table with book and tea

Often when I’m reading fiction I’ll find estate planning-related issues that cause conflicts, both big and small, for the characters. And, while the stories may be fictitious, the lessons they give us serve as valuable reminders of the importance of quality estate planning.

One such tale I recently revisited is the 1845 gothic novel, Wuthering Heights, in which author Emily Brontë swiftly weaves in ample estate planning issues with English family drama worthy of the Kardashians.

While many estate planning laws and practices have evolved and changed since the mid-1800s, many also have not. Indeed, the outcome of failing to create a valid, quality estate plan certainly has not.

All in the Family

Wuthering Heights twists and turns with love, revenge, birth, and death spanning some thirty-something years from the late 1700s to 1803. Among many other plot devices, conflict rests on the real property (named Wuthering Heights and Thrushcross Grange) that a man named Heathcliff comes to in possession of through a number of different property rights and inheritance laws. In this way English common law has its own sort of starring role in the book, a character for which Bronte shows an impressive grasp of.

Of course, I don’t want to spoil the book because it’s a classic and you should enjoy the experience of exploring it yourself. So, without any spoilers there’s a lot of family conflict and one of the characters (Heathcliff) taking vengeful advantage of a number of unfair laws (especially those discriminating against women) of the time to gain property and power over his siblings. What were these unjust laws you ask? For one, married women couldn’t legally own property in England during this period. Additionally, inheritances generally passed to sons only. (If a father did not have sons and did not specifically name a daughter as a beneficiary, the father’s closest male relative would usually become the heir to the father’s estate.)

Yet, the irony of Heathcliff’s unyielding (and suspect) property acquisition is that in the end, he failed to make an estate plan and therefore failed to seize his opportunity to decide to whom and when he wants his things to pass. Apparently, he had thought about it, but likely did what so many of us do and made excuses and put it off until it was tragically too late. (Again, no spoilers, but Heathcliff’s ending is no fairytale.)

First Wuthering Heights Lesson: Stop the Procrastination

This brings us to our first important Wuthering Heights estate planning lesson: make an estate plan. Seriously, every adult needs an estate plan, as you never know when unexpected death or incapacitation may occur. For instance, you’ll want to have a health care power of attorney in place before a medical emergency occurs. And if/when it does, you’ll want your assets to go to the beneficiaries of your choosing. Having a valid estate plan in place also saves your loved ones ample time, energy, and money in court costs and lawyers’ fees.

What Happened to the Estate

Because Heathcliff lived in 19th century England, without a valid will in place at the time of his death and without a clear heir at law or living spouse, Heathcliff’s property was “escheat,” a common law doctrine that made sure property was not in limbo without a recognized owner. This meant the property passed to the “Crown” (basically whomever the feudal lord of the area was, or in modern day it would be as if the property was held by the state) and then eventually passed to Heathcliff’s next generation of family members. Now, Heathcliff, given his history with his family, may not have chosen for his unqualified nephew (and niece) to inherit his property. Heathcliff may have wanted to make charitable bequests of his property to a charitable organization he supported. But, the fact of the matter is he didn’t have a will, let alone an estate plan, so then inheritance laws and the judicial system made these personal decisions for him.

As an estate planning attorney, I can assure you this is not something that only happens in books. Without a valid will in place your estate will go through a process called intestate succession where the Iowa probate process and the courts will decide how your hard-earned property is to be distributed. This can take a long time, cost a great deal in fees and court costs, and your property may end up transferred to beneficiaries you never would have selected. Plus, without an estate plan, you cannot give upon your death to charity.

Second Wuthering Heights Lesson: Intestate Succession

Dying in Iowa without an estate plan is different than dying in 1800s England, but what does the intestate succession process actually look like?

