What We Talk About When We Talk About Estate Planning

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Gordon Fischer Iowa City At Desk-Estate Plan

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 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!

Baby in arms of dad

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. Plus, you should keep them 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 finance
  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 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

Assorted pills

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 Finances

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 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.

Choose your Final Resting Place & Maybe Plan a Party

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 your spouse
  • 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 dies, becomes ill, or becomes disabled

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

Happy Pi Day: The One Constant in Estate Planning is Change

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 appropriate institution

What other documents might you need resides these six “must have” estate planning documents?

For most Iowans, probably the vast majority, what I’ve outlined above is enough. There may be folks who have more that $5 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.

See? That wasn’t so bad!

Glasses on estate planning documents

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.

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.

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Estate Planning: Just Five Easy Steps from Start to Finish

Estate planning together

You need an estate plan. You need an estate plan.

If I haven’t yet fully convinced you that you need an estate plan, consider many other reputable sources. Following the brutal infighting over his estate, Prince would probably tell you to make an estate plan. So would these other celebrities who died without a plan. Fox Business emphasizes the critical importance of an estate plan, adding, “[y]ou don’t have to be rich to plan for your death.” U.S. News & World Report notes both the financial and emotional pain inflicted on loved ones when folks fail to plan. Fidelity cautions that too often estate planning is a neglected, but important, part of overall financial planning. Forbes reminds us that, “Plain and simple, estate planning helps protect your family in the event that something bad happens to you.”

So, an estate plan is clearly critically important, but where to start? Keep reading for an easy five-step guide to get you where you need to go.

Estate Plan, Not Just a Will

Before I discuss the five easy steps, let’s get our terminology straight. Remember a will is NOT the same as an estate plan. While these two terms are (mistakenly) used interchangeably all the time, they are quite different.

An estate plan consists of several legal documents to prepare for your death or disability. Your will is just one of those documents, albeit a very important one. You need more than a will; you need an estate plan. With that settled, let’s discuss the five-step process of how I can craft your very own, individualized estate plan.

Honesty and Transparency

I work with my clients from a place of complete honesty and transparency. I’m upfront and open about my process of developing clients’ estate plans.

I’m always sure to inform potential clients of my five-step process:

  1. You download and fill out my free estate plan questionnaire.
  2. We meet for a free one-hour consultation and discuss your completed estate plan questionnaire.
  3. Based on the information you provided me, and our discussion, I draw up drafts of your estate planning documents.
  4. Once you are sure the estate planning documents are perfect, we sign the documents.
  5. About once a year we revisit your estate plan to ensure it’s aligned with your life changes.

That’s it. That’s really all there is to it.

estate planning in 5 steps

STEP ONE: Estate Plan Questionnaire

A great place for you to start is by filling out my free estate plan questionnaire. It’s completely free, with no obligation.

You can print off my estate plan questionnaire and either fill it out by hand, or type in your information digitally. If filling it out on a computer, tablet, or smartphone, remember to “save” often and regularly. The estate plan questionnaire collects essential information needed to craft a quality estate plan. This information includes contact information about your family and your professional advisors, assets, family, and specific property items.

Cost of an Estate Plan

Dollar

People thinking about completing an estate plan are often, quite understandably, concerned about its cost. No matter who you hire to draft or update your estate plan, make sure they’re completely up front with you about what it will cost. My own fees couldn’t be more obvious, as seen here from this rate sheet.

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

Looking at the different options, you may be confused as to which estate plan package is right for you. “Do you need a revocable living trust? Or would a simple will package be enough?” To which I say, relax. We’ll figure it out together.

There is no such thing as a “one-size-fits-all” estate plan. Estate plans – their terms, coverages, ins and outs – depend on a myriad of individual circumstances and indeed preferences.

This is why filling out my estate plan questionnaire is such a great first step. You can gather your own individual important and relevant information, all in one place, and think through decisions you’ll need to make when building your estate plan. Then, I can see from your responses what you might want and need. Once your estate plan questionnaire is complete, we’ll meet for a free one-hour consultation.

