Using Idaho's TEDRA to Alter an Idaho Trust

By Lane V. Erickson, Idaho Estate Planning Attorney

The purpose behind completing your Idaho estate planning is to help you and your family avoid situations that create problems. However, even with the most thorough and complete estate plans, problems can still arise. The reason for this is that it is impossible to anticipate every single scenario that could arise that could create problems for yourself or your family. One such problem that could exist is when a trust has been created but the purposes or reasons for the trust are no longer necessary and the individuals involved in the trust no longer want to have it. The problem is that in some instances you can't just simply walk away from a trust and act like it doesn't exist. There are specific laws and formalities that must be followed when a trust is created and it involves individuals other than the person who created the trust in the first place. The good news is that our team of Idaho estate planning attorneys have been assisting clients with these types of problems for more than 70 years. We are confident that we can help you too.

At the Racine Law Office, our team of Idaho estate planning attorneys includes partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. Each of the attorneys on our team are skilled, experienced and knowledgeable with all estate planning and probate issues and problems that can arise. We have helped numerous clients work through problems and helped them in completing their estate planning or probate.

If you have concerns or issues about a current trust, and what can be done about it, we can help. Below, we describe what TEDRA is and we also discuss how it can be useful in helping you and your family resolve issues that might arise concerning a trust.

The best place to start is by discussing what TEDRA is. The Trust and Estate Dispute Resolution Act, which is more commonly known as "TEDRA", is a set of Idaho statutes that are designed to help families resolve disputes and other problems involving trusts and estates either nonjudicially, or if that can't be done then judicially. In other words, TEDRA can be used to resolve issues without having to go to court. However, if these issues cannot be fully resolved outside of court then TEDRA can be used within court proceedings as well.

Under Idaho's statutes TEDRA can be found at Idaho Code §§ 15-8-101 et seq. The statutes are broken down into three specific Parts. Part 1 is designed to describe the purpose powers of Courts and definitions associated with the TEDRA statutes. In part 2, the judicial resolution process of TEDRA is explained. Then in part 3, the nonjudicial resolution portion of the TEDRA statutes are set forth.

Assuming for a moment that a family wants to proceed nonjudicially, which means that they all agree about what needs to be done, TEDRA can be an extremely useful tool in altering the terms or conditions of a trust or even eliminating a trust all together.

In order for a TEDRA Agreement to be binding, each party who is named as a beneficiary in a trust has to be given a copy of the trust which gives them the opportunity to understand how the trust works. The agreement would then explain how the trust will either be revised, modified, or eliminated. The individual beneficiaries then each have an opportunity to determine for themselves individually whether or not they believe that this action would be a good idea. If they reach the conclusion that it would be a good idea to revise, modify, or eliminate the trust, as set forth in the TEDRA agreement, they then have the ability to sign the agreement.

The agreement must essentially describe exactly how the trust will be changed, how a potential beneficiary might be affected by this change, and any new terms or conditions that may be created as part of the trust. At its essence a TEDRA agreement is nothing more than a contract. However, because it is created through specific statutory provisions, it does have some unique qualities as well.

While a TEDRA agreement cannot eliminate specific proceedings or provisions that are authorized by statute or the common law, such as a requirement to complete a probate when necessary, it can be used to provide a binding procedure to resolve matters through a written agreement among family members or named beneficiaries who have an interest in the estate or a trust. A TEDRA agreement can be used to modify, change, or eliminate a trust. An example here might be helpful.

Suppose that a married couple creates a trust and then uses a pour-over will to fund the trust upon their deaths. However, suppose that the children who are named as beneficiaries of the trust don't want the money or property from the first parent who passes away to go into the trust at all. Rather suppose that they would want the property or money to be transferred directly to the surviving spouse. In this instance, the children who were named as the final beneficiaries of the trust can enter into a TEDRA agreement with the surviving parent to eliminate the trust and allow the property to be distributed directly to the surviving parent.

There are a number of other circumstances that may arise where a family may decide that a trust is not such a good idea after all. In these instances, it is always a good idea to explore whether a TEDRA agreement can be used to eliminate or modify the trust so that a family's true intent can be accomplished. If you or your family have questions about whether a TEDRA agreement may be a good idea for you, we can help. We offer a consultation to discuss issues related to trust, estate planning, and probate. We would be happy to help you too.

Our experienced Estate Planning team of attorneys can help you and your family with your Idaho estate plan or with your probate needs. Whether you are seeking your own customized Estate Plan or are in need of a Probate for a loved one who has passed, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation with the Racine Olson team. You can also email us directly at racine@racinelaw.net. We will answer your questions and will help you solve your Idaho Estate Planning and Probate problems.