Wills, Trusts and Estate Planning I Frequently Asked Questions

Overview

Estate planning, which includes legal documents like wills, trusts, and powers of attorney, is the process of preparing instructions on how to manage your assets after your death. State and federal laws apply to estate planning, and so do taxes. It is vital to consult us, in order to protect your assets and meet the goals of your estate planning process.

Estate planning allows you to decide what will happen to your assets after your death. It allows you and your loved ones to save time and legal costs, and avoid financial and administrative hassles. Your estate plan should include three vital documents; a will, a durable power of attorney and a health care power of attorney.

A durable power of attorney is a legal document by which you appoint another person to make legally binding decisions for you.

A will is a legal document which controls who receives your property after your death.

In addition, other legal documents such as a health care power of attorney, a living will, and a revocable (or “living”) trust can help with decisions should you become incapacitated.

The basic purpose of estate planning is not simply to distribute property after death, but to reduce inefficiency and taxes throughout the probate process. Most estates are free of federal taxes, and a spouse can leave a surviving spouse an unlimited amount of money free of taxes. The current exemption from federal estate tax is over $2 million per person. In 2009, the cap will be raised to $3.5 million. In 2010, no estate taxes will be charged. However, in 2011 the estate tax will return with the $1 million amount set in 2002. It is anticipated Congress will change these amounts so it is important to review your estate plan regularly. 

Iowa has an inheritance tax.  Any property passing to a surviving spouse is free of Iowa inheritance tax.  Likewise, property passing to parents, grandparents, great grandparents, children, stepchildren, grandchildren, great grandchildren, and any other lineal ascendants or lineal descendants is exempt from Iowa inheritance tax.  Inheritance tax applies to any other beneficiaries with rates between 5% and 15%.

Estate planning is vital to work towards security and peace of mind for yourself and your family. If you need help an any stage in the estate planning process, you should contact a lawyer experienced in estate planning to ensure your needs are met and your estate is protected.

DISCLAIMER: The information you obtain at our firm web site is not, nor is it intended to be, legal advice. It is recommended that you should consult an attorney for individual advice regarding your own situation.