STEP TWO:  Free, One-Hour Consultation

Gordon Fischer meeting with client

In the free, one-hour consultation, we’ll talk about your estate plan questionnaire you completed. I usually meet clients in my office, but I’ve also met folks at coffee shops, restaurants, hospitals, and their houses. (I do make house calls!) I’ll listen carefully as you describe your intentions. I’ll answer all your questions. I’ll address all your concerns. Once we are both satisfied we understand each other, I’ll give you my recommendations. I’ll tell you in plain language what I think you need and why I think you need it. I’ll also tell you the exact cost. As you can see from my fee schedule above, I use a flat fee approach. So, you’ll get a 100% reliable figure.

STEP THREE: First Drafts of Estate Plan Documents

Glasses on estate planning documents

Once you and I agree about what documents and what terms in those documents should be included in your estate plan, I get to work. I draft a set of documents, unique to you and your needs. Once completed, I share this first draft with you.

How I share the draft with you depends entirely on your preference, which I ask about in the estate plan questionnaire. Most folks are good with email. Some clients don’t have email, or don’t want these sorts documents sent through email. In such cases I would either snail mail the documents, or have the client could pick them up at my office.

However you receive the documents, you’ll spend time reviewing the first draft of your estate plan. You’ll make changes, ask questions, and raise concerns. This is all on your time frame. You take as much, or as little time, as you feel you need. I will move at the speed you want. We can go through one draft or we can go through twenty. The important thing is we won’t continue to the next step until you are completely satisfied with your estate plan in all aspects. Only when you are completely, totally, and 100 percent satisfied do we execute the documents.

STEP FOUR: Executing Your Estate Plan

We’ll set up an appointment to meet (again, usually my office, but could be another place you choose). We’ll need two witnesses. I’m a notary. We’ll go through and properly sign and notarize all the documents.

Only Then, My Bill

I talked about the cost of an estate plan, but I haven’t yet mentioned a bill. That’s because I don’t present you with a bill until the end of the process. Only once you have a fully executed (i.e., signed, notarized, and witnessed) estate plan, then and only then do I provide you my bill for legal services. The bill total will exactly match the figure I provided you earlier, during our free consultation. If it doesn’t match, frankly, you could simply not pay the bill. (I might keep the estate planning documents, though). Some clients write a check right on the spot. Other clients want to pay along with all their other bills, so they remit payment later. Yes, you may take the estate plan documents without paying—I trust you’ll pay me.

Yes, YOU Get the Original Documents

Some lawyers keep the original, signed documents. I don’t. I give you the original documents to keep safely. I can make copies (electronic, paper, or both) for you if you’d like. I do keep both a paper and electronic copy of the signed version of your estate plan. Copies of estate plans are great, just in case, but it’s the original that counts.

Short Client Satisfaction Survey

I may send you an online client satisfaction survey via email. The survey is super short, optional, confidential, and anonymous. The questions center on your satisfaction with me, the process, and the product. The survey allows you to voice your opinion on working with me and helps me improve and maintain a high-quality level of service.

STEP FIVE: Annual Follow-Up

The only constant in life? Change. As your life inevitably changes, your estate plan must adapt.

How often should you revisit your estate plan? I like to check in with my clients on an annual basis.

Back to School: Political Science- How Changes to Legislation Impact Your Estate Plan

Some clients like revisiting their estate plan at the start of the year. Others prefer to review on a significant date, like a birthday or wedding anniversary. Some pick a random date we agree upon. The “default” date would be the annual anniversary of executing the estate planning documents.

Woman holding Calendar

At our decided-upon date, I’ll just do a quick check-in; typically, this is just a quick series of short emails. Only if there’s been a major life event, death of an heir or fiduciary; drastic change in health; significant change in assets; or the like, will we need to have a longer discussion. Of course, you don’t have to change anything you don’t want. I’ll simply provide advice.

You know you need an estate plan, and as you can see above, this five-step process isn’t so bad! So, cast those excuses aside and get started on checking off step one of your checklist.

If you have any questions or concerns about estate planning in your situation, please contact me any time. I can always be reached via email, gordon@gordonfischerlawfirm.com, or my cell phone, 515-371-6077.

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You Need a Financial Power of Attorney ASAP

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Financials in book

What is a financial power of attorney?

A financial power of attorney is a legal document that designates someone to handle your financial decisions on your behalf.

What happens if I don’t have a financial power of attorney?

If you do not have a power of attorney and you were to become incapacitated, any financial decisions would need to be made by a court-appointed conservator. At a court’s direction, the conservator would handle your financial assets. It’s a quite expensive and time consuming process, especially compared to the relative simplicity of executing a power of attorney.

