How to Distinguish a Deceased Person’s Estate Assets From Corporate Assets in Idaho
Detailed Answer
Under Idaho law, a corporation is a separate legal entity. Its assets belong to the corporation, not to any individual shareholder or officer—even if a relative formed the corporation. In contrast, a deceased person’s estate includes only assets owned by the individual at death. To distinguish between the two, follow these steps:
1. Review Title Documents and Account Records
Examine deeds, titles, and account statements. Real estate titled in the corporation’s name remains corporate property. Bank accounts, investment portfolios, and vehicles registered to the corporation are not part of the decedent’s probate estate. If the decedent owned shares of the corporation, those shares form part of the estate, but the underlying corporate assets do not.
2. Examine Corporate Formation and Governance Documents
Request the corporation’s articles of incorporation, bylaws, shareholder agreement, meeting minutes, and resolutions. These records will confirm ownership of assets, corporate officers, and authorized corporate actions. Such documentation helps establish the separate identity of the corporation and its assets.
3. Identify Assets Held in Individual Name
Trace assets titled in the decedent’s name alone or as joint tenants with right of survivorship. Under Idaho Code § 15-2-101(8), probate property includes all the decedent’s property except property that passes by right of survivorship, contract, trust, or other nonprobate transfer.
4. Look for Commingling of Funds
If the decedent treated corporate funds as personal and vice versa—paying personal expenses from corporate accounts or depositing personal income into corporate accounts—this commingling can blur the lines. While commingling alone does not automatically transfer ownership, it may support a claim to pierce the corporate veil under Idaho Code § 30-2-801 et seq.
5. Consider Statutory Definitions and Requirements
Idaho’s Probate Code defines probate property and nonprobate property. Refer to Idaho Code § 15-1-102 for definitions and § 15-2-101(8) for probate property. Idaho’s Uniform Business Corporation Act at Idaho Code Title 30, Chapter 1 outlines corporate formation, powers, and the distinct legal status of corporations. These statutes reinforce that corporate assets belong to the corporation.
6. Seek a Court Declaration if Dispute Arises
If an heir or creditor challenges asset classification, an interested party may petition the probate court for a declaratory judgment. The court can determine whether an asset belongs to the estate or the corporation. Under Idaho Code § 10-1202, the district court has jurisdiction to issue declaratory relief regarding rights, status, and legal relations.
Relevant Idaho Statutes
- Idaho Code § 15-2-101(8): Definition of probate property
(link) - Idaho Code § 15-1-102: Probate Code definitions
(link) - Idaho Code Title 30, Chapter 1: Uniform Business Corporation Act
(link) - Idaho Code § 30-2-801 et seq.: Piercing corporate veil
(link) - Idaho Code § 10-1202: Declaratory judgments
(link)
Helpful Hints
- Keep corporate and personal finances strictly separate.
- Obtain certified copies of all deeds, titles, and account statements.
- Review corporate meeting minutes and resolutions for asset transactions.
- Consult with a probate attorney if asset classification is unclear.
- Act early to prevent disputes among heirs and creditors.