It depends on the family situation. If married, the estate will pass to the surviving spouse. If there’s a surviving spouse and living children (whom are not children of the surviving spouse, but children of the deceased), then the estate will be split with half to the spouse and half divided amongst the living children (often referred to as “issue” in legal speak). If there is no spouse and no children, then the division process works its way down a list of surviving family members from parents, then to grandparents, then great-grandparents…and if no one from that list is alive than the estate would pass to the deceased spouse’s issue (such as stepchildren). Finally, if there are no family members living to inherit the estate, the intestate property will escheat (remember when we talked about that before) to the state of Iowa.

Assets that are inherited via beneficiary designations (such as 401ks, IRAs, annuities, checking accounts, and pensions) only become the property of the probate estate and pass through the intestate succession process if no beneficiary is named.

Note well that these highlighted provisions are just the basics. Other statutes come into play with the intestate process pertaining to various personal and financial situations.

Just as enlisting an attorney to help you craft a quality, individualized estate plan, it’s important that an attorney is brought on by the surviving family of the person who died intestate in working out how property will be divided.

brown books on shelf

Write Your Plan Before “The End”

The bottom line is: don’t be Heathcliff. Every adult (even young adults, and especially adults with minor children) needs to make an estate plan. Not only will this help your family avoid the worst-case scenario of litigation, it will also allow you the benefit of determining who you want inheriting your estate and when. You shouldn’t rely on the rules of intestate succession for dispersal of all the assets you acquired over the course of a life.

Lucky for you, it’s even easier to make an estate plan than it was back in the time of Wuthering Heights. Get started with my Estate Plan Questionnaire or contact me with questions about your individual situation.

hands of 2 grooms

Everyone needs an estate plan! This goes for if you’re a young professional or have minor children or are retired. And, it goes for all married couples

This year marks a decade since Iowa Supreme Court decision of Varnum v. Brien, which legalized same-sex marriage in the state. This case was a precursor and set a standard echoed subsequently in other states and eventually at the national level. The Supreme Court’s opinion in Obergefell v. Hodges, which legalized same-sex marriage was a major win for both LGBTQ and human rights. 

Love is love written on card

The 10-year marker of the Varnum decision reminded me that Obergefell had an enormous impact on estate planning. With same-sex marriage now recognized across the country, it opened a multitude of previously unattainable tools and tax-savings that come along with a legal and recognized marriage. Yet, same-sex couples still may have situations that require extra or special planning. You may be surprised to learn that It can’t be it covered by a single article, so I’ll hit the high points. Here are five considerations for same-sex spouses engaged in estate planning.

Unlimited Marital Deduction

The unlimited marital deduction is a money-saving must for all married couples. The unlimited marital deduction is an essential estate preservation tool because it means an unrestricted amount of assets can be transferred (at any time, including at death) from one spouse to the other spouse, free from taxes (including the estate tax and gift tax). Prior to Obergefell, same-sex couples had to depend on their individual applicable exclusion in order to provide for a surviving partner.

(Note that the marital deduction is available only to surviving spouses who are U.S. citizens. If your spouse is not a U.S. citizen, look at other tools, such as a qualified domestic trust (QDOT), which may act to minimize or eliminate taxes.)

marriage equality flags

Guardianship of Minor Children

A will is so critically important for several reasons, including the fact a parent can make a designation of guardianship for minor children should something happen to the parent while the child is still under age 18. Without a will, no guardianship can be established, and Iowa Courts must choose guardians. Unfortunately, with no clear evidence as to what the former caregivers would have preferred, the Court must make its “best guess” as to who the parents would have preferred and what would be in the best interest of the child. The Court may, or may not, choose who the caregivers would have named.

Child smiling on bridge

Establishing guardianship is SO important for all parents, but especially so for same-sex parents. The legal relationship between a minor child and a parent in a same-sex marriage should specifically be identified in the estate plan. Additionally, if only one spouse is currently the natural or adoptive parent of a minor child, the spouse of the said parent should consider adopting the child to legalize the relationship. Without this officially established relationship, the death of the adoptive/natural parent could open the door for a custody battle with the deceased’s family or the child’s birth parents. To avoid litigation (and avoiding litigation in estate planning is always a good idea), co-parent adoptions protect each parent’s rights regarding guardianship.

