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How Much Does an Estate Plan Cost in Iowa? Rates Should be Transparent!

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cash and checkbook

When estate planning you’re answering many of the unknowns for the future by deciding to whom you want your stuff—your cash assets, real estate, personal property, physical body, to name just a few—to pass to and when. You also have to consider some tough topics about your own mortality and imagine a future for your loved ones that doesn’t involve you in it. Estate planning also has a little bit of a learning curve—figuring out what strategies and documents you may need to help you meet your tax, financial, charitable giving, and estate goals and why. (Just one of the many reasons a qualified estate planner is a must.)

The one thing that shouldn’t be a mystery or an unknown cost is the cost of an estate plan. If you’re going to invest in a quality set of legal documents that never expire, tailored to your personal situation and intentions, you should know what you’re getting yourself into. Click the image below to see a cost breakdown by package. Rate Sheet Checklist

That’s why Gordon Fischer Law Firm is always transparent with estate planning package rates. You can find them at the end of my Estate Plan Questionnaire (the first of many important documents a part of your plan) and you can also find them on this (super shareable!) estate plan package rate sheet.

Don’t have an estate plan? Don’t let any questions about costs hold you back. Get in touch with Gordon at gordon@gordonfischerlawfirm.com or by phone at (515) 371-6077.

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Estate Planning with Cryptocurrency

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hands typing on computer

A cutting edge issue in traditional estate planning is cryptocurrency. “Cryptocurrency” (as defined by Investopedia) is “a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.”

The most common, and for now the unofficial standard for cryptocurrency (AKA altcoin) is Bitcoin. But the market is getting increasingly more crowded with others including Ripple, Dash, Litecoin, and Zcash to name just a few. (For the purposes of this article, we’ll focus on Bitcoin, but these points could be applied to cryptocurrencies in general.)

Many posts could be written about cryptocurrency, its benefits, and its challenges, but this post is focused on how to account for Bitcoin in your estate plan, as opposed to a standard currency, like the U.S. Dollar.

Acknowledge the IRS’ Perspective

The IRS has determined, at least for the time being, virtual currency is treated as personal property for federal tax purposes. So, virtual currency transactions are most definitely not the same as, say, online banking through your local community credit union. Instead, for general tax purposes, Bitcoin is treated like tangible property you own, like a painting or a car.

Establish the Existence of Bitcoin

Unlike a checking or saving account. there are no beneficiary designations on Bitcoin accounts. In fact, quite the opposite — Bitcoin is anonymous. Therefore, if you were to die without communicating that you have Bitcoin, it will die with you.

For security reasons, of course, you won’t want everyone to know about your ownership of Bitcoin. But you do need to develop a method for passing along the important details to a trusted representative such as your named trustee or executor. This is somewhat similar to accounting for digital assets in your estate plan and many of the same steps/tips apply.

Bitcoin falls into somewhat of a “grey” area outside the realm of a pure digital asset, but it also isn’t a pure financial asset. It might make sense to entrust the existence of Bitcoin to the person you assign to take care of your digital assets, especially if they have a better knowledge base of the what/why/how of cryptocurrency.

Make sure the Bitcoin is Accessible

Unlike a traditional bank account, your executor/trustee can’t just simply contact Bitcoin (as they would your community credit union or bank)  after your death. Your agent must have your private key (or username/password depending on the wallet host) in order to access and then distribute the coin as you’ve determined in your estate plan. Again, if you’re the only person who has access to your “wallet,” the Bitcoin will be forever lost in the network. If you’re comfortable with it, you could include your Bitcoin private key on a secure digital archive site like Everplans or, more traditionally, you could keep the key in a safety deposit box.

Estate Planning: On Valentine’s Day Skip the Heart Box & Go for Secure Storage

Plan for the Prudent Investor Act

Many states, including Iowa, have a version of the Prudent Investor Act. (The text of Iowa’s law can be found under the Iowa Uniform Prudent Investor Act.) Under the Act, if you die with a large reserve of Bitcoin, it could be considered an “investment” which the trusted agent could be required to sell and/or diversify. In the face of uncertainty, it’s always better to account for contingencies in your estate plan before your loved ones are faced with a bad scenario. If one of the goals of your estate plan is to grant your executor/trustee the ability to hold your Bitcoin long-term, then it’s wise to include specific language in your will or trust absolving the executor/trustee from liability if they “fail” to diversity your Bitcoin.

