By: Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
A friend just received a check in the mail for $300,000, his share of his mother’s estate. Of course he was delighted to get the money, but wants to make sure it passes to his kids when he dies and not his second wife.
If the funds are commingled with married assets, it will be hard to keep track of his mother’s money.
Sam can put the inherited funds in a new account in his individual name – “Sam, a married man dealing with his sole and separate property”- so the assets will continue to be Sam’s separate property.
Idaho law presumes the assets owned by a married couple belong to both spouses as “community property”, no matter how the assets are titled. However, a spouse can claim that the property is “separate” if it was owned before the marriage or received as a gift or inheritance to one spouse during the term of the marriage. It is critical to make certain a new account is created and the owner of the account refers to a married person dealing with his or her separate property.
Idaho law states that income generated from separate property is community property. To eliminate any dispute as to how much of a separate property account becomes community property, it is best to withdraw any interest or dividends paid on that separate property account.
Once Sam sets up his new account, he needs to update his estate planning papers to state that when he dies, his separate property is to be distributed to his children.
Receiving an inheritance starts a chain of events if you care who ends up with the money when you die.