Iowa Estate Plan

The Ohio Supreme Court fined two California-based companies multi-million dollar fines for the unauthorized practice of law. The operation apparently involved telemarketers and salespeople persuading elderly residents of purchasing a living trust in order to avoid exaggerated fees and costs at their death. Apparently, over 3,000 Ohio residents were convinced to purchase the products, which were from non-attorneys, although "approved" by an Ohio attorney, despite not speaking with the client. The Ohio Supreme Court was not thrilled with the performance of legal services by non-attorneys and handed down the hefty fines. Living Trusts (or revocable trusts or inter vivos trusts - all the same) can be an effective estate planning tool . The determination of whether it is an appropriate plan for you should be carefully considered after consultation with an attorney (not a salesman or telemarketer) who is familiar with estate planning. After the trust is established, it is als...

As David Goldman of the Florida Estate Planning Lawyer Blog recently noted , the IRS has announced that the annual gift tax exemption amount for 2010 will stay at $13,000.00 . This represents the amount that each individual can give to another person without having to either pay any gift tax or file a gift tax return. If you decide to make a gift in excess of the exemption amount, then it is necessary to prepare and file a gift tax return with the IRS. Whether you will have to pay any gift tax on a gift depends on how much you gifted already during your life. For more information on using the valuable estate planning tool of gifts, contact an estate planning attorney.

In a follow-up to a recent post I had on the Iowa Law Blog, Jason Clayworth of the Des Moines Register recently updated the situation concerning a young girl's application for social security benefits as a result of her father's death. A federal judge has overturned the rejection of benefits and thus permits her to receive benefits. The article continues to point out that legislators are examining long overdue updates to the Iowa statute to address these types of situations. The Social Security Administration has until January 11, 2010 to appeal. The complexities that are involved in cases like this are challenging. A recent Probate Section meeting of the Iowa State Bar began to examine some of the issues and an approach to take with this issue. The discussion revealed that there is a split in the probate section as a result of numerous questions and possible approaches. Beyond the basic philosophical question of is this "right", there other other related matt...

A little bit slow on my part in updating my prior post on the Heemstra case , but the Judge in a harshly worded ruling of September 18, 2009 ordered Heemstra to pay $750,000 in punitive damages, another $204,000 in other damages and ordered the sale of land owned by Heemstra and his wife. The judge found that the Heemstras engaged in a "complex shell game" to try and hide and move their assets to prevent Lyon's widow from recovering on her $5.68 million judgment. William Petroski of the Des Moines Register also covered the ruling in an article on the Des Moines Register. The judge found that the family fraudulently transferred their assets (even I called this one) to various family members and entities to produce the perception of a "penniless" defendant in order to avoid payment of the wrongful death judgment. The judgment goes beyond just Rodney Heemstra, and also included certain damages against Heemstra's son, an irrevocable trust, his sister, a limi...

A recent case from the Iowa Court of Appeals helps illustrate the importance of putting business matters in writing. In the Matter of the Estate of John Liike , John and his brother had inherited some land from their parent and had operated the land as part of a partnership for several years. The land was never actually placed in the name of the partnership, but kept in their individual names as tenants-in-common. Eventually, they entered into a written partnership agreement which provided that when one of them died, the other partner would have the option of purchasing the partnership property. No changes were made to the title of the land. After John died, John's widow and John's brother did not see eye-to-eye, with each wanting John's one-half interest in the farmland. The trial court found, and the Iowa Court of Appeals affirmed, that even though the land was not titled in the name of the partnership, the facts and circumstances clearly found that the land was mea...

The local Rodney Heemstra trial has brought asset protection into the local news lately. Mr. Heemstra shot and killed his neighbor during a dispute. After the incident, Mr. Heemstra made several restructuring changes to his finances and assets which involved the use of irrevocable trusts and other entities. Revocable trusts are a common estate planning tool, but they do not provide any asset protection for the person who creates the trust. With revocable trusts, the person has the power to revoke, or cancel the trust. That power to yank the assets back removes the option to protect those assets from your creditors as your creditors can access them as well. The question of when is it "too late" is a key issue in the asset protection plan is important. If transfers are made after an event that gives a basis for someone to bring a claim to collect, the state's fraudulent transfer statute under Iowa Code chapter 684 can apply to revoke those transfers as if they didn...

An Iowan is struggling with the definition of heir under the Iowa Probate Code. In order to qualify as an "heir" under Iowa law, you must have been conceived prior to the death of the biological parent. This has been the definition of an "heir" for 150 years. However, with advances in medical science, it is now possible that a child can be conceived after death through fertilization from frozen sperm. Still a child right? Wrong, under Iowa intestate law and for social security benefits. Despite the same result, social security administration has ruled that being conceived after death is not the same as being conceived before death of the biological parent. As a result, the child, who has her father's DNA and is in fact the biological daughter of her father, will not be able to reap the benefits of her father's social security benefits, as other children would, that he contributed to during his life. Due to a split in the circuit courts, expect to see ...

A power of appointment is special planning tool that not many people are aware of. What if you didn't know exactly how you wanted your assets distributed in the future at your death, but you did trust someone else, such as your spouse or child, to make those decisions for you? A power of appointment is a special authority that you can pass to someone to make distribution decisions for your assets in the future. For example, Husband's Will keeps his assets in trust for the life of Wife, and then it gives Wife the authority, at her death, to distribute the assets out as she chooses. Thus, if Son is in a bad financial situation or marital situation and it is not wise to give the money to Son now, the surviving spouse (Wife) could say that Son's share will stay in trust and not be given out to him. Or conversely, rather than keeping it in trust, it could be paid immediately to Son if his affairs are in order. If flexibility for future decisions is sought, this can be an a...

I've always wanted to say that. Now I can. I recently had a chapter published by Aspatore Books in the book titled " Estate Planning Client Strategies: Leading Lawyers on Understanding the Client's Goals Using Trusts Effectively, and Planning in a Changing Economic Climate (Inside the Minds) ." (Say that in one breath.) If you are interested in purchasing, go here (none of the proceeds go to me).

Quiz time - You leave a bequest in your will for a gift to an individual, but that individual dies before you do, leaving their own children.  Do those kids inherit their parent's share or do the other beneficiaries named in your will receive an increased amount?  If you guessed that the children of the beneficiary inherit, you are correct (but with an asterisk). Iowa's antilapse statute ( Iowa Code sec. 633.273 ) provides that if a devisee dies before the testator, leaving issue who survive the testator, the devisee's issue inherit the property devised unless the terms of the will indicate to the contrary.  Huh? What this means, if you want person A to receive property, but only if they survive you, then you need to specifically require that they must survive you in order to receive their inheritance.  Otherwise, if you don't, their children will inherit what you intended to go to their parent. A recent case of In re: Delmege Estate , the Iowa Court of Appeals addresse...