, “if a person dies intestate as to all his estate, property which he gave in his lifetime to an heir is treated as an advancement against the latter’s share of the estate only if declared in a contemporaneous writing by the decedent or acknowledged in writing by the heir to be an advancement.” Idaho Code § 15-2-110

In other words, if a person without a will wants his or her children to inherit equally, then any gifts made to a child during life must be identified as an advancement at the time the gift is given. For example, if a parent that has three children (A, B, C) and a $100k in savings, gives $10k to child “A” during the parent’s life without a written statement of intent to distribute as an advancement, child “A” would receive the 10k as a gift during life and then receive 1/3 of the remaining $90k upon the parent’s death. This would result in an unequal distribution wherein child “A” would receive $40k, “B” would receive $30k, and “C” would receive $30k of the parent’s savings.

However, if the parent of A, B, and C would have executed a written statement at the time of the $10k gift to A, indicating that the gift was an advancement, then “A” would have received $10k less at the death of the parent. As a result, children A, B, and C would have all received an equal 33k from parent’s savings upon the parent’s death.

Such a simple thing could mean all the difference in carrying out the intent of a parent and avoiding conflict among children.

If you have any questions regarding advancement or how to reduce potential conflict between your named beneficiaries upon your death, contact our Idaho Estate Planning Team of lawyers.

Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Matthew P. Stucki and the Racine Olson team of Estate Planning attorneys in Pocatello, Idaho Falls, or Boise. You can also email Matthew P. Stucki directly at mps@racinelaw.net. We will answer your Idaho, Estate Planning questions and will help you determine how to meet your personal estate planning needs.

 

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