Barry Peters Law

BARRY PETERS: Safety for Idaho Blended Families!

Barry Peters — Fri, 21 Oct 2011 18:45:09 +0000

After meeting for a few minutes with a new client this week, she mentioned that theirs was a blended family. She and her husband each had children from earlier marriages. That dynamic raised a common question in such circumstances: How can both spouses make certain that the children of both spouses will ultimately share in the inheritance?

Failure to take this question into consideration here in Idaho may result in the children of the first spouse to pass away being denied their share of the inheritance as a result of changes made by the surviving spouse to his or her Will.

The easiest way to makes certain that the inheritance ends up where it’s supposed to is to have your attorney or lawyer set up a Living Trust or a Family Trust that provides that, upon the death of either spouse, the terms of the trust may no longer be altered by the surviving spouse. The terms of the trust are locked down at the death of the first spouse to pass away.

This precludes the surviving spouse from being swayed to write off the deceased spouse’s children in favor of the children (or even the new spouse) of the surviving spouse. It gives all of the children in this blended family the legal right to make sure that the arrangement upon which both spouses agreed is what actually occurs. An easy solution to a sometimes-complicated problem.

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Please take a moment to let me know your thoughts in the “Comments” section, below. Thank you.

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Whether you live in Boise, Meridian, Eagle, Star, Nampa, or other nearby communities – in fact, anywhere in Ada County or Canyon County – for additional easy-to-understand information on Idaho Wills, Trusts, probate, and estate taxes, visit the user-friendly website at BarryPeters-Law.com. Then call attorney Barry Peters’ offices at (208) 939-2600 for an expedited appointment to begin the process of setting up your own Living Trust. Or, if you have questions, please call Barry for a FREE OFFICE CONSULTATION or visit his Q & A pages at BarryPeters-Law.com/common-questions. As always, your total satisfaction is guaranteed by Barry Peters, Attorney at Law, where all clients receive individual attention to the details of their unique circumstances.

BARRY PETERS: Avoid Inheritance Disasters!

Barry Peters — Fri, 07 Oct 2011 17:31:25 +0000

Another common question that clients ask here in Idaho is “how old should my children be before they receive their inheritance?”

As you can imagine, there’s no one-size-fits-all answer. Each family’s situation is different. Some children have already shown a remarkable maturity in financial matters at a very young age. And some children still struggle to manage their finances until the day they die.

However, there is one simple step that will significantly decrease the chances of a child being ruined by an inheritance. You can ask your attorney or lawyer to direct that the inheritance under your Will or Living Trust be paid out in installments instead of all at once.

For example, you could direct that a child receive 10% of his inheritance at age 22, the age at which many children are graduating from college, marrying, buying a house, or starting a business. Then a second larger installment — maybe 20% of his inheritance — could be paid at age 26. Finally, the bulk of the inheritance could be paid at age 30.

By paying smaller installments before the bulk of the inheritance is handed over, the child is given the opportunity to try out his wings with less at risk. If he blows the earlier installments, he will probably recognize that as he gets a bit older and has little or nothing to show for his profligacy. This will increase the chances of him using and investing the final installment well when it is paid at age 30.

To learn other practical suggestions for insuring that the inheritance you leave to your loved ones will benefit them to the maximum extent possible, contact Idaho attorney Barry Peters for your free initial consultation today. Call (208) 939-2600 to schedule your expedited appointment.

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BARRY PETERS: Best Christmas Gift? Your Living Trust!

Barry Peters — Fri, 30 Sep 2011 15:59:48 +0000

Have you wondered what might be a memorable gift you could give each other and your children for Christmas this year? How about the gift of setting up a Living Trust or a Family Trust for them?

While this may strike you as a bit out of the ordinary, think about it.

Here in Idaho, all of us look forward to blessing our children and loved ones with a significant inheritance as we pass away. We spend years building up our investments in part to accomplish this end.

But without proper planning, that inheritance can become a headache as the family is forced to endure the time and expense of the probate process.

But with a wise investment in a Complete Living Trust Package now while you’re still able to do so, you can spare your loved ones from that headache. It will be the icing on the cake. Trust me, they will rise up and call you “blessed.”

If you’d like to learn more about this option, your lawyer will be able to explain the many benefits that flow from such a plan.

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BARRY PETERS: Pitfalls of Deeding Home to Kids

Barry Peters — Fri, 09 Sep 2011 15:10:02 +0000

A few days ago I was reminded why deeding one’s home to the children in Idaho is an unwise way to avoid probate. Two significant pitfalls lurk in this “solution” to the probate problem.

First, unless the child or children to whom the home is deeded actually live in the house, the transfer will cause the loss of the homeowner’s property tax exemption. That can raise the property taxes for the parents here in the Boise area about $1,500 per year for the rest of their lives. Every year.

