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Idaho Wills and Trust Requirements

When deciding between a will or trust in Idaho or making other estate planning decisions in this state, it is important to understand the key differences between these two primary different estate planning tools and the general rules regarding estate documents.

Statutory Authority

Wills:  Idaho Uniform Probate Code, Tit. 15, Chs. 2 – 3 (Id. Stat. §§15-2-501, et. seq.).

Trusts: Idaho Statutes, Tit. 68: Trusts and Fiduciaries (Id. Stat. §§68-101, et. seq.); Tit. 15: Uniform Probate Code, Chapters 7 – 8 (Id. Stat. §§15-7-101, et. seq.).

Idaho Will Requirements

To create a valid Idaho will, a testator must be “of sound mind” and at least 18 years old or an emancipated minor. An Idaho will must be in writing and must be signed by the testator—or by another person for the testator at the testator’s direction while in the testator’s presence.

An Idaho will must also be signed by at least two witnesses, who must observe either the testator signing the will or the testator’s acknowledgement of the signature. Witnesses to an Idaho will must be at least 18 years old and generally competent to act as a witness. An Idaho will is not invalid solely because it is attested by an interested witness.

Idaho wills do not require notarization but can be made “self-proved” if the testator and witnesses execute a compliant affidavit.  The self-proved affidavit provides evidence that the testator signed the will voluntarily with the requisite capacity, intended the document to be treated as a will, and was not under constraint or undue influence. An Idaho self-proved will can be admitted in probate without in-person testimony of the witnesses. The Idaho Legislature provides a model self-proved affidavit within Id. Stat. §15-2-504.

Idaho law authorizes a testator to incorporate within a will a written statement or list of tangible personal property not addressed within the will itself.  The list, which must be referenced in the will, devises each item in the list to an identified beneficiary. The list must identify the items and beneficiaries with reasonable certainty and must be either written in the testator’s handwriting or signed by the testator.

A list of tangible personal property incorporated within a will is often titled a “memorandum of personal property” or “specific gift list.” It can be prepared before or after the will’s execution and may be altered by the testator after its initial creation. Under Idaho law, a memorandum of personal property may not be used to transfer real estate, cash, promissory notes or other evidence of indebtedness, title documents, securities, or personal property used in a trade or business.

Amendment, Revision, and Revocation of Idaho Wills

An Idaho will may be amended by executing another will that supplements and is not inconsistent with the existing will or by executing a codicil—a separate document amending an existing will. With either a codicil or subsequent will, the document must satisfy all legal requirements for execution of an original will.

An Idaho will can be revoked—in whole or in part—by a later will that either expressly revokes the earlier will or has terms inconsistent with the earlier will. Alternatively, an Idaho will can be revoked by burning, tearing, canceling, obliterating, or destroying the document with the intent to revoke the will. If an Idaho will was executed in duplicate, revocation of one of the duplicates is sufficient to effectively revoke the will.

If a testator is divorced after executing an Idaho will, any provisions of the will in favor of the former spouse are revoked by operation of law—unless the will, a divorce agreement, or another contract between the spouses expressly provides otherwise. Provisions revoked by divorce are treated as though the former spouse did not survive the testator. A decree of separation that does not formally sever the marriage does not trigger revocation due to divorce. Any provisions revoked due to divorce are automatically reinstated if the testator remarries the former spouse. Idaho’s rules for revocation upon divorce also apply to dispositions made via other revocable non-probate instruments—such as transfer-on-death designations or revocable living trusts.

If an Idaho testator marries after executing a will and the will omits the surviving spouse, the surviving spouse inherits the same share of the estate that the spouse would have inherited had the deceased spouse left no will. A later-wed spouse’s share is inapplicable if the omission appears to have been intentional or if the testator provided for for the surviving spouse outside the will.

