Posted with Permission of the Author, Sandra L. Clapp    

      You can pick up many financial planning books or articles that will emphasize the “evils of probate” and encourage the reader to “avoid probate.”  Many of these articles are designed to generate fear in the reader and rely upon state laws where estate administration is cumbersome and costly.  This second article in our planning series will focus on removing the mystery from “probate” and outlining administration and title options under Idaho law.

     You have probably heard the word “probate,” but what is it really?  Simply put, probate is the legal process of appointing the personal representative (executor), paying the decedent’s debts and final expenses, determining the heirs (whether through a will or intestacy), liquidating assets, paying all estate and/or income taxes of the decedent, and distributing assets to the heirs.  The “estate” generally refers to all property, debts, rights and obligations of the deceased person.  Each person has an “estate” on death without taking any action whatsoever as the estate is created automatically by law.   However, to have authority to act on behalf of the estate, the court generally must appoint the personal representative (also known as the executor or administrator in other states).  Once appointed, the personal representative assumes fiduciary rights and responsibilities to properly administer and distribute the estate and is accountable to the court, creditors, and beneficiaries regarding the estate.

     The laws of probate vary among the states and may be fairly straightforward or very complex and costly.  These probate laws govern the administration of the “estate,” which include the details of how the personal representative is appointed, the priority of creditor claims against the estate, the identity of the beneficiaries in intestacy (if death occurs without a will), and distribution and closing of the estate.  Idaho has adopted the Uniform Probate Code which provides for an efficient means to administer an estate without added court oversight or large additional cost.  In most Idaho estates, all documents are sent to the court and no appearance is made before the court unless a dispute occurs or for certain identified matters.  The initial appointment of a personal representative and determination of the heirs (through a will or intestacy) is generally a fairly swift process and can take less than one week except in more difficult circumstances.  If you are an Idaho resident, the need to probate the estate should not alone be a motivator to establish a trust or adopt more complex planning (although there may be other reasons which justify a trust or more complex planning documents).

     You may have read or received the recommendation that you create a revocable trust to “avoid probate” or protect your assets from creditors.  Many of the administrative steps outlined above regarding debts, taxes, and distribution will need to occur whether the estate is administered through a will or through a revocable trust.  Often the only difference is the initial filing of the pleadings for appointment of the personal representative.  A revocable trust will also not protect your assets from creditors because the person who creates the trust will generally retain the right to revoke, amend or terminate the trust, which will not prevent a creditor from accessing the trust assets to satisfy your debts or liabilities.

     There are situations where use of a revocable trust or other structure are appropriate.  One situation is if you own assets in more than one state, particularly real estate, the need for a more complex plan is appropriate to minimize the possibility of going through probate in more than one state.  With multi-state real property, it may be appropriate to establish a revocable trust or to hold the real property in a business entity such as a limited liability company or limited partnership.  Another situation where revocable trusts are beneficial is age or physical infirmity where your assets can be held and effectively managed by another through the trust for your benefit.  If a revocable trust is used, the assets must be titled in the name of the trust to be governed by the trust document and “avoid probate.”  In addition, a will is still generally required to transfer assets outside of the trust to the trust for administration as part of probate of the estate (remember the estate is all assets of the decedent which may be outside of the trust).  Generally a “pourover” will is used with a trust to transfer all assets outside of the trust into the trust for comprehensive administration. 

     Because use of a trust and estate planning generally involve important legal issues, it is recommended that you consult with your legal and tax advisors to ensure any action taken is appropriate for your circumstances.  This article is not intended to replace legal advice applicable to your situation and should be used only for informational purposes.  Next issue we will focus on asset titling and coordinating beneficiary designations to accomplish your planning desires.

Posted with Permission of the Author, Stephen M. Nipper

     The best book I read in 2009 was Seth Godin’s “The Dip.” If you haven’t read it, DO.

     In “The Dip,” Godin mentions the following passage from the Declaration of Independence:

     …all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed.

     My challenge to my fellow attorneys is this:  if there is an “evil” you are suffering or see others suffering, whether that “evil” be personal, professional, or societal, do something about it.  Maybe that means fixing broken relationships.  Maybe that means ending other relationships.  Maybe that means righting a wrong.  Whatever it means to you, and no matter how uncomfortable it is in the short term, deal with it.  Let 2010 be the year that you started enjoying life again.

[note:  the above appeared in JD Supra's post on "Lawyers-Legal Professionals Looking Ahead to 2010" (which is worth reading too)]

Re-Posted with permission of the author, attorney  Chuck Peterson of Peterson Law Office.   Originally posted on December 19, 2009 on http://www.idahocriminaldefenselaw.com/

     I sometimes laugh at the notion of lawyers as counselors. We are not trained to be counselors.  We are trained in the law and by experience we learn to be fighters. Advocates. I have always liked the French term “avocat” as it better describes our role in the disputes that dominate our professional lives.  But what do our clients really need from us?  And what does the idea of “wise counsel” include?

