We recently received a call inquiring what the alternatives are for getting married in Idaho, if any. Take, for example, two people who live in different states, can’t travel for some reason, but still want to marry. In Idaho (as with most states), before you can get married, you have to apply for a marriage license. (Marrying without a license is a misdemeanor and is punishable by a fine of between $50 and $200.) According to Idaho law, the county recorder must issue a marriage license ...
Own Things With Friends: Pros And Cons Of Various Ownership Ideas
Continuing on from my last post about community property laws in Idaho, today I’ll look at various types of property ownership and the pros and cons of each. I’m thinking here about how you hold bank accounts, title to real estate, or investment accounts with a co-owner. In Idaho, it is common to find property (especially real property) titled as “Bob and Sue Smith, husband and wife.” The effect of holding property in that “community property” form is that, upon the death of one spouse, ...
Community Property Versus Separate Property — What’s Mine Is Mine, Or Maybe It’s Yours, Or Maybe Not…
Idaho is what’s known as a “community property” state — one of 9.5 such states in the United States. (Alaska has an opt-in provision for community property, so it is the 1/2 state.) The rest of the states are “common law” property state. In those states, determining who owns what is generally straight-forward. If there is a written title document for the property (house, car, boat), then whoever is listed on the title owns the property. If there is not title, then whoever owned the money ...
Myth Busting: Life Insurance Is Not Necessarily Estate Tax Free
Okay, this one will be short to make up for last night’s lengthy, difficult post. The myth: some folks seem to believe that life insurance proceeds are automatically exempt from estate taxes. Not true. Life insurance is income tax free when paid to a beneficiary. But, they are included in your estate for estate tax purposes if the proceeds are payable to your estate or if they are payable to a beneficiary and you possessed “incidents of ownership” in the policy at the time of your death. ...
Myth Busting: Portability Does Not Eliminate Need For Good Trust-Based Planning, But It Does Change It
There seems to be a myth circulating on the Internet created by changes in the estate taxation rules from the American Tax Relief Act of 2012 (“ATRA”): that because of “portability,” there is no longer a need for the “traditional” A-B Trust planning. Although I agree with that statement for some couples, there are many groups of people for whom this advice is woefully inadequate. (Sorry in advance — this is long and kind of dense. If you don’t want to read the details, my point is that good ...
Trust Fund Doggie?
When considering what should happen with a person’s financial resources after his or her death, many people do put something aside for the care of their pets, including naming “guardians” and setting aside funds in a “pet trust” for the benefit of the pet. However, pet trusts are usually just enough to pay a pet’s basic expenses: food, vet visits, etc. In that context, pet trusts are a sensible way to ensure that a beloved family member does not end up in a shelter in the event of the ...
Same Sex Marriage Law Update
Since my last posting regarding estate planning in same-sex marriages a few weeks back, the U.S. Supreme Court has announced it will take up the issue of the legality of same-sex marriage. The Supreme Court reviews only a limited number of cases each year (perhaps 1 or 2%), picking and choosing from the thousands of cases decided on appeal by the Courts of Appeals. A quick civics lesson: if you have a federal lawsuit (like suing under the U.S. Constitution to force a State to recognize ...
Should I Take Steps To Avoid Probate? Yes!
One of the common sources of misunderstanding in the estate planning arena is the topic of probate. Simply put, probate is a legal proceeding that takes place after a person dies, to wrap up the financial affairs of that deceased person. Typically, the process involves a number of steps: establishing whether the person had a valid will; taking an inventory of the person’s assets at death; paying any debts and taxes owed; and distributing the remaining property under the will ...
Same Sex Estate Planning — Is It Any Different?
It used to be that estate and legal planning for same sex couples was drastically different than planning for opposite sex couples, since same sex couples were, by rule, not married. With the recent court decisions allowing same sex marriage, I’m contemplating whether this distinction remains true nonetheless. For now, at least, I believe the distinction remains important and that same sex couples should, for planning purposes, continue to treat themselves as unmarried. Here’s ...
Learn An Easy Lesson From Uber
Uber doesn’t seem to have done its homework before rolling out all over the country. Boise is just the latest jurisdiction to threaten further legal action against the company should it choose to continue its operations under its current system. Uber is now facing dozens of legal actions all over the country challenging its business practices, including regulatory complaints in Seattle, Houston, Oklahoma City, Chicago, Boston, California, and Illinois. (See this article for more.) One of ...