If a child is born to an Idaho testator after execution of a will—and if omission does not appear intentional and the testator did not make other provisions for the child in lieu of the will—the child inherits a share of the estate equal to what the child would have received had the testator died without a will. An after-born child’s presumed share is inapplicable if the testator had at least one other child when making the will and left substantially all of the estate to the omitted child’s other parent.

Holographic and Oral Wills

A document that is not witnessed or otherwise does not satisfy Idaho’s execution requirements for wills may still be valid as a holographic will. To qualify as an Idaho holographic will, a document must be signed by the testator and all of the document’s material provisions must be in the testator’s handwriting.

Oral (or “nuncupative”) wills are not recognized under Idaho law.

Idaho Trust Requirements

Idaho is not among the majority of states that have adopted the Uniform Trust Code. Instead, Idaho trusts are principally governed by common law rules and statutes enacted by the Idaho Legislature within Titles 15 and 68 of the Idaho Statutes.

The three essential parties to an Idaho trust are the grantor, beneficiary, and trustee. The grantor—sometimes called “settlor” or “trustor”—is the person who originally forms the trust. The grantor prepares—or hires an attorney to prepare—the written trust instrument governing the trust and typically funds the trust with its initial assets. A “dry trust”—or a trust that has not been funded or is not currently holding any assets—is not invalid under Idaho law solely because the trust has no assets. However, a trust that is never funded cannot serve its intended purpose.

The second essential party to an Idaho trust is the beneficiary. A beneficiary is the person who benefits from the assets held in the trust. An Idaho trust can have more than one beneficiary and can be designed so that beneficiaries change over time. Certain Idaho trusts that do not serve charitable purposes are called “purpose trusts.” Idaho purpose trusts can remain legally valid even if the trust does not have an identified beneficiary at a given time.

The third essential party is the trustee—the person responsible for administering the trust, managing its assets, and making distributions to beneficiaries. Trustees are ordinarily appointed within the trust instrument, though Idaho law allows for appointment of a trustee by a court if necessary. Idaho law requires a trustee of a trust principally administered in Idaho to register the trust with an Idaho court. A trustee registers a trust by filing a statement identifying the trust’s settlor, original trustee, and date.

Unless a trust instrument says otherwise, trustees of Idaho trusts are considered fiduciaries and held to the “prudent man” standard. A trustee’s administration of a trust must be reasonable and equitable and conducted with the prudence, diligence, discretion, and judgment exercised by persons of ordinary prudence in carrying out their own affairs.

Idaho law also authorizes—but does not require—appointment within a trust instrument of a fourth party to the trust—the “trust protector.” A trust protector is a disinterested person who may be empowered to—for example—amend a trust instrument for favorable tax treatment, modify beneficiary interests, veto distributions, provide advice to the trustee, and terminate the trust.

Most Idaho trusts are governed by a written trust instrument, though Idaho law recognizes oral trusts. However, Idaho’s trust statutes are often limited in application to “express trusts”—or trusts evidenced by a written instrument.

Idaho law recognizes numerous types and categories of trusts. Common trusts in Idaho estate planning include

  • Revocable living trusts. Also called an “inter vivos trust” or just “living trust,” a revocable living trust is created during the grantor’s lifetime, and the grantor retains the right to amend or revoke the trust. Revocable living trusts are a popular tool for transferring assets outside of probate.
  • Irrevocable trusts. Irrevocable trusts cannot be amended or revoked by the grantor. Less common than revocable trusts, irrevocable trusts are useful for asset protection and reducing estate taxes.
  • Testamentary trusts. A testamentary trust is a trust created by will that does not become effective until the grantor’s death.
  • Special needs trusts. A special needs trust is an irrevocable trust designed to preserve a beneficiary’s eligibility for government assistance programs like Medicaid.
  • Spendthrift trusts. A spendthrift trust restricts beneficiaries’ right to transfer their interests in the trust and prevents attachment of trust assets by beneficiaries’ creditors. If the same person is both a settlor and a beneficiary of an Idaho spendthrift trust, that person’s creditors can attach his or her interest in the trust.
  • Charitable trusts. A charitable trust is designed to serve a charitable purpose and often names a specific charitable organization as beneficiary. Charitable trusts are usually irrevocable. There are numerous types of charitable trusts that serve a variety of objectives.

