Idaho trusts are governed by a body of law that looks different from most of the country. Idaho never adopted the Uniform Trust Code. Instead, Idaho trust law is spread across Title 15, Chapter 7 of the Uniform Probate Code, Title 68 on trusts and fiduciaries, the Idaho Trust and Estate Dispute Resolution Act, and Idaho’s unusual perpetuities statutes. The result is a system that is flexible and trust-friendly, with directed trusts, trust protectors, purpose trusts and no traditional rule against perpetuities, but one in which some protections that UTC states take for granted simply are not codified. Holmes Law, the practice of Michael Holmes, drafts and advises on Idaho trusts remotely for clients throughout the state.
This page is the hub for Idaho trust law. It covers the statutes that govern Idaho trusts, the main types of trusts, the duties Idaho imposes on trustees, notice and limitation periods, how trusts can be modified without a decanting statute, spendthrift protection, perpetuities, and how Idaho taxes trust income. Detailed planning pages cover the Idaho revocable trust, Idaho irrevocable trusts, special needs trusts and charitable trusts.
Where Idaho Trust Law Comes From
Because Idaho is not a Uniform Trust Code state, there is no single “Idaho Trust Code.” The main sources are:
- Title 15, Chapter 7, Idaho Code. Trust registration (§§ 15-7-101 to 15-7-105), court jurisdiction over trusts (§ 15-7-201), trustee duties and liabilities (§§ 15-7-301 to 15-7-308), additional trustee powers including division, consolidation and small-trust termination (§ 15-7-402), trust protectors and trust advisors (§ 15-7-501), spendthrift trusts (§ 15-7-502), purpose trusts (§ 15-7-601) and “dry” unfunded trusts (§ 15-7-701).
- Title 68, Idaho Code. The Uniform Trustees’ Powers Act (§§ 68-104 to 68-113), certification of trust (§§ 68-114 to 68-119), the Idaho Uniform Prudent Investor Act (§ 68-501 and following) and the rules for private foundations and charitable trusts (Chapter 12).
- Title 15, Chapter 8, Idaho Code. TEDRA, the Trust and Estate Dispute Resolution Act, which provides both binding nonjudicial agreements and a streamlined judicial procedure for trust and estate matters.
- Idaho Code §§ 55-111 and 55-111A. Idaho’s statutes abolishing the rule against perpetuities and substituting a limited rule against suspension of the power of alienation.
- Common law. Where the statutes are silent, Idaho courts apply general trust principles, which is why well-drafted Idaho trust instruments spell out matters a UTC state would handle by default.
Common Types of Idaho Trusts
Most Idaho trusts fall into a handful of categories:
- Revocable living trusts, used to avoid probate, to manage property during incapacity and, for married couples, to hold community and separate property under one plan.
- Testamentary trusts, created by a will and funded through probate, often for minor children.
- Irrevocable trusts, including irrevocable life insurance trusts, spousal lifetime access trusts, long-term dynasty trusts and trusts used in Medicaid planning.
- Special needs trusts, both third-party supplemental needs trusts and first-party payback trusts that meet federal Medicaid rules.
- Charitable trusts, including charitable remainder and charitable lead trusts, subject to Idaho’s charitable trust statutes and the Attorney General’s oversight.
- Purpose trusts, which Idaho authorizes for noncharitable purposes such as caring for a pet or maintaining a family cemetery plot, enforceable by a person named in the trust or, if none, by the court (§ 15-7-601).
Idaho also expressly validates a trust that has no assets at a given time (§ 15-7-701), which matters for standby trusts designed to receive life insurance or a pour-over at death.
Trustee Duties Under Idaho Law
Standard of Care and Investments
Unless the trust provides otherwise, an Idaho trustee must observe the standards that would be observed by a prudent person dealing with the property of another, and a trustee with special skills, or named because of claimed skills, must use them (§ 15-7-302). Investment decisions are governed by the Idaho Uniform Prudent Investor Act, which requires the trustee to consider the portfolio as a whole, diversify unless there is a good reason not to, act loyally and impartially among beneficiaries, and keep costs reasonable (§§ 68-501 to 68-509).
