Idaho Estate Planning Considerations
Community Property State
There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Domicile is a person’s legal permanent residence and may not be where they currently live. For those in the military, people who have homes in several states, or those who have moved frequently, figuring out which state is their proper domicile is critical.
IRS Publication 555 provides guidance and states that generally, community property is property:
- That you, your spouse, or both acquire during your marriage while you and your spouse are domiciled in a community property state.
- That you and your spouse agreed to convert from separate to community property.
- That cannot be identified as separate property.
Guidance is also given regarding what is considered separate property:
- Property that you or your spouse owned separately before your marriage.
- Money earned while domiciled in a noncommunity property state.
- Property that you or your spouse received separately as a gift or inheritance during your marriage.
- Property that you or your spouse bought with separate funds or acquired in exchange for the separate property during your marriage.
- Property that you and your spouse converted from community property to separate property through an agreement valid under state law.
- The part of property bought with separate funds was purchased with community funds and amount with separate funds.
A premarital agreement is an agreement that may change the result of the property division
Last Will and Testament
The minimum age of a person competent to make a will is 18 (or an emancipated minor). The number of witnesses necessary to execute a will is two.
Uniform Transfers to Minors Act (UTMA)
The custodial arrangement terminates when:
- The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, or trust, or exercise of a power of appointment.
- The minor child reaches age 18 concerning other custodial transfers.
- The minor child dies.
Dying without a Last Will, the Idaho laws of Intestacy.
The estate goes to the surviving spouse, taking the decedent’s full 50% share of all community property. Separate property goes to the spouse as follows:
- If there are no surviving descendants or parents, —100% of the estate
- If there are surviving descendants of the decedent, —50% of the estate
- If there are no surviving descendants, the decedent is survived by one or both parents —50% of the estate.
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
- 100% (or applicable portion) of the estate goes to surviving descendants by representation (see Idaho Code §15‐2‐106)
If there is no surviving spouse or descendant:
- 100% to surviving parent or parents equally
- If there is no surviving spouse, descendant, or parent:
- 100% of the estate goes to descendants of parents by representation (see Idaho Code §15‐2‐106)
If none of the above:
- Intestacy laws outline further distribution steps to the level of grandparents and their descendants. See Idaho Code §15‐2‐103(d).
- If no legally described recipient can be found, estate assets go to the state of Idaho.
Idaho follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition
Hawaii does not impose an inheritance tax.
Hawaii imposes an estate tax.
The exemption amount for residents is $5.49 million in 2020. For non-residents, the exemption amount is multiplied by a factor equal to the property’s value located in Hawaii divided by the federal gross estate.
The tax rates range from 10% of the net taxable estate for estates of $1 million or less to $1,385,000 plus 20% of the excess over $10 million.
Generation-Skipping Transfer Tax (GST Tax)
Hawaii imposes a GST tax on transfers involving property located in the state and transfers from a resident trust.
Hawaii does not impose a gift tax.
On May 2, 2012, the Hawaii legislature passed HB 2328, which conforms the Hawaii estate tax exemption to the federal estate tax exemption for decedents dying after January 25, 2012.
On June 7, 2018, the Governor signed SB 2821, which amended HI ST § 236E-6 to reduce the Hawaiian exemption, effective January 1, 2018, to $5,000,000 indexed for inflation.
The Hawaii Department of Taxation released Announcement 2018-13 on September 4, 2018, in which it announced that the exemption would remain at the amount available to decedents dying during 2017.
In response to practitioners’ calls, the Hawaii Department of Taxation indicated that it would not adjust the exemption for inflation in 2019.
Effective January 1, 2020, Hawaii increased the rate of its state estate tax on estates valued at over $10,000,000 to 20 percent. See Act No. 3 (April 4, 2019).