Posts

Happy Father’s Day! Give Dad A Gift That Lasts Forever!

, , , , ,
father's day

To all the dads out there, happy Father’s Day! We all have our own unique relationships and therefore unique lists with an endless number of things we can and should thank our dads for. But the one thing we all have in common is there are not enough words and never the perfect gifts that fully encompass how thankful we are for all they’ve given us. A dapper tie, classic “#1 dad” t-shirt, a new tool for the toolbox, the hippest craft beers, these are all great. These gifts are kind, but they pale in comparison to all the tangible and intangible things your *pops* has given you over the years.

That’s why I propose this year you give your father a gift that’s unconventional, yet incredibly valuable…an estate plan! Why is this one of the greatest gifts for a loved one?

  • An estate plan leads to peace of mind. Your dad can feel good knowing if the unexpected happens, then the legal “stuff” surrounding your life is accounted for.
  • Estate planning means that you (the testator) get to make the decisions about who you want to have what stuff and when.
  • Estate planning isn’t just about death. Documents like financial and health care powers of attorney play an important role if (gosh forbid!) your father were to be incapacitated by an accident or illness. Everyone wants the ability to choose the people they want to make important decisions regarding their money and health instead of a court-appointed guardian or conservator.
  • Estate planning saves your family (including dads for sure!) time and money in attorney’s fees and court costs in the probate process.
  • By encouraging your father to execute an estate plan, you are recognizing that you want his wishes to be heard on important matters like disposition of final remains and a living will. (It makes up for all the times you didn’t follow directions as a kid!)
  • Estate plans can also be seen as a representation of your everlasting love for your father, because estate plans never expire! They need to be reviewed regularly and updated when goals or big life-changing events happen, but a valid estate plan will last as long as your mom wants it to. What other Father’s Day gifts can you say that about?
  • Help your father leave an enduring legacy. Estate planning means your dad can plan for his estate to benefit the causes and organizations he cares for through charitable bequests.

How do you gift someone an estate plan you ask? Well, you certainly can’t buy one at a store, but this is your chance to get creative.

  • Gift the gift of information.Even sharing the benefits and educating your dad on the main components of an estate plan is an amazing present.
  • Connect him with an estate planning attorney.Sometimes the hardest part of estate planning is simply getting started. When you work with an estate planning attorney (in lieu of something with a high potential for negative unintended consequences like a DIY will off the internet), they help guide and consult you through the process on top of writing the actual documents.
  • Give a storage container.This is a gift you could actually put a bow on! There are many different ways you can choose to store your estate plan, so take stock of what your father has in terms of secure storage. Is there a locked file cabinet readily available or does he need a water-proof, fire-proof place to keep his original estate plan? The storage container could be a sort of representative for the estate plan that is to come.
  • Help dad gather information to fill out an Estate Plan Questionnaire. An Estate Plan Questionnaire helps you and your attorney collect all the important details related to your estate in one place.
  • Gift your assistance. Let your father know that when he’s ready to discuss his planning decisions that you’ll be there to listen, and if necessary, bring your siblings (if any) and all other family members to the table so that everyone is on the same page.

Already got your dad a gift? That’s wonderful! I’m sure he would love it in addition to an estate plan!

Questions, concerns, or otherwise from you or your father? Contact me at any time via email or phone (515-371-6077).

/by

Estate planning for Married Couples: Avoid Conflicts of Interest

,

Estate planning is all about strategy—leaving the right assets and inheritances to the right beneficiaries; timely distributions of the estate; and avoiding as many taxes and fees as possible. Another strategic move is deciding whether you and your spouse should use the same lawyer, or whether you should each have your own lawyer.

If you are married, please note you have the option of hiring separate attorneys for your estate planning needs.

Though the goals of most married persons are the same when it comes to wills, trusts, and estate planning, some married individuals (especially individuals who have children from prior marriages) have differing views on the ownership of property and beneficiaries, and naming executors, trustees, and guardians.

Likewise, some married individuals have private information they do not wish to share with their spouse — information that may be essential to the estate planning process that would have to be disclosed to the attorney and, therefore, disclosed to the spouse if I am representing both spouses.

Additionally, sometimes married individuals have “awkward” questions they wish to ask the attorney — questions they would not be comfortable asking in the presence of their spouse, such as how a divorce might affect their estate plan.

By obtaining separate attorneys, you would be able to:

  1. share in confidence any secrets or private information with your attorney that may be important to the estate planning process;
  2. ask in confidence whatever questions you may have; and
  3. receive completely confidential advice and counsel. 

