Justin Jeppesen: Choosing a Guardian for Minor Children in Idaho

If you are like me, one of the most important reasons for estate planning is to ensure proper provisions are made for your young children.

 If you have minor children, dealing with all the issues involved can seem overwhelming. I understand, but the alternative is to risk making no provisions and having someone else make those decisions for you!

 When selecting a guardian, consider:

• Would your parents really have the energy to raise more children?

• Can you select a sibling or friend?

• Do you have a sibling you absolutely would NOT want?

• Will the guardian be able to raise your child like one of their own?

• Can one person raise all of your children? Should it be a couple?

• Do you want to name more than one potential alternate? (yes… you do.)

• Does your primary choice live in another city or state? Would you want them to move to where your kids are? (entice them….)

• Are you comfortable with the guardian’s parental style and moral beliefs?

• Have you talked to your selected guardian?

 Once you’ve settled on a guardian, discuss your decision with that person to make sure he or she is willing to take on the responsibility. You should name as many contingent guardians as you can muster, in case your first choice is unable to serve.

 Then – consider money:

• Are there adequate financial arrangements so that the child’s presence will not be resented? Ie - Term Life Insurance!

• Should the person who has physical custody also handle their finances? Quick answer, No!

 You may, and in my opinion should, name one person or couple to be your child’s guardian and name another person to handle the child’s finances (called a conservator, custodian, or Trustee).

 Also, you can decide if trusts should be set up and how money should be distributed when your children reach adulthood. I am a huge fan of this strategy. I have had too many conversations with young twenty-somethings that have received a life insurance policy and spent that money trying to cover up the loss of a parent.

 Finally, just because you’ve previously selected a guardian doesn’t mean that person is still the best choice. As your children grow, review your guardian choice every couple of years.

Justin Jeppesen: Estate Planning Tips for Parents of Minor Children

Kids bring with them a lot of added responsibility. If you have kids you already know this. If you are about to have kids, you will find this out shortly.

Of these added responsibilities, protecting them is an obvious one. But when you think of protecting your little ones, has the idea of protecting them after you have passed away, or become permanently disabled, ever crossed your mind?

(I will let you in on a little secret of mine. I never dwelt on the potential of my own death until I had a child.)

One of the responsibilities of having minor kids that you need to add to your list is to create a Will or a Trust. I understand that creating a Will or Trust causes you to think about and plan for death. But, you are already thinking about it anyway. Why not answer your “What-if” questions?

A Will or Trust can provide you with some certainty in the face of life’s complexities, such as who will have the right to be a guardian of your children if they are still minors. Or, dictating who will receive your assets and how those assets will be distributed.

If you have decided to answer your “What-If” question, I am providing a few tips to help:

1. Consider Potential Guardians for your Minor Children. For the majority of parents, this is the first and hardest step to complete. Whether it is due to difficulty imagining someone else raising your children, deciding on one person over another, not feeling like you have available options, not wanting to “burden” someone with your kids, not wanting to hurt someone’s feelings, or not having someone physically near you to care for the, this can prove to be the step that stops you from completing your Guardian Nomination in your Will. The problem is, this problem is still there and unanswered in the event that you pass away.

2. Consider Your Child’s Financial Needs after Your Death. Using a Trust in your plan prevents a child’s inheritance from being placed in a locked account controlled by the court. You have the opportunity to name a trustee of the trust, who will be responsible for managing the funds that will be used to raise your child. The Trustee will manage the funds how you decide. I help you with this, but think about the things you would financially assist your child with if you were present. Put this in the Trust. In addition to the specifics you provide, the trust assets will be used to pay for your child’s health, education, maintenance and support. Finally, you can designate ages you would like your adult child to inherit the assets in the trust outright. For example, some parents find that 35 is a more appropriate age to inherit a lump sum of money than age 18, Idaho’s prescribed age.

3. Update Beneficiary Designations. Make sure that your beneficiary designations are up to date on life insurance policies, retirement accounts, or other beneficiary-designated assets, and that these designations match the intent of your will or trust. When considering beneficiary designations and minor children, no designations or a designation directly to the child will result in that account falling outside of your plan and going directly into the child’s hands at age 18.

4. Create a Durable Power of Attorney for Care and Custody of Minor Children. If you are traveling, of your child is traveling, or you become disabled or incapacitated, a Durable Power of Attorney gives the person you designate the power to make medical and financial decisions on your behalf for the child. Absent this document, and without a spouse present to make the decisions for you, the only alternative to naming someone to take on medical or financial decisions for your child is through a court-appointed guardian.

How long should this all take? It depends on how to decide to tackle the planning, ie a Will or a Trust, but at my office, plan on taking time at home to fill out a questionnaire, one planning meeting that lasts 40 - 75 minutes. I will then draft and you will review your documents, followed by a short meeting to finalize your documents. Not so painful. Often the time it takes you to make decisions about guardianship far exceeds the time it takes to get the documents in place once those decisions are made.