If adoption isn’t on the table, it’s smart to create a trust with specific provisions for the relationship between the non-legal parent and the minor child if someone else were to become the guardian.

(Expert advice: The adoption tax credit is not available for a spouse adopting a spouse’s child. If adoption is in the plans it may be financially advantageous for the adoption to take place prior to marriage.)

Give Your Assets to your Child(ren)

Adoption also plays an important role not just in guardianship but in the passage of assets. Typically, when parents die their assets are passed on to their child(ren). If this is indeed an estate planning goal for a same-sex couple, adoption should definitely be considered since it’s more common in same-sex marriages for only one parent to be biologically related to the child.

The term for adoption by a spouse (without the “first parent” losing any parental rights) varies from state-to-state and can be called second-parent adoption, co-parent adoption, stepparent adoption, or confirmation adoption.

mom daughter blowing kiss

Once an adoption is final, an adoptive parent has all the permanent legal rights and responsibilities of a parent-child relationship, exactly the same as that of a birth parent.

Without the legal determination and an estate plan the child(ren) may not get anything as the couple’s assets could flow instead to other family members.  

Professional Planner

For all the aforementioned considerations and more, it’s smart for all couples, but especially same-sex couples, to avoid the DIY online estate plan templates. Most of these services don’t include the specific provisions and important estate plan needs of LGBT couples. Seek out a lawyer with ample experience in estate planning who understands the potential legal challenges your estate could face so they can adequately protect your assets from potential peril. For instance, if you think the situation could arise where family members who disprove of the marriage or decisions regarding the estate could create future conflict, your lawyer should be able to advise on how a “no contest” clause to be incorporated into the estate plan.

Comprehensive Review

As stated before, given the tax-saving tools that marriage provides, it’s nothing but beneficial to review any and all existing estate plan documents of each spouse. (Married couples often seek joint representation in estate planning, but individual representation can help couples avoid conflicts of interest.)

In your estate plan review confirm that definitions accurately reflect relationships with verbiage such as “spouse,” “children,” “husband,” “wife,” and the like, so there’s no ambiguity when it comes to execution of the plan.

Following marriage, it’s also a good idea to take a look at re-titling property (such as a home) from sole ownership to joint tenancy. This means that if one spouse were to pass, the other would get the property without it passing through probate. (Depending on your situation, you could also consider “tenancy in common” as another option for holding property titles under multiple names.)

Additionally, don’t forget to check your beneficiary designations on accounts such as savings/checking, insurance, 401k, and retirement benefits, as these designations actually trump your will.

Ask your professional advisors—lawyer, financial advisor, insurance agent—to help you maximize your money-saving benefits when it comes to gift, income, and federal/state estate taxes.

two brides getting married

Get Started

You’ve worked hard for the assets you’ve built and the property you’ve acquired. Almost assuredly you want these assets to pass to the ones you love—the ones you’ve built a life with and around. Don’t let legal loopholes, family members that will never fully understand that love is love, or guardianship issues get in the way you crafting your legacy. It’s never too early to get started on your estate plan (with my free, no-obligation) estate plan questionnaire. I’m always happy to discuss the topic over the phone (515) 371-6077 or via email.

Gordon Fischer at desk with client

I’ve previously written about the six “must have” documents of everyone’s estate plan. These documents include some key people that are essential. But, the terms for some of these roles can be confusing. Let’s review the main ones today.

Who/What is a Beneficiary?

Let’s talk first about beneficiaries. This is a basic term you’ve probably heard before or seen while filling out documents. Your beneficiary is the person to whom you leave your belongings, assets, money, land, etc. Of course you can leave your stuff to more than one person, in which case there would be multiple beneficiaries. With multiple beneficiaries, you’ll have to clearly designate who gets what. This can be done in a number of ways; for example, percentages of total value of the estate, or it can be done with specifics.