If represented jointly, you will be waiving and losing all three of the above rights with respect to your spouse.

If you decide to obtain separate attorneys, this firm would be pleased to represent either one of you separately. If you are married and decide you would like this firm to represent both of you, then complete this Estate Plan Questionnaire jointly (please do not fill out two separate forms).

Joint Representation

 

Two brides in white wedding dresses

For many married couples, joint representation is a likely choice. 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.

It’s important for your lawyer to avoid conflicts of interest, so they can uphold and respect your attorney-client privilege. If you choose to have joint representation you may waive the conflict of interest clause so that you may be represented together. Or, of course, you can seek separate legal counsel and not sign such a clause.

Young Couples Should be the Most Concerned with Estate Planning

This communication is critical if you opt for joint representation. Without it, disaster can strike mid-meeting with the lawyer if couples disagree about which child is most responsible in terms of estate execution or how much of a trust fund each beneficiary should receive at age 18.

Individual Representation

 

couple holding hands in green space

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.

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

Have questions? Need more information? A great place to start is by downloading my Estate Plan Questionnaire, or feel free to reach out at any time; my email is Gordon@gordonfischerlawfirm.com and cell phone is 515-371-6077. 

/by

You Are A Superhero: Charitable Giving Through Estate Planning. (Everything* You Need to Know About Estate Planning: Day 7)

, , , , ,

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

BEQUESTS TO CHARITIES IN YOUR WILL

You can include the nonprofits you care about most in your will, leaving a legacy after you have passed on. You can include charities like your church, alma mater, a local cause, or an international organization in your estate plan. If you ask the charity you care about most, I bet they’ll tell you that your charitable bequest, no matter how big or small, can make a huge impact. 

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 you should! However, I implore you to ask yourself another question: 

How much is enough for my kids?

If you have an abundance of assets, and/or your children are independent adults, could you provide adequate support for your children and include a bequest to one or more charities?

LET’S TALK

Invite the whole family to the kitchen table sometime (even if your kitchen table is a virtual one, via email or Zoom) 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 for your children. 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 chunk of one or more of the assets, which can be avoided by giving said asset(s) to charity (since charities are tax-exempt).

LIFE INSURANCE

Sometimes when parents give a major asset(s) to charity, and their kid’s inheritance takes a real hit, they’ll buy a new life insurance policy to make up the shortfall to the kids. 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 explain 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 to one or more beneficiaries.

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, I’m here to help you maximize your 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 of giving.

STUDIES SHOWED

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

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 group. That means that “Test Group Two” raised over $1 million more than the control group.

Certainly, your lawyer plays an important role in reminding, guiding, and assisting you in your charitable giving so that you can use your superpower – charitable 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 nonprofits make in our communities could be incredibly transformative.

LET’S GET STARTED

Harness your superpowers and start 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 to get you thinking and planning. 

Already have an estate plan and want to update it to include the causes that are near and dear to your heart? Don’t hesitate to contact me.

*OK, not everything. But many things, let’s say, an excellent start.

/by

Everything* You Need to Know About Estate Planning (Day 1)

, , , ,

Estate planning.

Not exactly material for scintillating conversation. In fact, I’d bet most of us like to avoid this topic because it can be confusing, and it requires lots of decision-making. And, well, yes, it forces one to think about one’s own mortality. Estate planning, after all, is a roadmap about what you want to happen after you move on from this life. While it may not be a fun topic, it is indeed a necessary one.

ESTATE PLAN: YOU ALMOST SURELY NEED ONE

Almost everyone needs some kind of estate plan. If you’re young, healthy, unmarried, have no children, and have no significant or unusual assets . . . perhaps you could talk me into the idea that you don’t entirely need an estate plan. Even in such (rare) cases, I strongly recommend making sure your beneficiary designations are completed and up to date (for example, on your bank/credit union savings accounts and retirement benefit plan). But, if you are married, and/or have kids, and/or have significant or unusual assets, and/or own part or all of a business, you most definitely need an estate plan!

WHAT IS AN ESTATE PLAN, ANYWAY?

What do we talk about when we talk about estate planning? There are six documents that should be part of most everyone’s estate plan and you should keep each updated and current. Also, don’t forget about assets with your beneficiary designations. For most Iowans, that’s good – six documents, keeping them current, and also remembering about those assets with beneficiary designations.