Issues With Owning Out of State Property

If you own real property in more than one state, additional planning requirements are necessary during the Probate process.

Unless special arrangements have previously been made, when a person passes away with property in more than one state, the personal representative of the deceased will have to initiate Probate proceedings in State where the deceased person lived, and then they will be required to initiate an ancillary probate in each other state where the deceased person owned other properties.

The requirement to initiate ancillary probates can substantially increase the cost of administering one’s estate when he or she passes away.

If you own property in more than one state, creating a Living Trust or Family Trust not only avoids probate in the state where the deceased person lived, but they also avoid the requirement of ancillary probates in the others states.

In most cases, the cost of creating a trust is minimal when compared to the cost of having to administer an estate in multiple states.

Avoiding Probate in Idaho with a Small Estate Affidavit

Is Probate required to transfer assets when I pass away? Is there an option if I don’t have much?

Probate is required under one of two circumstances in the state of Idaho. One, you personally own any interest in real property. Or, two, you own more than $100,000.00 in probate-able assets.

So, what if your estate does not meet either of these criteria? Is Probate required?

In Idaho, the law allows for the collection and disposition of assets through a Small Estate Affidavit, found under Idaho Code 15-3-1201. In addition to the asset requirement, the affiant must swear to additional information as well.

The law does allow for the avoidance of Probate, but that may not always be your best option. Consider three potential outcomes.

First, did the deceased person have a Will? If so, the provisions of that Will must be carried out. By avoiding Probate, you also avoid the neutral party in the Judge of ensuring that the provisions of your Will are followed. That way your last wishes still have a voice. Otherwise, a potential arises of someone filing a contest.

Second, did the deceased person have debts? If so, the Probate process can allow for the elimination of some of those debts through a notice to creditors and the 4-month limitation on claims that accompanies the notice. If you proceed with the Small Estate Affidavit, you do not benefit from this limitation on filing a claim. Also, if you collect and spend all of the assets in which a creditor has priority, you may be required to refund the creditor long after you spent the money.

Third, did the deceased person have assets outside of the State of Idaho? The other state might not acknowledge the Idaho Small Estate Affidavit.

I understand that the popular thought is to avoid Probate. There are options available to you, including the Small Estate Affidavit. However, I urge you to have a better understanding on the topic of Probate before proceeding. If you believe the estate of a loved one is eligible to avoid Probate, call Jeppesen Law today at 208-477-1785 for a free consultation and we can discuss your options.

How to Avoid Probate in Idaho

If you have ever heard of Probate, or heard someone talking about Probate, it is usually in a negative light and in terms of avoiding it (or wishing they had avoided it).

Recently, I have shared some information on what Probate is, when Probate is required, the typical cost of going through Probate, and the most surprising bit of news I ever get to share, when a surviving spouse is required to go through Probate.

But, how do you (or I) avoid Probate? I will offer three potential different paths to avoiding Probate to chew on.

First, don’t own enough assets that would “require” Probate. Typically, if you have less than $100,000 of Probate-able assets and you do not owe any real estate, you can, and might want to avoid going through Probate. Although initially, this does not sound ideal, a large portion of our population fall into this category.

Second, you can try to piecemeal a plan together to avoid Probate. Update the Beneficiary Designations for ALL of your financial accounts, update all of your title-able personal property into an ownership status called community property with rights of survivorship, and update the ownership of all real estate into the ownership status of community property with rights of survivorship. This step typically only helps avoid Probate for the first spouse to pass away in a married couple. Also, this step has severe inheritance consequences that are too complex to cover in a simple blog post. Please know that I recommend against updating your ownership of these assets without first consulting an estate planning attorney to discuss the consequences of your potential decision.

Third, is a Living Trust or sometimes called a Family Trust. A Trust is a universal solution that covers all types of property upon the death of both spouses. In my opinion, this is the best option available to avoid Probate.  A Trust that is properly established and maintained (not difficult, but certain actions will need to happen in the future), it will avoid probate entirely, including the delay and the expense, upon the death of both spouses.

That’s why so many people understand that a Living Trust or Family Trust is the best option for avoiding the time and delay of probate.

Is Probate Required for a Surviving Spouse?

The unthinkable just happened. Your husband or wife just passed away, either expectedly or unexpectedly. Your spouse had everything updated and had a Will. So are you, the surviving spouse, required to go through Probate?

There are few scenarios that frustrated clients more than when they learn that the client has a 6-month long probate legal proceeding ahead of them, which is required to move the deceased spouse’s property and possessions into the name of the surviving spouse. Especially, when they believe that they had everything “taken care” of.