An example of percentages:  “I want Beth to inherit 20% of my estate.”

An example of a specific bequest:  “I want my son John to inherit the country house and I want my daughter Suzie Q to inherit the lake house.”

You don’t have to be related to your beneficiaries, and you’re under no obligation to leave anything to family members whom you wish not to receive your assets (no matter how hard that may be or how guilty you might feel). You could elect to leave part or your entire estate to charities. It truly is your choice as to who should benefit under your estate plan.

There’s a lot more to say about beneficiaries, but for now, just remember to make sure all documents are up-to-date. Keeping your estate plan up-to-date ensures you avoid nightmares like your ex-husband from years ago cashing in on your retirement funds.

How about an Executor?

Let’s talk about the executor of the will. An executor is the person who is in charge of your estate plan. They make sure the will is carried out as it is written. It’s not an awful job, but it is an awful lot of responsibility. Most folks, having never had to deal with the execution of a will, might not know how arduous it can actually be. Additionally, your executor might be close to you and grieving your passing while trying to make sure everything is taken care of properly. It can be stressful, to say the least.

When picking an executor, you want to make sure it’s someone you trust. Obvious, right? But, it’s so much more than that. We all have people in our lives we love and trust on a personal level, but we know they’re not responsible with things like finances and details. Those people would not a good executor choice, generally speaking. Look for someone in your life who is detail-oriented and can handle the part-time job of dispensing an estate.

If there’s no such person in your life, or even if there is and you simply don’t want to burden them with the task, there’s another great option: corporate executors or trustees–which can be found at a bank or a credit union. The corporate executor offers the bonus of being completely neutral in all things, which can be helpful if you have sticky family dynamics that might make life difficult for the executor. The corporate executor does come at a cost, which is usually based on the size of the estate. I tend to think you get what you pay for, and this could be an excellent option to consider.

If you do go with an executor you know personally, you’ll want to sit down and talk with them about it. You want them to know that you’ve assigned them the task and why you chose them specifically. And, if you’re choosing one child out of many, you’ll want everyone to be on the same page so there’s no unexpected turbulence after you’re gone.

How about Legal Guardians?

Legal guardians are the folks who will take care of your minor children should something happen to you before they reach the age of 18. Like your executor, this job requires a lot of trust in the person you choose.

Clearly, this is not a job that ends after the estate is closed. Who you decide to choose should be a matter of closeness of relationship (as in bond, not necessarily family ties), mutual values, and ability to handle the responsibility. Have an in-depth conversation with the person or people you choose. You want to confirm that you’re comfortable with their parenting style, make sure they feel they’re up to the job, and let them know why you chose them.

Important Trait in Common: Trust

What’s the key theme in all of these roles from beneficiaries to executors to legal guardians? Trust. The level of trust you have in the people who are involved in and benefit from your estate plan should be strong to be successful. If you ever have any questions about selecting the key players in your estate plan, don’t hesitate to reach out.

Your Estate Plan Should be Unique to You

There it is in a nutshell. Those are the basics of the key people in your estate plan.

Whether your estate plan is simple or complicated, it does require some thought and time, but it’s worth the investment. A proper estate plan can save you and your estate costs, taxes, 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.

No Day Like Today

Why not start right now with my Estate Planning Questionnaire? It’s provided to you free, without any obligation.

Do you have an estate plan? Why or why not? I’d love to hear from you. You can reach me any time at gordon@gordonfischerlawfirm.com or by phone at 515-371-6077.

Estate planning is not just for your grandma, rich people, or families with kids. Call it adulting or simply being prepared, creating a quality estate plan is an essential part of your financial health. Here are five valid reasons for single, twenty-somethings to make an estate plan ASAP.