Sure, estate planning is complicated, but not that complicated. I’ll show you.

SIX “MUST HAVE” DOCUMENTS OF YOUR ESTATE PLAN

There are six documents that should be part of most everyone’s estate plan:

  1. Estate planning questionnaire
  2. Will
  3. Power of attorney for health care
  4. Power of attorney for financial matters
  5. Disposition of personal property
  6. Disposition of final remains

We’ll go through each document briefly, so you have a sense of what each entails.

ESTATE PLAN QUESTIONNAIRE

Estate planning involves facing heavy questions and, depending on the amount of assets and beneficiaries you have, may take quite a bit of time and thought. I recommend clients (and even those who aren’t my clients) complete an estate plan questionnaire.

An estate plan questionnaire is an easy way to get all of your information in one place, and it should help you understand and prioritize estate planning goals. (I must also admit a questionnaire makes it easier for your attorney to build your estate plan!)

As with any project, it helps “to begin with the end in mind.” A questionnaire can help get you there.

LAST WILL AND TESTAMENT

Now let’s get to the will. The will is the bedrock document of every estate plan, and it’s a little more complicated than other documents.

With your will, you’ll be answering three major questions:

  1. Who do you want to have your stuff? A will provides for orderly distribution of your property at death according to your wishes. Your property includes both tangible and intangible things. (An example of tangible items would be your coin collection. An example of an intangible asset would be stocks.)
  1. Who do you want to be in charge of carrying out your wishes as expressed in the will? The “executor” is the person who will be responsible for making sure the will is carried out as written.
  1. Who do you want to take care of your kids? If you have minor children (i.e., kids under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults.

POWER OF ATTORNEY FOR HEALTH CARE

A power of attorney for health care designates someone to handle your health care decisions for you if you become unable to make those decisions for yourself. This essentially gives another person the power to make decisions on your behalf. For example, if you don’t want to be kept alive with machines, you can clearly outline that in your power of attorney for health care. But keep in mind that power of attorney for health care isn’t just about end-of-life decisions – it can cover any medical situation.

POWER OF ATTORNEY FOR FINANCIAL MATTERS

The power of attorney for financial matters is similar, only your designated agent has the power to make decisions and act on your behalf when it comes to your finances. This gives them the authority to pay bills, settle debts, sell property, or anything else that needs to be done if you become incapacitated and unable to do this yourself.

It might be obvious by now, but I’ll say it just in case: choosing an agent for a power of attorney requires that you think long and hard about who would be best suited for the job and who you trust.

DISPOSITION OF PERSONAL PROPERTY

Now, let’s get to the disposition of the personal property. This is where you get specific about items you want particular people to have. If you’re leaving everything to one or two people, then you may not need to fill this out. But, if you know you want your niece Suzie to have a specific piece of jewelry, and your nephew Karl to have that antique bookshelf he loved, then you’d say so in this document.

DISPOSITION OF FINAL REMAINS

We come to the disposition of final remains. This document is where you get to tell your loved ones exactly how you want your body to be treated after you pass away. If you want a marching band and fireworks shooting your ashes into the sky (that’s a thing, by the way), then this is where you make it known. It can be as general as simply saying “I want to be cremated,” or it can be specific and include details of plots you’ve already purchased or arrangements you’ve already made.

KEEP UPDATED AND CURRENT

OK, so you’ve gone to an estate planning lawyer, and these six “must have” estate planning documents have been drafted and signed. What else? You need to keep these documents updated and current.

If you undergo a major life event, you may well want to revisit with your estate planning lawyer, to see if this life event requires changing your estate planning documents.

What do I mean by a major life event? Some common such events would include:

  • The birth or adoption of a child or grandchild
  • Marriage or divorce
  • Illness or disability of you, your spouse, or other family member
  • Purchasing a home or other large asset
  • Moving to another state
  • Large increases or decreases in the value of assets, such as investments
  • If you or your spouse receives a large inheritance or gift
  • If any family member, or other heir, passes away

This is just a short list of life events that should cause you to re consider your estate plan. There are many others.

DON’T FORGET ABOUT YOUR BENEFICIARY DESIGNATIONS

There are six “must have” estate planning documents, plus you need to keep them current. Also, don’t forget about your beneficiary designations. For example, savings and checking accounts, life insurance, annuities, 401(k)s, pensions, and IRAs are all transferred via beneficiary designations. These beneficiary designations actually trump your will.