Duty to Inform and Account
Idaho Code § 15-7-303 requires the trustee to keep beneficiaries reasonably informed. Within thirty days after accepting the trust, the trustee must inform the current beneficiaries in writing of the court in which the trust is registered and of the trustee’s name and address. On reasonable request, a beneficiary is entitled to a copy of the trust terms that describe or affect his or her interest, to relevant information about the trust’s assets and administration, and to an annual statement of accounts and a statement on termination or change of trustee.
Registration
A trustee whose principal place of administration is in Idaho is directed to register the trust with the court there (§ 15-7-101). Registration is a simple filing, and it does not bring the trust under continuing court supervision: § 15-7-201(b) directs that trust administration proceed free of judicial intervention unless an interested party invokes the court.
Bond, Liability and Removal
A trustee need not post bond unless the trust requires it, a beneficiary reasonably requests it, or the court finds it necessary (§ 15-7-304). A trustee who signs contracts in a fiduciary capacity and discloses that capacity is generally not personally liable on them (§ 15-7-306). The court may remove a trustee for a material breach, unfitness, lack of cooperation among co-trustees, persistently poor investment performance, changed circumstances, or other good cause (§ 15-7-308).
Dealing With Third Parties
Banks and title companies frequently ask to see a trust. Idaho’s certification of trust statutes (§§ 68-114 to 68-119) let the trustee provide a short certification of the trust’s existence, the trustee’s authority and other key facts instead of the full instrument, protecting the family’s privacy.
Notice and Limitation Periods for Idaho Trusts
Idaho does not have the UTC’s short statutory window for contesting a revocable trust after the settlor’s death, so Idaho trust instruments and administration practice have to be thought through more carefully. The main codified limitation protects trustees who account properly. Under § 15-7-307, a beneficiary who receives a final account or statement fully disclosing a matter and showing termination of the trust relationship must bring any claim for breach of trust within six months after receiving it. Even without full disclosure, a trustee who issued a final account and told the beneficiary where the records could be examined is protected after three years.
After a settlor’s death, claims against revocable trust assets by the settlor’s creditors are channeled through the probate estate under § 15-6-107, which makes the trustee of the principal trust liable for allowed claims the probate estate cannot pay. For that reason, some trustees open a short probate simply to run the creditor period.
Modifying an Idaho Trust Without a Decanting Statute
Idaho has not enacted a general decanting statute, and it has not adopted the UTC’s provisions on modification by consent or by the court. Idaho practice relies on four other tools instead.
TEDRA Binding Agreements
TEDRA allows the parties interested in a trust to resolve a “matter” by written agreement signed by all parties, which is then binding and conclusive on all persons interested in the trust (§ 15-8-302). “Matter” is defined broadly and includes construction of the trust, changes of trustee or situs, and amending or reforming a trust to achieve tax objectives (§ 15-8-103). Virtual representation (§ 15-8-205) lets a parent or other representative sign for minor, unborn or unascertained beneficiaries in appropriate cases, and filing the agreement with the court makes it equivalent to a final court order (§ 15-8-303).
Trust Protectors and Trust Advisors
Idaho Code § 15-7-501 expressly authorizes trust protectors and directed trusts. A trust protector’s powers may include amending the trust for tax or legal changes, increasing or decreasing beneficial interests, modifying powers of appointment, terminating the trust, changing situs or governing law, and interpreting the trust. An investment trust advisor or a distribution trust advisor can direct the trustee, and a trustee following those directions is protected. Building a protector into an irrevocable Idaho trust is the most reliable way to keep it adaptable.
Division, Consolidation and Small-Trust Termination
Under § 15-7-402, a trustee may divide a trust or consolidate trusts on written findings and notice to interested persons, and may terminate a trust worth less than $100,000 by giving notice of a distribution plan that tracks the trust’s dispositive scheme. If anyone objects within thirty days, the trustee must seek court approval.
Court Proceedings
The court of registration has jurisdiction to construe trusts, instruct trustees and resolve disputes (§ 15-7-201), and TEDRA provides a judicial path when agreement cannot be reached.