  1. The future of your digital assets (e.g., bank or credit union account information, social media accounts, and more) are in limbo. So much of our lives are lived online that it’s just as important to have your online presence accounted for as your personal, physical property.
  1. Your debt still needs to be handled. Unless it’s student loans, your debt just doesn’t go away if you pass away, and someone in your family may well be responsible for paying it off.
  2. Without an estate, your assets will be liquefied to pay off debt, and then reassigned to whomever a probate court deems to be the best recipient. This also means that without an estate plan you cannot donate your assets to the charities you care most about.

4. Do you really want to leave all of the burial decisions and house cleaning to your distraught loved ones?

5. Who’s going to parent your fur baby (dog, cat, bunny, chinchilla, you name it) if something happens to you? You’ll want your pet to go to a loving home and an estate plan (with a pet trust) is a great (only?) way to set the standard for continued care and ownership.

These are just a few of the many considerations that are, yes, tough to think about, but so important.

Have questions? Need more information?

A great place to get started is with my Estate Plan Questionnaire. Also, I’m always here to offer guidance, explain important terms, and answer questions. Feel free to reach out at any time.

april fool's day balloons

Hopefully, you didn’t get pranked too bad today or misled by a jokester on social media today. But, if you did, happy April Fool’s Day! We all love a good practical joke now and then, but the subject of estate planning is definitely not one to laugh at. If you already have an estate plan in place, that’s fantastic, but don’t let an old or inadequate estate plan make a fool out of your life, property, and legacy.

Review Your Estate Plan

Let this lighthearted April Fool’s day actually serve as a reminder to review your current documents and determine if you need to consider updated language, additional provisions, or a different strategy (like “upgrading” from a basic will to a trust). When revisiting your estate plan consider these common mistakes I see when reviewing folks’ less-than-optimal documents.

Living Trusts Missing Retirement Plan Lingo

Many people have a valid portion of the estate assets investing in retirements plans like IRAs and 401(k)s. The mistake comes when people designate their revocable living trust as the beneficiary of these plans, but the trust hasn’t been written or updated to grant the trustee the power to manage the accounts placed in the trust. Without vesting this power in the successor trustee (presuming the testator was the initial trustee and then passed away), the trustee can lack the ability to properly deal with the plan assets and unfavorable income tax consequences can occur.

Uncertain if your revocable living trust properly contains the requisite retirement plan lingo? Simply check with an experienced estate planning attorney and invest in amending.

Outdated Living Wills

Also known as an “advanced medical directive,” your living will should contain the appropriate Health Insurance Portability and Accountability Act of 1996 (more commonly referred to as HIPAA) language. (HIPAA involves privacy and who can and cannot have access to your medical records.) If your living will was drafted pre-2001 (before Congress passed new rules governing the Act) it likely doesn’t contain the essential references to HIPPA. I’ve even seen some living wills written well after 2001 that didn’t have the proper provision. It may sound silly, but without this “magic” wording, your designated health care representative won’t have access to your medical records. Without this access, they may not be able to fulfill their duty in making the most informed decisions regarding your health care as possible. This mistake can be especially important if you’ve designated someone other than a close relative (such as a spouse or adult child) as your agent.

Underfunded Living Trusts

Another mistake I’ve seen is living revocable trusts that are not fully funded. Undoubtedly, without the guidance of a quality estate planner, the funding process can feel overwhelming. When people procrastinate or run into roadblocks when placing assets into their trust they can get frustrated and fail to complete the process. This is a misstep with negative consequences because without funding the trust, it’s best thought of as an empty container waiting for a testator’s assets to fill it up. Without it, if the person with the underfunded trust passes away, the estate will still need to pass through the sluggish and costly probate process. And, quite frankly, the investment in the trust will have been for little benefit or advantage.

Let your estate planner help you through this process. Also, consider if you have any new major assets that need to be assigned to the trust.

All jokes aside, every Iowan deserves a high quality and functional estate plan that meets their goals. Don’t be a fool and let more time go by before reviewing your plan! Please contact me with any questions; I offer a free one-hour consult.