Regarding assets with beneficiary designations, you must make sure that designations are correctly filled out and supplied to the appropriate institution.

WHAT OTHER DOCUMENTS MIGHT YOU NEED BESIDES THESE SIX “MUST HAVE” ESTATE PLANNING DOCUMENTS? 

For many Iowans, what I’ve outlined above is enough. There may be folks who have, say, more than $1 million in assets, or who have complex assets (for example, more than one piece of real estate), or own part or all of a robust business, or otherwise have unusual situations. In such cases, a trust may be helpful. But that will be more “advanced” estate planning. What I’ve described above is an excellent start.

There it is in a nutshell. This is what goes into an estate plan.

Whether it’s complicated or simple, it does require some thought and time. But it’s worth the investment – a proper estate plan can save you and your estate costs and fees; help your family and friends; and provide you peace of mind.

Perhaps most importantly, through proper estate planning, you can help your favorite charities in ways large and small. Really, without estate planning, it’s not possible, at your death, to help nonprofits you care about. With an estate plan, you can be a real-life charitable superhero!

BEGIN TODAY

Why not start right now on your own plan for the future with my free estate plan questionnaire? It’s provided to you free, without any obligation. I would love to discuss your estate plan with you; reach out at any time by email, gordon@gordonfischerlawfirm.com, or cell phone, 515-371-6077.

*OK, not everything. But many things, let’s say, an excellent start.

/by

What do Wills and Tattoos have in Common?

,
woman with tattoos

A will is the bedrock of every estate plan. But, even though most people know they should have one, they don’t know what a will is, what goes in it, or how it works. In fact, only one in four adults in America (25%) has a will—that’s roughly the same number who have tattoos (23%). Look at it this way: you can take your tattoo to the grave, but your assets that stay above ground need to be administered properly.

Wills: the bottom line

A will is a legal document that provides for the orderly distribution of your personal property at death according to your wishes. It spells out your directions regarding other important matters such as the care of any minor children, the transition of business assets, and the naming of an executor who will oversee its directives are followed.

4 Major Reasons YOU Need a Will

What if you DON’T have a will

Not having a will means the judicial system (the “court”) will end up administrating your estate through the lengthy process of probate in accordance with state intestate laws. There is no guarantee this process will result in dispersing your assets in the way you would have wanted. This process can cost your family not only a lot of time and money, but it can also lead to anxiety and heartache.

Spooktacular Savings on Probate Fees

Will is NOT an estate plan, and vice versa

The will is the bedrock document of every estate plan, and it’s a little more complicated than other documents. With your will, you’ll be answering four basic but very important questions. I’ll list the questions, then discuss each separately.

a. Who do you want to have your stuff?

b. Who do you want to be in charge of carrying out your wishes as expressed in the will?

c. Who do you want to take care of your children? If you have minor children (i.e., children under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults.

d. What charities do you want to benefit when you’re gone. A will is a great way to benefit your favorite nonprofits.

YOU Are a Super Hero: Charitable Giving Through Estate Planning

Who do you want to have your stuff?

A will provides orderly distribution of your property at death according to your wishes. Your property includes both tangible and intangible things. (An example of tangible items would be your coin collection. An example of an intangible asset would be stocks.)

A will provides the orderly distribution of your tangible and intangible property at death according to your wishes.

Tangible personal property is usually considered to be everything (other than land) that has physical substance and can be touched, held, and felt. Examples of tangible personal property include furniture, vehicles, baseball cards, jewelry, art, your Great-aunt Millie’s teaspoon collection, and pets. Intangible personal property doesn’t have a physical existence so it can’t be touched, but it nevertheless has value. Your intangible personal property might include bank accounts, stocks, bonds, insurance policies, and retirement benefit accounts.

Most people think “real estate” or “land” when they hear the word “property,” but “property” has a different meaning when it comes to estate planning.

There are generally considered two basic categories of property: real property and personal property. Real property is land and whatever is built on the land, attached to it, or natural to it such houses, barns, grain silos, tile drainage lines, and mineral rights. Personal property is essentially anything that is not real property. Two qualities of personal property to keep in mind: it is moveable and it can be hidden. Jewelry, cash, a pension, and antiques are kinds of personal property.

Example: The fenced acreage you own is real property because it is land that is immovable. But, the cattle on it are personal property because they can be moved—or hidden.

Legal Words of the Day: Tangible Property & Intangible Property

Who’s in charge?

Who do you want to be in charge of carrying out your wishes as expressed in the will?

