Sunday, August 26, 2007

Iowa Attorney Fees in Probate

Attorney fees in probating an estate of a deceased individual in the state of Iowa are set by the court. Pursuant to a state statute, the ceiling for fees is approximately 2%. Iowa Code section 633.198. While the statute states that it is the maximum, many Iowa attorneys treat it as the standard flat fee and will request - and often receive - fees based upon the 2% figure whether the amount of work equates to the 2% fee or not. Life insurance death benefits are not included when applying the 2% fee, but IRA's, 401k, jointly owned property, real estate, etc. are all included.

If there is "extraordinary" services rendered, attorneys can also request extraordinary fees. Iowa Code sec. 633.199. The statute sets out some examples of extraordinary services, such as sale of real estate, litigation and tax issues. Such fees are in addition to the ordinary 2% fees.

An option to avoid paying attorney fees based on this flat rate system and approved by the court, whether the 2% ordinary fee or extraordinary fees, is to establish and properly fund a revocable trust during your life. A revocable trust permits the administration of a deceased's estate without having to go through probate and court administration. This gives the trustee the abiliity to negotiate with attorneys on an agreeable fee.

Tuesday, August 07, 2007

There's Gold in That There Dirt

A recent article highlighted the "pot of gold" that many Iowa landowners are sitting on. While the residential real estate market has taken a downturn across the nation, farmland values continue to experience double digit growth in Iowa and surrounding states. The increasing focus and benefits of renewable energy continue to push land values higher and higher.

As a by-product of this increased growth, landowners' taxable estates are increasing, thereby creating potential estate tax exposure for their heirs. There are several methods for landowners to reduce-if not eliminate-any federal estate tax created by the increases in farm values. Many individuals may not consider these issues as farmland values have risen so sharply in the past few years that unless an owner is looking to sell, he or she may not even realize the total value of their taxable estate.