Spendthrift Protection in Idaho
Idaho Code § 15-7-502 confirms that a settlor may restrain both voluntary and involuntary transfer of a beneficiary’s interest, and that simply declaring an interest to be held in a “spendthrift trust” is enough. Idaho does not, however, permit self-settled asset protection trusts. Section 15-7-502(4) provides that when a person is both settlor and beneficiary, a spendthrift clause does not stop the settlor’s creditors from reaching the portion of the trust the settlor contributed. The statute includes a narrow carve-out allowing a grantor trust to reimburse the settlor for income tax on trust income without making the settlor a beneficiary for this purpose, and it protects a beneficiary who holds an ascertainable-standard or limited power from being treated as a settlor (§ 15-7-502(5)-(6)).
Perpetuities: Idaho Dynasty Trusts
Idaho is one of the few states that abolished the rule against perpetuities outright. Section 55-111 states that there is no rule against perpetuities applicable to real or personal property. Section 55-111A substitutes a rule against suspending the absolute power of alienation for longer than lives in being plus twenty-five years, but it also provides that there is no suspension when the trustee has an express or implied power to sell trust property. Because nearly every modern trust gives the trustee a power of sale, Idaho trusts can be designed to last for multiple generations. The details, and when a dynasty trust is worth the complexity, are covered on the Idaho irrevocable trusts page.
How Idaho Taxes Trust Income
Revocable trusts and other grantor trusts report income on the settlor’s own returns. A non-grantor trust is a separate taxpayer. Idaho treats a trust as a resident trust if three or more of the following were true for the entire taxable year: the grantor was domiciled or resident in Idaho; the trust is governed by Idaho law; the trust has real or tangible personal property in Idaho; the trustee is domiciled or resident in Idaho; or the trust is administered in Idaho (§ 63-3015(2)). A trust meeting three of those factors for part of the year is a part-year resident trust. That multi-factor test means changing the trustee or the place of administration can change a trust’s Idaho residency, which is worth planning around for trusts that accumulate income.
Idaho has no state estate, inheritance or gift tax, so Idaho trusts are generally designed around federal transfer tax and income tax considerations.
How Idaho Differs From Its Neighbors
Clients who move to Idaho, or who own property in more than one state, often assume trust rules are the same everywhere. They are not. Oregon, Montana and Wyoming have adopted versions of the Uniform Trust Code, with statutory rules on nonjudicial modification and notice to beneficiaries, and Washington has enacted the Uniform Trust Decanting Act. Nevada, Utah and Wyoming permit self-settled asset protection trusts. Idaho has none of those features by statute, but offers broad trust protector and directed trust authority, TEDRA agreements borrowed from Washington’s approach, and no rule against perpetuities. A trust drafted for another state will usually still work in Idaho, but it may rely on default rules that Idaho simply does not have.
Frequently Asked Questions
Has Idaho adopted the Uniform Trust Code?
No. Idaho trust law comes from Title 15, Chapter 7, Title 68, TEDRA, and the common law. Planning documents therefore need to address issues that a UTC state would handle by statute.
Do I have to register my Idaho trust?
Section 15-7-101 directs a trustee administering a trust in Idaho to register it with the court. Registration is a short filing identifying the trustee and the trust; it does not put the trust under court supervision.
Can an Idaho irrevocable trust be changed?
Often, yes, through a TEDRA agreement among all interested parties, through a trust protector named in the instrument, by division or consolidation under § 15-7-402, or by court order. Idaho has no general decanting statute.
Can I protect my own assets from creditors with an Idaho trust?
Not with a self-settled trust. Section 15-7-502(4) allows the settlor’s creditors to reach the settlor’s contributions to a trust of which the settlor is a beneficiary. Spendthrift protection works for trusts created for others.
How long can an Idaho trust last?
Idaho has no rule against perpetuities (§ 55-111), and a trust in which the trustee has a power to sell does not suspend the power of alienation (§ 55-111A). Idaho trusts can therefore be drafted to last for generations.
What information must an Idaho trustee give beneficiaries?
Written notice within thirty days of accepting the trust, and on reasonable request a copy of the relevant trust terms, information about assets and administration, and annual accounts (§ 15-7-303).
Speak With an Idaho Trust Attorney
Holmes Law drafts Idaho revocable, irrevocable, special needs and charitable trusts and advises trustees on administration, all remotely. Michael Holmes is admitted in Idaho and can explain how Idaho’s non-UTC framework affects your plan. To get started, contact Holmes Law about an Idaho trust, or read more on the Idaho estate planning page.