Selection Sunday 2017

1. If you understand #SelectionSunday, and #MarchMadness, you can most certainly understand estate planning.

When I meet people who say they’re confused about estate planning I love to see their faces when I tell them understanding the basics of wills, trusts, and even business succession planning may sound intimidating, but the basics are as simple as understanding NCAA March Madness. Seriously! Many folks know what teams are on the bubble, which teams were playing well at end of the season and which weren’t, what the most likely upsets are, and so on.NCAA Basketballs

Just like all those details are a part of #SelectionSunday and #NCAAMarchMadness, there are multiple inputs that go into a quality estate plan. For starters, there are your personal goals, the six main estate planning documents, and then personal considerations for, say, children, a family with special needs, pets, and charitable bequests. Feel free to read into these estate plan elements (like you would check out the stats of your favorite teams!) in between sweating out your bracket. And, speaking of your bracket…

2. If you have time to fill out a March Madness bracket (and you do), you also have time to fill out an Estate Plan Questionnaire.

Most everyone I know fills out a March Madness bracket in a (mostly) friendly competition with family, friends, co-workers, or sometimes all three. If you have time to fill out a bracket, why not also put serious thought into securing your future with estate planning? No, I’m not trying to guilt you. It’s just, again, it’s not that hard! You can find my Estate Plan Questionnaire here. It’s a great place to start.

 3. Weird stuff happens.

We all know that a huge part of the fun of NCAA March Madness is the upsets. The super thrilling and/or gut-wrenching endings that shouldn’t have happened, but somehow did. It’s a reminder that life, for better or worse, is quite unpredictable. Why not make sure that plans are in place in case something unexpected happens?

Want some more sports to legal analogies in your life? Check out this read on preparing your favorite nonprofit for top-notch compliance.

Regardless of who you’re slating to win it all, I would love to hear from you; let’s schedule an initial free one-hour consultation (at no obligation, of course). Email me at gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077.

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.

Businessman taking notes and planning in a meeting

Q: How many elephants will fit into a Minivan?

A: Four: Two in the front, two in the back.

Q: How many giraffes will fit into a Minivan?

A: None. It’s full of elephants.

Jokes aside, you can fit just about any asset into a trust. Here is a “short” list of assets actually placed into trusts:

  1. Airplanes
  2. Antique automobiles
  3. Antiques
  4. Artwork
  5. Assets held by C Corporation
  6. Assets held by S Corporation
  7. Autographed books
  8. Barn doors
  9. Beach house
  10. Beanie Babies
  11. Boats
  12. Bonds
  13. Books
  14. Bookstore
  15. Boxes
  16. Boxing gloves
  17. Broadway musical
  18. C Corporation stock
  19. Cheese shoppe
  20. Chocolate store specializing in “I love chocolate” t-shirts
  21. Chocolate store specializing in baking chocolate
  22. Chocolate store specializing in bars of chocolate
  23. Chocolate store specializing in candy-coated chocolate
  24. Chocolate store specializing in chocolate and almonds
  25. Chocolate store specializing in chocolate mixed with peanut butter
  26. Chocolate store specializing in couverture chocolate
  27. Chocolate store specializing in dark chocolate
  28. Chocolate store specializing in milk chocolate
  29. Chocolate store specializing in organic chocolate
  30. Chocolate store specializing in hot chocolate
  31. Chocolate store specializing in liqueurs chocolate
  32. Chocolate store specializing in semi dark chocolate
  33. Chocolate store specializing in sweet chocolate
  34. Chocolate store specializing in white chocolate
  35. Chocolate store* (You’re now probably quizzically asking, “Should I send Gordong chocolate?”)
  36. Coin collections
  37. Comic books collection
  38. Commercial and residential real estate
  39. Condominiums
  40. Credit card rebates
  41. Cupcakery
  42. Depression-era glass
  43. Dolls
  44. Enamelware
  45. Equestrian ribbons
  46. Farmland
  47. Ghosts
  48. Gold bullion
  49. Grain
  50. Guitars
  51. Hedge fund carried interest
  52. Historic papers
  53. Installment notes
  54. Intellectual property
  55. Law firm
  56. Life insurance
  57. Limited liability partnerships
  58. Livestock
  59. Marbles
  60. Mineral rights
  61. Monica (my wife)
  62. Moonstone
  63. Music store
  64. Mutual funds
  65. NHL team
  66. Oil and gas interests
  67. Olives
  68. Operating partnership units
  69. Paint-by-number landscapes
  70. Painted planks
  71. Paintings
  72. Patents
  73. Photographs
  74. Pickles
  75. Pooled income funds
  76. Racehorses
  77. Real estate
  78. Restaurant
  79. Restricted stock (144 and 145)
  80. Retained life estate
  81. Retirement benefits
  82. Royalties
  83. S Corporation stock
  84. Sculpture
  85. Sculpture garden
  86. Sea urchins
  87. Seat on New York Mercantile Stock Exchange
  88. Seats at events
  89. Snow globes
  90. Soda pop bottles
  91. Spirits of the damned
  92. Stamp Collection
  93. Stocks
  94. Tangible personal property
  95. Taxidermy
  96. Teddy bears
  97. Timber deeds
  98. Vacation home
  99. Vehicles
  100. Violin
  101. Wines

