The September edition of “The Iowa Lawyer” is now out! Published by the Iowa State Bar Association, this month focused entirely on retirement-related topics. According to the ISBA, there are approximately 2,300 ISBA members who are 60 and older. And, in Iowa in general, people age 65 or older comprise 16.7% of the population. Retiring is a whole different stage in life that can come with newfound challenges as well as benefits. While geared toward Iowa attorneys, many of the insights are applicable in other industries. For instance, succession planning is important for all business owners! Similarly, retirement is a time when charitable giving often gets a boost.
GFLF’s piece focuses on how you can use retirement benefit plans to benefit the charities and causes you care about in a strategic, tax-wise way. This is super important for all Iowans to know (not just attorneys!). In the article we focus in on three important tax concepts:
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/09/Screen-Shot-2018-09-06-at-9.25.01-AM.png6721003Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-09-06 09:25:352020-05-18 11:28:51Retire with a Reason: Read GFLF's Latest Article in The Iowa Lawyer
There are few speeches that resonate across space and time in the way that Martin Luther King Jr.’s “I Have a Dream” speech has. Delivered on this day in 1963 from the Lincoln Memorial in Washington D.C., the iconic speech has inspired the importance of hope and change in America for multiple generations. He challenged America to “rise up and live out the true meaning of its creed: ‘We hold these truths to be self-evident, that all men are created equal.'” Take a moment to revisit the speech. You can listen to the audio of the speech on The Martin Luther King, Jr. Research and Education Institute’s webpage and I’ve included the text of the speech below as well below.
I Have A Dream
I am happy to join with you today in what will go down in history as the greatest demonstration for freedom in the history of our nation.
Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of their captivity.
But one hundred years later, the Negro still is not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languishing in the corners of American society and finds himself an exile in his own land. So we have come here today to dramatize a shameful condition.
In a sense we have come to our nation’s capital to cash a check. When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the unalienable rights of life, liberty, and the pursuit of happiness.
It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked “insufficient funds.” But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. So we have come to cash this check — a check that will give us upon demand the riches of freedom and the security of justice. We have also come to this hallowed spot to remind America of the fierce urgency of now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice. Now is the time to lift our nation from the quick sands of racial injustice to the solid rock of brotherhood. Now is the time to make justice a reality for all of God’s children.
It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end, but a beginning. Those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual. There will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges.
But there is something that I must say to my people who stand on the warm threshold which leads into the palace of justice. In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred.
We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again we must rise to the majestic heights of meeting physical force with soul force. The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. They have come to realize that their freedom is inextricably bound to our freedom. We cannot walk alone.
As we walk, we must make the pledge that we shall always march ahead. We cannot turn back. There are those who are asking the devotees of civil rights, “When will you be satisfied?” We can never be satisfied as long as the Negro is the victim of the unspeakable horrors of police brutality. We can never be satisfied, as long as our bodies, heavy with the fatigue of travel, cannot gain lodging in the motels of the highways and the hotels of the cities. We cannot be satisfied as long as the Negro’s basic mobility is from a smaller ghetto to a larger one. We can never be satisfied as long as our children are stripped of their selfhood and robbed of their dignity by signs stating “For Whites Only”. We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied, and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream.
I am not unmindful that some of you have come here out of great trials and tribulations. Some of you have come fresh from narrow jail cells. Some of you have come from areas where your quest for freedom left you battered by the storms of persecution and staggered by the winds of police brutality. You have been the veterans of creative suffering. Continue to work with the faith that unearned suffering is redemptive.
Go back to Mississippi, go back to Alabama, go back to South Carolina, go back to Georgia, go back to Louisiana, go back to the slums and ghettos of our northern cities, knowing that somehow this situation can and will be changed. Let us not wallow in the valley of despair.
I say to you today, my friends, so even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.
I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident: that all men are created equal.”
I have a dream that one day on the red hills of Georgia the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood.
I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice.
I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.
I have a dream today.
I have a dream that one day, down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of interposition and nullification; one day right there in Alabama, little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers.
I have a dream today.
I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all flesh shall see it together.
This is our hope. This is the faith that I go back to the South with. With this faith we will be able to hew out of the mountain of despair a stone of hope. With this faith we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day.
This will be the day when all of God’s children will be able to sing with a new meaning, “My country, ‘tis of thee, sweet land of liberty, of thee I sing. Land where my fathers died, land of the pilgrim’s pride, from every mountainside, let freedom ring.”
