Idaho Estate Planning Estate Planning Myths That Need to be Obliterated - Part 2
By Lane V. Erickson, Idaho Estate Planning Attorney
Welcome back to our multi-part series on estate planning myths that need to be obliterated. This is part 2 of that series. Last week we installed our first article that had to do with some of the myths that exist or that people believe when it comes to estate planning. We obliterated the myths that estate planning is only for the wealthy, that all attorneys are the same, and that you need a trust as part of your plan.
If you have not read Part 1, we encourage you to go back and do it. It is a great place to start when it comes to obliterating the myths that exist when it comes to Idaho estate planning. In this article, we will continue by describing some additional myths about estate planning that are not true and that need to be obliterated.
As we do this, you need to keep in mind that estate planning is all about you. It’s about protecting you while you are alive, through your durable power of attorney, living will and power of attorney for health care. It is also about giving you an opportunity to control who receives your money, property, and other assets after you pass away through your last will and testament or a trust.
As we’ve said many times, we found that most people don’t get their estate planning done either because they misunderstand what it is due to the myths that we are obliterating, or because they simply don’t know how to start. Our goal is to make the process as simple as possible. To start we encourage you to download our free Estate Planning Questionnaire which is the best place to start when it comes to creating your own estate plan. This document makes it easy for you to pull together all the information you should be considering when it comes to thinking about your own estate plan.
After this, we encourage you to schedule a free 30-minute consultation with us. During this consultation we can go over the information you put in your Questionnaire. This allows us to answer your specific questions which helps you know what you should have as a part of your own estate plan.
Even though this is a multi-series set of articles about the myths these articles are only a summary. If you do have questions, we encourage you to contact us so we can answer your specific questions and help you with your specific needs.
Today we are going to tackle three additional myths and show why these myths are wrong. Again, our hope is to help educate you about the estate planning and probate process in Idaho so you can get the help you need, when you need it.Probate Only Happens When a Person Dies Without a Will
The first myth that we are going to tackle today is that a probate is only necessary when a person dies without a written last will and testament. I hear this all the time from clients who are considering whether they need to get their estate planning done or from family members of a person who passed away. The focus of this myth is whether a probate is needed when a person dies.
The fact is that whether a probate is needed is not controlled by whether a written will exists. In other words, whether a person does or does not have a written will, does not control when a probate will need to be done.
To put it more succinctly, a probate is required in Idaho in two (2) very specific circumstances. First, a probate is required in Idaho anytime a person dies when their name is on a deed or title to real estate of any kind. This could be a home, or farm ground, or even bare ground. If there is real estate involved, then a probate is required.
Second, a probate is required even when there is no real estate, if the total value of the person’s estate is worth $100,000 or more when they die. The estate includes everything such as bank accounts, vehicles, jewelry, guns, other personal property, and any other items of value the person owned on the day they died.
As you can see, neither of these two requirements, say or mention anything about a written will. In other words, if there is a written will, and a person owns real estate when they die, then a probate is required. Additionally, if a person does not have a written will, and the total value of their estate is worth $100,000 or more when they die, then a probate is required.I Don’t Need an EP - My Family Knows What I Want and Will Do the Right Things
Now whether or not a written will exists, is important and goes towards obliterating the second myth that we will talk about today. This myth is: I don’t need an estate plan; my family knows what I want and will do the right things.
The purpose of the written will is to make sure that the right things happen. The written will gives the decedent the ability to nominate who they want to be appointed as a personal representative of their estate. Without a written will, the statutes in Idaho control who this person will be. While this sounds fine, it often leads to problems.
For example, if there is no written will, and the deceased person did not have a living spouse, then the children of the deceased person are all in equal priority under Idaho’s statutes to become the personal representative. If the children do not agree on who should be appointed, there could be a fight at the very beginning of the probate about who should be appointed as the personal representative.
Additionally, your written will gives you the ability to give your estate money, property and other assets to who you want them to go to. In other words, you can be very specific about the gifts that you leave for your family members or close friends. Without a written will, again, this is controlled specifically by Idaho statutes. These statutes may not distribute your property the way you would want. Additionally, if your family tries to distribute property in a way that goes against what the statues say, any of the family members could file litigation in court opposing the proposed distributions. In other words, a legal fight could arise because you didn’t have a written will.My Estate Plan Controls Everything, Including My Retirement Accounts
The final myth that we will tackle today is that your estate plan controls everything, including your retirement accounts. This is a myth that is often discussed with my clients as well. Additionally, some well-meaning attorneys believe that this is true as well and put language in a will in an attempt to control retirement accounts. However, the truth is, retirement accounts are not controlled by a written will.
Retirement accounts like 401ks, IRAs, pensions, and others are controlled by a contract. The contract exists between the person who owns the account, and the administrator of the account. Because retirement accounts are controlled by contracts, a part of the contract gives the owner the ability to name or list one or more beneficiaries who would receive the account if the owner of the account dies.
The owner of the account has the ability to change or designate who the beneficiaries of their retirement accounts are whenever they want. When a person lists a beneficiary, the contract controls. In other words, if the contract says my retirement accounts go to my daughter, but the written will says my retirement accounts go to my son, the contract will control and the daughter would receive the retirement account.
So, there you have it. Three more myths obliterated. Thank you for reading this part 2 and keep your eyes open for part 3 which will be coming soon. If you do have questions, we would be happy to discuss those with you during a free 30-minute consultation. We encourage you to contact us.Enlist an Idaho Estate Planning Attorney to Help You
Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a free consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho estate planning problems.