The September edition of GoFisch is live! This month’s edition features:
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There’s been a lot going on in the news lately and we could all definitely use a ray of bright light in our lives right now. For me, positivity came in the form of an article written by Ken Fusion about my father, Dieter Fischer. My dad passed away earlier this year in March, and this article captured highlights of my father’s legacy he built. He was a hard-working immigrant from Germany who came to the U.S. in 1960 with his wife (my mom). Not only did he love his family, but he also loved America and, in a way, was the true embodiment of the “American dream.” You can read the full article here, if you’re interested!
With my mom, wife, and dad at the Iowa Bar swearing in ceremony, 1994
This is all to say that considering the legacy you want to leave is a key part of estate planning. It’s beneficial and can even be uplifting to consider how you want to be remembered and how you want to pass your proverbial torch on to the next generation. It’s less obvious because there’s no legal document you can pen to create this. A legacy is comprised of the memories you create, stories you share, people you love, and difference you make. This legacy can be cemented by giving your property to the people and charities you want, how and when you want.
A cherished photo from a great day a few years back with my mom, dad, and wife
Want to get started on your estate plan? A great place to start is with my free Estate Plan Questionnaire. Want to talk about your loved ones who have passed away? I understand where you’re coming from and would love to hear about how they’ve impacted you. Contact me at any time.
On the GFLF blog this month, we’re going “back to school” with some fun legal lessons like last-minute gifts of personal property, nonprofit operation, and what planned giving actually means. Happy learning!
If you have an estate plan already, give yourself a high-five! You’re well on your way to establishing a worthy legacy; effectively and efficiently transferring your hard-earned property; and saving your loved ones time, money, and emotional turmoil. Plus, you’re ahead of the more than half of Americans who haven’t done any estate planning!
Even though estate plans never expire there are many reasons you might need to revise or at least double-check your documents. Some common life events that could impact your documents and/or estate planning goals include: the birth of a child/grandchild; death of a beneficiary; marriage; divorce; moving across state lines; receipt of an inheritance; and other major financial status changes.
I recommend my clients review their plans at least annually and if there’s any question if a life change would require an estate plan revision, it’s better to just ask! (Reminder, I offer a free one-hour consult! Even if I didn’t draft your current estate plan, I’m happy to discuss your situation to determine if an updated estate plan is in order.)
It can be easy to forget or overlook changes that occur outside the realm of your personal life that may impact your estate. For instance, changes in federal or state legislation could render your current estate plan provisions ineffective and irrelevant. A recent example that had a major impact was the Tax Cuts and Job Act of 2017.
The Tax Cuts and Job Act doubled the estate tax exemption, meaning the law massively increased the total amount of assets you can own before you are subject to estate taxes. For an individual to be subject to estate tax, your estate must exceed $11.2 million. For a married couple, the estate tax has no effect until total estate is worth more than $22.4 million. In short, the federal estate tax really only applies only to the richest of the rich.
But in 2017, before passage of the TCJA, the estate tax exemption was half of what it is now. Even more relevant, in 2001, the estate tax exemption was much, much smaller, just $675,000. From 2002-09, the estate tax ranged from $1 million to $3.5 million. Back in those days, even middle-class and certainly upper middle-class Iowans had to have some concern about the estate tax. After all, if you add up all your assets–real estate, vehicles, retirement benefit plans, insurance, etc.–you can reach that threshold surprisingly quickly.
It used to be that estate planners would establish complicated trusts to make certain clients avoided the estate tax. One example (of many) of such a complex trust is the A-B marital trust.
The A-B trust was almost entirely designed to minimize estate taxes. It was one trust, but with two parts. Under the A-B trust, the “A” trust holds the portion of the estate designed to qualify for the martial deduction, while the “B” trust was designed to maximize any unused estate tax exemption for the surviving spouse.
Now, an A-B trust isn’t as necessary unless a single person’s estate is greater than the federal estate tax threshold. (It might be necessary in a state that had a state estate tax, but Iowa does NOT have a state estate tax; we need only worry about the federal estate tax).
The upshot of the recent legislative tax change is that some folks could do with a much more simple trust than what they currently have. Considering the new estate tax regime, a simple revocable living trust will much more neatly fill their needs, and also be more easily interpreted, explained, and more easily defended in case of challenge. Also, with a simple revocable living trust, less can go wrong. There need not be any legale “Rube Goldberg” contraptions designed to avoid a federal estate tax that won’t apply anyway.
