One of my client recently shared this article with me: Turn an Inherited IRA Into a Family Fortune. As the article correctly points out, if you inherit an IRA (or a 401k or some other tax-advantage retirement account), you need to be careful what you do with it. If you withdraw the whole amount, you will face a nasty surprise come tax time. Instead, your best bet is almost always to keep the account as an inherited IRA, take the minimum distributions each year, and keep allowing the IRA to ...
My Kids Shouldn’t Inherit, So Can’t I Just Leave the Money to My Parents?
I often speak to groups on the topic of estate planning. (If you want me to speak to your group, please contact us!) When I do, I always talk about how best to protect kids in the event the worst happens and the parents both die. You see, if children are too young or too immature to do something sensible with an inheritance, I usually recommend that the inheritance should be held in trust. Inevitably, someone will say, "I named my parents as the beneficiaries on all my accounts. They ...
Navigating the Probate Process — What to Do Now That a Loved One Has Died
If your loved one died recently, you are likely in turmoil. You may feel a variety of emotions -- grief, anger, or even relief. You also may be worried about what you need to do from a legal standpoint to wrap up a person's affairs. If so, you need to understand the probate process, and this post will help. What is Probate? Probate is a court process for wrapping up a deceased person's legal and financial affairs. Steps in the process may include the following: Appointment of a ...
Grandfather Screws Up – Leaves Legacy of Pain and Regret
I heard a story from another lawyer today, although it is sadly quite common. A grandfather, trying to do something for his grandkids as his dying wish, left those grandkids a bunch of money. His grandkids are still young - teens and preteens. He probably figured he would help them get a leg up by leaving them each about $1 million. So how is that a mistake? The problem is that he left those gifts to the kids directly, rather than using a trust. Why does that matter? Because when the ...
Who Wants to Be a Trustee? – Part 3 – Tasks
Trustees are obligated to meet their duties, described in Part 2 of this series. To do so, the trustee must complete a number of tasks throughout his or her service as trustee. Throughout, the trustee must consider whether he or she has the power to take a particular action. Well-drafted trusts include a lengthy section spelling out exactly what the trustee may do in administering the trust. Generally speaking, if an action benefits the beneficiaries, the trustee may do that act if ...
Who Wants to Be a Trustee? – Part 2 – Duties
In this second entry in our trustee series, we look at the duties a trustee must follow under state law. Here are the basics: Duty to Follow Trust Document Although perhaps it seems obvious, the trustee must follow the trust document. If there is any confusion, the trustee has to try to figure out what the grantor intended. So, a trustee must read (and re-read) the entire trust document to make sure she understands what the terms of the trust say. Then she has to follow those terms, even ...
5 Things Your Kid Should Do Before Leaving for College
May is graduation month. (Congratulations, class of 2018!) Perhaps one of your children graduated from high school and is fledging the nest. Whether they are off to college or to some other great adventure, there are a few documents you should make sure your child completes before leaving home. (And if they've already left, call them and have them get on these tasks right away! Or next time they are home for a visit!) 1. Health Care Power of Attorney Now that your child is over 18, in the ...
Who Gets My Guns, and How?
Estate planning is complicated, but of all the assets covered in a plan, guns present the most unique challenge. In Idaho, approximately 57% of households own one or more firearms. Thus, as an Idaho estate planning attorney, we frequently encounter and address the challenges these items present. One complicating factor is the myriad of laws that apply, including federally and on the state and local level. Often, firearm owners don't consider these legal issues while they are alive. That ...
What to do with all this stuff?
One common issue for my clients is how to handle distribution of their "stuff" -- what estate planning lawyers call "tangible personal property." There's a really easy answer, and you can get started on it right now! But first, some terminology: Types of Property Lawyers divide property into two major groups: "real" and "personal." Real property is land and the objects permanently attached to the land (houses, office buildings, etc.). Personal property is everything else. We also ...
How Will the New Tax Proposal Impact Your Estate Planning?
About the New Tax Proposal Republicans in the U.S. House released their new tax proposal yesterday. The full text of the document is available on the web. It's 429 pages and proposes to simplify the tax code, repeal the alternate minimum tax, and reduce corporate taxes. Of course, this bill is a first draft and is in the early stages of the legislative process. It is fair to say that this version of the bill will not become law, though many of its proposals might. So, how will the new tax ...