Estate Planning

Why do I need a will? 

You may not need a will, but it is often a very good idea.  Having a will provides a number of benefits.  You nominate the person who will oversee the wrapping up of your affairs (i.e., the executor).   A will allows you to designate gifts of property or money to people or organizations outside of your immediate family.  You can also choose to treat your beneficiaries on non-equal terms.  If you have minor children, you can nominate someone as guardian for them, and you can set up a trust so that money will held for them, and used for their benefit, until they reach an age you consider appropriate for distribution.

What happens to my estate if I don't have a will? 

If you have assets to be probated, then the court will have to appoint someone as administrator.  This is usually a family member, but it could be a creditor or anyone else who claims to be interested in your estate.  After payment of debts and costs of administration, remaining assets will be divided among your heirs at law according to statute.

What decisions do I have to make to prepare a will? 

At minimum, you need to appoint an executor and decide how you want your assets divided.  Selecting a backup executor is recommended in case the first person you nominate can't serve for some reason, such as unavailability, frail health, or death.  If you have minor children, choose a guardian.  Also, decide whether you have enough assets to set aside into a trust for your children's benefit.  If you do, then also think about naming someone as trustee, and decide when you want the trust beneficiaries to receive their shares.

Can I change my will without making a new will? 

Maybe, depending on the nature of what you want changed and how extensively the will must be modified to make the change.  Sometimes the attorney will recommend a new will in order to avoid any confusion that might result from trying to enforce and interpret multiple instruments.

If I have a trust or a will that creates a trust, what options do I have for distributing the assets? 

You have a wide range of flexibility.  Most commonly, the trust ends for a beneficiary sometime between age 18 and 30, sometimes all at once or in multiple distributions at various ages.  You can fashion the trust for whatever you think will be most suitable.  Some people choose to include incentives for their children to complete college or advanced degrees, such as by accelerating payouts to beneficiaries to get a degree or by deferring payout to those who choose not to.

What is a revocable trust or a living trust? 

Trusts of this type are another form of estate planning.  They are usually thought of as will substitutes, although a trust should be paired with a pour-over will to deal with any assets that are not included in the trust but that need to be probated.  A trust sets up a legal entity to hold the assets, and the person setting up the trust (called a trustor or settler) usually appoints themselves as trustee.  For a trust to be effective, it needs to be funded with assets.  For optimal effect, most of the trustor's assets should be transferred to the trust.  Like its name, a revocable trust can be changed or revoked during the trustor's lifetime.

If I set up a trust, does my estate need to be probated? 

If your estate planning was done well and kept up to date along with changes in assets, then no probate should be necessary.  But, many times significant assets do not get transferred to the trust, and a probate is then essential in order to gain access to the asset.  Even if everything is done right, certain legal steps are recommended to ensure an orderly transition after your death and to deal with the claims of your creditors.

What is an executor? 

An executor is a person appointed by the court – usually because you have nominated the person to serve as executor in your will – to administer your estate and, to the extent possible, carry out the terms of your will.  Your will should nominate someone you trust for this important duty.  They will work with the estate's attorney to take care of necessary matters, such as collecting, selling and transferring assets, paying bills, and filing tax returns.

What is a trustee? 

A trustee is a person you name in a will or trust to supervise and handle assets held in a trust.  Unlike an executor, whose responsibilities usually take less than a year to carry out, a trustee may serve for many years, depending on the age of beneficiaries, terms of distribution, etc.  A trustee also has ongoing responsibilities to invest and preserve the assets, file tax returns, and make periodic distributions for suitable purposes that benefit the beneficiaries.

When should I consider doing a power of attorney? 

A POA is a way for you to appoint someone to handle your financial and legal affairs at a time when you are still living but unable to do it yourself.  A POA can be revoked at any time, so long as you are competent to do so.  The alternative to a POA is a conservatorship, which is a court-created and court-administered process for managing your affairs.  It is considerably more expensive to set up and maintain, you don't have any say in who the court appoints, and the process typically takes at least a few weeks to get it done.

What is the difference between an executor and a power of attorney? 

An executor has authority only after death, and only after being appointed as executor by a probate court.  Until then, an executor has no legal right to act for the person who nominated them as executor.  By contrast, an agent appointed under a POA may have power to act for the appointing principal until the principal's death, but not after.

What is a living will? 

A living will is a type of advance directive which states your intention about an end-of-life situation.  Put simplistically, if you are ever in a terminal condition from which there is no reasonable likelihood of recovery and you are unable to state your wish about whether artificial means (such as a ventilator) should be used to sustain your life, a living will tells everyone that you do not want that kind of care.  A living will is simply a statement of your wishes about what should be done in that kind of situation.  It provides helpful clarity to health care providers and to family members who might be in a position to make medical decisions on your behalf.


When does my estate have to be probated? 

The circumstances that require a probate process are varied.  Common situations where probate is needed involve real estate that doesn't pass to a surviving spouse by right of survivorship, or other assets that cannot pass to someone else by contract (e.g., beneficiary designation) or survivorship.  An attorney can review the estate's assets and determine whether probate or an alternative process is suitable.

How is the probate process started? 

The person nominated as executor in the will meets with an attorney to discuss the estate and, if it is determined that probate is necessary, to sign some initial paperwork.  If there is no will, then any person with an interest in the estate can petition to be appointed as administrator.  This is usually a family member.

How long does probate take? 

The timeline can vary quite a bit depending on factors such as the difficulty in locating or selling assets and whether the executor and beneficiaries or heirs are responsive in providing information and signing documents.  At minimum, an ordinary probate will take at least 7 or 8 months. 

How much does it cost to probate an estate? 

Costs will vary depending in part on the value of estate assets and also the expenditures that may be necessary to deal with estate assets and debts.  Every estate has certain costs of administration, which include court costs, executor fees, and attorney fees.  Court costs will depend on asset value and the degree of court supervision that is necessary.  Executor and attorney fees are capped at roughly 2% of the value of estate assets, unless the court allows additional fees due to extraordinary efforts.

Are there taxes payable because of probate? 

Federal estate taxes may be payable if the net value of the estate exceeds a specific amount, which is $5,450,000 for individuals dying in 2016.  This amount is adjusted annually for inflation.  Iowa inheritance taxes may be payable depending on the relationship of the beneficiary or heir to the deceased person and how much that person receives.  For estates under the federal limit that pass to surviving spouses and descendants, there are no such taxes.

Does a trust have to be probated? 

Neither the trust nor its assets have to be probated in order to pass to the beneficiaries.  However, some steps may be necessary to transition administrative responsibilities to a new trustee, to address tax matters, and also to start the clock running on a limited period for creditors to file claims.  Also, if all assets in the deceased individual's estate were not in the trust, probate for those assets may be necessary

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