And if America is to be a great nation this must become true. So let freedom ring from the prodigious hilltops of New Hampshire. Let freedom ring from the mighty mountains of New York. Let freedom ring from the heightening Alleghenies of Pennsylvania!
Let freedom ring from the snowcapped Rockies of Colorado!
Let freedom ring from the curvaceous slopes of California!
But not only that; let freedom ring from Stone Mountain of Georgia!
Let freedom ring from Lookout Mountain of Tennessee!
Let freedom ring from every hill and molehill of Mississippi. From every mountainside, let freedom ring.
And when this happens, when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual, “Free at last! free at last! thank God Almighty, we are free at last!”
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/08/Screen-Shot-2018-08-28-at-11.37.01-PM.png517480Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-08-28 18:44:422020-05-18 11:28:51I Have a Dream: 55 Years Ago Today
We talk about taxes and fees a lot in estate planning because if you don’t have a quality plan in place your estate will likely be hit with taxes and fees to a varying degree. Actual figures depend on the gross value of your estate, what state you lived in, and what strategies you employed (such as a living revocable trust) that help to reduce or even eliminate taxes and fees.
Recently I wrote about one specific tax that only applies to states—the state estate tax. If you don’t have time to read the full post and live in Iowa, the bottom line is that generally you won’t need to worry about it. Unlike places like Minnesota and Illinois, Iowa does not have a state estate tax. However, Iowa DOES have a special “death tax” that only six states in the U.S. have.
What is an Inheritance Tax and how is Different than an Estate Tax?
At first glance the inheritance tax seems mighty similar to the estate tax (both state and federal). Indeed, both are collected after someone’s death. However, an estate tax is assessed by the overall gross value of a person’s estate. This figure totals up all assets passed to all beneficiaries, regardless of their relationship to to the decedent (the person who passed away).
Any estate taxes owed are paid out of the estate assets before beneficiaries receive their distributions. And, the estate executor is responsible for making certain any state or federal estate taxes owed are fulfilled.
The inheritance tax, instead, is a tax levied on assets and property certain beneficiaries have inherited from someone who has died. I say “certain” because in most states the relationship of the beneficiary to the person who died determines if inheritance tax is owed or not. Amount of tax owed is calculated on each eligible beneficiary’s share of the estate and the beneficiary’s relationship to the decedent.
The beneficiary subject to estate taxes is personally responsible for filing the tax. In Iowa this means filling out Form 706 and filing before the due date on the last day of ninth month after death.
The good news in light of all this tax talk is that Iowa’s inheritance tax only applies in certain situations. Not every Iowan who passes away will render their heirs subject to more taxes. For instance, Iowa’s inheritance tax does not apply if the estate is valued at $25,000 or less.
The following, among others, are exempt from Iowa’s inheritance tax:
Annuities purchased under a retirement or employee pension plan
Assets left to U.S. charitable, religious, and educational organizations
As you can see, most people won’t ever have to deal with Iowa’s inheritance tax. So, who isn’t exempt as a beneficiary? Domestic partners, friends, and non-lineal relatives such as nieces, nephews, siblings, aunts, uncles, and cousins are all subject to the inheritance tax on the assets they inherit. Assets bequest to corporations or social/fraternal organizations don’t fit the qualifications as “educational, religious, or charitable” and are therefore not exempt.
Iowa’s max inheritance tax rate is 15%. (Which is better than our neighboring state of Nebraska, which has the highest top inheritance tax rate of 18%.)
In case you were wondering, there is no federal inheritance tax to worry about.
How do I Know if my Estate or Beneficiaries will owe Taxes?
Consult with an experienced estate planner and other professional advisors so that may they thoroughly evaluate if your estate will be subject to estate or inheritance taxes. Regardless, it’s a good idea to start looking into strategies and estate planning tools to reduce the burden of (all) taxes on your beneficiaries.
One way to do that during your lifetime is to gift (cash or non-cash) assets during your lifetime. The gift tax rate is currently at $15,000. Meaning the IRS will allow you to give away up to that amount, per donee (person receiving the gift), every year, without facing a gift tax.
I also highly recommend consulting an estate planner and other related trusted professional advisors to review your estate planning goals, financial situation, and assets. There are all sorts of unique considerations people face in that demand a thorough review and thoughtful solutions.