*Yes, this is a cry for help. I love sweets, especially chocolate, way too much.

Why put assets in trust?

There can be many reasons to use a trust, and specific benefits can accrue from specific trusts. In general, there are four great reasons to initiate a trust.

1. Save money

Using a trust, you avoid probate, which can save you lots of money. Probate will generally take two percent-plus of your estate, and even “just” two percent of your entire estate can add up to a lot of money. Avoiding probate also helps you avoid fees, costs, and taxes.

2. Save time

timer with sand in it

Using a trust, you avoid probate, which can save you lots of time. Going through probate, even here in Iowa, can take several months, to a year, or even more. Your heirs and beneficiaries may not receive their inheritances until the end of this probate process. Again, with trusts, you bypass probate. With trusts, your beneficiaries can get their inheritances in mere days, or weeks, rather than several months.

3. Flexibility of distributions

Don’t want your 18-year-old to inherit half-a-million dollars in one fell swoop? I agree it’s not a good idea. Trusts offer flexibility for the payout of inheritances. You set the ground rules of when and how distributions are made. For example, you might decide your children can receive distributions at certain ages. (For example, one-third at age 25, one-third at age 30, and the remaining at age 40). Or, you might decide your children can receive distributions at the attainment of certain milestones, such as marriage, the birth of a child, buying a first home, or receiving a certain degree

4. Privacy

Probate proceedings are public. Your will, once you pass and it is filed in court, is a public record. Some desire privacy about financial matters (say, about their family business) even after death.

Also, privacy can prevent hurt feelings among family members. For example, do you really want your Cousin Joe to know he received significantly less than all the other cousins?

What are the drawbacks to a trust?

It’s more expensive to set up a trust than basic estate plan documents, although I would say those costs are greatly outweighed by the money you’ll save your estate in the end. It’s also a bit of an administrative hassle, as your assets (such as car, house, stock funds, etc.) have to be retitled in the name of the trust. Again, though, I believe this inconvenience is much outweighed by the smooth operation of a trust at death.

Let’s talk about trusts!

Have an asset that didn’t make the list of 101 items? It can probably still go in a trust (even if it isn’t chocolate related!). Sometimes it’s hard to know if a trust may be right for your personal situation. It certainly doesn’t hurt to take me up on my offer for a free one-hour consultation. Give me a call at 515-371-6077 or shoot me an email at gordon@gordonfischerlawfirm.com.