Top 10 Estate Planning Goals

Think About Taxes

If your executor/trustee retains your Bitcoin it would not be considered income (at least at the time of this post’s writing). However, if Bitcoin is converted to cash following your passing, it must be declared as income on an estate tax return. Additionally, if your executor were to retain Bitcoin, see it appreciate in value, and then sell it, there is the issue of the capital gains tax. (“The IRS requires American resident taxpayers to report Bitcoin trading income and losses worldwide on U.S. resident tax returns.”) Consider this in your directive of how you would like your Bitcoin to be managed in event of your death.

Fair Market Value: Step Up or Down

The fact that Bitcoin is currently considered personal property means evaluating for either a step-up or step-down in basis given the fair market value on the date of death. (I write more on this in regards to four different types of assets here.)

Let’s consider the hypothetical where Betty inherits 100 Bitcoins (BTC) from Amy. At the time of Amy’s death 1 BTC is worth $50 and when Betty goes to spend 1 BTC, it’s worth $60. That means Betty’s taxable gain on the use of the Bitcoin is $10. How much Amy initially paid for the 100 BTC is irrelevant. Again, the only relevant factor is the fair market value on the date of Amy’s death. It’s wise, as part of your estate planning, to consider your Bitcoin’s depreciation or appreciation to determine how this may affect your heirs. It’s even wiser to discuss your individual situation with professional tax and financial advisors, as well as your estate planning attorney.

Estate Planning is a Must, not an Option

It’s likely we’re going to only see more unique situations, such as that which cryptocurrency presents, in the future. While the future value of Bitcoin may be uncertain, for certain you need an estate plan, and you shouldn’t let your investment die with you. If you already have an estate plan, it’s probably a good time to revisit it to ensure it accounts for assets like Bitcoin. Email me or give me a call (515-371-6077) with questions or to discuss your digital estate planning needs.

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3 Things #SelectionSunday Can Teach You About Estate Planning

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Selection Sunday 2017

1. If you understand #SelectionSunday, and #MarchMadness, you can most certainly understand estate planning.

When I meet people who say they’re confused about estate planning I love to see their faces when I tell them understanding the basics of wills, trusts, and even business succession planning may sound intimidating, but the basics are as simple as understanding NCAA March Madness. Seriously! Many folks know what teams are on the bubble, which teams were playing well at end of the season and which weren’t, what the most likely upsets are, and so on.NCAA Basketballs

Just like all those details are a part of #SelectionSunday and #NCAAMarchMadness, there are multiple inputs that go into a quality estate plan. For starters, there are your personal goals, the six main estate planning documents, and then personal considerations for, say, children, a family with special needs, pets, and charitable bequests. Feel free to read into these estate plan elements (like you would check out the stats of your favorite teams!) in between sweating out your bracket. And, speaking of your bracket…

2. If you have time to fill out a March Madness bracket (and you do), you also have time to fill out an Estate Plan Questionnaire.

Most everyone I know fills out a March Madness bracket in a (mostly) friendly competition with family, friends, co-workers, or sometimes all three. If you have time to fill out a bracket, why not also put serious thought into securing your future with estate planning? No, I’m not trying to guilt you. It’s just, again, it’s not that hard! You can find my Estate Plan Questionnaire here. It’s a great place to start.

March Madness Inspired: 64 Charitable Gifts of Non-Cash Assets

 3. Weird stuff happens.

We all know that a huge part of the fun of NCAA March Madness is the upsets. The super thrilling and/or gut-wrenching endings that shouldn’t have happened, but somehow did. It’s a reminder that life, for better or worse, is quite unpredictable. Why not make sure that plans are in place in case something unexpected happens?

6 Estate Planning Resolutions You Can Actually Keep

Want some more sports to legal analogies in your life? Check out this read on preparing your favorite nonprofit for top-notch compliance.

