Sunday, November 29, 2015

Estates in Iowa: Do I Really Need to Go Through Probate?

A common issue that pops up with family members after someone dies is "do we need to go through probate?"   To answer that question, there are series of follow-up questions to be answered first.  To start the process, you should have a list of the assets in front of you and go through a "filter" process of the following questions.

Question 1: Is there a named beneficiary for the assets?  Do any/all of the assets have a named beneficiary?  For example, life insurance and annuities typically have a beneficiary.  Is there a POD (Payable on Death) or TOD (Transfer on Death) beneficiary?  If the answer is "yes"  to all the assets, then you are done.  Go straight to the claims process and pass probate.  If the answer is yes to some, but not all, we move to the next question. (If the beneficiary is the "estate", then that doesn't count but doesn't necessarily mean you have to go through probate.)

Question 2: Is there a surviving joint owner?  Next question is whether there is a surviving joint owner on the remaining account(s).  While this can create some problems, if the rest of the accounts have a joint owner, you can skip probate.  If you still have assets that don't have a named beneficiary or a joint owner, then you move to the next question.

Question 3: Is there a funded revocable trust?  If the decedent established a living (revocable) trust and properly titled the remaining assets, then you can avoid probate and just have the trust administration to deal with those assets.  You can end the analysis here.

Question 4: Is the total value of remaining assets less than $25,000.00?  Other than the joint assets and those with named beneficiaries, and assuming no real estate (land), do those assets total less than $25,000.00?  If so, you can use an affidavit to transfer all of those assets. For example, if there a checking account of $1,500 and a savings account of $10,001 you would be able to take a completed affidavit of distribution to the bank and they will cut a check out to you.  You should contact a trust & estate (T&E) attorney (me) to help with preparation of the affidavit to provide to the financial institution.

Question 5: Is there real estate involved for the remaining assets?  If there is real estate involved, whether it is a small home or if it is a sprawling farmland, probate is your new best friend. Contact a T&E attorney and get the process going.  However, if it has been more than 5 years since the decedent passed, you have another option that I don't feel like getting into right now.

If you get to the end of the process and it appears that you need to go through the probate process, the world does not end.  There are some other issues (Medicaid estate recovery and small estate vs regular estate) that need to be determined.  Also, just because you don't have to go through probate doesn't mean that you may not have some other issues to deal with for the estate.  (taxes, such as income, inheritance or estate, plus Medicaid liens)  A good probate attorney (ahem...you should know who fits that category by now) will be able to walk you through the process. Also, if you had a power of attorney, it is now worthless.  Stop using it immediately.

Wednesday, October 21, 2015

Break Out the Balloons - It is National Estate Planning Awareness Week!

Every year I count the days down to this week.  Well, not really.  But it does serve as a regular reminder about the need to address the basics of estate planning.  Despite my best intentions, there continues to be a large portion of Americans that don't have estate plans.  Based on a 2014 survey, for those individuals age 51-64,  51% don't have wills.  For all ages above 18, it is 64% without wills.  Wow.

Many younger people feel invincible and don't believe it is necessary to  have a will in place.   I suppose you can wait until the day before you die to sign your will and all is fine.  But for most people, except for Marty McFly, we don't know when our number gets called.  It is one of the reasons we buy insurance - protection against the unknown.

For the cynical people out there you are probably saying "whatever lawyer boy, you are just trying to get some business." Yep.  Lawyers need to eat, too.  But it is frustrating to see situations where lack of proper planning disrupts the family relationships and they fall apart.  Some basic planning steps would allow an easier transition without additional cost, delay and problems.  Plus, those attorney fees in those situations are normally higher anyway.  Putting an estate plan together is not as hard or expensive as you might think.

Estate Planning Awareness Week 2015 - schedule an appointment with a qualified attorney...or you can roll the dice.




Monday, July 27, 2015

Changes to the 2015 Iowa Probate Code - Authority of Representative to Get Financial Details

One of the convenient & powerful changes to the Iowa Probate Code from the 2015 legislative session involved the authority of a court-appointed representative to get information or access to financial information or assets.  Iowa Code section 633.78 was revised to give both the representative and the financial institution the necessary authority and protection in dealing with assets.

Okay, that was enough of a legal mouthful.  If you want a bigger mouthful, you can read the bill that was signed by Governor Branstad.  This was a bill that was drafted and sponsored by the Probate Section of the Iowa State Bar Association.  Another great job by the Section.

To give you an example of how this is useful, let's assume that you are the executor of an estate, or you represent the executor.  And assume that you believe that decedent owned an account at a financial institution, or that you know for a fact that they owned an account at the institution.  The  executor has certain duties to (1) identify and account for assets and (2) distribute the property to the proper parties.  But what if the financial institution isn't exactly cooperative with providing information or access about the decedent's accounts?  After all, we are in the age of scams and paranoia over identity theft.  Well, section 633.78 comes to the rescue in that you now have very clear authority in dealing with that account.  Should the financial institution continue to be resistant, they can be held responsible for damages and attorney fees.  Additionally, the financial institution is also protected in providing that information or account to you. Everybody wins!