It’s important to know that estate planning is not just about protecting your estate from taxes. The benefits of estate planning are many when compared to dying intestate (without a will), including but definitely not limited to:
Plus, a good estate plan should be written to fit with your personal goals. It can be hard to think about a world where you won’t be alive, but it’s also a reality we must all face. How we prepare for our death (or incapacitation) can mean a world of difference for the loved ones and favored causes we leave to carry our torch on into the future.
Was your trust drafted when the federal estate tax was lower? For the good of your loved ones, let’s optimize your planning strategy. If you’re not sure what kind of trust you have, or whether it really fits your situation, don’t stress one second. I offer a free one-hour consultation! Truly, I would love to hear from you; email me at gordon@gordonfischerlawfirm.com or call me at 515-371-6077.
Even if you don’t work at a nonprofit organization, undoubtedly you know someone who does! There are more than 26,361 nonprofit organizations (including public charities, private and public foundations, civic leagues, chamber of commerce, veterans organizations, and others) in Iowa. Nonprofits not only make our state and world a better place to live, they also make a substantial economic impact in Iowa. The nonprofit sector employs 135,300 people (11% of the total workforce) and generates annual revenue of more than $20.3 billion (according to data from 2016)!
I founded Gordon Fischer Law Firm with a dream of a legal practice that involved consistently strives to promote and maximize charitable giving. A big part of that mission is assisting nonprofit organizations of all creeds and sizes be successful through all stages of operation. From formation to hiring, board building and donor retention, to legal compliance and facilitation of charitable gifts, GFLF is here to help nonprofits build up to be the best they can be. So, if not for your own use, pass along the good word of our services to just one person you know in the nonprofit sector, be it an executive, fundraiser, board member, or active volunteer! Click the image below to get an easily shareable PDF on how to build a better nonprofit.
I would love to meet you this Friday at the Falls Prevention Awareness, Health & Resource Fair where I’ll have a table full of valuable estate planning information and time to get to know you and hear your about your goals for the future! The Fair will start at 10 a.m. and go until 1 p.m. Friday, September 21 at the Radisson Hotel and Conference Center (1220 1st Avenue, Coralville, IA).
This event is sponsored by the University of Iowa Hospitals and Clinics Trauma Program, the Visiting Nurse Association, Johnson County Livable Communities, and partially funded by The Community Foundation of Johnson County.
The free event is open to the public and includes the chance to win one of five door prizes!
Planning to attend? Tell me in the comments below! Can’t make it? Don’t worry! I’m always available to assist with your estate planning needs from start to finish. Contact me via email (gordon@gordonfischerlawfirm.com) or by phone (515-371-6077). Plus, I offer a free one-hour consultation!
If spelling tests weren’t always your strong suit in school, fear not! Today’s legal word of the day is an easy one that’s having a momentary editorial heyday.
As you probably heard, The New York Times took the highly unusual step of publishing an unsigned, anonymous op-ed entitled, “I am Part of the Resistance Inside the Trump Administration.” The person was identified only as follows:
“…. a senior official in the Trump administration whose identity is known to us and whose job would be jeopardized by its disclosure. We believe publishing this essay anonymously is the only way to deliver an important perspective to our readers.”
The article led to a nationwide guessing game. Who is the senior official in the Trump administration who penned this “explosive” piece? Suspicion fell onto, of all people, Vice President Mike Pence. This is because the op-ed writer uses the word “lodestar,” and Pence has used this obscure word multiple times. (Pence vehemently denied he was the author, by the way.)
I don’t know who wrote the op-ed, and we may never know, but the real winner out of this news cycle is the word you never knew you needed in your vocabulary—lodestar!
Lodestar means “a star that leads or guides,” and is especially used in relation to the North Star.
At this point you’re like, “Gordon, this is a cool word I can def use in playing Scrabble, but what does it have to do with the law?”
Well, “lodestar” is a synonym and practically interchangeable with the word “polestar,” which is defined as a “directing principle; a guide.”
A court will use the term polestar like so: In this case, our polestar must be this principle . . .
Basically the court will use such-and-such as its guiding principle.
For example, in the law of wills, the Iowa Supreme Court stated In the Estate of Twedt that “the testator’s [maker of the will’s] intent is the polestar and if expressed must prevail.” You’ll see the same in the law of trusts, the intent of the settlor of a trust must be the polestar.
