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Spooktacular Savings on Probate Fees

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person with sparkler spooky

Forget the scariest movies of all time, did you hear the unnerving tale about the will admitted to probate? Frightening stuff!

Some folks are surprised, even shocked, to learn that a will doesn’t avoid probate, but it doesn’t. Whether you die intestate (no will), or even with a will, your estate must pass through Iowa probate court. If you have an estate plan (including a will) this process is much more smooth and simple for your loved ones, because you’ve clearly told them, and the court, how you want your property dispersed. But, even with a basic estate plan, this is still a judicial process. (Plus your will becomes public record when it goes through probate.) The only practical way to avoid probate is through a revocable living trust. The “living”part of this means a trust that is established and funded by you during your lifetime.

Funding and Administering Your Living Trust

Trust in the Trust

A trust can sound somewhat elusive. And you may think it’s reserved just for the very wealthy, like that strange couple that live in the huge, dark mansion on the hill. However, a trust can be an incredibly important tool in many situations and provide multiple advantages.

spooky haunted mansion

Save Time & Money

Time

One of the major benefits of a trust is that it enables your loved ones and your favorite charities—your beneficiaries—to avoid the time and financial costs of probating a will. This is because, upon death, the property and assets are already distributed to the trust. Otherwise, the probate process can take anywhere from several months to more than a year to complete.

Fees

Probate can also be expensive considering fees. Fees and costs can reduce your estate by 4%, or even more. Executor’s fees, and attorney’s fees are both authorized by Iowa statute to be as high as 2% each, for a total of 4%, and that doesn’t include court costs. While that may not sound like a lot, it can actually equate to a good chunk of money that you would most certainly rather pass along to your heirs or to your favorite charity. Far more often than not, the cost of creating a trust is considerably less expensive than the cost of probate would be.

The Case of Frank E. Stein

bats in the sky

A simple example. Let’s suppose Frank E. Stein’s estate is worth $2 million. This may sound like a lot, and it is, but consider things like a large, expensive house, or a second home, or a vacation home, or a farm, or a family business, can rather easily push an estate into the multi-millions territory. Again, with Frank’s estate worth $2 million, a “shave” of 4% reduces the estate by $80,000. That’s $80,000 that could have gone to Frank’s favorite charity, The Home for Wayward Bats. A revocable living trust, completed by a qualified estate planner, would cost around $2,400.

Privacy

Revocable living trusts offer an additional benefit: privacy. When a will is filed with the Iowa probate court upon death, the will becomes a public record. Trusts, on the other hand, remain private documents. You may not want your friends, neighbors, monsters, and others to know the contents of your will. Like all good mysteries, some things are better left a mystery.

Start a Conversation

scary forest path

Considering all the aspects of a trust doesn’t have to feel like a twisty path through a scary forest straight out of Grimm’s Fairy Tales. I’m more than happy and willing to be your guide. Don’t hesitate to reach out; email me at gordon@gordonfischerlawfirm.com or call at (515) 371-6077.

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6 of the Scariest Things Your Nonprofit Can Do

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Girl holding scary pumpkin

Horrifying. Blood curdling. Hair raising.

These are just a few of the adjectives that can be used to describe six of the scariest things your nonprofit can do (or fail to do). As a lawyer who regularly works with nonprofit organizations to help them succeed in pursuing their missions, these six items literally haunt my nightmares.

  1. Failing to have an employee handbook with necessary policies.

Spine chilling!

Seriously? How can you NOT have an employee handbook? An employee handbook (even if you have but a single employee) makes clear the rights and responsibilities of both the employer and employee. So many disputes can be avoided by a clear, easy-to-read, and direct employee handbook. One of your best bets to fight off this spooky scenario is to get my free guide to developing a quality employee handbook!

5 Necessary Policies for your Employee Handbook

  1. Merely copying a handbook off the Internet or “borrowing” it from another nonprofit.

Very eerie!

This is about as bad as not having a handbook at all! Just grabbing a random handbook and adopting it as your own makes as much sense as picking up a random hitchhiker on a foggy night. Others’ employee handbooks may have provisions you don’t need, or worse, ones you don’t want.

I once reviewed a handbook for small-but-sincere nonprofit that worked with the homeless. Several times in the handbook, quite specific medical terms came up—there was a HIPPA provision, there was talk about medical certifications, medical training, and proper handling of medical records. I realized, with a shock, this nonprofit had “borrowed” a handbook from a hospital.

How much faith or confidence will employees have in an employee handbook that’s filled with irrelevant stuff that clearly doesn’t apply to them at all? This is scary stuff, folks, very scary stuff.

Scary skeleton skull

  1. Failing to have an appropriate disclaimer in your nonprofit’s employee handbook

Truly frightening!

An employee handbook is just an employee handbook . . . or so you may think. But, what happens when it doesn’t have an appropriate “disclaimer?”

An employee handbook may constitute an employment contract! If you think about it, an employee handbook has all the elements of a contract—it’s written, it’s specific, it “promises” certain things will (or won’t) happen. It’s even “signed” by the nonprofit/company.

So, an employee handbook could actually be considered a unilateral employment contract unless the employer includes an appropriate disclaimer. Make sure you do so.

When is an Employee Handbook not an Employee Handbook?

  1. Not having adequate job descriptions

Terrifying!

Job descriptions are so important – for the same or similar reasons that employee handbooks themselves are needed. Job descriptions lay out in writing what is required of employees.

Job descriptions are also helpful in relation to what is now-called the American with Disabilities Act Amendments Act (ADAAA). Job descriptions demonstrate the “essential functions” (as opposed to non-essential) job functions of each position.

Also, strongly consider job descriptions for board members.

  1. Failing to have an acknowledgement page in your nonprofit’s employee handbook

Dreadful!

It is critically important your employee handbook include an acknowledgment page that the employee signs and returns. The acknowledgement page should state that the employee understands it is his or her responsibility to both read and follow the policies. The acknowledgement page should be able to be separated from the handbook, so that it can be signed by the employee and saved in the employee’s personnel file.

harvest moon

  1. Not making absolutely clear that your new employee handbook supersedes other, older policies

Ghastly!

Your nonprofit’s new employee handbook must make clear it trumps other, older policies and provisions. The employee handbook needs a “superseding” provision. This provision must state unambiguously this employee handbook is indeed the most up-to-date guidance on your nonprofit’s policies.

ghost in coffee mug

Wow, that was super scary!

After writing this post, I probably won’t sleep well tonight. But, if you follow these six pieces of advice you’ll rest easy knowing that you’re more likely avoid the nonprofit graveyard. If you’re facing these spooky scenarios don’t hesitate to reach out by phone (515-371-6077) or email to schedule a free consultation. You can also

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