Retire with a Reason: Read GFLF’s Latest Article in The Iowa Lawyer
Charitable Giving, From Gordon's Desk..., NewsThe September edition of “The Iowa Lawyer” is now out! Published by the Iowa State Bar Association, this month focused entirely on retirement-related topics. According to the ISBA, there are approximately 2,300 ISBA members who are 60 and older. And, in Iowa in general, people age 65 or older comprise 16.7% of the population. Retiring is a whole different stage in life that can come with newfound challenges as well as benefits. While geared toward Iowa attorneys, many of the insights are applicable in other industries. For instance, succession planning is important for all business owners! Similarly, retirement is a time when charitable giving often gets a boost.
GFLF’s piece focuses on how you can use retirement benefit plans to benefit the charities and causes you care about in a strategic, tax-wise way. This is super important for all Iowans to know (not just attorneys!). In the article we focus in on three important tax concepts:
You can read the full article by clicking here and scrolling to page 23.
Any questions after reading? Feel to explore more on the topic in our other blog posts on the subject or contact GFLF at any time to discuss by email, at gordon@gordonfischerlawfirm.com, or by phone at 515-371-6077.
I Have a Dream: 55 Years Ago Today
UncategorizedThere are few speeches that resonate across space and time in the way that Martin Luther King Jr.’s “I Have a Dream” speech has. Delivered on this day in 1963 from the Lincoln Memorial in Washington D.C., the iconic speech has inspired the importance of hope and change in America for multiple generations. He challenged America to “rise up and live out the true meaning of its creed: ‘We hold these truths to be self-evident, that all men are created equal.'” Take a moment to revisit the speech. You can listen to the audio of the speech on The Martin Luther King, Jr. Research and Education Institute’s webpage and I’ve included the text of the speech below as well below.
I Have A Dream
I am happy to join with you today in what will go down in history as the greatest demonstration for freedom in the history of our nation.
Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of their captivity.
But one hundred years later, the Negro still is not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languishing in the corners of American society and finds himself an exile in his own land. So we have come here today to dramatize a shameful condition.
In a sense we have come to our nation’s capital to cash a check. When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the unalienable rights of life, liberty, and the pursuit of happiness.
It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked “insufficient funds.” But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. So we have come to cash this check — a check that will give us upon demand the riches of freedom and the security of justice. We have also come to this hallowed spot to remind America of the fierce urgency of now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice. Now is the time to lift our nation from the quick sands of racial injustice to the solid rock of brotherhood. Now is the time to make justice a reality for all of God’s children.
It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end, but a beginning. Those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual. There will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges.
But there is something that I must say to my people who stand on the warm threshold which leads into the palace of justice. In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred.
We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again we must rise to the majestic heights of meeting physical force with soul force. The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. They have come to realize that their freedom is inextricably bound to our freedom. We cannot walk alone.
As we walk, we must make the pledge that we shall always march ahead. We cannot turn back. There are those who are asking the devotees of civil rights, “When will you be satisfied?” We can never be satisfied as long as the Negro is the victim of the unspeakable horrors of police brutality. We can never be satisfied, as long as our bodies, heavy with the fatigue of travel, cannot gain lodging in the motels of the highways and the hotels of the cities. We cannot be satisfied as long as the Negro’s basic mobility is from a smaller ghetto to a larger one. We can never be satisfied as long as our children are stripped of their selfhood and robbed of their dignity by signs stating “For Whites Only”. We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied, and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream.
I am not unmindful that some of you have come here out of great trials and tribulations. Some of you have come fresh from narrow jail cells. Some of you have come from areas where your quest for freedom left you battered by the storms of persecution and staggered by the winds of police brutality. You have been the veterans of creative suffering. Continue to work with the faith that unearned suffering is redemptive.
Go back to Mississippi, go back to Alabama, go back to South Carolina, go back to Georgia, go back to Louisiana, go back to the slums and ghettos of our northern cities, knowing that somehow this situation can and will be changed. Let us not wallow in the valley of despair.
I say to you today, my friends, so even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.
I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident: that all men are created equal.”
I have a dream that one day on the red hills of Georgia the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood.
I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice.
I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.
I have a dream today.
I have a dream that one day, down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of interposition and nullification; one day right there in Alabama, little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers.
I have a dream today.
I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all flesh shall see it together.
This is our hope. This is the faith that I go back to the South with. With this faith we will be able to hew out of the mountain of despair a stone of hope. With this faith we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day.