Regardless of who you’re slating to win it all, I would love to hear from you; let’s schedule an initial free one-hour consultation (at no obligation, of course). Email me at gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077.

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3 Must-Reads: Estate Planning Made Simple

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Gordon Fischer Estate Planning Simple

You know you need an estate plan, but you still don’t understand really what you need or where to start. What to do? I’m here to help and it’s one of my personal missions to break down estate planning so it’s as easy and accessible as possible.

Here are three blog posts, all relatively short and simple, that should help.

First, I provide the very basics of estate planning which features the six “must have” estate planning documents everyone needs.

What We Talk About When We Talk About Estate Planning

For many, the six “must have” estate planning documents is enough. Some Iowans will also want or need a trust.

Second, here are the basics of what you need to know about trusts.

Trusts can be needed and utilized for a number of reasons. Perhaps someone’s assets are too large, too numerous, and/or too complicated and a trust is needed. Perhaps the person simply has a desire to avoid probate. Trusts can also provide a measure of privacy that, say, wills, do not.

Four Major Ways to Classify Trusts

Third, you may ask, how does someone go about actually getting these documents? What’s the process of putting together an estate plan? Well, probably every lawyer has a different estate planning process. I naturally prefer mine – I think it’s very client-focused and client-friendly, and allows plenty of give and take between me and you. We’ll have an ongoing dialogue between us to ensure the best plan for you. Really, it only takes five steps to have a full and complete estate plan.

Estate Planning: Just Five Easy Steps from Start to Finish

Let’s Talk.

After reading these posts you may still have questions or will want to discuss your personal estate situations. I would love to schedule a time to meet or discuss over the phone. Shoot me an email or give me a call and we’ll start the conversation on what YOU need to leave a lasting legacy and secure future for your loved ones.

If you’re feeling good and want to get started on your estate plan, the best place to begin is with my free, no-obligation Estate Plan Questionnaire.

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YOU Are a Super Hero: Charitable Giving Through Estate Planning

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super hero comic book

You are a superhero. Seriously, you have the ability to change the world or, at the very least, your little corner of it. You can affect this level of change just by asking yourself one simple question: what causes would I like to benefit in my will?

Bequests to Charities in Your Will

Yes, that’s right. You can include the nonprofits you care about most in your will, leaving a legacy after you have passed on. And, it doesn’t cost anything extra! Just the assets you’re choosing to gift. You can include charities like your church, alma mater, a local cause, or an international organization in your estate plan. And, if you ask the charity you care about most, I’ll bet they’ll tell you that the result of your charitable bequest, no matter how big or small, can make a huge impact.

Terrible, horrible, no good, very bad idea of NOT having a Will

What About My Kids?

When folks come to me for estate planning help, a major reason they do so—perhaps even the single reason they do so—is to benefit their children. Parents often think, “I love Charity X, but of course, I love my kids even more, and I’ve got to take care of my family.” Of course, you do! And, of course, you should! But, ask yourself another question: How much is enough for my kids? If you have lots of assets, and/or your children are adults, and successful on their own, could you provide adequate support for your children and still also include a bequest to one of more charities?

superhero-costume-children

Let’s Talk

Invite the whole family to the kitchen table sometime (even if your kitchen table is a virtual one, via email) and talk about the distributions you want to make at death. Ask if including gifts to charity from your estate plan would be appropriate and acceptable to the kids. Perhaps it’s a charity the whole family supports. Perhaps this will be the beginning of a multigenerational cycle of giving.

Why not talk about it? This can be an especially productive conversation if you can explain that taxes are going to eat up a lot of one or more of the assets anyway, and this can be avoided by giving said asset(s) to charity (since charities are tax-exempt).

The Importance of Discussing Your Estate with Your Family

Life Insurance

Sometimes when parents give a major asset(s) to charity, and their kids’ inheritance takes a real hit, they’ll buy a new life insurance policy to make up the shortfall to the kids. Or, they may even buy a new life insurance policy and name the charity directly as a beneficiary. There’s also a very helpful kind of trust called an ILIT, that significantly increases the impact of life insurance. Without getting too complicated, let me give you the basics.

