Always act in the best interest of the Beneficiaries, not your own!

If you have been named the Trustee of a Revocable Living Trust, there are a few things you should know. As Trustee, you have a fiduciary duty to the Beneficiaries of the Trust. In other words, you should always act expeditiously for the benefit of the Beneficiaries. You should avoid any conflicts of interest, such as using the trust assets to benefit yourself, borrowing money from the trust, placing money in an account you own or investing trust money in your own company. As incredible as it may seem, newspapers are full of such stories.

As the Trustee, you have a duty to openly and regularly communicate with the Beneficiaries and not withhold information from them. Here are some things Beneficiaries should know about:

• How money in the Trust is invested
• What are the Trust assets and liabilities
• Any sales of the assets/property in the Trust
• Any expenses paid for advisers, attorneys, accountants, real estate agents, etc.

You will need to keep detailed and accurate records so that you can provide an accounting to the Beneficiaries and be prepared to defend your actions if necessary.

When a Trust terminates, you need to distribute the Trust Estate to the Beneficiaries as soon as possible and close the Trust. Depending on the objectives of the Trust and the desires of the Beneficiaries, a Trust can be terminated in as short as 6 months or it can continue for several years.

When terminating the Trust, you must pay the Trust expenses, creditor claims and administrative costs. The balance of the Trust will be distributed to the Beneficiaries in kind (give the specific asset to the Beneficiaries), or you can sell the assets and distribute cash to them.

If there is personal property belonging to the Trust, you will decide to whom the property is to be distributed. With luck, a Tangible Personal Property list has been left in the Trust, indicating to whom the items go. If not, you will decide. One way to divide up the personal property is to place items of approximate, equal value into separate piles, put numbers on them and have people draw a number and claim that pile.

When you make the distribution of the Trust, you should consider holding back a small reserve to cover any additional expenses or tax liabilities. You should talk with your accountant about the need to file a tax return for the Trust.

Once you are confident that all Trust expenses have been paid, you may distribute the reserve balance to the Beneficiaries. You may want a signed receipt from the Beneficiaries that they have received the distributed assets and that they release you from any further liability or responsibility as the Trustee of the Trust.

It’s an honor and a significant responsibility to be chosen as a Trustee—to be trusted to carry out the objectives of the Trust and protect the interest of the Beneficiaries. If you are concerned about something you don’t fully understand, we are available to answer questions.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

August 2019

Procrastinating can lead to a situation where it’s “too late.”

Meeting with a lawyer to discuss your legal needs can be compared to meeting with your doctor for a wellness exam. Your doctor evaluates your current health situation and recommends actions that you can take to ensure as healthy a future as possible. If, on the other hand, you procrastinate and don’t have regular wellness exams, sometimes when a problem is discovered it is too late to do anything about it. Early detection is always best.

When you have a “legal wellness” exam, your lawyer can advise you concerning what legal documents you need to have in place and what actions you need to take to be as prepared as possible for any eventuality that might occur. Sometimes, if you have a chronic illness, planning for long-term care should also be part of the conversation. In law as in medicine, if you wait too long, once the problem becomes evident, you may not be able to do anything about it.

For example, sometimes individuals set up a Trust to avoid probate. After the Trust is set up, they buy and sale property but some of the property is mistakenly not put into the Trust. When the grantors of the Trust pass away, their failure to transfer the property to the Trust is discovered. So, their heirs must probate the estate to transfer title to the property into the Trust. The goal of avoiding probate has been frustrated. Meeting with a lawyer to review the Trust could have avoided this.

Another example is when Mom and Dad are doing fine, so they aren’t thinking about their “legal wellness”. Then years go by and one of them unexpectedly becomes incapacitated. It’s now too late to put legal documents in place to appoint agents, who can act on their behalf. It makes sense to have regular “checkups”—medical and legal to take care of things while you still can.

Quality of life is important to each of us. Just as a wellness exam can catch physical problems while they are still treatable, legal exams can identify and solve problems while you are still able to do something about it.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

June 2019

Are you aware of these lesser-known facts?

Often, there is apprehension concerning end-of-life decisions. To make it easier, there are legal documents that you can put in place to carry out your wishes. One is a Living Will, which is an advance directive that sets forth your instructions for life-sustaining medical procedures if you are unable to communicate your wishes to your family and healthcare provider. Below are some lesser-known facts concerning a Living Will and Durable Power of Attorney for Health Care (DPOAHC) in Idaho.