This will be the day when all of God’s children will be able to sing with a new meaning, “My country, ‘tis of thee, sweet land of liberty, of thee I sing. Land where my fathers died, land of the pilgrim’s pride, from every mountainside, let freedom ring.”
And if America is to be a great nation this must become true. So let freedom ring from the prodigious hilltops of New Hampshire. Let freedom ring from the mighty mountains of New York. Let freedom ring from the heightening Alleghenies of Pennsylvania!
Let freedom ring from the snowcapped Rockies of Colorado!
Let freedom ring from the curvaceous slopes of California!
But not only that; let freedom ring from Stone Mountain of Georgia!
Let freedom ring from Lookout Mountain of Tennessee!
Let freedom ring from every hill and molehill of Mississippi. From every mountainside, let freedom ring.
And when this happens, when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual, “Free at last! free at last! thank God Almighty, we are free at last!”
Tax Talk: Iowa’s Inheritance Tax
Estates & Estate Planning, Taxes & Finance, Wills, Trusts & EstatesWe talk about taxes and fees a lot in estate planning because if you don’t have a quality plan in place your estate will likely be hit with taxes and fees to a varying degree. Actual figures depend on the gross value of your estate, what state you lived in, and what strategies you employed (such as a living revocable trust) that help to reduce or even eliminate taxes and fees.
Recently I wrote about one specific tax that only applies to states—the state estate tax. If you don’t have time to read the full post and live in Iowa, the bottom line is that generally you won’t need to worry about it. Unlike places like Minnesota and Illinois, Iowa does not have a state estate tax. However, Iowa DOES have a special “death tax” that only six states in the U.S. have.
What is an Inheritance Tax and how is Different than an Estate Tax?
At first glance the inheritance tax seems mighty similar to the estate tax (both state and federal). Indeed, both are collected after someone’s death. However, an estate tax is assessed by the overall gross value of a person’s estate. This figure totals up all assets passed to all beneficiaries, regardless of their relationship to to the decedent (the person who passed away).
Any estate taxes owed are paid out of the estate assets before beneficiaries receive their distributions. And, the estate executor is responsible for making certain any state or federal estate taxes owed are fulfilled.
The inheritance tax, instead, is a tax levied on assets and property certain beneficiaries have inherited from someone who has died. I say “certain” because in most states the relationship of the beneficiary to the person who died determines if inheritance tax is owed or not. Amount of tax owed is calculated on each eligible beneficiary’s share of the estate and the beneficiary’s relationship to the decedent.
The beneficiary subject to estate taxes is personally responsible for filing the tax. In Iowa this means filling out Form 706 and filing before the due date on the last day of ninth month after death.
Iowa’s Inheritance Tax
The good news in light of all this tax talk is that Iowa’s inheritance tax only applies in certain situations. Not every Iowan who passes away will render their heirs subject to more taxes. For instance, Iowa’s inheritance tax does not apply if the estate is valued at $25,000 or less.
The following, among others, are exempt from Iowa’s inheritance tax:
As you can see, most people won’t ever have to deal with Iowa’s inheritance tax. So, who isn’t exempt as a beneficiary? Domestic partners, friends, and non-lineal relatives such as nieces, nephews, siblings, aunts, uncles, and cousins are all subject to the inheritance tax on the assets they inherit. Assets bequest to corporations or social/fraternal organizations don’t fit the qualifications as “educational, religious, or charitable” and are therefore not exempt.
Iowa’s max inheritance tax rate is 15%. (Which is better than our neighboring state of Nebraska, which has the highest top inheritance tax rate of 18%.)
In case you were wondering, there is no federal inheritance tax to worry about.
How do I Know if my Estate or Beneficiaries will owe Taxes?
Consult with an experienced estate planner and other professional advisors so that may they thoroughly evaluate if your estate will be subject to estate or inheritance taxes. Regardless, it’s a good idea to start looking into strategies and estate planning tools to reduce the burden of (all) taxes on your beneficiaries.
One way to do that during your lifetime is to gift (cash or non-cash) assets during your lifetime. The gift tax rate is currently at $15,000. Meaning the IRS will allow you to give away up to that amount, per donee (person receiving the gift), every year, without facing a gift tax.
I also highly recommend consulting an estate planner and other related trusted professional advisors to review your estate planning goals, financial situation, and assets. There are all sorts of unique considerations people face in that demand a thorough review and thoughtful solutions.
Have any questions or owe inheritance taxes yourself? Don’t hesitate to contact me at gordon@gordonfischerlawfirm.com or by phone at 515-371-6077.