An ILIT is an irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies. Upon the death of the insured, the trustee invests the insurance proceeds and administers the trust for one or more beneficiaries.

(Legal) Word* of the Day: ILIT

What is the Role of an Estate Planner?

When it comes to estate planning, you’re thinking about so many different variables and scenarios, so what if you forget to factor in charity? Lucky for you, that’s why I’m here—to help you maximize charitable giving. That means determining how your generosity can not only help an organization make a difference but how you can maximize the financial and estate-related benefits from giving.

9 Reasons You Need a Lawyer to Write your Estate Plan

Studies Showed

A 2013 study* showed how lawyers, like me, can help charitable giving factor in estate planning. The scientifically-conducted research from the UK-based Behavioural Insights Team showed that when lawyers asked clients specific questions regarding charitable giving, the results were significant. Here are the results:

  • Control Group/Baseline

Lawyers who provided no reminder or inquiry to their clients about possibly benefiting a charity in their estate plan (bequests) resulted in 4.9 percent of those clients including a charity in their plans.

  • Test Group One

Lawyers who asked their clients, “Would you like to leave any money to a charity in your will?” resulted in 10.8 percent of their clients including a charity.

  • Test Group Two

Lawyers who said, “Many of our clients like to leave money to a charity in their will. Are there causes you are passionate about?” resulted in 15.4 percent of their clients including a charity. What a dramatic increase!

Here are the approximate dollar values associated with each group:

  • Control Group/Baseline

Average bequest $5,000

  • Test Group One

Average bequest $4,800

  • Test Group Two

Average bequest $10,200

Again, test group two gives a powerful example of the difference charity-minded estate planners can make.

In the study, there were a 1,000 people in each of the groups. That means that the “Test Group Two” raised over $1 million more than the control group.

volunteers taking selfie

What this means for you is that your lawyer plays an important role in reminding, guiding, and assisting you in your charitable giving so that you can use your superpower (giving through your will) to the fullest extent.

In 2017, $35.70 billion was contributed to US charities through bequests. Imagine if everyone worked with a lawyer with a strong focus on charitable giving! The impact could be incredibly transformative for the impact nonprofits can make in our communities.

Let’s Get Started

Harness your superpowers and get started with your legacy today. The best place to start is by filling out my Estate Plan Questionnaire. It’s easy, free, and there’s no obligation. It’s simply a document that gets you thinking and planning. Already have an estate plan, but want to update it to include the causes that are near and dear to your heart? Don’t hesitate to contact me.

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5 Celebrities Who Died Without a Will

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After Prince’s unfortunate death in 2016 the news featured a multitude of articles commemorating his life and artistic influence. After those headlines faded, a new piece of news emerged: the artist died without a will. His estate, estimated to be between $150-$300 million, went to probate in the state of Minnesota and the state court appointed a special administrator to parcel out what Prince actually owned, the value of the property, and whom will actually receive the assets.

Prince Died Without a Will: 4 Reasons YOU Need an Estate Plan

It’s a bad idea for anyone to die without an estate plan in place, as it leaves a great deal up to the law of intestate succession. Most people would prefer to choose their beneficiaries and a trusted executor to carry out their wishes. Under intestacy laws, you cannot choose these important people. You also cannot use your estate plan to achieve goals to reduce or eliminate income, estate, or inheritance taxes. Basically, without a will, you have no control over who gets what of your hard-earned assets at death.

Unfortunately, far too many people (six out of 10 Americans) don’t have estate planning documents like a will or living trust. Plus, since celebrities often have complex and highly valuable assets, dying intestate is often an extremely complicated, litigious affair. (For the sake of your friends, family, and lasting legacy avoiding litigation is a good goal to have with an estate plan.) For instance, a big question in the Prince case is who will be the beneficiary of perhaps one of the most persistently valuable assets—the right of publicity, which includes elements like Prince’s name and likeness.

Avoid the Worst Case Scenario: Litigation over an Estate Plan

While the average Iowan won’t have to consider publicity rights a part of their estate, there are at least six key documents celebs and the non-famous alike should have that cover important elements like finances, healthcare, and personal disposition of property.