     First – clients need and deserve our full attention. They need to unload the facts and circumstances that make their case, and they need to know that we understand their plight.  Let’s call this ACKNOWLEDGMENT.  They need to know that we understand all the facts so that we can help them tell their story. Every case is just that – a story.  Our clients are not bit players in their dramas, they are the stars.  So we need to acknowledge their role and give them our best attention.

     Second – our clients need the TRUTH about their situation.  We have the benefit of our education and experience. The key to making their position a winner is understanding how their facts fit the law. Once we know how facts and law will join, we need to tell them what we think about their position.  Is there position likely to carry the day? If not, they need to hear that from us, before a judge or jury tells them what we so often know but do not fully articulate.  The truth can save them money and save us the emotional upheaval every trial brings.

     Third – our clients need the benefit of our ability to lead in the face of the storm – this is VISION. Vision encompasses more than just acknowledgement and truth. Vision transcends the tough times and sleepless nights our clients cannot get past.  Vision is our ability to keep moving forward regardless of the collateral damage. But in tough times, vision is the first casualty.  Think of a time in your life where you faced that seemingly impossible situation. Was your ability to see the bigger picture eclipsed by the detail of your personal hardship? Our clients and their families are under incredible stress, handling life and death decisions that grip them. They are often depressed, indecisive, preoccupied and mired down with anxiety and guilt.  They need us to lead and to direct – they need the vision that comes from our view of the territory and understanding of the law.

     If you are a lawyer thinking about next year – as I am right now – maybe these thoughts will help with your planning.  My resolution for 2010 is to be a more client-focused “avocat..” 

     I will try to not fight with the folks who have asked me to fight for them.  This is not always easy because of their emotional state and the stakes involved in their case, and sometimes, the client is wrong.  Sometimes the client won’t listen and will not take our advice.  But I will try.

Givens Pursley LLP is pleased to announce the addition of new associate Emily McClure. Emily joins Givens Pursley following a clerkship with the Honorable Stephen S. Trott of the Ninth Circuit Court of Appeals. During her clerkship Emily also assisted the Honorable B. Lynn Winmill of the United States District Court for the District of Idaho.

     Emily earned her B.A. with Honors in Political Science from Willamette University in 2002 and her J.D. from Boston College Law School in 2008.

With the very sad loss of Pat Collins this past March, the IBA felt the acute loss of an excellent General Counsel and good friend. During the final months of Pat’s illness, Ken Howell, a partner with Hawley Troxell Ennis and Hawley LLP since 1991, stepped in to work with the IBA during the 2009 legislative session. That was fortunate as the 2009 session proved to be challenging, and Ken served as de facto General Counsel during that session. Ken had worked with Pat on banking issues for over 20 years and currently serves as the Chair of the firm’s Banking Practice Group.

     Ken was a natural fit for the IBA with his extensive knowledge of banking law and impressive experience with over 25 years at Hawley Troxell. Ken is a 4th generation Idaho native, born in Wilder, and has contributed in a wide range of community activities over many years. When he is not practicing law, his personal interests include woodworking (he is currently finishing a piece for the new Statehouse using wood salvaged from trees removed during the construction of the new Statehouse wings), scuba diving, electronics, and is an avid reader.

Courtesy of:   Hawley Troxell Ennis & Hawley

From Idaho Business Review

http://www.idahobusiness.net/

      Concordia University announced an initial agreement to purchase property at 501 Front Street in Boise for its planned law school, set to open in 2011.

     “We’re delighted about the prospect of settling the Concordia University School of Law in the heart of Boise, within close proximity of the courts, state and local governments and law firms,” said Concordia University President Chuck Schlimpert in a news release. “With our emphasis on community service and engagement, we look forward to contributing a wealth of new resources and talent to Boise’s downtown core and to the state as a whole.”

      The university says it evaluated approximately 40 potential sites during the past year before deciding on the Front Street location. The purchase is expected to close by April 2010, following a period of due diligence. Colliers International is the real estate broker on the transaction.

      Cathy Silak, former Idaho Supreme Court justice, has been named as dean of the new law school. The dean’s Advisory Council is chaired by Richard Fields, a partner at Moffatt Thomas Barrett Rock & Fields, and includes 26 local and regional, business and civic leaders.

      “This site is a win-win for the City of Boise and the university, and we look forward to close collaboration with the city during planning and development of the property,” Silak said in the news release.

      The current Front Street property is a two-story brick building with approximately 17,000 square feet. Concordia will use the existing structure but also plans to develop an additional 30,000 square feet of space to meet the law school’s need for classrooms, offices and amenities. Union Corner Construction, the general contractor, plans to source all jobs and subcontractors from the local Boise area.

      The University of Idaho College of Law, based in Moscow, has been seeking to open a second branch in Boise, but its initial plans to do so were rejected by the Idaho State Board of Education in 2008. The college is now moving ahead with a more modest Boise expansion – from a semester-in-practice to a full third-year program, which it plans to launch in fall 2010.

