An Idaho living trust is an estate planning tool that allows you to maintain control of your assets in trust during life and determine their distribution after death. A revocable living trust offers many benefits that you may want to consider.
Living Trusts in Idaho
Creating a living trust in Idaho allows the trust-maker to place assets into the trust during life. A trustee is selected and can be anyone you choose. Most people choose to be their own trustee, but a successor must be chosen to manage the trust after your death. The trustee manages the assets with the direction to manage and use them for the benefit of the trust-maker during his life. As trust-maker you continue to use your assets as you normally would, living in your home and spending your money without a noticeable difference. After your death, your assets are then distributed to your beneficiaries.
A living trust in Idaho can take in almost all of your assets (exceptions include IRAs, 401(k)s, and Keoughs). A revocable trust can be altered or canceled by you at any time during your life. An irrevocable trust becomes permanent upon signing.
One of the biggest perceived benefits of a living trust is that it allows the assets in the trust to pass outside of probate, without a court proceeding. Idaho has enacted the Uniform Probate Code so its probate proceedings are uncomplicated, however it can still take months as well as the cost of an executor and attorneys to probate a will. There is a simplified estate process available for estates worth less than $100,000, so if your assets fall under this amount a trust may not make sense. If you do not have a trust or a will, your assets are distributed according to state intestacy statues which uses a statutory percentage for specific relations.
Do I Need a Living Trust in Idaho?
A living trust in Idaho can offer many benefits. A trust allows you to keep all the information about your assets and beneficiaries out of the public record. A trust need not be approved by a court and does not become public as a will does. All of your plans remain private.
The trust also gives you total control of your assets during your life as well as after your death. While you are alive, you continue to manage and use your assets with no change. After your death, you can continue to control them through the terms of the trust. A will distributes assets upon your death, but a trust allows you to determine specific dates for disbursement if you wish.
In addition, because your assets are owned and managed by the trust, if you become mentally incapacitated, your assets are already being handled for you and there may be no need for a conservatorship.
Living Trusts and Estate Taxes in Idaho
A living trust will not protect your assets from estate taxes in most instances. Currently the federal exemption for estate tax is just above $5 million, so estates over that amount are the only ones taxed. You can set up a marital trust, sometimes called a QTIP or AB trust, which transfers assets from a deceased spouse to a surviving spouse to avoid taxes on that transfer. Revocable trusts do not shield assets from Medicaid.
How to Create a Living Trust in Idaho
To create a living trust in Idaho you create and then sign a declaration of trust in front of a notary. You then transfer ownership of assets into the trust to fund it. At this point it becomes effective.
A revocable living trust offers a variety of benefits that may appeal to you and fill your needs. Creating a trust should be one piece of your estate planning.
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