Learn from Prince and these other five celebrities (among many more) who passed away without the proper estate planning in place:

  1. Howard Hughes, entrepreneur/producer/aviator

Hughes died on a flight in 1976 with no surviving spouse, child, parent, or sibling. Without a will, his $500 million-valued estate was eventually decided by a small Texas county probate court jury five years after his passing. The probate had brought about a “circus-like” atmosphere as more than 600 people showed up in person claiming to be “wives, sons, daughters, first, second, third, fourth and fifth cousins” of the late Hughes (and that didn’t count all the people who petitioned via letter). A couple of wills were also produced but were eventually thrown out as fakes.

The Howard Hughes Estate: A Cautionary Tale

  1. Amy Winehouse, singer/songwriter

The British artist died in 2011 when she was just 27. Without a will, her estate worth millions went to her parents. Say, even if Winehouse did want her brother to inherit part of the estate, he couldn’t because of (U.K.) laws covering who inherits what.

hollywood sign

  1. Tupac Shakur, rapper/actor

Shakur was tragically shot and killed in 1996 at the young age of 25; after his death, “his mother had to file court papers establishing herself as the administrator of his estate and the sole living heir.” Shakur also left a complex web of financial dealings, spendings, and debts to figure out. Shakur’s estate was made more complicated over the years through several albums of his music (intellectual property) released posthumously. Additionally, Tupac’s biological father lost a lawsuit claiming he was entitled to half of the estate.

  1. Pablo Picasso, artist

It took more than six years of “bitter negotiations” for Picasso’s estate to be settled (for a pricey $30 million) after he died in 1973. Picasso passed at the ripe old age of 91 but did so without a will, so his assets were divided amongst seven familiar heirs. Picasso left a massive amount of valuable assets including 45,000 works of art, five homes, $4.5 million cash, $1.3 in gold, stocks, and bonds. “In 1980 the Picasso estate was appraised at $250 million, but experts have said the true value was actually in the billions.”

5 Celebrities With Crazy Estate Plan Provisions

  1. Sonny Bono, singer/U.S. Representative

Bono passed away in 1998 following a fatal skiing accident with no will to his name. Issues flared when Cher (of their former pop duo Sonny & Cher) alleged he owned her past due alimony and a man named Sean Machu said he was Bono’s illegitimate child. His fourth spouse became the estate’s administrator.

microphone

  1.  Billie Holiday, jazz musician/singer

The famed singer’s estate at the time of her death stands as a paradox to her modern posthumous fame. When Holiday died in 1959 she had “$0.70 in the bank and $750 strapped to her leg.” Since she died intestate under New York state law all of her royalties went to her estranged husband Louis McKay. Her total estate only continued to grow after her death including four Grammy awards, a movie about her life starring Diana Ross, and induction into the Grammy Hall of Fame.

You, yes you, can be a star too, but you need to have an estate plan in place to protect your legacy. The best way to get started is with my free (no obligation) estate plan questionnaire. Or, contact me to discuss your individual situation. Shoot me an email at gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077.

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Four Major Ways to Classify Trusts

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number four on wood

We dove into the definition of the term “trust,” but that’s just the tip of the iceberg when it comes to learning about the important agreement that’s often used for purposes including estate tax liability reduction, estate property protection, and probate avoidance. There are four standard ways of classifying trusts.

Trust Classifications

handshake over table

Trusts may be classified by their purpose, duration, creation method, or by the nature of the trust property. One common way to describe trusts is by their relationship to the life of their creator. Those created while the grantor is alive are referred to as inter vivos trusts or living trusts. Trusts created after the grantor has died are called testamentary trusts. Another helpful classification of trusts is comparing those which are revocable to trusts which are irrevocable.

Inter Vivos Trust

An inter vivos trust, also known as a living trust, may be either revocable or irrevocable. In a revocable trust, the grantor can retain control of the property, if the grantor so wishes, and the terms of the trust may be changed or even canceled. An irrevocable living trust, on the other hand, may not be changed or terminated after it is executed.

