Iowa Estate Plan

If someone is unable to take care of their own well-being and their finances, it may be necessary to establish a guardianship and conservatorship for them. A guardian is appointed by the court, after someone requests to be appointed, to oversee the health and well-being of an individual. On an annual basis, they will report to the court as to the status of the ward. Before a guardian can take certain steps, it is necessary for certain decisions to be approved by the court. The guardian does not handle any finances or assets for the ward. A conservator is also appointed by the court upon request. A conservator is responsible for managing the finances of the ward, paying bills, investing and paying taxes. The conservator also has to provide on an annual basis an accounting of all income, expenses and changes in the investments of the ward. The conservator and guardian may, but need not be, the same person. In some situations, more than one person may seek to be appointed, which may...

Following a controversial decision by the Iowa Supreme Court and after some wrangling in the Iowa legislature , Governor Chet Culver signed SF 473 into law on April 11, 2008. Effective July 1, 2008, this new chapter to the Iowa Code (chapter 144C) authorizes an individual to designate an individual to make decisions over the disposition of their bodily remains following their death. The designation does not indicate how a person wants their body remains to be handled, only who has the authority to make those decisions that are "reasonable under the circumstances". Now, what is "reasonable under the circumstances"? Under the definitions section, consideration should be given to the deceased's financial situation, religious beliefs and cutural or family customs. Also, if the designee doesn't promptly step forward and assume their responsibility, they forfeit their rights. In fact, the designee has either 24 hours after notification or 40 hours after ...

Joel Schoenmeyer has a good post on testamentary trusts on his Death & Taxes blog . Many clients think of estate planning in terms of either having a trust or a will. In fact, a testamentary trust plan involves both concepts. For those individuals that are not comfortable with the revocable trust plan which involves transferring all of one's assets to their trust and the cost of setting up such a plan, a testamentary trust is an alternative which gives you control from the grave over how your assets are handled. For example, if you have young children and you aren't interested in a revocable trust, a testamentary trust would control when and how your children would access those funds in the future if something should happen to you. Without such a testamentary trust and with just a simple will, your children would receive 100% of the assets at the "mature" age of 18. Not ideal, eh? While you maintain control, such a plan does require your estate to go thro...

Besides taxes, the other sure thing in life is that it comes to an end eventually. A common question becomes "what's next?" (I'll skip the whole afterlife heaven and hell discourse and stick to the worldly issues.) And of course you have the whole " what to do with the body issue ". Depending on the planning that was done beforehand will dictate a lot that will be done afterwards. For example, if the decedent properly used a revocable trust , it may not be necessary to go through the probate process. Good planning and organization prior to our "time" is important in helping to alleviate the work that our family and friends are forced to go through. Transfer of Assets If all of the assets were held jointly , it may not be necessary to go through the probate process, although there may be some other advantages with going through probate. Also, if the asset has a named beneficiary (e.g. life insurance, IRA, etc.), that asset will pass automati...

I missed it last week, but April 16th was National Healthcare Decisions Day 2008 . Most people have an opinion on what type of medical treatment they would receive if they had the opportunity to visit with their healthcare provider. It certainly makes sense that one would want to establish ahead of time what type of medical treatment if they weren't capable of visiting. Unfortunately, a 2003 article reported that less than 50% of severely or terminally ill had an advanced directive in their medical record. If you don't have an advanced directive already, take steps to have one signed. Then, after getting it signed, the next step is to have it included as part of your medical record.

John Dedon of Dedon On Estate Planning has a good summary on some key issues to keep in mind after you establish your revocable trust. One of the key advantages of a revocable trust plan is the capability of your estate to stay out of probate. While there are advantages and disadvantages to each plan, one of the biggest downfalls, as noted by Dedon, is the failure of individuals to properly fund the trust (read - transfer assets to the trust). While it is possible to transfer certain types of assets that are left in an individual's name to a trust post-death, there are no guarantees that it can be accomplished. It typically involves time and expense, some of the key issues a trust seeks to avoid.

Over at the Iowa Law blog, I have a post about the listing of assets in the Iowa probate process. This public listing requirement (called a "report and inventory") exposes financial information. The use of the revocable trust can avoid this financial exposure.

I've said it before and I'll say it again: If you have significant changes in your life, such as marriage, birth of a child, or a death, you need to review your estate plan. Unfortunately, as I've noted on the Iowa-Lawblog , Heath didn't heed my advice and failed to provide for his young daughter, which has now evolved to a family legal fight .

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% o...

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.