You might wonder just how after something like this is useful.  Well, in the past 26 days that the law has been in effect, I've used it one time and I'm getting ready to use it in another matter if we continue to have difficulties in getting cooperation.  I would say that is a pretty quick and useful history already.

Sunday, April 05, 2015

Probate Patience: How Long Should it Take to Complete Probate?

A common question that comes up in client meetings is 'how long does it take to get through probate?'  There a lot of variables that go into that determination.  However, it is fair to recommend some patience for the process to get completed.

Notice Publication - This is one of the primary delays.  One requirement is that the executor/attorney needs to publish notice in a local newspaper to run for 2 consecutive weeks.  Then, after the 2nd publication, there is a 4 month period in which anybody can file a claim in the estate or contest the will.  There is also a requirement that notice be given to all interested parties.  The claims process/will challenge ends than later of (1) four months after the second notice publication notice or (2) 30 days after mailing notice.

Inventory - An inventory needs to be completed and filed with the court.  That includes getting date of death values and listing of all assets.  Depending on the organization of the records and information, that may take some time to get assembled.  This inventory should be filed with the court within 90 days after the appointment of the executor.

Tax Filings - In addition to filing the decedent's final individual income tax return, there are also fiduciary returns to be filed.  In Iowa, the Iowa Department of Revenue has to approve and issue a proper clearance before you can close the estate.  That review process can take up to 90 days after filing.  Other tax filings potentially include the Iowa Inheritance Tax return and the federal estate tax return (for larger estates).  Both of those returns also have to be approved and a proper clearance issued.

Creditors & Challengers - You also have the potential issue of claims filed in the estate and resolution of those claims. Then, if you have a will challenge, you are really getting the probate case extended out for several months or possibly years.

On average, I estimate a year to complete the probate process.  Sometimes they can close sooner, but sometimes later.  Every case is different with different facts and different persons.

Sunday, March 01, 2015

The Trusted Trustee: Who Gets to Have All the Fun?

When you are putting together your estate plan (and shame on you if you haven't done so yet) one of the decisions you may face is 'who should be the trustee?'

This question assumes that you are using a trust.  Whether it is due to young beneficiaries, special needs, or other circumstances that call for managed control of assets, a trustee is the title assigned to person/entity.  So what are the requirements?


  1. Capable - A trustee needs to handle investments, accounting, and tax returns.  Some people's brains turn to mush with visions of talking cats when faced with dealing with financial issues.  Your Uncle Bob might be a great guy, but if he is putting a name to the talking cat and not looking at investment returns and allocations, he might not be the best choice for trustee.
  2. Discretionary - Sometimes trustees have to make tough decisions.  These may not be popular decisions with the beneficiaries and Uncle Bob may not want to disappoint his nephew/nieces.  Does the 18 year old nephew entitled to get that Corvette Supercar?  Unless his name is Matt Gardner, probably not.  But Uncle Bob may have to tell him "no".
  3. Available - Life is busy.  Raising two kids with activities, community activities, family events, work commitments, blogging...life is busy and asking someone to handle another activity in life can be overwhelming.
  4. Trustworthy -There are frequent stories of people get tempted by easy access to money that isn't theirs.  Whether they just needed a "short-term loan" or they've fallen on hard times, sometimes the candy becomes too tempting.
Rather than putting a friend or family member in a difficult position and responsibility, a professional trustee maybe better suited to handle the job.  Banks and trust companies (that are qualified) meet all of these qualifications.  Of course, they do charge a fee for their services.  (Not everything, like this blog, in life is free.)  But having peace of mind that the future of your beneficiaries is being safely and properly managed is worth something.

Sunday, January 04, 2015

What Happens When your Special Needs Child Turns 18 in Iowa?

A common scenario for children with special needs can arise when the child turns age 18 (age of majority in Iowa).  Once they are an adult, they are entitled to make their own decisions and healthcare information to others may be restricted.

To deal with this situation as they relate to medical issues, there are a couple of different options:


  • Medical power of attorney/HIPAA Release - If your child has sufficient capacity to execute documents, a medical power of attorney (MPOA) and a HIPAA release form would aid a parent in getting access to that information and being involved in health care decisions. The key question is whether the child is able to legally execute these documents.
  • Guardianship - If the child doesn't is unable to understand and knowingly consent and authorize a MPOA document, the next step would be to establish a guardianship for the child.  A guardianship is a court proceeding where you would request court approval to be appointed guardian (co-guardians) for your child to be involved and make certain decisions.  Once appointed, you will continue to have regular court filings and be limited to certain decisions.  You should consult with an Iowa probate attorney to get the guardianship properly set up and operating.
Raising a special needs child may be a lifelong commitment.  In addition to dealing with these decisions once they are an adult as discussed above, you should examine your plans for taking care of their finances and health care decisions when you are no longer able to serve in that position.