What the Queen of England can Teach us about Trusts

Testamentary Trust

A testamentary trust is most often a component of a will. The testamentary trust is created when the trustor passes away. The designated trustee then steps in and distributes or manages the assets of the trust according to the deceased’s wishes.

Show Your Kids You Love ‘Em with a Testamentary Trust

Revocable Trust

A revocable trust allows assets to pass outside of probate, yet allows you to retain control of the assets during your (the grantor’s) lifetime. It is flexible in that it can be dissolved at any time, should your circumstances or intentions change.

A revocable trust typically becomes irrevocable upon the death of the grantor. You can name yourself trustee, or co-trustee, and retain ownership and control over the trust, its terms, and assets during your lifetime. You may also make provisions for a successor trustee to manage them in the event of your death or incapacity.

Although a revocable trust allows you to avoid probate, it’s subject to estate taxes. It also means that during your lifetime, it is treated like any other asset you own.

Irrevocable Trust

An irrevocable trust typically transfers your assets out of your (the grantor’s) estate and potentially out of the reach of estate taxes and probate, but cannot be altered by the grantor after it has been executed. Therefore, once you establish the trust, you will lose control over the assets and you cannot change any terms or decide to dissolve the trust. An irrevocable trust is preferred over a revocable trust if your primary goal is to reduce the amount subject to estate taxes by effectively removing the trust assets from your estate. Also, since the assets have been transferred to the trust, you are relieved of tax liability on the income generated by the trust assets (although distributions to others may have income tax consequences). Trust assets in an irrevocable trust may also be protected in the event of a legal judgment against you

Latest Iowa Lawyer Issue: Read GFLF’s Article on Irrevocable Life Insurance Trusts

Let’s Get Started

You probably still have some questions on trusts…which is why I’m here! Don’t hesitate to contact me. I offer a free one-hour consultation at which point we can discuss your personal situation, see if a trust is right for you, and set up the steps to take for success.

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Cozy Up this GoFisch Book Club Pick: Sycamore Row

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books on a table

Hopefully, by now you have had a chance to read last month’s GoFisch Book Club pick, “Made to Stick: Why Some Ideas Survive and Others Die.” While I could complain about how the weather right now in Iowa is in a perpetual state of snow-ice-snow-wind-freezing rain, it’s actually a great excuse to curl up with cocoa and a great book. The title for this month is not a new book, but it is an enticing, mystery involving, what else, estate planning!sycamore row

Published in 2013, John Grisham’s Sycamore Row leads readers on a trip to the south in 1980’s Mississippi where a wealthy white man, Seth Hubbard, commits suicide and leaves his entire estate to his black housekeeper, Lettie Lang, instead of his two adult children, Herschel and Ramona. (I bring up the race of the characters because racism and prejudice are important themes in the novel’s setting and plot conflicts.) Sycamore Row is a sequel for fan-favorite character and fictional attorney, Jake Brigance, who was introduced to the world in Grisham’s most famous book, A Time to Kill.

Brigance is instructed by the decedent to defend his will against the inevitable controversy and litigation he anticipates will ensue. Over the course of the thriller, another will is unearthed which disposes the estate to Hubbard’s children. There are also serious questions about Hubbard’s purported testamentary capacity, as well as undue influence on the legal documents in question.

Grisham’s career as an attorney has clearly influenced his writing, and this novel offers suspense and intrigue around the topic of estate planning, while also reinforcing the importance of making a valid estate plan, keeping it updated, and discussing your decisions with your family.

What are your thoughts on Sycamore Row? I would love to hear them! Also, if the book inspires you to make certain you have a valid estate plan in place so that you can disperse your estate in accordance with your wishes, don’t hesitate to contact me! You can also get started on your estate plan with my free, no-obligation Estate Plan Questionnaire.

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Valentine’s Day For Married Couples: Give your Spouse a Worthwhile Gift

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heart lock on bridge

You’ve been perpetually reminded by commercials, Facebook ads, and the candy aisle at the store that everyone’s favorite pink, red, and chocolate-dipped holiday is coming up quick. In this #PlanningForLove series through February 14, I’m featuring different aspects of how estate planning oddly but perfectly fits in with a day all about love. For this post, I’m going to focus on married couples because, despite the commercialization and overpriced flowers, Valentine’s Day seems as good as time as any to celebrate your spouse!