After I die, can my agent continue to operate under my financial power of attorney?

A common misperception is that your agent will be able to use this power after your death. At your death, any power of the agent is automatically revoked and it will be necessary to switch management to the representative appointed through probate.

Laptop with finance info on it

Who should I choose to serve as an agent?

The agent you choose will be managing your finances, so it is critically important to choose someone trustworthy; someone who will not abuse or exploit this power; someone who will listen to your wishes, goals, and objectives, as included in the document or otherwise communicated; and, someone who will look out for your best interests.

You also have the option of designating a successor agent who can take over if the original agent is unable or unwilling to serve. This is highly recommended.

Who should receive a copy of my financial power of attorney?

The person named as agent and any person named as a successor agent should receive a copy. It would also be wise to share a copy with your financial institution(s), such as your bank or credit union.

First in Class: Importance of Power of Attorney for College Students

Can I revoke the financial power of attorney?

Yes, you may revoke the document, at any time. You can also amend the document (change it, revise it, etc.) at anytime.

Financial power of attorney is one of the six main documents which comprise Iowans’ estate plans. To get started on establishing your financial power of attorney contact me by phone at 515-371-6077 or email.

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9 Reasons You Need a Lawyer to Write your Estate Plan

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Gordon Fischer at desk with client

“The first thing we do, let’s kill all the lawyers.” —Shakespeare, Henry VI

This line is oft-quoted to suggest the Bard felt contempt for lawyers. But, it’s notable that Will, one of the most acclaimed writers of the English language, hired a lawyer (Francis Collins of Warwick) to craft a very detailed will.

DIY Will?

Still, a common question I get all the time is, “Can I write my own will? Do I really need an attorney?” It’s a fair question.

In this age, you can watch a YouTube video, read a DIY blog post, or ask your network on Twitter, to fix or build or make almost anything. There’s limitless information, which makes it feel like you can bypass the “pros” for a cheaper, simpler fix. So, yes, you can write your own will or use an internet service like LegalZoom.

The question, though, isn’t whether you can write your own will, with some research surely you can. The question is instead: should you write your own will? And, if so, will it be valid and hold up in court?

To this point, hypothetically, with lots of study, you could perform oral surgery on yourself, but should you do so and will it turn out well?

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

Economic Self-Interest?

Before I provide nine reasons you should hire a lawyer to draft your estate plan, let’s deal head on with the idea that my conclusion is based on my own economic self-interest. “Of course you want people to hire an estate planning lawyer, because you are one!”

But, I’m not saying you should hire a lawyer only if that lawyer is me, Gordon Fischer of Gordon Fischer Law Firm…although, if you’re interested, we can certainly schedule a free consultation with no obligation. Rather, I’m just saying you should hire a competent lawyer well-versed in estate planning and probate law. There are many fine Iowa attorneys. This is not about me and my money, this is about you and your money.

The plain truth is you need a lawyer to help you with your estate planning. Here are nine reasons why.

Reason #1: You need more than just a will

Always remember, and never forget, you don’t just need a will, you need an estate plan. While the two terms “will” and “estate plan” are often used interchangeably, this is wrong, as they are two different things. An estate plan is a set of legal documents to prepare for your death or disability. A will is just one of those legal documents, albeit an important one.

In fact, there are at least six “must have” estate planning documents you need. So, you don’t need to draft just one legal document and get it right, but several.

Reason #2: Save time and energy

Handing off the complex task of drafting a thorough estate plan to a responsible professional will alleviate an immense burden on you. It’s simply a lot of work to write an estate plan.

Reason #3: Save money

stacked up coins

Without an estate plan, you and your estate may end up paying more in the long run in professional fees, court costs, and taxes. Using  a flat rate with an attorney will be much more straightforward and to your long-term economic advantage.

Reason #4: Save more money

An experienced attorney knows where to look and what questions to ask to help you secure additional tax and financial benefits.

Reason #5: It’s complicated

I’ve mentioned this before, but this stuff is hard. It’s part art and part science. Every phrase, every word, can undo an estate plan.

Plus, the law is dynamically changing all the time. The federal government, Iowa government, agencies like the IRS, and courts at every level are changing the rules of the game constantly. It’s almost a full-time job keeping track of the current play of the rules, let alone learning the rules to begin.