Gordon Fischer Estate Planning Simple

You know you need an estate plan, but you still don’t understand really what you need or where to start. What to do? I’m here to help and it’s one of my personal missions to break down estate planning so it’s as easy and accessible as possible.

Here are three blog posts, all relatively short and simple, that should help.

First, I provide the very basics of estate planning which features the six “must have” estate planning documents everyone needs.

For many, the six “must have” estate planning documents is enough. Some Iowans will also want or need a trust.

Second, here are the basics of what you need to know about trusts.

Trusts can be needed and utilized for a number of reasons. Perhaps someone’s assets are too large, too numerous, and/or too complicated and a trust is needed. Perhaps the person simply has a desire to avoid probate. Trusts can also provide a measure of privacy that, say, wills, do not.

Third, you may ask, how does someone go about actually getting these documents? What’s the process of putting together an estate plan? Well, probably every lawyer has a different estate planning process. I naturally prefer mine – I think it’s very client-focused and client-friendly, and allows plenty of give and take between me and you. We’ll have an ongoing dialogue between us to ensure the best plan for you. Really, it only takes five steps to have a full and complete estate plan.

Let’s Talk.

After reading these posts you may still have questions or will want to discuss your personal estate situations. I would love to schedule a time to meet or discuss over the phone. Shoot me an email or give me a call and we’ll start the conversation on what YOU need to leave a lasting legacy and secure future for your loved ones.

If you’re feeling good and want to get started on your estate plan, the best place to begin is with my free, no-obligation Estate Plan Questionnaire.

Someone pointing into the sunset

Estate planning allows people to elect tools and strategies that makes life for their loved ones as uncomplicated as possible following death. Almost everyone I work with wants to ensure their family members are set up for success.

Dad holding daughter

One such estate planning tool to accomplish this is the handy dandy trust. There are almost limitless different types of trusts; trusts may be classified by their purpose, duration, creation method, or by the nature of the trust property. For instance, there is the fairly common “animal care” or “pet” trust. You can also place almost any asset imaginable in a trust.

For some parents looking to help a son or daughter (minor or adult) with special needs, a trust can be a powerful avenue to continuing to support the loved one. (In this trust situation the child would be the beneficiary of the trust, the parents would be the settlor, and a trustee would be assigned.) Why? In general, the idea is that a special needs trust can use estate assets to enrich and enhance the child’s life while maintaining the individual’s viability for enrollment in public benefits programs. Examples of assistance programs can include Supplemental Security Income (SSI), Medicaid, subsidized housing, and vocational rehabilitation, among others.

Specifics of Special Needs Trust

Smart estate planning for special needs ensures that the parts of the estate which pass on to the individual with special needs are NOT considered an “available asset” by the associated agencies that disperse essential benefits. Many people make the mistake of leaving assets to a loved one with a disability through a will. This is problematic because acquiring assets, such as a significant lump sum of money, can disqualify your loved one from certain government assistance programs. By setting up a special needs trust, instead of solely using a will, you can avoid these issues. How? Because the trustee has total control over the management of the funds, and the beneficiary does not, government program administrators, like the ones from SSI and Medicaid, don’t “count” the trust assets when considering eligibility.

Beyond protecting the beneficiary’s eligibility for public benefits a special needs trust can also:

  • offer assured lifelong money management for the child; and/or
  • establish a pool of available funds in the future event that public benefits should be restricted or revoked.

Careful Drafting Required

It’s important to remember that details of each special needs trust will vary depending on factors like the beneficiary’s age, competency, and familial situation. Also, because of the complexities involved, special needs trusts require extremely careful drafting. So, If you’re even considering establishing a special needs trust as a part of your estate plan, it’s definitely necessary to speak with an experienced estate planning professional to make sure all of the nuances of the trust are executed properly.

Don’t hesitate to contact me with questions via email (gordon@gordonfischerlawfirm.com) or on my cell phone at 515-371-6077.