Most Idahoans believe that the living spouse is automatically entitled to all of the deceased spouse’s property and that the Probate process will NOT be required.

Unfortunately, that is not the case.  Unless the spouse who passed away took special steps to avoid the probate requirement, it will be necessary even if the surviving spouse is legally entitled to inherit everything. However, creating a Will is not a special step to avoid Probate.

A special step that is used most often, and is the most effective, to avoid probate is to set up a Revocable Living Trust or Revocable Family Trust.

Justin Jeppesen: When is Probate Required, When is it Not?

After the dust begins to settle when a person passes away, the dreaded thought that now you must go through Probate for their estate seeps into your thoughts. Often times you are correct to think this, but multiple times a week I talk with people that aren’t required to Probate a deceased person’s estate. So, when is Probate required?

In the state of Idaho, Probate will be required to administer a deceased person’s estate if he or she meets one of the following two factors, or both: 1) $100,000.00 or more of personal assets; and/or 2) any interest in real property (ie personal residence, condo, undeveloped land, oil interests, etc.).

If you have a house, even if there is a mortgage on it, you will go through Probate. If you have a large collection of jewelry, tools, or guns chances are you will go through Probate. If you have a life insurance policy, retirement account, CD, investment account, or checking and savings account that does not have a beneficiary designation on it, you are probably going through Probate.

Is Probate required for you? That depends on whether or not you meet one of the two Probate triggering factors. The real property factor is easier to understand than the $100,000.00 personal asset factor. Either you own a home, or land, or don’t.

If you don’t meet either factor, Probate is not required for you. Yay! Having stated when Probate is required, please understand that a skilled, competent, and experienced estate planning attorney can explain to you the ways to avoid Probate, even if you meet the requirements under the law.

Ultimately, if a person owns property worth more than $100,000.00, or if he or she owns any real estate, the most effective means of avoiding Probate is through the use of a Living Trust.  A Trust, properly prepared and funded with the assistance of a lawyer, it is the best way to avoid probate.

Justin Jeppesen: Cost of Idaho Probate

If you find yourself having to Probate the estate or Will of a loved one, among the chief-est of concerns is the Cost? Let alone all of the other unknowns involved with Probate, the cost is often the one question most people in my office want to know.

While I can’t guarantee you a cost, I can provide general guidelines. If everything went well, with no surprises, you can expect to spend somewhere in the neighborhood of $2K - $5K throughout the entire Probate process on Attorney’s fees. Again, only if everything goes off without a hitch.

Jeppesen Law charges a flat rate of $2,000 to proceed with an informal probate. Often, this is the only charge for Attorney’s Fees that the clients incur. However, my Representation Agreement has built in per hour price contingencies if an unexpected Creditor Claim or Will Contest arises, but that seldom occurs.

What does that $2,000 include? An informal probate proceeding (no court, yay!), Office Consultation regarding probate of decedent’s estate, Prepare of Application for Informal Probate and Informal Appointment, Preparation of Statement of Informal Probate and Appointment, Preparation of Letters Testamentary, Prepare of letters to the Probate Magistrate Judge in the Venue county, Preparation of the Notice to Creditors to be Published with the local Newspaper, Filing the Application and other pleadings with the County Probate Court, Real Estate Transfer Documents, Publication Fees, and County Probate Court Filing Fees. Whew, that was a mouth full.

As a reminder, it is always a good idea to ask your attorney early on in the process of estimated costs. After ask a number of specific questions that can lead to pitfalls, the attorney should be able to provide an estimated cost. Better yet, hopefully he/she can offer you a fixed fee plan. This approach encourages efficiency and economy that ultimately works to the benefit of the clients.

However, to avoid both the cost and the time delay of probate, a Living Trust or Family Trust is often the best option available.

Justin Jeppesen: Idaho Probate Explained

In a very basic description, probate is the court process to oversees that the correct people inherit  property when someone passes away.

With or without a Will, Probate is initiated with a petition.  And, by law, the Probate process must last at least 6 months.

Once the probate court determines whether or not there is a Last Will & Testament, then the court appoints the appropriate person to serve as the Personal Representative of the Probate Estate.  Usually that person is named in the Will, however, that person can be appointed if they have priority for that role under Idaho law if there is no Will.

After the Probate court appoints the Personal Representative, he or she will collect the deceased person’s assets and property, pay legitimate creditor claims, sell any property that cannot be divided, and distribute the remaining property and funds to the named heirs or appropriate devisees.

During that remaining 6 months the Personal Representative will prepare and file a list of the decedent’s property and will provide an “accounting” to the court describing the property and financial details of the probate process.

At the end of the 6 month period, if the Personal Representative is finished with his or her work, ie creditors have been dealt with, remaining property distributed, etc., a final statement is filed with the court closing down Probate.