Reason #6: One Shot

After you shuffle off this mortal coil, how many chances do you get to get your estate plan right? One! There is no second chance. Don’t get me wrong, you can always invest in a new estate plan if you realize your DIY attempt at an estate plan stinks. But, you shouldn’t have to if you get it right the first time! And, if something happens to you before you have the chance to make said second estate plan you’re out of luck. It’s done.

Plus, your estate plan will probably need updates and revisions following any big life or applicable legislative changes that you’ll want an attorney to help you address. (See reason #8 for more on this.)

Back to School: Political Science- How Changes to Legislation Impact Your Estate Plan

Reason #7: Objectivity

Along with expertise, lawyers offer objectivity. By working with a lawyer, you’re going to bring that extra voice of reason to bear on current and future estate planning needs. Is it a good idea to leave your entire estate to your dog Buster? Is your 18-year-old kid truly mature enough to handle your IRA worth a million dollars? A lawyer can give you direct, unvarnished, and unbiased advice.

Reason #8: The only constant in your life is change.

As your life changes, your estate plan must adapt. Perhaps you move to a new state. Maybe you have a kid and then some more kids. The kids grow up and have kids of their own. Throughout, perhaps you marry or divorce. Your financial situation significantly changes. All these life events, and many more, necessitate changes to your estate plan. You need a lawyer to tell you when your estate plan needs a tune-up and to perform the tune-up.

Reason #9: Lawyers themselves!

lawyer probate

It’s funny to think about, but nonetheless true. After you die, who will determine if your estate planning documents are valid? Lawyers! State judges (who will, of course, be attorneys) are going to review your estate plan documents. These judges will determine whether your documents meet the necessary requirements. You don’t want to leave it up to a judge, trained as a lawyer, to try to figure out if your DIY documents are valid under the Iowa Probate Code.

Closing Argument

Have I convinced you? Or do you still want to go it alone?

Feel free to contact me any time to discuss further why you need a lawyer to draft an estate plan. I offer a one-hour free consultation, without any obligation. I can be reached any time at my email, gordon@gordonfischerlawfirm.com, or on my cell, 515-371-6077.

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Familiarize Yourself with Fiduciary Duties

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fiduciary

A fiduciary role is one of the highest, strongest relationships between people. It is a role involving the highest care and the greatest importance. The people you choose to fulfill these roles should be carefully considered; they should be those whom you have the utmost confidence in.

Examples of common fiduciary roles include the executor of your will, trustees of your trusts, guardianships of your children, and agents for your financial and healthcare power of attorney. Other fiduciary roles include attorney, accountant, banker and/or credit union manager.

Often times, people choose corporate executors to remove some of the liability and risk, since corporate executors are familiar with the estate planning process. A corporate executor is going to know the drill. With a corporate executor, you have a true estate planning professional that knows and understands

If you DO choose to name a private individual to a fiduciary role within your estate plan, you need to ensure they are trustworthy, organized, and reliable.

The American Bar Association has comprehensively defined the different fiduciary duties as:

  • Duty of care;
  • Duty of loyalty;
  • Duty to account;
  • Duty of confidentiality;
  • Duty of full disclosure;
  • Duty to act fairly; and
  • Duty of good faith and fair dealing.

Understanding fiduciary duties and selecting the right individuals will help you feel content, secure and satisfied with your estate plan.

Have questions? Need more information?

I would love to discuss your estate plan with you. You can contact me by email at Gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077. Don’t have an estate plan? The best place to start is the Estate Plan Questionnaire.

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5 Scenarios for Estate Planning Revisions

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Estate planning revisions

You have an estate plan? High five! You are already better off than most of your fellow citizens. In fact, numerous surveys have shown that about half of adult Americans do not even have a basic will. So, kudos to you if you’ve already knocked out this major life decision and planning initiative. If you already have a will, there are at least five major scenarios in which you should revisit and make changes accordingly:

