Iowa Estate Plan

Currently in Iowa, if a decedent owns personal property that totals $25,000 or less, and that property would normally pass under a Will or the intestate statute, you can skip probate with just an affidavit .  The governor recently signed a bill that increased that figure up to $50,000 (for deaths after July 1, 2018), along with a few extra new additions to the affidavit. So...what does that mean lawyer boy?  This: If the dead person owned real estate, the affidavit doesn't work. If the dead person owned other types of property that all together total more than $50,000, the affidavit doesn't work. You still have to pay inheritance taxes , if any are due. You still have to pay the creditors, if any. You still have to pay the state back for any Medicaid debts due. Otherwise, you use the affidavit to transfer those small estates. Here's a common scenario where the affidavit could be used: John Smith passes away.  When he died, he owned his truck, lived in a...

You gotta love email.  In seconds, I can transmit a message around the globe to one person or to hundreds of people, or I can share a photo of my dog, Georgia.  Or you can email your parents' attorney and tell the attorney what changes to make to your parents' estate plan to exclude one of your siblings.  Whoops. In  Estate of Boman , decided earlier this year, the on-going feud between two sisters and their brother, plus a little "spice" mixed in with the stepmother, resulted in jury trial supporting the claim of undue influence for a will and also intentional interference of inheritance by the sisters.  The court's ruling specifically identified the numerous email communications from the sisters to their dad's attorney as significant evidence supporting the brother's claim.  While the brother (will contestant) was not able to successfully support his claim of lack of capacity as his evidence failed to find lack of capacity for "the day the will ...

This past year, I had the opportunity to go skydiving. What a blast! I had wanted to skydive for a while so I was anxious to jump out. However,  when you are on the edge of the plane door, looking out at the ground several thousand feet below you, a slight pause is a natural feeling. Thinking about your possible demise can be unnerving. Similarly, sometimes doing your estate planning can have the same feeling.  Unfortunately death is a certainty for all of us and it doesn't necessarily get any easier later on. As I stood on the edge of the plane, I didn't pause long as my tandem guide jumper basically pushed me out (with him and the parachute thankfully).  My job as your estate planning attorney is to do the same thing. Push you out of the plane!  Or, better yet, to get your affairs in order (just in case that parachute doesn't open).

Adoption can be a wonderful thing.  My niece, in this picture, is adopted and she is a wonderful addition to our family.  However, adoption can have some funky applications in the estate planning world.  A recent ruling from the Iowa Supreme Court was interesting on a couple of issues involving an adoption: To avoid paying inheritance taxes for a bequest to a non-lineal descendant, a nephew was adopted by his aunt. Even though he was adopted by his aunt, the son's biological mother was still able to include an inheritance for her son. The first point is not all that unusual and I have advised clients of this very option.  Basically, whether you are adopted or biological, as a child in Iowa, you do not pay any inheritance tax when you inherit from your parents.  But, if you are a nephew, cousin, friend (basically a non-lineal descendant) there is an inheritance tax owed on an inheritance based on this table .  So, if reducing a tax bill is worth chan...

It is hard to believe that my oldest daughter is heading off to college this week at Drake University .  I'm excited for her as she starts this next journey in her life.  In addition to getting all of the necessary supplies, such as towels, laundry bags, books, pepper spray, etc., it is also important that parents of college-bound kids have the kids sign power of attorney documents .  While we may still think of them as young kids, the fact is that under the law, they are legal adults and entitled to full and independent control of their financial information/assets as well as medical decisions and privacy protection.  This is regardless of the fact that you as the parent may be paying their tuition and treating them as a dependent for tax deduction purposes.  However, it can be extremely beneficial to have your child sign a power of attorney document so that you are authorized to: obtain medical information and consent to medical procedures if necessary; a...

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. ...