An executor is a person who’s in charge of your estate plan. You entrust your executor with the authority to ensure that your wishes are carried out and that your affairs are in order.

Beneficiaries, Executors, and Guardians, Oh My!

Managing an estate plan is not an awful job, but it is an awful lot of responsibility. If you have never dealt with the execution of a will, you might not know how time-consuming, complicated, and demanding it can be. You may also be grieving at the deceased’s passing while trying to make sure all particulars are handled properly. It can be a stressful role, to say the least.

When picking an executor, you want to make sure it’s someone you trust, but also someone you know can handle the complexities and responsibilities of the job. We all have people in our lives whom we love, but recognize they’re not dependable when it comes to things like finances and managing paperwork. Choose someone in your life who is organized, detail-oriented, and can take on what is essentially the part-time job of administrating your estate.

If there’s no person in your life you believe trustworthy or capable enough to be your executor, or you don’t want to burden with the role, you have another option: appointing a corporate executor or trustee. You can find corporate executors and trustees at banks and private investment firms. They usually charge a fee based on the size of the estate. But corporate executors and trustees have the advantages of experience, a dedicated staff, and impartiality. The latter quality is particularly important if there are complicated family dynamics, such as blended families or bad blood.

Avoid the Worst Case Scenario: Litigation over an Estate Plan

Whether you choose someone you know or appoint a corporate executor or trustee, you need to sit down with that person for a formal discussion. For a friend or family member, make clear why you’ve assigned him or her the role. Avoid surprises: don’t keep the name of your executor a secret. If you chose one of your children to be your executor, make sure to tell the other(s) to avoid hurt feelings and strife after you’re gone.

Additionally, if you have a large or complicated estate, you would like to set up long-term trusts, or you worry about taxes, a corporate executor or trustee might be a good solution.

Who gets the kids?

For parents with minor children (those younger than 18 years old), it is critically important that you designate a guardian(s) who will be legally responsible for their education, health, and physical care until they reach adulthood. Like the executor’s, it is job that requires you choose someone you trust, but it encompasses so much more than the able administration of your estate—and it doesn’t end after the estate is closed.

In most cases, the surviving parent assumes guardianship of children without a Court intervening. However, there are still a number of factors to consider when choosing a guardian, including parenting style, financial situation, religious and personal values, age, and location. You need to have an in-depth conversation with any potential guardian or guardians to confirm everyone is comfortable with the arrangement and that he or she is prepared for this responsibility.

The Kids are Alright: Guardianship for Children

In Iowa, dying without establishing guardianship results in the Court choosing a child or children’s caregiver(s). It considers what is in the best interest of the child and makes a guess as to the person or people a parent would have wanted. The choice might be someone the deceased parent would never have selected—all the more reason to name a legal guardian in your will.

Tattoo estate planning on your to-do list

Go ahead get that tattoo and wear it proud all the way to the very end. But while you’re showing your ink off, also think about what you want to do with all of your assets. Talk to a qualified estate planner or get started with estate planning by filling out my free, no-obligation estate plan questionnaire. Any questions? Don’t hesitate to contact me at gordon@gordonfischerlawfirm.com or by phone 515-371-6077.

/by

Estate Planning: Don’t be Late, be Up-To-Date

,
keep estate plan up-to-date

At first, estate planning can seem a bit much. It can be hard to know where to start and what all you need to know. But once you enlist an experienced attorney to act as a guide through the process and go through executing your plan (making it official), you can breath easy. The great news? Once you have your estate plan in place, it never expires. But, it’s not enough just to have an estate plan—you need to keep it current so it reflects changes in your life, as well as changes in applicable laws. Just to take two examples, an outdated estate plan can more easily be challenged in probate court. or create tensions among family members, than one that reflects your current situation.

5 Scenarios for Estate Planning Revisions

Ensuring your estate plan is up-to-date is especially important when major changes occur in your life. Here are a few of them:

  • Your marital status changes through marriage or divorce.
  • You might not want a former spouse to inherit any of your assets, but it could happen if your estate plan is not properly revised.
  • You have kids (or more grandkids) as this could change your distribution model.
  • Make sure that your children are represented by a trustworthy guardian in case something happens to you. You will also want to add any additional children as beneficiaries.

