A simple and inexpensive way to create a Trust.
There is a relatively unknown and unused law in Idaho known as the Uniform Custodial Trust Act. Setting up a trust under this Act provides for a more structured setting for managing assets than can be achieved by simply naming an agent to manage property under a financial power of attorney. Under the trust, you can track how the trustee is managing your property and direct him or her in the administration of the trust.
In some circumstances, this additional tool may be helpful in planning for your future. For instance, if you had concerns about your money being used to take care of you, you could put some money into a trust with specific instructions that the money is to be used for whatever needs you might have if you become incapacitated.
The comments to the Act state: “The objective of the statute is to provide a simple trust that is uncomplicated in its creation, administration, and termination.”
Having such a trust may avoid the necessity of a conservatorship if you become incapacitated. It also allows a parent to set up a trust for a disabled child.
Idaho Code §68-1318 provides a form that can be used to create a custodial trust. Signing the form and delivering it to the custodial trustee creates the custodial trust. You may want to seek legal advice to explain how custodial trusts work and how to set one up correctly.
If you have set up a trust for your own benefit, you are the beneficiary of the trust. As the beneficiary, you may terminate the custodial trust at any time; you may receive so much of the income and property of the trust that you request; and you may direct the investments and management of the property in the trust as long as you are not incapacitated. If you become incapacitated, the trustee will manage the property in the trust subject to the terms you have set up, and follow “the standard of care that would be observed by a prudent person dealing with the property of another.”
The Act outlines the general duties and powers of the trustee in managing trust property. The trustee keeps records of all transactions with respect to the trust property, provides information to the beneficiary upon request and makes an annual accounting.
Idaho Code § 68-1317 provides that on the termination of the trust, the unspent assets go to the beneficiary, to the estate of the beneficiary, or to the person or entity designated by the deceased beneficiary or designated in the original document creating the trust.
Thus, we can see that the Custodial Trust Act provides a simple way to set up a trust to manage property, which is especially useful in the event of incapacity. If you are considering a trust, take a look at the Custodial Trust Act.
Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity.
If you have a question about a Senior’s legal, financial or healthcare needs, please call us.
June 2020