  1. Moving out-of-state or out-of-country. What makes a will legal and valid in Iowa is not the same in other states, like, say, Ohio or Rhode Island. Each state has its own set of laws governing wills, probate, and so on. Also, if you buy property in another state and/or set-up a secondary residence, this must be included in your estate plan.
  2. If something happens to one of your beneficiaries or fiduciaries. Life happens to everyone else in your plan, and sometimes this means beneficiary passes away or a fiduciary retires. Reviewing your plan’s key contact list at least annually, in addition to on an as-needed basis, will keep everything fresh and relevant.
  3. If your marriage status changes. Needless to say, you will want to update your estate plan in the case of a marriage or divorce. Most estate planners you’ll meet can attest to horror stories on behalf of their clients of what happens when an ex-spouse inherits a huge sum of money, merely because an estate plan wasn’t properly updated.
  4. If you have kids (or more kids). You’ll want to ensure that in case something happens to you that your children are going to be protected by a trusted guardian. And, also, presumably you’ll want to add the children as beneficiaries, etc.
  5. If your financial situation changes significantly. This includes inheriting money or complex assets. Perhaps your business accelerates astronomically. Maybe you have what professional advisors call “a liquidity event,” (e.g., you’re flush with cash). Your estate plan, and its distributions, will need to be revisited to accommodate such changes in fortune.

Back to School: Political Science- How Changes to Legislation Impact Your Estate Plan

This, however, is just the tip of the iceberg! While your estate plan never expires, many other situations involving shifts in personal/financial goals, changes in needs (such as deciding you need a trust instead of just a basic estate plan), and even changes to legislation can mean estate planning revisions.

Have questions? Need more information?

If you think you may need to revise your estate plan and would like a free consult feel free to reach out at any time! You can contact me by email at Gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077.

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Estate Planning: What About Trusts?

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brown books on shelf

When you hear the word “trust” it’s usually in the context of a belief of reliability of someone, such as: “I trust her to read about the past legal word of the day, quid pro quo.” Trust in the world of estate planning is entirely different, although you can certainly put trust in a well-crafted trust to maximize the benefits of an estate plan!

What is a Trust?

In simplest terms, a trust is a legal agreement between three parties: grantor, trustee, and beneficiary. This allows a third party (the trustee) to hold assets for a beneficiary (or beneficiaries). Trusts can be set up in a variety of ways and specify the details of when and how the assets will pass to the beneficiary. Trusts are a part of a well-crafted estate plan and can be used to minimize fees, costs, and taxes.

Let’s break it down further by looking at each of the three parties to a trust.

Grantor

 

All trusts have a grantor, sometimes called the “settler” or “trustor.” The grantor creates the trust, and also has legal authority to transfer property to the trust.

Trustee

The trustee can be any person or entity that can take title to property on behalf of a beneficiary. The trustee is responsible for managing the property according to the rules outlined in the trust document, and must do so in the best interests of the beneficiary.

What Is a Trustee & What Do They Actually Do?

Beneficiary

The beneficiary is the person or entity benefiting from the trust. The beneficiary can be one person/entity or multiple parties (true also of grantor and trustee). Multiple trust beneficiaries do not have to have the same interests in the trust property. Also, trust beneficiaries do not have to even exist at the time the trust is created (such as a future grandchild, or charitable foundation that has been set up yet).

Trust Beneficiary: Break it Down

Trust Property

A trust can be either funded or unfunded. By funded, we mean that property has been placed “inside” the trust. This property is sometimes called the “principal” or the “corpus.”

Legal Words of the Day: Tangible Property & Intangible Property

Any Asset

Any asset can be held by a trust. Trust property can be real estate, intangible property, business interests, and personal property. Some common examples of trust property include farms, buildings, vacation homes, money, stocks, bonds, collections, personal possessions, vehicles, and so on.

101 Assets You Could Place in a Trust

“Imaginary Container”

We speak of putting assets “in” a trust, but assets don’t actually change location. Think of a trust as an “imaginary container.” It’s not a geographical place that protects your car, for example, but a form of ownership that holds it for your benefit. For instance, on your car title the owner blank would simply read “the Jane Smith Trust.” It’s common to put real estate (such as farms, homes, vacation homes) and entire accounts (like bank, credit union, and brokerage accounts) into a trust.

After the trust is funded, the trust property will still be in the same place before the trust was created—your land where it always was, your car in the garage, your money in the bank, your stamp collection in the study, and so on. The only difference is the property will have a different owner: “The Jane Smith Trust,” not Jane Smith.