The Kids are Alright: Guardianship for Children

  • Your financial situation significantly changes.
  • Your estate plan and its distributions will need to be revised to take into consideration any changes in your income. Did you inherit money or valuable assets? Is your career is suddenly flourishing? Maybe you experienced something that’s called “a liquidity event”—that is, you’re flush with cash from winning the lottery or selling a successful business. Don’t let your good fortune evaporate by ignoring your estate plan.

Beneficiaries, Executors, and Guardians, Oh My!

  • A beneficiary or legal representative dies or becomes unable to fulfill his or her duties.
    • Keep the list of the beneficiaries, guardians, trustees, executors, and agents named in your estate current.
  • You relocate to a different state (or country) or you acquire property in another state.
    • Laws governing wills and probate vary from state to state. So, if you buy property in another state and/or set-up a secondary residence, this needs to be reflected in your estate plan. Are you a snowbird who heads to your house in southern Texas every cold Iowa winter? Make sure the Lone State property is in your estate plan. It can be a huge hassle if your will doesn’t address all of your real estate, not to mention expensive.

How a Letter of Instruction Works with your Estate Plan

I advise clients to review their estate plans every year. If there are any updates or questions it’s recommended that folks meet with their lawyer and other professional advisors. Some clients like to do this around the first of the year, while others prefer picking a date that’s easy to remember, like a birthday or anniversary. Any date will work— the important thing is to do it. Don’t be late, keep your estate plan up-to-date!

/by

3 Ideas for How to Help Nonprofits During COVID-19

,
four faces covered by health masks

Consequences from COVID-19 including skyrocketing unemployment, mental health concerns, and general basic supply scarcity has meant an increased demand for services from nonprofits in a multitude of sectors. I’ve seen a number of successful efforts to help out local businesses, such as restaurants and shops, that are hurting from lack of foot traffic. These campaigns have focused on alternative revenue streams such as delivery deals and gift cards. The same concept can and should go be applied to your favorite nonprofit organizations as well.

Here are three ways you can help nonprofits while continuing to practice safe social distancing.

Donate cash under the CARES Act

The federal “Coronavirus Aid, Relief, and Economic Security” (CARES) Act was recently passed and among other policy goals, aims to incentivize charitable giving. The CARES Act creates a new federal income tax charitable deduction for total charitable contributions of up to $300. The incentive applies to cash contributions made in 2020 and can be claimed on tax forms next year. This deduction is an “above-the-line” deduction. This means it’s a deduction that applies to all taxpayers, regardless if they elect to itemize.

For those taxpayers who do itemize, the law lifts the existing cap on annual contributions from 60 to 100 percent of adjusted gross income. For corporations, the law raises the annual contributions limit from 10 to 25 percent. Likewise, the cap on corporate food donations has increased from 15 to 25 percent.

Protect yourself from coronavirus

Photo by Obi Onyeador on Unsplash

Gift retirement benefit plans

If you have a retirement benefit plan, like an IRA or 401(k), you may gift the entire plan, or just a percentage, to your favorite charity or charities upon your death. Retirement plans can be an ideal asset donation to a nonprofit organization because of the tax burden the plans may carry if paid to non-charitable beneficiaries, such as family members.

This can be accomplished by fully completing a beneficiary designation form from the account holder and name the intended nonprofit organization(s) as a beneficiary of your qualified plan. The funds you designate to charitable organizations will be distributed directly to the organizations tax-free and will pass outside of your estate, Individuals who elect this type of charitable giving can continue to make withdrawals from retirement plans during their lifetime.

25 Days of Giving: Help a Charity With Your Retirement Assets

Write in bequests to your estate plan

Execute an estate plan, or update an existing one, to include bequests (gifts) to the nonprofit organizations you care about. There are multiple different types of bequests which means testators have flexibility with the structure of their estate plans. An experienced estate planner will be able to advise you on all of your options, but here is a brief overview.

Pecuniary bequest

A gift of a fixed or stated sum of money designated in a donor’s will or trust.

Demonstrative bequest

A gift that comes from an explicit source such as a particular bank account.

Percentage bequest

A percentage bequest devises a set percentage—for example 5 percent of the value of the estate. A percentage bequest may be the best format for charitable bequest since it lets the charity benefit from any estate growth during the donor’s lifetime.

Specific bequest

A gift of a designated or specific item (like real estate, a vehicle, or artwork) in the will or trust. The item will very likely be sold by the nonprofit and the proceeds would benefit that nonprofit.

Residuary bequest

A gift of all or a portion of the remainder of the donor’s assets after all other bequests have been made as well as debts and taxes paid.

