Iowa Estate Plan

Not every marriage works out.  Duh.  Sometimes, after one ends, another marriage begins and several challenges begin.  You have the challenges of "mixing" families together, learning about snoring patterns, and discovering a new person.  You also frequently have the challenge of dealing with estate planning.  I'll skip the issues with snoring and focus on some of the estate planning points. If you are smart...and brave...bring up the subject of a premarital agreement (or a "prenup" if you prefer).  Just don't wait until you are on the way to the ceremony.  Not exactly a romantic subject and many people will steer clear of it because of the delicateness of the topic.  (" You think we are going to get divorced!?! ")  The premarital agreement can provide protection for each other, not only in the event of a divorce, but also upon the death of one of you.  Remember: you can't disinherit your spouse as part of your will or trust estate p...

A financial advisor recently reached out to me regarding the impact of a Power of Attorney document concerning financial matters.  In particular, the question was whether the person signing the document (the "principal") loses any power or authority once they sign the POA document.  As a reminder, the default rule ( and recommended direction in my opinion ) is that the agent's power is immediate upon signing.  In other words, it is not necessary to wait until the principal is incapacitated before there is authority for the agent to be able to act on behalf of the principal. So the question is: "Once the principal signs the POA for an immediate power, does that principal lose any power/authority?"  Quick answer: No. The POA document in this scenario simply adds another individual as an authorized party to deal with accounts or other financial interests.  Thus, the principal can continue to operate as normal.  The principal also has the ability to remov...

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...

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...

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. ...

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...

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? 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. 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/niece...

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-guardia...

When I was younger, I used to love Now and Later candy , despite the "workout" it gave my mouth/teeth.  You can enjoy the candy as a hard candy, and continue to enjoy it later when it is soft and chewy. It was like having having a different piece of candy, all in one piece. When I discuss a power of attorney document with a client, one of the questions that I go through is whether they want the authority to be a springing power or an immediate power.  For example, do you want the person you identify to have authority to act on your behalf only when your doctor says you don't have sufficient capacity? Or, alternatively, do you want that person to have authority immediately , regardless of your capacity level? For many clients (and for many attorneys) the initial thought/answer is 'why would you give someone power over your assets when you don't need any help?'  Here are my three responses: 1.  You may have sufficient capacity, but you aren't around....

I have previously posted previously pretty much on all of these items separately, but I thought I'd commit to the "checklist-mania" and add my own checklist.  For individuals that are helping out with an aging family member, this can be a quick guide to get you started.  (If you are taking advantage of an aging family member, then you need to get a conscience and turn yourself into the authorities.) While this list can be used for pretty much anybody, young or old, this can be a helpful guide for those assisting a parent/grandparent with planning. Power of Attorney (health) - This document enables health care decisions, such as medicine, doctor, facility, therapy, etc. to be made by a selected individual.  While more than one can be named, it is typically preferred to name one responsible individual. Power of Attorney (financial) - This document provides for someone to handle financial matters.  Iowa's recently updated statute provides significant changes to th...