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Five Common Estate Planning Mistakes to Avoid

From time to time, it’s good to review why having a complete, up-to-date estate plan is so important. In addition to confirming our own actions, it can provide us with valuable information to pass along to friends and family who, for whatever reasons, have yet to act. So, here are five common estate planning mistakes to avoid.

1. Not having an estate plan. Every state has laws for distributing the property of someone who dies without an estate plan—but not very many people would be pleased with the results. State laws vary, but generally they leave a percentage of the deceased’s assets to family members. (Non-family members, like an unmarried partner, will not receive any assets.) It is common for the surviving spouse and children to each receive a share, which often means the surviving spouse will not have enough money to live on. If the children are minors, the court will control their inheritances until they reach legal age (usually 18), at which time they will receive the full amount. (Most parents prefer their children inherit later, when they are more mature.)

2. Not naming a guardian for and giving guidance to your minor children. Your choice for a guardian for your minor children must be named in your estate planning documents, preferably with guidance on your philosophical and religious beliefs, as well as a letter to your children (philosophical will) about who you are and what your hopes and dreams are for them which they may read when they are older. If the parents have not done this, and both die before the children reach legal age, the court will have to name someone to raise them without knowing whom the parents would have chosen.

3. Relying on joint ownership. Many older people add an adult child to the title of their assets (especially their home), often to avoid probate. But this can create all kinds of problems. When you add a co-owner, you lose control. Jointly-owned assets are now exposed to the co-owner’s creditors, divorce proceedings and possible misuse of the assets, and the co-owner must agree to all business transactions. There could be gift and/or income tax issues. And if you have more than one child but only name one to be co-owner with you, fluctuating values could cause your children to receive unbalanced/unintended inheritances.

4. Not planning for incapacity. If someone cannot conduct business due to mental or physical incapacity, only a court appointee can sign for this person—even if a valid will exists. (A will only goes into effect after death.) The court usually stays involved until the person recovers or dies and the court, not the family, will control how their assets are used to provide for their care. The process is public and can become expensive, embarrassing, time consuming and difficult to end.

Giving someone power of attorney as a way to avoid the court process can be risky because that person can do anything they want with your assets with no real restrictions. For this reason, a living trust is often preferred for incapacity planning. With a trust, the person(s) you choose to act for you can do so without court interference, yet they are held to a higher standard as a trustee; if they misuse their power, they can be held accountable.

Someone also needs to be given the power to make health care decisions for you (including life and death decisions) if you are unable to make them for yourself. Without a designated health care agent, you could be kept alive by artificial means for an indefinite period of time. (Remember Terri Schiavo? Terri’s story and information about the Terri Schiavo Foundation can be found at http://www.terrisfight.org/, ) The exorbitant costs of long term care, most of which are not covered by health insurance or Medicare, must also be part of incapacity planning. Consider long term care insurance to protect your assets.

5. Not keeping your plan up to date. Every estate plan is based on the personal, family and financial situations, and tax laws, in effect at the time it was created. All of these will change over time, and your plan needs to change with them. It’s a good idea to review your plan every couple of years or so and make sure it still does what you want it to do. Your attorney will let you know when a tax law change might affect your plan, but you need to let your attorney know about other changes that could affect it.

We would love to meet with you and answer your questions. Call us at 208-345-6308 to schedule your free Idaho estate planning consultation or Oregon estate planning consultation, where you can ask all your questions about living trusts and make an informed decision about the plan that will be best for you and your family.  We serve clients in Boise, Eagle, Meridian, Nampa, Caldwell, Star, Emmett, the Treasure Valley, the Magic Valley, Twin Falls, Mountain Home in Idaho, including Ada County, Canyon County, Gem County, Twin Falls County and elsewhere in Idaho.  We also service client in Portland, Lake Oswego, Gold Beach, Brookings, Port Orford, Medford, Oregon, and all over the Pacific Northwest!

The Idaho Special Needs Trust: Planning for a Disabled Dependent

THE IDAHO SPECIAL NEEDS TRUST: PLANNING FOR A DISABLED DEPENDENT

If you have a child or another loved one who is physically, mentally, or developmentally disabled, he or she may be entitled to government benefits such as SSI or Medicaid.  Most benefits are available only to those with limited financial assets and income.  As a result, leaving an inheritance to a disabled loved one may cause the loved one to no longer qualify for government benefits.

Is there a way to allow such a family member to receive an inheritance and also continue to receive government benefits?  The answer is, “yes”.  A special kind of trust called a “Special Needs Trust” can be drafted to supplement government benefits; to provide only benefits or luxuries above and beyond the benefits the disabled person receives from any local, state, federal, or private agency.   A special needs trust designates a trustee, who will have complete control over the distribution of assets and income to the beneficiary.  The beneficiary of a special needs trust cannot have the right to demand any principal or interest from the trust.