Contingent bequest

A gift made on the condition of a certain event that might or might not happen. A contingent bequest is specific and fails if the condition is not made. An example of a charitable contingent bequest might be if a certain person predeceases you,

Estate Planning & Charitable Giving during COVID-19: 2 New Iowa Lawyer Articles

This is just a small list, as there are many ways to efficiently and effectively make charitable donations in a tax-wise manner that benefits both parties involved. Because each individual’s financial situation is unique it’s highly recommended to consult with the appropriate professional advisors.

I’d be happy to discuss any questions, concerns, or ideas you may have. Contact me via email at gordon@gordonfischerlawfirm.com or by phone at 515-371-6077.

/by

Estate Planning Considerations: Requisite Formalities

,
Fancy estate planning pen on notebook

Estate planning documents express your wishes in the event of your disability or death. However, estate planning documents must follow certain formalities to be legally enforceable. If your estate planning documents lack these formalities, they may not be enforceable, which could be disastrous for your loved ones and beneficiaries.

Iowa Requirements

Keep in mind estate planning requirements vary state by state. Let’s look at a Last Will and Testament, just one of six “must have” estate planning documents every Iowan needs. For a will to be valid in Iowa, it must comply with these requirements:

  • Maker (testator) must be at least 18 years of age or married;
  • Maker must be of “sound mind”;
  • Will must be written;
  • Will must be signed by maker in presence of at least two competent witnesses, at least 16 years of age, who also sign in presence of maker and each other; and,
  • Maker must tell the witnesses it is his or her will.

Formalities Matter

It is important to have a reputable legal professional handle your estate planning. If you don’t, you risk missing one or more legal formalities, which might make your entire estate plan worthless. For this reason, avoid creating a will, or for that matter any estate planning documents, through an online service.

Starting an estate plan may seem like a daunting chore, but it doesn’t have to be. The easiest place to start is with my free, no-obligation Estate Plan Questionnaire. Of course, you may always reach out to me at any time with any questions or concerns.

/by

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

,
Person writing on paper

A last will and testament certainly sounds like a complex document. But, when boiled down, your will answers just three simple, yet important questions.

  1. Who do you want to inherit your assets?

A will provides for the orderly distribution of your property at death according to your wishes. By property, I mean everything you own. Your property includes both tangible and intangible things. An example of a tangible item would be your stamp collection. An example of intangible items would be stocks and bonds.

mom and daughter holding hands

  1. Who do you want to be in charge of carrying out your wishes as expressed in the Will?

In a will, you also name the “executor” of your estate. The executor is the person who’s responsible for making sure the will is implemented as written. Needless to say, this is a very important position, and you want to name someone you can trust completely, and you know to be responsible and competent.

  1. Who do you want to take care of your kids?

If you have minor children (i.e., kids under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults. Also, a will can set up a financial trustee (may be the same as the guardian) who can oversee and be responsible for your child’s funds until they are old enough (and mature enough) to inherit property.

The Kids are Alright: Guardianship for Children

 

Without a Will, There’s No Way

Without a last will and testament, you’ve given no guidance to anyone about who should inherit your property, who should be in charge of carrying out your wishes, and who you want to be your kids’ legal guardian. Not having a will creates unneeded stress and heartache, and even total chaos, for your loved ones and friends. This distress would also come at the worst possible time—when they are mourning your passing.

Drafting a quality estate plan that incorporates your wishes and goals is the height of responsibility. And if estate planning sounds intimidating, fear not! We’ll walk through the five steps of estate planning together. The best place to start is with my Estate Plan Questionnaire.

I’d love to hear from you. You can email me anytime at gordon@gordonfischerlawfirm.com.

/by

Show Your Kids You Love ‘Em with a Testamentary Trust

, ,
love in lights

Valentine’s Day is coming up quick and while I think the commercialized messages of “this is love” can get a little cheesy, I’m a full supporter of a day that celebrates love. Be it love for your spouse, a celebration of the fact that you are awesome, or showing even more adoration for your furry best friend, the world could always use a little more love. In this important addition to the #PlanningForLove series, let’s talk about ways you can show love to your children through your estate plan.

Gordon Fischer Law Firm’s Valentine’s Day Gift Guide

I’ve discussed the importance of guardianship quite a bit on this blog. It’s important that anyone with minor children establish guardianship so that if something were to happen to you as a legal guardian that your minor children (under age 18) would be immediately placed in the care of someone you know, trust, and most importantly, choose. Just as establishing guardianship is a powerful gift that your children will hopefully never have to actually know about or experience, a testamentary trust can also continue to provide and support your children if something were to happen to you.