• A Living Will directs your family and healthcare providers on whether to continue or withhold life-sustaining treatments such as intubation, mechanical ventilation, or tube feeding for hydration and nutrition.
• A Living Will takes effect only when a medical doctor certifies that you have a terminal and incurable illness, or you are in a persistent vegetative state.
• In Idaho, the Living Will and DPOAHC are combined into one document.
• A Durable Power of Attorney for Health Care allows you to appoint a person to make all decisions regarding your healthcare and takes effect only when you are not able to communicate.
• If you can communicate, you will continue to make your own decisions concerning your healthcare, and what treatments you want. This includes making decisions about where you live—at home or in a facility.
• There is a presumption in favor of cardiopulmonary resuscitation (CPR) if you do not have a pulse and are not breathing. This is a different condition than being diagnosed as terminally ill. If you do not want CPR you should indicate it in your Living Will and should fill out a Physician’s Order for Scope of Treatment (POST) with your doctor.
• Living Wills created in other states that substantially conform to Idaho’s Living Will statutes, are recognized as valid.
• Persons may give consent for their care to others, in the following order: a Guardian, the person named as an Agent in their Living Will, a spouse, a parent, a relative or any other competent individual representing himself or herself to be responsible for your healthcare.
• If you have not made a prearranged funeral plan or if provisions relating to the disposition of your remains are unclear—for example, do you want cremation or a burial—the decision is made by the person designated as your Durable Power of Attorney for Health Care. If you want to make provisions relating to the disposition of your remains, you may want to prepare a document which specifies what you would like to have done.
• A Living Will can be registered with the Idaho Secretary of State’s office, and if registered, your information will be available online to doctors, even if you are traveling.
• If you change your mind, you can amend or revoke your Living Will and Durable Power of Attorney for Health Care.

When it comes to end-of-life decisions, there are things you can do to make it feel less daunting. Getting correct information and knowing what’s available, will help you make better choices.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

April 2019

Does it really matter how you sign your name?

When signing legal documents, this question frequently comes up—how should I sign my name? There is not a black and white answer to this question, but here are some guidelines.

There are good reasons to sign your name on legal documents the same way your name is listed on government documents, such as your Social Security card or your Driver’s License. If the document is going to be notarized, a notary public may ask to see your identification card to identify you and compare signatures. The goal is to sign your name in a way that will avoid confusion.

There is no law that I am aware of that says you must sign your name a certain way. But title companies, banks and county assessor’s offices often get particular about how documents are signed, especially documents that transfer title to real property.

Below are some general rules that court clerks and title companies have suggested to me. I realize that sometimes these suggestions might conflict with each other. You can choose the one that fits your situation the best.

• Sign your name the way it is listed on government documents that identify you.
• Sign your name the same way that it is listed in the heading, the body of the document or the signature line.
• If you are signing a deed, sign your name the same way that it was written in the deed that transferred the property to you. Sometimes when your name has been written multiple ways on previous deeds, you can state your name and then state, “also known as”, then write your name the other ways that it was written previously.
• If you have a common name or the same name as a parent, use your full name, with your middle name, or Jr. or Sr. if applicable, to avoid confusion.

Generally speaking, a person is not going to escape liability, or on the other hand a contract or other legal document is not going to be invalidated because you didn’t use your full name, your name is misspelled, or you signed Bill Smith when your name is William Smith.

Signing your name as indicated above will avoid confusion and make it easier for title companies and assessor’s offices to verify your signature.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

October 2018

Separate Property May Become Community Property if it is commingled.

I recently received a call asking for clarification of a Senior Tip I wrote a few months ago. Below is the answer to the question. The call made me think that there may be others with questions that they would like answered. If you have a question that you would like me to address in a Senior Tip, you are welcome to call me or email me at tpacker@srv.net.

The previous Senior Tip discussed how community and separate property are treated differently under Idaho inheritance laws. The question that was asked was how do you know whether property is community property or separate property.

Here are the definitions of separate property and community property:

• All property the husband or wife owned before marriage, and all property acquired during the marriage by gift or inheritance, and any proceeds from this property, is considered separate property. (Idaho Code § 32-903)
• All other property acquired during the marriage by either husband or wife is community property. (Idaho Code § 32-906.)

Here are a few examples of the different ways separate and community property are treated under Idaho law:

• As to community property, the surviving spouse will inherit all the deceased spouse’s community property and ½ of the separate property. The other ½ of the separate property will pass to the surviving parents or children of the decedent. (Idaho Code § 32-102)
• The separate property of one spouse is not liable for the debts that the other spouse contracted before the marriage. (Idaho Code § 32-910-11)
• Either spouse alone can incur a debt that obligates their community property, but not the separate property of the other spouse. However, as to the community property, both spouses must sign to purchase or sell real property. (Idaho Code § 32-102)

If a husband or wife brings separate property into a marriage and commingles it either with the community property or the separate property of the other spouse, it may be converted into community property. For example, if you receive an inheritance, and you deposit the money into a community bank account it will become community property. If each spouse sells their home, and they buy a new home together with the proceeds of their sales, the new home will be community property.