Each state has different rules regarding a person’s ability to qualify for government benefits.  Therefore, it is imperative that you consult with an Idaho estate planning attorney or Oregon estate planning attorney who is well versed in drafting Idaho special needs trusts or Oregon special needs trust or special needs trusts specific to another state where your beneficiary is receiving government benefits.  Be sure to work closely with an Idaho estate planning attorney or Oregon estate planning attorney who has considerable experience with these trusts. Idaho special needs trusts and Oregon special needs trusts are a powerful estate planning tactic which allow you to make sure that your loved one is well cared for after you are gone.  You will have peace of mind knowing that your child or other beneficiary will not only be able to continue to receive benefits, but can also enjoy an inheritance that provides them the life style you would choose for them if you were still living.

We would love to meet with you and answer your questions. Call us at 208-345-6308 to schedule your free Idaho estate planning or Oregon estate planning consultation, where you can ask all your questions about Idaho living trusts or Oregon living trusts and make an informed decision about the plan that will be best for you and your family.  We serve clients in Boise, Eagle, Meridian, Nampa, Caldwell, Star, Emmett, the Treasure Valley, the Magic Valley, Twin Falls, Mountain Home in Idaho, including Ada County, Canyon County, Gem County, Twin Falls County and elsewhere in Idaho.  We also service client in Portland, Lake Oswego, Gold Beach, Brookings, Port Orford, Medford, Oregon, and all over the Pacific Northwest!

Why Gun Owners Need an Idaho Gun Trust

A gun trust is a special type of trust that is designed to hold all of your firearms and firearms-related accessories. Gun trusts make it much easier for your loved ones to handle your firearms should you become incapacitated or die, they boost your ability to share and transfer NFA firearms, and they help ensure all state and federal laws are followed.

Gun trusts have become the planning tool for gun owners whose collections include NFA firearms. One of the primary reasons is the ability to share possession of the NFA firearms with other trustees. Unlike other firearms, unless restricted by your state’s laws, NFA firearms can only be possessed by the person to whom the firearm is registered. There is no exception for family members or other people with whom you live. If you leave your NFA firearm at home where it is accessible to other people, you and the other people in your home are violating federal law.

Most NFA gun owners are aware of this gun-trust benefit. But many gun owners are not aware that gun trusts are important tools for all gun owners, whether or not a collection includes NFA firearms.

Even if your collection does not include NFA firearms, you and your family will still benefit from a gun trust.  Gun trusts are important for all gun owners, because they prepare you and your loved ones for your death and incapacity by responsibly addressing your firearms and keeping your affairs out of the court system. Planning for the possibility that you will be incapacitated (whether from age or accident), even if temporarily, is important for everyone. It is even more important for gun owners.  Remember:  if you don’t plan, the government has a plan for you. The government’s plan is a public, expensive, judge-controlled system that will take away your right to own a firearm.

All gun owners should try to avoid the court system if they are incapacitated or die by creating general estate planning documents as well as a gun trust.  To learn more about proper estate planning for gun owners, watch a short video Estate Planning for Gun Owners.  To learn why gun trusts are still important planning tools, even after Rule 41F went into effect, watch Why You Still Need a Gun Trust Even After Rule 41F.

What does a properly drafted gun trust look like?

When properly written, gun trusts are powerful asset protection and estate planning tools. A well-drafted gun trust will achieve the following for the gun owner who creates the trust:

  1. Ensure that friends and family can lawfully possess and transfer trust-owned firearms during the gun owner’s lifetime;
  2. Create a private plan that completely avoids the court system for all firearms if the gun owner becomes incapacitated or dies;
  3. Assists gun owners in sharing NFA firearms with other law-abiding gun owners;
  4. Helps the successors and heirs understand the gun owner’s desires related to all the trust-owned firearms;
  5. Helps the ones you care about to comply with firearms laws when they possess or transfer the firearms;
  6. Assists the gun owner to own firearms in more than one state; and
  7. Ensures that neither gun owner nor any loved ones commits an accidental felony. All of these gun-trust benefits are not affected by Rule 41F.

We would love to meet with you and answer your questions.

Call us at 208-345-6308 to schedule your free consultation, where you can ask all your questions to an Idaho firearms attorney or Oregon firearms attorney about Idaho trusts, Oregon trusts, Idaho gun trusts, Oregon gun trusts, and Idaho gun laws and Oregon gun laws and make an informed decision before you start a project.  We serve clients in Boise, Eagle, Meridian, Nampa, Caldwell, Star, Emmett, the Treasure Valley, the Magic Valley, Twin Falls, Mountain Home in Idaho, including Ada County, Canyon County, Gem County, Twin Falls County and elsewhere in Idaho.  We also service clients in Portland, Lake Oswego, Gold Beach, Brookings, Port Orford, Medford, Oregon, and all over the Pacific Northwest!