Let’s face it, it’s a miracle any of us find a soul mate, a best friend, a partner in crime…whatever you call them…that not only tolerates all your weirdness on the daily, but also still loves you “for richer or poorer” and “through sickness and in health.” I can think of no better way to honor that kind of long-term commitment than to take the appropriate estate planning steps with your sweetheart in mind. I realize it may not be the most romantic gesture, but it’s WAY more valuable than stale chocolates or a heart-holding teddy bear. And, like your love, there is no expiration date on an estate plan.

For richer or poorer makes a lot of sense when put in the context that someday you are going to pass away and you probably want to pass your assets to your spouse (and heirs at law) while also minimizing the burdens. If you die without a will it will cost your beloved a lot of time and money, on top of anxiety and even heartache.

Estate Planning: On Valentine’s Day Skip the Heart Box & Go for Secure Storage

In sickness and health also directly relates to one of the main estate planning documents. For instance, say you were in an accident and were severely incapacitated. You would want to have your health care power of attorney established and kept updated (many spouses choose one another as the designated representative), so that important medical decisions could be made by someone you trust to do what’s in your best interest.  The same goes for a financial power of attorney. There are many aspects of your separate finances you may want to designate to your spouse so they could settle or manage specific assets in the case that something happened to you.

Beyond the numerous benefits that come with the six main estate planning documents that all Iowans need (yes, all Iowans, young and old; rich and not wealthy!), what are the other considerations of spouses should have in regard to estate planning?

couple in love with writing on wall

What’s Mine is Yours: Common Law Property

The majority of states, including Iowa, are called “common law property” states. (As opposed to the alternative—community property states—which applies to eight states.)

In this case, “common law” is simply a term used to determine the ownership of property acquired during the marriage. As in, the common law system provides that property acquired by one member of a married couple is owned completely and solely by that person. Of course, if the title or deed to a piece of property is put in the names of both spouses, then that property would belong to both spouses. If both spouses’ names are on the title, each owns a one-half interest.

If your spouse were to pass away in a common law state, his or her separate property is distributed according to his or her will, or according to intestacy laws without a will. The distribution of marital property depends on how the spouse’s share ownership—the type of ownership.

If spouses own property in “joint tenancy with the right of survivorship” or “tenancy by the entirety,” the property goes to the surviving spouse. This right is actually independent of what the deceased spouse’s will says. However, if the property was owned as “tenancy in common,” then the property can go to someone other than the surviving spouse, per the deceased spouse’s will. Of course, not all property has a title or deed. In such cases, generally, whoever paid for the property or received it as a gift owns it.

The Best Valentine’s Date Isn’t What You Think

‘Til Death do us Part: Forced Share Law

If married, technically your spouse cannot disinherit you. An Iowa statute allows spouses to take a “forced share” against the will. In short, the surviving spouse has a choice; the spouse can inherit any property bequeathed to him/her under the will, OR the spouse can take a forced share. So, even if a will leaves nothing for the surviving spouse, the surviving spouse can take a forced share against the will.

Under Iowa law (specifically, Iowa Code § 633.238), a surviving spouse that elects against the will is entitled to:

  • One-third of the decedent’s real property;
  • All exempt personal property that the decedent held; and,
  • One-third other personal property of the decedent that is not necessary for payment of debts and other charges.

In other words, a surviving spouse can choose (elect) after your death to basically ignore your will or trust that doesn’t provide for said surviving spouse, and take approximately one-third of your estate.

For example, if you left your entire estate to your children and not your spouse, your spouse can say, “You know, I don’t like this at all. I’ll take one-third of my dead spouse’s estate. Thank you!” And, pretty much just like that, boom, the surviving spouse can do so.