Transfer of Ownership

 

 

Putting property in a trust transfers it from personal ownership to the trustee, who holds the property for the beneficiary. The trustee has legal title to the trust property. For most purposes, the law treats trust property as if it were now owned by the trustee. For example, trusts may have separate taxpayer identification numbers.

But trustees are not the full owners of trust property. Trustees have a legal duty to use trust property as provided in the trust agreement and permitted by law. The beneficiaries retain what is known as equitable title: the right to benefit from trust property as specified in the trust.

Assets to Beneficiary

The grantor provides terms in a trust agreement as to how the fund’s assets are to be distributed to a beneficiary. The grantor can provide for the distribution of funds in any way that is not against the law or against public policy.

game of chess

Types of Trusts

The types of trusts are almost limitless. 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 way you can describe trusts is by whether they are revocable or irrevocable. A revocable trust can be modified by the grantor; an irrevocable trust cannot be modified or terminated without the beneficiary’s permission.”

But again, there are so many types of trusts, and the aforementioned are just a few examples.

Calling all Word Nerds: 9 Terms to Know About Trusts

Do YOU need a trust?

If you have substantial or complicated assets (for example, you own more than one piece of real estate), own part or all of a robust business, or have any other special circumstances, a trust may be incredibly helpful.

Great Place to Start: Estate Planning Questionnaire

A great place to start is with the estate plan questionnaire, provided to you free, without any obligation. Also, feel free to reach out at any time by email, gordon@gordonfischerlawfirm.com, or on my cell, 515-371-6077.

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Tune In to Hear Gordon on the Radio

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radio studio

On Halloween (10/31) my voice will be making a radio appearance on KCJJ 1630 AM‘s “Senior Talk” program hosted by Rex Brandstatter! We’ll be talking on the importance of estate planning for seniors, as well as the need-to-know information that ALL Iowans should know about creating a successful, quality plan for the future.

The program starts at 12:10 p.m. and will last for about 30 minutes. If you won’t be around a radio over the noon hour on 10/31, don’t worry as you can listen live via KCJJ’s YouTube channel. Plus, the program will be archived on YouTube after the show!

Hopefully my conversation will Rex will inspire you (and all of your family members and friends) to send those estate planning excuses to the graveyard. (Sorry, I had to get at least one spooky pun in there!) One of the best ways to get started on my five-step estate planning process is with the easy, free Estate Planning Questionnaire.

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Do Estate Plans Have an Expiration Date?

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calendar book with pen

So many things in life come with built-in expiration dates. Some, such eggs, milk, and cheese, are clearly stamped, while other common items (everything from spices, fire extinguishers, lipstick, to hard liquor) lose their quality or effectiveness over time, but don’t have a clear “best used by” date on them.

So, how about an estate plan? If your running shoes can expire, how about important legal documents? This is a common and certainly valid question.

As bill-paying Americans, it seems par-for-the-course that like everything else, we need to routinely file paperwork, with payment(s), to keep coverage in place. Fortunately, estate planning documents do not expire. Once valid, such legal documents are effective for, well, for as long as you want. This includes all documents that could (and probably should) be in your estate plan, such as a will, health care power of attorney, financial power of attorney, instructions for disposition of personal property, and instructions for final disposition of remains.

You will never receive a notice in the mail that your carefully crafted estate plan is set to expire in 30 days if you don’t submit another signed form or check payment. However, I highly recommend revisiting your estate plan annually to make certain life changes over the past year are appropriately reflected. For example, having a child, getting married or divorced, moving to another state, changes in financial circumstances, and other major life events necessitate revisiting your estate plan. After all, estate planning documents can be changed up until the moment you pass away.

Update Your Estate Plan: How, When, & Why

Since these legal documents do not expire, there’s no better time than now to get started on your estate plan. The best place to start? Download my Estate Plan Questionnaire; it’s free and provided at no 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.

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Survey: I Want Your Valuable Feedback

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feedbackk survey

I could use your opinions! As a lawyer who strives to maximize charitable giving in Iowa (the mission of Gordon Fischer Law Firm), estate plans are a regular part of my job. But, for most people, estate planning isn’t a normal part of the day-to-day. So, I am doing research on how and why people obtain estate plans and would appreciate if you could take three minutes (or less!) to share your thoughts and experiences with me. The goal of this survey is to gather candid feedback and varying perspectives on this topic. Note that the survey is completely anonymous and confidential.

Click here to take the short survey.

 

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