Deep in Debt?

We can help you pay it off

$1,000$100,000+

Steps to Creating a Living Trust in Idaho

Idaho living trust is an exceptional estate planning tool that allows you to retain complete control over your valuable assets, effectively entrusting them within a meticulously crafted legal framework during your lifetime, with provisions for their seamless distribution after your demise.

By opting for a revocable living trust in the beautiful state of Idaho, you open up possibilities and countless advantages that merit careful consideration.

Living Trusts in Idaho

A living trust is a legal method to safeguard and manage assets and property. It involves creating a written document and appointing a trustee to oversee the trust and distribute its assets to chosen beneficiaries according to the trust's instructions. The trustee can be the person themselves or someone they select.

In Idaho, a living trust can include almost all your assets except for IRAs, 401(k)s, and Keoughs.

There are two main types of living trusts: irrevocable and revocable trusts.

With irrevocable trusts, once assets are placed in the trust, the person who established them cannot remove them without obtaining permission from all individuals named in the trust. The trust gains complete control over the property and assumes responsibility for paying taxes separately.

On the other hand, revocable trusts offer greater flexibility. They can be changed or modified at any time. The person who creates the trust continues to own its assets and is responsible for taxes, just as they would be without the trust.

Benefits of a Living Trust in Idaho

A significant advantage of having a living trust is that it allows the assets held within the trust to bypass the probate process. In Idaho, the probate proceedings in probate court are relatively straightforward due to the implementation of the Uniform Probate Code.

However, even with the simplified process, it can still take several months and incur expenses such as executor and attorney fees to probate a Will.

A simplified estate process is available for estates valued under $100,000. If your assets fall within this range, creating a trust may not be necessary.

Without a trust or a Will, the state's intestacy statutes would govern the distribution of your assets, which determine the allocation based on predetermined percentages for specific relatives.

Living Trusts and Estate Taxes in Idaho

In Idaho, it's essential to understand that having a living trust does not generally provide protection against estate taxes. Currently, the federal exemption for estate tax applies to estates valued above approximately $5 million, meaning only those exceeding this threshold are subject to taxation.

To potentially avoid taxes on the transfer of assets from a deceased spouse to a surviving spouse, you can establish a marital trust, also known as a QTIP or AB trust. However, it's crucial to note that revocable trusts do not offer asset protection from Medicaid.

Creating a Living Trust in Idaho: Step-by-Step Guide

Step 1: List Your Assets

Start by listing all your assets, such as your home, cars, jewelry, stocks, bonds, and life insurance policies. This will help you identify which assets might need to go through probate. Including these assets in your living trust offers various advantages.

Step 2: Gather Important Documents

Collect the necessary paperwork, such as property titles, stock certificates, and bank account statements. These documents are crucial for transferring ownership to the trust.

Step 3: Decide on Grantors

Decide if you will be the only grantor or if a shared trust would be more suitable. Shared trusts are helpful for married or domestic partners who own assets together. In certain situations, having two trusts can fulfill specific needs.

Step 4: Choose Beneficiaries

Carefully select the beneficiaries of your living trust. They can be family members, friends, loved ones, or charitable organizations. Your choices will determine who receives the trust property after you pass away.

Step 5: Appoint a Successor Trustee

Choose a successor trustee who will manage your assets according to your wishes if you become mentally incapacitated or after your death. It's essential to select someone you trust and discuss your plans with them to confirm their willingness and ability to take on this responsibility. They can also be a beneficiary in the trust.

Step 6: Designate a Property Manager for Minors

Consider appointing a property manager if you expect a minor child to inherit assets through the living trust. This person will oversee and protect the inherited property until the child reaches the age specified in the trust.

Step 7: Prepare the Trust Document

You can create your trust document using an online trust creation service or seek assistance from an estate planning attorney.

Step 8: Sign and Notarize the Document

Once the trust document is ready, sign it in the presence of a notary public. This step ensures the document's authenticity and legal validity.

Step 9: Transfer Property to the Trust

Follow specific procedures for each property type to transfer your assets into the trust. Real estate requires changing the title, while intellectual property needs ownership rights to be assigned. Ensuring that your assets are properly held within the trust is crucial.

Step 10: Safely Store the Document

Find a secure place to store your trust document and grant authorized access to a trustworthy person, such as the estate plan successor trustee.

Step 11: Regularly Review and Update the Revocable Living Trust

Major life events like births, deaths, marriages, divorces, and property transactions should prompt a thorough review of your living trust to ensure it reflects your current wishes. Even without such events, it's wise to review the document periodically every few years to ensure its relevance.

Updated on:

Was this page helpful?

  • expertise badge
  • This site is verified as a Trusted Site by Best of the Web
  • TrustLink logoTrustLink logo
  • Customer ratings on BBB
  • IAPDA logo
  • Calchamber Member
  • Calbar Registered
  • D&B
  • Godaddy
  • yelp logo