There is an almost endless number of different kind of trusts and you can put just about any asset in a trust. Testamentary trusts are one of the most common kinds of trusts I establish for my clients. You may recognize the first word of the type of trust from “last will and testament.” Indeed, a testamentary trust is a trust written into your will and provides for the distribution of a portion or all of your estate.

(Legal) Word of the Day: Trust

Sounds simple enough, but you’re thinking, “What does this have to do with my kids?”

Different from an inter vivos trust, which is established during the settlor‘s lifetime, the testamentary trust kicks in at the completion of the probate process after the death of the person who has created it for the benefit of their beneficiaries.

Typically testamentary trusts are created for minor children or others (such as a relative with some kinds of disabilities) who may inherit a large amount of money if you (the testator) were to pass away. The general thinking is that you may not want a minor child, or even a young adult, to have uninhibited access to their inheritance until a certain age (and presumed level of maturity) is reached. (I can imagine what I would have done with an inheritance at, say, age 18 and it surely wouldn’t have been the smartest use of money!) The testamentary trust then terminates at whatever age you choose, at which point your beneficiaries receive their inheritances outright and can use the funds in any way they choose.

child with red heart

The testator can choose the distribution to be distributed in percentages such as 25% at age 18, 25% at age 22, and the remaining 50% at age 25. Or, the trust funds may be distributed in full at a single age. (All at age 25 is the default if the testator doesn’t choose otherwise.) Distributions can also be made immediately upon your passing if all beneficiaries are legal adults (age 18 or older). The testamentary trust could also be set-up for disbursements around milestones, such as a percentage or full disbursement when the beneficiary graduates from an accredited two- or four-year college institution.

Testamentary Trustee

With a testamentary trust, you also need to designate a trustee. The trustee is responsible for managing the trust property according to the rules outlined in the trust document and must do so in the best interests of the beneficiary (for example, a minor child). Generally, I advise the appointed guardian also be the trustee of a child’s testamentary trust.

Testamentary Trust Options

In my Estate Plan Questionnaire, I offer clients three main options for testamentary trust organization. (Note that there can be more than one testamentary trust created in one will.)

  • Option 1: Separate trust fund for each beneficiary. Each beneficiary’s inheritance to be held by the trustee in a separate fund. Whatever is left in each beneficiary’s trust fund, if anything, will be distributed to that beneficiary when they attain the age(s) indicated in the following section. This option ensures that all of your beneficiaries are treated equally, regardless of needs.
  • Option 2: Single trust fund for multiple beneficiaries. The entire inheritance will be held by the trustee in a single trust fund for the benefit of multiple beneficiaries (such as multiple children). The trustee may make unequal distributions during the term of the trust if a beneficiary needs additional assistance. Whatever is left in the trust, if anything, will be distributed equally when your youngest beneficiary attains the age(s) indicated in the following section. This option will allow the trustee to accommodate a particular beneficiary’s needs by distributing more of the inheritance to that beneficiary during the term of the trust. (Recommended with younger beneficiaries.)
  • Option 3: No delayed distribution. Beneficiary’s inheritance may be made directly to the beneficiary or a court-appointed conservator if the beneficiary is a minor/incapacitated. Funds will be distributed directly to the beneficiary at the age of 18.

Mom and daughter hugging

The important takeaway from all of this is that a testamentary trust can be entirely personalized to fit your wishes. For example, most folks want the testamentary trust written in such a way that their beneficiaries may have access to funds to pay for higher education costs like tuition, room and board, books, and fees, on top of the necessary funds needed for an adequate standard of care, protection, support, and maintenance of the beneficiary.

Estate Plan Revisions & Updates

If you already have an estate plan review it. Estate plans never expire, but major life events or a change in estate planning goals can necessitate changes. For example, if your family welcomed a new baby or adopted a child then it’s definitely time to update your estate plan to include them! Maybe something changes in the future with one of your beneficiaries and you want to change distribution percentages or ages? Simply contact your estate planning attorney and let them know your wishes.

A Lasting Love

hearts on a string

The love for your children knows no bounds and without a doubt, you want to make certain you can still provide for them if something unexpected were to happen to you. There’s no day like today (or Valentine’s Day!) to get your ducks in a row just in case. The best place to begin is with my Estate Plan Questionnaire or by contacting me.

/by