     Effective January 1, 2010, the federal estate tax and generation skipping transfer (GST) tax are repealed for the year 2010 unless congress enacts further changes. If no further changes are adopted, the federal estate and GST tax will return on January 1, 2011, with a $1,000,000 estate tax exemption (which is significantly reduced from the $3,500,000 exemption that was in effect in 2009). It is unknown if congress will attempt to adopt retroactive changes to the estate tax or if retroactive estate tax imposition would be found to be unconstitutional. Each state may continue to have a separate estate or inheritance tax, although Idaho has not adopted such laws.

     The federal gift tax will continue in 2010 with a $1,000,000 lifetime exemption and the $13,000 per person annual exclusion. However, taxable gifts in 2010 will be subject to a maximum top rate of 35% gift tax rather than the 55% rate that will apply in 2011 if there are no legislative changes. For estates of individuals dying in 2010, the assets in the estate will be subject to carryover basis under complex basis allocation provisions (rather than receiving a “step up” in basis to date of death fair market value). In 2010, the fiduciary can allocate up to $1,300,000 to increase the basis of assets and the fiduciary can allocate up to $3,000,000 to increase the basis of assets passing to a surviving spouse or a QTIP trust.

     As a result of the repeal of the estate tax and the basis carryover, if your planning documents incorporate any estate tax planning provisions such as a bypass trust, generation skipping transfers or disclaimer trusts, I strongly recommend you have these provisions reviewed to ensure your intent is protected and that the plan is appropriate based upon the present circumstances. Many of these tax planning clauses in existing documents are tied to provisions of federal law that may not exist or that may have no effect if a death occurs in 2010. By incorporating these tax planning concepts into the estate documents, concern exists that litigation will be required to judicially construe the provisions of a will or trust if no estate tax exists on death and yet the document relies upon these concepts for distribution of the estate. It is also important that provision be made in your documents for basis allocation under the present state of the law.

     Finally, the repeal of the estate and GST taxes has created an opportunity to make larger transfers to children and grandchildren at potentially lower cost. Any gifts will remain subject to the lifetime gifting exemption of $1,000,000 or the $13,000 annual exclusion. However, any taxable gifts will be subject to gift tax at the current rate of 35%. There would presently be no limit on transfers to grandchildren or trusts for grandchildren or other descendants because as of this writing there is no GST tax (other than the regular gift tax noted above). It is also possible that legislative changes or regulations may be adopted that significantly restrict the use of valuation discounts, such as may be applicable to limited partnership interests. Although there is no certainty that the gift tax rate will remain at 35% or that congress will not attempt to retroactively impose a GST tax, if you are interested in such transfers it is recommended the gifts be made as early in 2010 as possible to take advantage of the current lower gift tax rate, the repeal of the GST tax and the potential valuation discounts.

Effective June 1, 2010, the Idaho Bar Examination format, Topic List and Grading Standards will change and the July Bar Exam will be administered over two days instead of two and one-half days. Please be sure to review the following information carefully and refer any questions to the Admissions Department.

February 2010 Examination

July 2010 Examination – July 27 – 28, 2010

July 2010 Laptop Computer Registration Form will be available April 1, 2010.

Bar Exam Requirements Idaho Bar Commission Rules 201 – 204

A student or attorney applicant for the bar examination and for admission to the practice of law in this state must show to the satisfaction of the Board of Commissioners the following:

* is at least the age of majority;

* is a person of good moral character;

* prior to taking the examination, will have received a Juris Doctorate, or an equivalent basic law degree from an American Bar Association approved law school as defined in Rule 200(a);

* must take the Multistate Professional Responsibility Exam prior to taking the Idaho Bar Exam or within the next two (MPRE) administrations after successfully completing the bar exam and receive a scaled score of 85 or better.

* Foreign Applicants – Idaho Bar Commission Rule 205:

An applicant who is a citizen of another country admitted to the United States and is a permanent resident and who meets all the qualifications for admission to practice law as established in the Idaho Bar Commission Rules may apply for permission to take the bar examination and for admission on the same terms and conditions as a student.

http://isb.idaho.gov/admissions/bar_exam/bar_examination_information.html

The law firm of Worst, Fitzgerald & Stover, PLLC is pleased to welcome Kara M. Gleckler to the firm as an associate attorney. Kara received her bachelor’s degree from Brigham Young University where she obtained the distinction of valedictorian. She received her Juris Doctor, summa cum laude, from the University of Idaho, College of Law in 2007, graduating first in her class. Before joining Worst, Fitzgerald & Stover,Kara served as a law clerk for the Honorable John Bradbury of the Second Judicial District Court.

Jean R. Uranga, a partner with Uranga & Uranga, has been named one of the Top 40 Women by Mountain States Super Lawyers. This honor is given to women lawyers who received the highest point totals in the 2009 Mountain States Super Lawyers nomination, research and review process. Uranga was also named by her peers as a Super Lawyer in family law. She was also recognized by the Best Lawyers In America for 2009 and 2010 in family law and family law mediation. She is “AV rated” as determined by Martindale- Hubble’s peer review process. Uranga is a former Idaho State Bar commissioner and former president of the Idaho State Bar.