Iowa Estate Plan

A recent ruling from the Iowa Court of Appeals continued to reinforce the surviving spouse's right in the case of I n the Matter of the Estate of Herbert C. Shaffer, issued March 11, 2009 .  Husband and wife had executed a postnuptial agreement (presumably in another state as postnuptial agreements - agreements entered into after a marriage - are not recognized in Iowa but are recognized in other states ).  The postnuptial agreement basically provided that each would be responsible for their own expenses and would not look to the other party for reimbursement.  Subsequently, husband executed a will in which he left all of his property to his children from his earlier marriage. After husband died, wife had a change of heart and decided to exercise certain rights of a surviving spouse.  Specifically, she sought to elect to (1) take against the will and (2) request spousal support.   First, a little background on these rights.  Basically, you can't disinherit your spouse unless he...

At the Ohio Estate Planning, Trust & Probate Law blog , there is another great example of why will preparation should not be handled by yourself, especially if you have any unique situations in your family.  Imagine after trying to kill your parents, you inherit $500,000 from them after they, understandably, attempted to disinherit you.  Just another example of seemingly easy estate planning gone wrong.

I recently had the opportunity to sit down and visit with Gabriel Glynn of Iowa's Asset Protection Specialists, LLC  (APS) about his business.  After learning about the services they offer, I believe that his company offers an excellent supplement and expansion to the "standard" estate planning.  Basically, APS will come to your house and inventory all of your belongings by video and photographic means.  They will also scan any important receipts, which can document prices paid for certain items and they will also scan other important documents.  After their inventorying job is complete, APS will provide you with a complete copy of the inventory as well as maintain two separate back-ups. Imagine trying to replace all of the items in your house following a flood, fire or burglary.  Not easy, eh?  With the APS system, imagine how much easier it would be to complete an insurance claim when you have a verifiable record of those assets lost.  Or, what about trying to determine...

For anyone interested in attending a no-pressure-educational class on estate planning basics for Iowa residents, feel free to check and sign up for the Estate Planning Basics class I'll be teaching through the Urbandale Parks and Recreation Community Education Program.

Alzheimer's is a horrendous disease with someone developing Alzheimer's every 71 seconds . Watching a loved one's condition continue to deteriorate to the point of not recognizing family members or their life is truly depressing. However, there are certain legal steps to consider when a family member is involved. Guardianship and conservatorship If decisions need to be made for an incapacitated individual, whether medical care or financial matters, it may be necessary to have a guardian/conservator appointed by a court. Trust - If a self-settled trust has already been established by the incapacitated individual, it may be necessary to examine having the successor trustee step in to handle trust management matters. Power of Attorney - If the individual has already signed a power of attorney (health and financial), steps should be taken to determine whether the disability provisions are applicable and granting authority. Beneficiary Designation review - Information sh...

The "Death tax" is alive and well in Iowa. Iowa currently has an inheritance tax system in place. What this means is that the person who inherits the property will determine if tax is owed or not. Compared to an estate tax system, where the size of the estate determines where tax is owed or not. (Although if the total estate is less than $25,000, there is no Iowa Inheritance tax imposed.) Iowa has an unlimited exemption from inheritance taxes for surviving spouses, charities and lineal descendants/ascendants. If the recipient fits into any of those categories, there is no Iowa inheritance tax. If the recipient is outside those categories, the tax will vary based upon the amount of the inheritance and the relationship to the decedent. The Iowa Department of Revenue's table illustrates how the tax is computed and the different tax rates applicable. If any tax is owed, it is due on the 30th day of the ninth month following the date of decedent's death.

It is not unusual to hear people use the wrong term when referring to obtaining government assistance for health care expenses. Medicare and Medicaid are two separate and distinct programs administered and financed by the government for covering health care expenses. Eligibility for "Medicare" is based simply on age or disability. "Medicaid", on the other hand, has eligibility based upon financial requirements. In other words, a millionaire could qualify for a Medicare, but not Medicaid. Hyman Darling has another good post explaining the difference between the programs.

People, for a variety of reasons, procrastinate on a variety of legal matters. A recent survey indicated that 55% of adult Americans do not have a will. Another legal issue that some individuals procrastinate on is adoption. If you place these two puzzle pieces together, you have the potential for an unfair picture. For example, assume this scenario: H & W have a child together, C. Shortly thereafter, W dies and H remarries W2 while C is still a young child. Together, H & W2 raise C and treat C as their own child, even though W2 never formally adopts C as her own child. Later in life, H dies and all of his assets pass to W2 as joint assets. C continues to care for and treat W2 as their mother. W2 then passes away without having executed a will. Who inherits W2's estate? Or, more importantly, who should inherit? Under the intestacy laws, C would not inherit from W2 as there is no legal status of a parent-child relationship as required to inherit under the intesta...

In Iowa, the fee for the executor is set by the court and is based upon a state statute. Their fee is also based upon the size of the estate, as reported on the inventory filed with the probate court . Iowa Code section 633.197 provides that the personal representative (executor or administrator) fee shall not exceed $220.00 for the first $5,000 of probate assets, and then 2% on all assets over $5,000.00. All assets of the estate are included in the fee determination, with the exception of life insurance payable to others. Any compensation received by a personal representative is taxable income to that individual. Thus, if a personal representative is a beneficiary, they may want to consider whether to waive their fee and thus increase their inheritance, which may be free of tax, or to take their compensation and pay income tax on that amount.

Over at the North Carolina Estate Planning Blog , Greg Herman-Giddens has a good post on "5 Legal Tips for Peace of Mind" . This post covers some basic legal issues to be aware of to "get your house in order". While there are many other things that I could add to the list, this is a good basic foundation.