Second, if the children into whose name the property is transferred have creditor problems, the children’s creditors can force the sale of the home – even while the parents are still living there – to satisfy those debts.

So although the use of a deed may initially appear to be a viable poor man’s alternative to a living trust, the tax consequences will almost immediately cost as much as the trust itself would have cost. And the risk of losing the home to creditors overwhelms any cost savings.

Instead, the parents should look carefully at the long term savings available by the utilization of a professionally-prepared Complete Living Trust Package. At a cost of just $1,495.00, this makes much more sense than running the risks inherent in trying to avoid probate by deeding the home to the children while the parents are still living.

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BARRY PETERS: No Will? Who Inherits?

Barry Peters — Fri, 19 Aug 2011 14:19:25 +0000

Another common question is “who will inherit my property if I pass away without a Will?”

Answer: The state of Idaho gets to make that decision for you. Specifically, the Idaho Code includes a set of rules called the “laws of intestate succession.” But that’s just a fancy way of saying that your things will pass to certain relatives whether or not you would have chosen those particular family members as recipients of your possessions.

As to who the state designates as your heirs, there’s a list. It starts with your surviving spouse. If there is no surviving spouse, next are your biological or adopted children. But depending on the circumstances, it could be a combination of your spouse and children. If you have neither a spouse, nor children, your parents are next, followed by your brothers and sisters. And the list goes on from there.

In the case of a deceased person who left no Last Will and Testament, the Idaho probate judge will simply go down the list until he or she comes to a level at which there is at least one living person. At that level, the judge will divide the estate evenly between all of the living persons at that level.

Mechanical. But rarely the precise persons you’d want to end up with all of your things. And arguments often develop, especially between surviving spouses and children.

So please have a Will or Living Trust professionally prepared by your lawyer or attorney to spare your loved one the additional stress of haggling over what you would have wanted done with your things. After all, there are few things quite as stressful as a family as the death of a loved one coupled with uncertainty in the realm of inheritance rights.

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BARRY PETERS: Avoiding Abuses of Powers of Attorney

Barry Peters — Fri, 12 Aug 2011 12:46:07 +0000

Carefully-crafted and cautiously-granted Powers of Attorney are a good thing. They will normally be part of a well-executed set of estate planning documents in Idaho that plans for various worst-case scenarios.

But they do come with risks. In particular, legal literature is replete with stories of spouses who used a Power of Attorney to clear out bank accounts and transfer real estate to themselves before filing for divorce. Or greedy children who have used such Powers of Attorney given by their parents to get their hands on an inheritance before being legally entitled to do so. In both of these scenarios, the party holding the Power of Attorney misuses it to make gifts to themselves. They attempt to line their own pockets with assets to which they are not entitled.

In light of this danger, is there a safety mechanism that your attorney or lawyer can include in your Power of Attorney to reduce the risk of such misuse? Yes there is!

Simply make sure that your attorney includes a sentence in your Power of Attorney that explicitly says that it may not be used to make gifts of your property. By expressly taking away this authority, your lawyer will leave a safety mechanism that will permit a court to recover any assets that are transferred in a self-serving fashion by the person to whom you gave the power.

While this is not a perfect solution, it does provide something of a safety net to permit a recovery of assets in many circumstances here in Idaho.

So check any financial Powers of Attorney that you’ve given to make sure that they include an express prohibition against making gifts of your property.

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Barry Peters: Med. Pwr of Atty vs. Lvg Will Pwr of Atty

Barry Peters — Sat, 06 Aug 2011 16:34:34 +0000

It’s happened several times recently. I’ve asked clients if they have a medical power of attorney. They’ve answered “yes.” But when they showed me what they have, it turned out to be the narrow power of attorney included in their Living Will.

It’s important to know that there is a vast difference between a general medical power of attorney and the very restricted “power of attorney for health care” that is included in your Living Will. Here’s the difference in Idaho:

Your Living Will answers the questions of what type of care do you want to receive in the event that you end up in a coma from which you are not going to recover? Do you want your medical care and life support systems continued or discontinued? And regardless of whether you want your medical care discontinued, do you want to continue to receive food and/or water? Those are the questions that you will answer in your Living Will.

Part of the Living Will which your attorney prepares will include a “Durable Power of Attorney for Health Care.” It is the part of the document where you deputize a close friend or family member to be responsible to present your Living Will’s instructions to your doctors and hospital in the event you actually end up in such a coma. But despite its broad-sounding title, this document only applies when you are in a coma from which you are not going to recover and it only applies to the specifics of following your instructions with respect to medical care and the providing of food and water while you are in that coma.

If you want to authorize someone else to help gather medical information and make medical decisions for you in the event of other circumstances, then your lawyer should prepare a Durable General Medical Power of Attorney for you. Otherwise, federal law will prohibit your health care providers from either discussing your medical condition with others (including your spouse and other family members) or from following their instructions for your medical care.