The word is also used in the law of charitable giving. The intent of the donor is the polestar which courts must follow if there are any issues. For example, suppose a donor posthumously donates $100,000 to a nonprofit, but the nonprofit no longer exists. What was the donor’s intent? Is it stated anywhere what the donor wanted to happen to the charitable funds if the nonprofit was no more? If not written, did the donor discuss the matter with anyone? To resolve any dispute involving a charitable gift, the guiding principle–the polestar–must be the donor’s intent.
A major reason to have an estate plan is that YOU get to control your own future, rather than being controlled by outside forces or outside events. Through proper estate planning, you can be in total control of the answers to the following questions:
And if there are any questions or issues regarding your estate plan, lawyers and judges looking at your estate plan will make decisions based on YOUR intent. Your intent will be the polestar!
Don’t delay any longer – thank your lucky (North) stars you still have time to make a proper estate plan. I’d be happy to talk with you about your estate plan any time, or you can get started on organizing your important info in my free Estate Plan Questionnaire. I can be reached via email (gordon@gordonfischerlawfirm.com) or by cell (515-371-6077). I’d truly love to hear from you.
On the blog we’ve been going “back to school,” and our lessons wouldn’t be complete without a mandatory gym class. Which brings us to the question: is there gender bias in sports? Duh, yes. Mos def. It’s been especially newsworthy in tennis too.
There was nothing wrong with Serena Williams’ catsuit. Please, if a guy wore that, it would be noticed for sure, but certainly not banned.
Even worse: France’s Alizé Cornet received a code violation at the U.S. Open on Tuesday for removing her shirt on the court sidelines (she had a sports bra underneath). This is something men do all the time, and even while on the court.
The conversation continues in the aftermath of the US Open Finals last night between Serena Williams and Naomi Osaka. Were the umpire’s penalties in U.S. Open Final match the result of sexism? I certainly think so. I mean, I’ve seen male players such as, say, Rafael Nadal or John McEnroe, go absolutely bananas on the court and not receive a penalty to the tune of $17k.
Here are three truths that aren’t changed by any contretemps at Arthur Ashe Stadium:
First, Serena Williams is the greatest tennis player in history.
Second, at least on this day, Naomi Osaka outplayed Williams thoroughly for an amazing upset win.
Third, America, I love you like crazy, the crazy way that only an immigrants’ kid could love America. But, you have serious problems with sexism and misogyny.
Here’s yet another truth bomb: nonprofits, already under terrific scrutiny by board members, donors, stakeholders, and government agencies, can’t afford even a whiff of a controversy like the tennis examples above. Even allegations of scandal can destroy previously successful nonprofits. And, just like the game of tennis, both need to consistently be working toward implementing rules and standards that ensure equity.
Such situations can split Boards, cause stakeholders to resign or pull back, snap shut donors’ wallets, and even result in expensive litigation. Fortunately, there are policies and procedures that can prevent your hardworking organization from ever having to deal with controversy (particularly those relating to discrimination, gender bias, and the like), by deterring such actions from every occurring. Let’s first discuss the IRS Form 990 and then the policies that relate to this annual information return.
IRS Form 990. This is the form that (most) nonprofits have to annually file some version of. Say what you will about the IRS – but in Form 990, the IRS provides nonprofits a path to prosperity. On Form 990, the IRS asks about several major policies and procedures that actually help nonprofits govern smarter. Any and every nonprofit should have all of these policies and procedures in place, with regular updates as appropriate. But, in our context, three policies are particularly relevant here.
At this point in the blog post, I feel as though I can actually hear you: “I don’t think we could ever afford that in our budget…we don’t know where to start!”
Before I delve into specific policies that will help your fave nonprofit combat discrimination and bias, let me repeat a special offer. I offer all nonprofits 10 major policies and procedures on IRS Form 990, drafted specifically and individually to each organization. for a flat fee of $990. No jokes, tricks, or hidden fees. Interested in learning more? Give this post a read, and don’t hesitate to contact me to take advantage of this solid, straight-up deal.
Data related to compensation is reported in three different sections on Form 990: “Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees;” “Statement of Functional Expenses,” lines 5, 7, 8, and 9; and Schedule J;” and “Compensation Information for Certain Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees.”
Having a set policy in place that objectively establishes salary ranges for positions, updated job descriptions, relevant salary administration, and performance management, is used to establish equality and equity in compensation practices. A statement of compensation philosophy and strategy, which explains to current and potential employees and board members how compensation supports the organization’s mission, can be included in the compensation policy.