Preferred Portability: Unlimited Marital Deduction

The unlimited marital deduction is a money-saving must for married couples. The unlimited marital deduction is an essential estate preservation tool because it means an unrestricted amount of assets can be transferred (at any time, including at death) from one spouse to the other spouse, free from taxes (including the estate tax and gift tax). Note that the marital deduction is available only to surviving spouses who are U.S. citizens. If your spouse is not a U.S. citizen, look at other tools, such as a qualified domestic trust (QDOT), which may act to minimize or eliminate taxes.

Property Passage

If you acquired property (like a house or other significant asset) before getting married, take a look at re-titling property (such as a home) from sole ownership to joint tenancy. This means that if one spouse were to pass, the other would get the property without it passing through probate. (Depending on your situation, you could also consider “tenancy in common” as another option for holding property titles under multiple names.)

love me when I'm dead graffiti

Joint Representation is Optional

Married couples often seek joint representation in estate planning, meaning they both utilize the same estate planning lawyer. (And, yes, you most definitely want to hire a qualified, experienced estate planner.)  The benefits are obvious; joint representation can be cost-effective and can be more efficient since you can work together on a single Estate Plan Questionnaire in preparation to meet with the estate planning lawyer. Another advantage is that the joint representation somewhat forces open and honest communication between you as a couple as you make decisions on beneficiaries (such as children and grandchildren), executors, and disposition of property.

However, individual representation is, of course, an option and can help couples avoid conflicts of interest.) There are times when it is best for each spouse to seek separate legal counsel. One such time is when there are different interests that are at odds with each other. For example, if one or both people have children from a previous marriage/relationship that will be named as beneficiaries. There can be conflicting interests between stepparents and stepchildren when it comes to the estate. Additionally, if you both have your own individual estate planning lawyer, you may have more freedom to voice individual concerns, without having to audit your opinions in accordance with your partner’s desires.

All You Need is Love…and an Estate Plan

You’ve worked hard for the life you’ve built together with your spouse. This Valentine’s Day, give a gift that ensures your commitment will carry on even after one of you passes on. The best way to get started is with my free, no-obligation Estate Plan Questionnaire. You can also email or call (515-371-6077) me at any time. I’d love to explain more how an estate plan says, “I love you,” way better than a card ever could!

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4 Major Reasons YOU Need a Will

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Discussion of will and estate plan

Yes, YOU need a will. If you don’t have a will, it can cost your family and friends not only a lot of time and money, but also lots of anxiety and even heartache.

Here are four major (and certainly not the only) reasons wills are one of the most essential estate planning documents that you should most definitely have.

#1 Without a will, probate courts and the Iowa Legislature decide everything about your estate.

If you die without a will, you are leaving it up to the legislature/courts to decide who will receive your property. In some situations, even who will get to raise your children.

#2 Without a will, you cannot choose a guardian for your children.

You read that right. Without this essential estate planning document, the court will choose guardians for your children. One of the most important aspects of a will is that it allows you to designate who will be the guardian for minor children. This can ensure your children are cared for by the person that you want, not who the court chooses for you.

The Kids are Alright: Guardianship for Children

#3 Without a will, the probate court will choose your estate’s executor.

If you die without a will, the probate court is forced to name an executor. The executor of your estate handles tasks like paying your creditors and distributing the rest of your assets to your heirs. Of course, if the probate court has to pick who will be your estate’s executor there is always a possibility that you would not have approved of that person if you had been alive.

However, if you have this ever important document, it will name an executor who will be responsible for carrying out all of your final wishes, pay your bills, and distribute your assets just as you wanted.

Couple sitting on bench talking about will

#4 Without a will, you can’t give your favorite nonprofits charitable gifts from your estate.

If you die without a will, your estate assets—your house, savings, automobiles, property—will pass to your heirs under Iowa’s statute. This excludes you from the enormous potential to do good by donating charitable gifts to your favorite nonprofits in your will. Testamentary gifts can help ensure causes you care about are supported well into the future.

Do you have a will? Why or why not? I’d love to hear from you in the comments below.

For Iowans looking for a place to start their estate planning, check out my estate plan questionnaire. It’s free, and provided to you without any obligation. I’m also happy to discuss your individual situation to help determine what estate planning tools are best for you. Reach out via email or phone at any time.

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