Special Considerations

Estate Taxes: Idaho does not impose either estate or inheritance taxes.  Large Idaho estates may still be liable for federal estate taxes.

Simplified Probate:  Idaho law allows several methods for streamlined estate administration without formal probate. If a decedent does not own real estate and leaves personal property valued less than $100,000, the decedent’s successor can gather estate assets by completing a necessary affidavit, and probate court is unnecessary.

Idaho informal probate allows for administration through the probate court, but with less procedural formality. The estate’s personal representative files an application for informal probate and, once appointed by the court, collects estate property, provides notice to creditors, and distributes estate assets. Informal probate is appropriate for non-complicated estates without disputes.

Idaho summary administration is available when a surviving spouse is the sole beneficiary of a decedent’s estate. The surviving spouse files a petition for summary administration and attends a probate court hearing, but summary administration otherwise avoids probate proceedings.

Non-Probate Transfers:  Along with non-probate transfer through living trusts, Idaho law recognizes several other mechanisms for transferring assets outside of probate. Idaho allows assets co-owned as joint tenants with a right of survivorship to automatically transfer to a surviving co-owner. Married couples can elect to own Idaho real estate as community property with a right of survivorship, in which case undivided ownership of the real estate vests with the surviving spouse upon the other spouse’s death. Idaho does not recognize tenancy by the entirety.

POD (payable-on-death) and TOD (transfer-on-death) designations, which provide for automatic non-probate transfer to a named beneficiary upon an owner’s death, are also useful in Idaho.  POD designations can be added to financial accounts and CDs.  TOD designations can be used with registered securities, brokerage accounts, and some other similar assets.

Along the same lines, some assets—like retirement accounts, annuities, and life insurance—allow owners to name a beneficiary who automatically takes ownership of the asset upon the original owner’s death.

Transfer-on-Death (TOD) Deeds and Vehicle Titles:  Idaho does not recognize TOD designations on either real estate deeds or vehicle titles.

Spousal Shares: Idaho is one of the nation’s few “community property” states. Unless obtained via gift or inheritance, most assets acquired by either spouse during the marriage qualify as community property. Idaho law treats community property as being jointly owned by the couple—with each spouse holding a one-half share.

A surviving spouse is entitled to his or her one-half interest in the couple’s community property upon the other spouse’s death. Both spouses can devise by will their “separate property” (i.e., assets that do not qualify as community property) and their one-half interests in the couple’s community property.

If a deceased spouse dies without a will, the surviving spouse receives the decedent spouse’s one-half community property interest—in which case the surviving spouse then solely owns the community property. The surviving spouse’s intestate share of the deceased spouse’s separate property depends on whether the deceased spouse left other surviving relatives. If there is no surviving parent or issue (i.e., children or grandchildren), the surviving spouse receives all of the separate property. If a parent or child survives the deceased spouse, the surviving spouse receives half of the separate property.

Spousal elective share statutes are designed to prevent disinheritance of surviving spouses. Because Idaho is a community property state, Idaho does not have a spousal elective share except for “quasi-community property.” Quasi-community property refers to property of a decedent spouse which would have been community property had it not been acquired in another state. Idaho law gives surviving spouses a one-half elective share in a deceased spouse’s quasi-community property.

Creating a will or trust does not have to be difficult or intimidating.  However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests (to name a few)—can add a layer of complexity and result in unforeseen long-term consequences.  Whenever any out-of-the-ordinary issues are present, it’s a good idea to consult with an experienced attorney familiar with and licensed under the laws of the relevant jurisdiction.

 

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