You can give your separate property, or ½ of your community property to whomever you want after your death, but you must have a Will to do so. If you don’t have a Will, your property will be distributed by the laws of the state as explained above.

Many people, not understanding these laws, make decisions that produce results they did not intend.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

September 2018

Choosing to make a Will ensures your estate goes to whom you intend.

Some people don’t see the importance of making a Will. A Will is a written declaration of what will happen to a person’s money and property after they die.

Under Idaho inheritance laws, if a married person dies without a Will, the spouse inherits all the community property and half of the separate property. The remaining half of the separate property is inherited by the decedent’s children.

If, however, the decedent is single and has no children, the next in line to inherit would be the decedent’s living parents. If the parents are deceased, the decedent’s siblings would inherit the decedent’s property. If there are siblings, the estate is divided by the number of siblings, living and dead. Each living sibling receives one share. The share of a deceased sibling is divided equally between his or her children.

Sometimes people fail to make a Will, but verbally state to whom they want their property to go. A Court will not honor a verbal statement. If there is no Will, the inheritance laws must be followed.

I know of a situation where a man died, who had never married and had no children and whose parents were deceased. He told his siblings that he wanted them to have his estate, but he never wrote a Will. His estate ended up being divided among his nieces and nephews, to whom he had never intended to give any money or property.

In another situation, a couple had lived together for years, but never married. They never got around to making Wills and then one of them unexpectedly died. Sadly, the surviving partner inherited nothing. If the deceased partner had written a Will, she could have left everything to her partner.

Where there’s a Will, there’s a way for your property to go to those you intend. By creating a Will, your desires will be followed. You can name a Personal Representative to administer your estate, you can name a Guardian and Conservator for a minor or disabled child, and you can designate who will receive your estate.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

August 2018

Common-Law Marriages after 1996 are not recognized in Idaho.

Occasionally, I encounter couples that are living together, but have never gone through a formal marriage ceremony. This situation raises the issue of common-law marriage, which is widely misunderstood. Common-law marriages entered into before January 1, 1996 are recognized in Idaho. However, after January 1, 1996, Idaho does not recognize common-law marriage—consent to marry alone will not constitute a marriage; it must be followed by the issuance of a license and a solemnization ceremony. (Idaho Code  32-201)

If you are trying to prove that you have a common-law marriage, that was entered into prior to 1996, you would have to establish the following four requirements: (1) The man and the woman must both have been eighteen years of age or older; (2) they must have consented with each other to be husband and wife; (3) after they consented the parties both assumed marital rights, duties, and obligations to each other—this requires that they lived together as husband and wife, treated each other in a manner typical of married people, and held themselves out as husband and wife; and (4) this was done while living in the state of Idaho.

By abolishing common-law marriage in 1996, Idaho eliminated much of the uncertainty, ambiguity and inconsistencies that surrounded common-law marriage.

Living together in Idaho after 1996, without a solemnization of your marriage, may affect your eligibility for Social Security and Medicaid benefits. In addition, you will not inherit from your significant other unless they have made provisions for you in their Will.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

July 2018

If you have a small estate, you can deed your house and still be able to live there until you pass away, and avoid probate.

If you have a simple estate, you might want to consider passing your house, using a Gift Deed and retaining a life estate. This type of deed conveys your house to a person or persons and reserves to you, the Grantor, the right to live in the house for the rest of your life. The ownership in the property is divided into two interests: a life estate and a remainder interest. The person who holds the life estate has the right to possess the property during his or her lifetime. The person who has the remainder interest has the right to possess the property after the life tenant passes away.

Example: John Smith, in consideration of the love that he has for his daughter, Laura, conveys his house to her as her sole and separate property reserving and excepting to John the right to all rents and profits on the property and the right to use the property for as long as John lives. At John’s death, the house passes to Laura simply by recording a Death Certificate, without having to go through probate.

If you want to use a deed retaining a life estate, there are a couple of things you should know. First, once your have deeded the property retaining a life estate, you can no longer sell the property without the signature of the person holding the remainder interest. For example, a woman deeded her home to her daughter and retained a life estate. Later, she had a falling out with her daughter. She wanted to sell her home and move, however, her daughter refused to sign the deed, so the woman was unable to sell her home. Second, if you deed your home and retain a life estate and later apply for Medicaid, your life estate interest may be counted as an asset towards eligibility for Medicaid.

A Gift Deed retaining a life estate is a way to transfer your property without going through probate and still retain the use of the property during your life time. Make sure you understand the risks before using this type of deed.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

June 2018