Idaho Estate Planning the 3 Ways to Avoid Probate in Idaho
By Lane V. Erickson, Idaho Estate Planning Attorney
For 20 years I have met with clients individually and as families to discuss their Idaho estate planning and probate needs. When discussing probate with clients I find that there is a good deal of confusion about when or whether a probate will be needed. I find that the goal of many people in creating their estate plan is to avoid probate if it all possible. While probate does have a bad name it’s really not that bad to have a probate completed in Idaho because the costs of probate in the Gem State are lower than almost every other state. Even though this is true, some people still want to avoid probate. When this occurs, we can help.
At the Racine law office, our premiere Idaho estate planning and probate attorneys have assisted clients for over 70 years in completing their estate plan to meet all of their individual and unique needs. This may include finding a way to avoid probate after our client has passed away. Our team includes partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. We are confident that our team can help you meet your estate planning needs including finding ways to help you avoid probate after you pass away.
While Estate Planning and probate options are as unique as the individuals who own them, there are really some very basic ways that any person can avoid probate if they choose. Below is a list of three main options that could result in avoiding a probate in Idaho.Option 1 - Give Everything Away Before You die
The first option is to give everything away before you die. The reason for this is that in Idaho a probate is required anytime a person’s name is on the deed or title to real estate, or when the value of their estate is worth $100,000 or more regardless of whether any real estate is involved. As a result, if you can come up with a gifting plan that allows you to give away all the assets, money, and property in your estate, including real property, then a probate may not be required after you die. So long as you fall below the two thresholds listed above, which is having real estate in your name, or having your estate worth $100,000 or more, then a probate will not be required for your estate. Rather, your family and loved ones will have other options that they can use to transfer away any remaining property or assets that you own.
The problem with option 1 is that none of us has a crystal ball. What I mean by this is none of us knows for sure how long we’re going to live, or how much of our own money, property, and other assets we may need to care for ourselves through our lifetime until we pass away. If we knew exactly when we were going to die, and how much of our money, property, and other assets we would need up to the day we die, then this would be the perfect option.
Even though we may not have a crystal ball, this option is still good in order to allow you to give away meaningful gifts to your family and loved ones while you are alive. It is my experience that family members who do this, usually strengthen relationships with their family and loved ones. Additionally, they get to enjoy seeing their family or loved ones receive the gifts they give.Option 2 - Use a Trust
The second option in avoiding probate that may be available to you is to use one or more trusts as part of your estate planning. As mentioned above, if you have your name on the title or deed to any real estate, or if the value of your estate is worth $100,000 or more when you die, then a probate in Idaho is required. However, if during your lifetime you create one or more trusts that you transfer your money and property into, then you may not meet the criteria for a probate when you die.
An additional benefit of owning and using trusts is that you may still be in control of all the money, property, and assets that you put into the trust until you pass away. Additionally, you can name yourself as the beneficiary of the trust, which means you have the ability to enjoy and continue to use the money, property, and assets that are in the trust until you die.
As a probate tool trusts are very useful. However, it needs to be noted that as an estate planning tool, a trust can be expensive. In fact, we find that most often the costs of getting a trust are usually about the same as the costs of doing a probate. So, there’s no real financial benefit to using a trust other than it does help avoid the time and steps of completing a probate after you die.Option 3 - Use a Right of Survivorship and PODs
A third option that you may be able to utilize is using rights of survivorship and PODs. As an example, Idaho allows a married couple to own real estate jointly with a right of survivorship. This simply means that when the spouse passes away, the title to the real estate automatically transfers to the surviving spouse without the need for a probate to accomplish this change in title.
However, most married couples purchasing a home have to use a mortgage in order to accomplish the purchase. In other words, most people don’t have enough money laying around to make a cash purchase of real estate. Some banks who offer mortgages to a couple in order to allow them to purchase a house, do not allow a right of survivorship on the deed that is issued. As a result, a joint tenancy with the right of survivorship may not be not available to a married couple until they have paid their home off and they have the title free and clear from the mortgage of the lender.
PODs can also be utilized. A POD is an acronym for “payable upon death”. This title usually accompanies some sort of bank account or other financial account. For example, a parent may have a bank account with cash or CDs in it. A parent may sign documentation with a bank or financial institution that states that when they die that account or CD or whatever is held will be payable upon death to the children who are named as the recipients. While this is possible, it should be noted that Idaho statutes may still require that the monies from these accounts be used to pay the debts and expenses of the deceased parent. In other words, creditors may be able to come to the children and force them to use the money to pay their parents debts.
If you have questions about how you or your family or loved ones can avoid probate, we are confident that we can help.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 consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at email@example.com 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.