So if you end up unable to communicate – due to an accident, stroke, dementia, or even a coma which has not yet been determined to be irreversible – and if you don’t have a separate medical power of attorney, you may end up in medical limbo where your physicians cannot discuss your condition with others and cannot follow their instructions with respect to your care.

Everyone in Idaho should take the time to have a general medical power of attorney prepared, signed, and notarized. Please don’t make the mistake of believing that the power of attorney included with your Living Will takes care of that issue. If you have additional questions on this or other issues, please feel free to call Barry Peters at (208) 939-2600 for a free telephone consultation to receive informed answers to those queries.

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BARRY PETERS: Update Lvg. Wills & Powers of Atty.

Barry Peters — Fri, 29 Jul 2011 00:40:15 +0000

Several years ago, Congress passed the HIPPA act which made it a federal crime for a health care provider to give anyone other than the patient information about that patient’s condition or the recommended treatment of that condition.

While well-intentioned, the act continues to perplex the medical community as it staunches the normal and natural flow of medical information to family members in case of an emergency.

For that reason, it is important that both Living Wills (which specify the type of medical care that you will receive in the event that you are in a coma) and Powers of Attorney that include medical authority here in Idaho explicitly give the agent the right to receive medical information about the principal’s condition. Otherwise, in the absence of such an express grant of authority, there is a risk that the hospital or physicians of the principal could balk at sharing critical medical information with the person holding the power of attorney.

So if you’ve not already done so, you should consider having your Living Will and your Power of Attorney reviewed by an attorney to ensure that they are both HIPPA-compliant. And if your documents need to be updated, that can be arranged for as little as $50 per document.

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Barry Peters: Use Trust to Limit Medicaid Lien

Barry Peters — Fri, 15 Jul 2011 15:10:33 +0000

Another common question for estate planning attorneys is whether a Living Trust or Family Trust might be used to avoid a Medicaid lien? In other words, if a person puts his or her assets into a trust and then needs to enter an assisted living facility, will the assets in that trust be subject to a lien for the government payments made for that person’s care in the assisted living facility?

In answering that question, several points are worth noting.

First, it is generally a good thing that the government requires personal assets to be used up before providing the safety net of benefits for assisted living. Otherwise, the government would essentially be funding the inheritance of the heirs from tax dollars. That, of course, was never Congress’ intention in setting up the Medicaid program.

But second, having said that, without a Living Trust with some carefully-crafted provisions, one spouse’s need of Medicaid assistance normally will requires that the assets of both spouses be spent down before benefits will commence. However, please note that this does not generally require that the couple’s personal residence be sold before benefits will be paid. The couple will instead be permitted to retain their residence, but it will become subject to a lien for the benefits paid during the last 3 to 5 years of the couple’s lives. Those benefits covered by that lien must then be paid by the heirs selling or borrowing against the home after both spouses have passed away. So, unless careful planning is done, it is possible that the benefits paid for one spouse may end up depleting the inheritance left by both spouses.

On the other hand, it is permissible within a Living Trust to create an equal division of the assets between the spouses with certain assets being assigned to one spouse and the remaining assets to the other. By doing this, the “spend down” required as a condition of Medicaid assistance will generally only apply to the assets assigned to the spouse in need of that assistance. The assets assigned to the healthy spouse can thereby be protected from both the “spend down” requirement and the Medicaid lien resulting from the benefits paid for the spouse in need of assistance.

While not a perfect means of protecting assets from depletion due to Medicaid assistance, this approach is a far better one than simply allowing the entire estate to be depleted due to a failure to plan ahead. For assistance in implementing these protections, contact Barry Peters at (208) 939-2600 for an expedited FREE initial consultation.

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BARRY PETERS, ID Atty: When Probate Required

Barry Peters — Fri, 08 Jul 2011 14:46:52 +0000

The good news is that, under Idaho law, probate is only required under two circumstances. The bad news is that most people fall into one or both of those circumstances.

Probate is legally required every time a person passes away who either (1) owned at least one piece of real estate at the time of death, or (2) owned assets with a total value in excess of $100,000. For everyone else, probate is not required since other more simple procedures are available.

So the first questions that a family will face when determining whether a probate proceeding is required is whether the person who has passed away owned any real estate or had total assets with a value greater than $100,000. If the answer to either question is affirmative, then probate of the estate will be required unless the person took steps to avoid the estate being forced into probate.

Steps that might have been taken to avoid probate include setting up a Living Trust, using unconventional forms of ownership such as Joint Tenancy or Life Estates, or designating “payable on death” beneficiary designations on certain assets. But as you consider these alternative options, keep in mind that there are certain pitfalls that may come with alternatives other than the establishment of a Living Trust.

If probate is legally required, it is also important to find an attorney who can make the process as quick, efficient, and inexpensive as possible. That’s where a FREE initial consultation with Barry Peters is always a wise first step.

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