Idaho Law Blog

Most clients I work with on their Estate Planning are shocked to learn that everyone has an Estate Plan, even when they have done nothing. There really are no exceptions to this. In Idaho, like most every other state, written statutes create a default Estate Plan for anyone who has not created one for themselves.

While this may seem intrusive, the reason the government has a default Estate Plan for you is because the law recognizes that when a person passes away, many people may make a claim to the decedent’s property. To avoid the potential chaos that could result from this problem, and to stop those that are unscrupulous, the law has created a systematic default Estate Plan for the distribution of a person’s belongings when they die. This is called the Law of Intestacy.

Essentially, if you die without a written Will, or Estate Plan, you die “Intestate.” If you don’t have a written Will as part of your Estate Plan then Idaho’s “intestacy” statutes and laws will automatically create an Estate Plan for you that determines who will receive your property when you die. In other words, if you don’t create an Estate Plan for yourself, the government has a default plan for you.

Deciding on and naming your Beneficiaries is an important part of your financial and Estate Planning. When I sit down with clients, many are surprised to learn that there are opportunities to name Beneficiaries both inside and outside of their Estate Planning. The purpose of this post is to describe in basic terms the 4 things you should know about choosing Beneficiaries.

1. First, you need to know the basics about Beneficiaries. Beneficiaries named in your Estate Planning usually occurs in your Last Will and Testament or in a Trust that you may have created. These Beneficiaries will receive the specific assets you designate from your estate. However, there are other Beneficiaries that you need to be aware of because you are able to name Beneficiaries for a broad range of assets, including retirement plans, annuities, life insurance policies and bank accounts. All of these assets fall outside of your Estate Planning and are not covered by your Last Will and Testament. Rather, these types of assets are controlled by the contract you signed with the company that holds these assets, accounts and contracts. On these contracts you can name different types of Beneficiaries such as individuals, charities, and/or trusts. Whether you can name young children under the age of majority — age 18 or 21, depending on the state in which you live – depends on the law in the state in which you live.

When you name a Beneficiary, in your Last Will and Testament, typically, a probate will need to occur before the property or assets you designate can be transferred. However, your retirement plans, annuities, life insurance policies and bank accounts can pass directly to your named Beneficiaries and won’t have to go through probate. In addition, even if you’ve put in you Last Will and Testament, that you want your retirement plans, annuities, life insurance policies and bank accounts to go to a specific person, the contract you have with the Company that holds that contract, and the Beneficiaries that you name in that contract, will override bequests you’ve made in your will. Understanding these differences will help you in naming your Beneficiaries in each of these documents.

A Personal Representative is an individual selected by you and identified in your Last Will and Testament. The role of a Personal Representative is to administer your estate and distribute your assets according to your wishes upon your death. It sounds easy, but often it is not.

When you pass, the first step for you Personal Representative is to get appointed by the Court. Once appointed your Personal Representative has, what is often, the difficult task of identifying and locating all of your assets. This includes bank accounts, investment accounts, retirement accounts, life insurance, real property, burial plots, vehicles, personal property and all other asset that you may have owned during your life. Identifying your assets often require the Personal Representative to search extensively through documents located at your house and to go through mail that is still being sent to your address. However, sometimes this is not enough to lead the Personal Representative to your assets. In today’s technological age, many people access their accounts online, eliminating the need for paper documents to be sent directly to their houses. This creates a problem for a Personal Representative as he or she may not become aware of certain assets that you may have had before your death.

Organizing and creating a list of your assets can be very beneficial to your Personal Representative. Nobody knows what assets you own better then yourself. By putting together a list of your assets with usernames and passwords when applicable, you will save your Personal Representative hours worth of time and effort that would otherwise be spent on searching for those assets. Once you have created a list of your assets, it is important to store them in a safe place and let your named Personal Representative or other individual that you trust know how to gain access to your list.

Losing a loved one is difficult. Grieving with your loss while trying to navigate the probate process alone is more than most people can cope with. For this reason, most people hire an attorney to help them through probate which is the collection and management of all assets; paying debts or taxes owed against the estate; and distributing property to your loved one’s heirs. Once you found that attorney to help you through the probate process, how do you prepare for your first meeting?

The tips listed below will help you get organized and will give you and some confidence going into that first meeting. To start with, seek to receive eight to ten (8-10) certified copies of the death certificate. Death certificates are used in planning and carrying out the probate process in many ways from providing a copy to the Court to forwarding copies to account holders and life insurance providers. If possible, bring at least one copy of the death certificate to your first meeting with your probate attorney.

The next step is also very important. You need to determine if there is an existing written Will, or written Estate Plan. Providing these documents to your probate attorney will help in the determination of whether probate is required or can be avoided. For instance, if there is a trust, probate might not be necessary.