Here are answers to some common questions in our main practice areas:
If you have any additional questions, please feel free to contact one of our attorneys in Idaho Falls, ID.
What should be in my estate plan?
Everyone knows that they should have at least a Will. However, in certain circumstances, it may be more appropriate to create a trust to protect your assets and ensure that those assets are distributed as you desire. We can help you understand when it is appropriate (and when it is not appropriate) to make a trust part of your estate plan. Regardless, every estate plan should include health care directives so that your loved ones, and health care professionals, know your wishes when medical intervention is all that is keeping you alive.
What is a trust?
For estate planning, a trust is a legal document that instructs the "trustee" (someone you have chosen) how to handle your possessions upon your passing. If the trust is created while you are still alive, it is called a "living trust." A trust allows you much more flexibility than a will. While a will can only dictate "who is to receive what," a trust can be used to dictate the conditions by which "who is to receive what," if at all. For example, a will permits you to give $1000 to your child on your passing. However, a trust permits you to give that $1000 to your child only if s/he uses it for college expenses. (In fact, a trust can instruct that the money be paid directly to the college!) In this way, a trust allows you much more control over how your assets will be used even after your passing.
A trust allows you to address more complex financial or personal circumstances. Examples in which a trust should be considered include if you own substantial assets, real property in more than one state, or a family business. Trusts can also be helpful for asset protection, blended families, or second marriages.
What is probate?
"Probate" is the process by which the government ensures that a deceased person’s wishes, as expressed in their will, are carried out. It is also the process by which a deceased person's assets are distributed if the deceased has no will. In fact, if there is no will, the government even decides who receives the deceased person’s assets! In other words, probate is the government's set of rules for you. One advantage of a trust is that you, not the government, sets the rules.
Do I need a trust to avoid the cost of probate?
If the purpose of a trust is simply to avoid the cost of a "typical" probate, the answer is "no. "Although there are many important reasons a trust may be appropriate, we do not believe the cost of a trust justifies trying to avoid the cost of probate. Of course, there may be other reasons why probate avoidance is appropriate. We can counsel with you about such circumstances.
What happens if I die without a will?
If you do not have a will at your passing, the government decides how your assets will be distributed. Surprisingly, your surviving spouse will not necessarily receive the entire share of your estate. This can create hardships and family turmoil, particularly at that difficult time when your survivors are mourning your passing. At the very least, it is critical to have a will and a health care directive.
What is a health care directive?
In Idaho a health care directive is called a "Durable Power of Attorney for Health Care and Living Will." It addresses two different, but related, scenarios and therefore is usually combined into one document. The "Living Will" instructs health care providers what life savings efforts are to be taken (or not taken) if you are comatose, death is imminent and medical intervention is all that is keeping you alive. The "Durable Power of Attorney for Health Care" is a similar document but does not address "end of life" situations. It is used to appoint someone to make other health related decisions for you in the event you are unable to do so. Because they are so important, we include health care directives as part of every plan. We also register the health care directive (with your permission) so that any health care provider can access your directive when an emergency arises, even if you do not have it with you.
Should I form a company or corporation for my business?
A business entity is typically used to allow people to "do business" with others in a way that provides tax advantages and legal protections. If you (or you and your spouse) operate without a business entity, you are a "sole proprietorship." If you are in business with others, and operate without a formal business entity, you are part of a general partnership. Neither a sole proprietorship nor a general partnership will provide protection for your personal assets if the business fails or is sued. Other entities, such as corporations and limited liability companies, can provide you those protections. We can counsel with you to identify the best method to protect your investment, and then assist you in setting up that entity.
Can I use just use a form to set up a business entity?
The short, but misleading, answer is yes. In Idaho, you need only complete and submit the correct form to the Idaho Secretary of State (and pay the required filing fee) to form your business entity. You don’t need to pay an attorney or anyone else to obtain that form because they are available for free from the Idaho Secretary of State website at www.sos.idaho.gov. In some cases, you will also need to obtain an employer identification number (EIN) from the IRS, which you can also obtain online and for free at www.irs.gov. But the short answer is also misleading because it doesn’t tell you the whole story. Just because your business entity is "formed" does not mean you are armed with the tools to avoid or address the many challenges which can arise. There are additional steps at this critical business formation stage which can help you avoid serious problems as your business grows. If you would like assistance setting up your business, please contact us to arrange for a consultation.
If I can set up my business by filing a form, why should I use an attorney?
Just because your business entity is "formed" does not mean all the tools and protections are automatically available to you in the way you would like. For example, what happens if there are two of you in the company and you have a major disagreement? Dispute resolution is not something to address after the problem arises. If addressed at formation, this and many other issues can be addressed in a way that fosters, rather than undermines, stability. In that environment, you can focus on making your business grow.