Generally, this policy provides the benefits of:
This policy can state clearly an organization’s intention to abide by federal and state law under which it is illegal to have pay differentiate based on gender.
This policy should clarify what types of documents should be retained, how they should be filed, and for what duration. It should also outline proper deletion and or destruction techniques.
The document retention and destruction (DRD) policy is useful for a number of reasons. The principle rational as to why any organization would want to adopt such a policy is that it ensures important documents—financial information, employment records, contracts, information relating to asset ownership, etc.—are stored for a period of time for tax, business, and other regulatory purposes. No doubt document retention could be important for proof in litigation or a governmental investigation.
When I was a litigator, I represented employers who could not find a key document–a personnel file; written warning; performance review, and the like. Needless to say, in all these situations, the missing documents were a huge disadvantage to the employer in defending itself. Make sure that doesn’t happen to you by setting down rules as to what documents to keep and how long to keep them.
You know, there’s even a question of federal code. You may have heard of the federal law, the Sarbanes-Oxley Act of 2002. It reaffirms the importance of a DRD policy. Sarbanes-Oxley reads:
“Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.”
While the Sarbanes-Oxley legislation generally does not pertain to tax-exempt organizations, it does impose criminal liability on tax-exempt organizations for the destruction of records with the intent to obstruct a federal investigation.
Yet another reason a DRD policy is an excellent idea, is it forces an organization to save space and money associated with both hard copy and digital file storage, by determining what is no longer needed and when…it’s like sanctioned spring cleaning!
Nonprofits, along with all corporations, are prohibited from retaliating against employees who call out, draw attention to, or “blow the whistle” against employer practices. A whistleblower policy should set a process for complaints, including gender bias or harassment, to be addressed and include protection for whistleblowers.
Ultimately this policy can help insulate your organization from the risk of state and federal law violation and encourage sound, swift responses of investigation and solutions to complaints.
A whistleblower policy encourages staff and volunteers to come forward with credible information on illegal practices or violations of adopted policies of the organization, specifies that the organization will protect the individual from retaliation, and identifies those staff or board members or outside parties to whom such information can be reported. (Instructions to Form 990)
The Sarbanes-Oxley Act (referenced under the document retention and destruction policy above) also applies here. If found in violation of Sarbanes-Oxley, both an organization and any individuals responsible for the retaliatory action could face civil and criminal sanctions and repercussions including prison time.
On top of the super important policies he first line of defense for nonprofits is a well drafted, individualized employee handbook. Really, 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.
In terms of gender discrimination, there are several provisions that should help insulate your favorite nonprofit. Your employee handbook would have an equal opportunity statement; anti-harassment policy; complaint procedure; and rules about compensation, document retention, and whistleblowing.
I offer a free “starter” employee handbook that can get you thinking about the types of provisions you should/could include in your employee handbook.
If you already have some (or all) of the above policies or employee handbook in place, seriously consider the last time they were updated. How has the organization changed since they were written? Have changes to state and federal laws impacted these policies at all? It may be high time for a new set of policies that fits your organization.
Robert Frost famously opined that writing free verse is like playing tennis without a net. Well, I don’t know about that, but any nonprofit without the 10 major polices asked about on IRS Form 990, or without an employee handbook, is definitely like playing tennis without a net, ball, lines, umpires, or rules! And, the best way to play the “game” while assuring equity and fairness for all the players involves preventing bias and discrimination from ever holding a place on the court.
Schedule your free one-hour consultation and let’s talk about your organization’s needs!
The September edition of “The Iowa Lawyer” is now out! Published by the Iowa State Bar Association, this month focused entirely on retirement-related topics. According to the ISBA, there are approximately 2,300 ISBA members who are 60 and older. And, in Iowa in general, people age 65 or older comprise 16.7% of the population. Retiring is a whole different stage in life that can come with newfound challenges as well as benefits. While geared toward Iowa attorneys, many of the insights are applicable in other industries. For instance, succession planning is important for all business owners! Similarly, retirement is a time when charitable giving often gets a boost.
GFLF’s piece focuses on how you can use retirement benefit plans to benefit the charities and causes you care about in a strategic, tax-wise way. This is super important for all Iowans to know (not just attorneys!). In the article we focus in on three important tax concepts:
You can read the full article by clicking here and scrolling to page 23.
Any questions after reading? Feel to explore more on the topic in our other blog posts on the subject or contact GFLF at any time to discuss by email, at gordon@gordonfischerlawfirm.com, or by phone at 515-371-6077.