Frequently Asked Questions (FAQs)

Only 40% of all Americans have Wills to clearly state to whom they want to give their assets when they die. Thus, without a Will, the state where they reside at their death dictates how and to whom their estate will be distributed. Often, the government has an entirely different plan than the one they would have designed. However, even if you have a Will, you should periodically review it to be certain that it is up-to-date and clearly states your desires.

Even fewer people have a General/Durable Power of Attorney for financial matters in the event of any temporary or permanent mental and/or physical disability which occurs during their lifetime. Failing to have this type of Power of Attorney may require court involvement with higher ongoing costs for filing annual reports and obtaining court approval.

Finally, a Living Will coupled with a Health Care Power of Attorney states how one wishes to be cared for at the end of his or her life and designates a trusted person to access medical records, talk to one’s doctors, and make treatment decisions for him or her.

The entire process of getting a Will prepared and signed is much simpler than people realize. I like to meet for about an hour with you to obtain basic information about your family circumstances and your assets. At the conclusion of our initial conference, I will give you a firm quote for the cost of preparing the Will. Within 3 or 4 business days, I can have the Will ready for you to review and sign. At that time, payment for my services is due.

Currently, the cost of a simple single person Will with no tax planning provisions is about $300. For married couples with a trust for minor children, the total cost of both Wills is about $500. For married couples without a trust, the overall cost is about $400. More complicated tax-planning Wills with trust provisions are approximately $500 each. If your need for these estate planning documents go beyond those stated above, you are entitled, without obligation, to receive a specific written estimate of the fee likely to be charged before the documents are prepared.

People are often worried about the delays and costs associated with probate after reading horror stories about estate administration in places other than Iowa. The definition of probate is simply the legal process that transfers one’s assets upon death to his or her beneficiaries. But each state has a different probate system, and many states have incredibly inefficient systems. Fortunately, Iowa has one of the lowest cost, most efficient probate systems in the United States, probably due to the number of senior citizens who reside here.

No estate can continue for more than three years under Iowa law without special permission from the probate court. In most cases, estates are closed within 9-18 months. I try and guide my clients through the probate process in 7-10 months for two reasons: I have developed a smooth in-office process for moving estates through probate as quickly as Iowa law will allow, and I want to see beneficiaries receive their money promptly.

Further, the costs of probate in Iowa are reasonable in comparison with other states. Under Iowa law, no fiduciary or attorney can request compensation in excess of a statutory cap on fees unless extraordinary circumstances exist. The statutory cap is essentially 2% of the assets includible in the estate. Some assets, such as life insurance payable to beneficiaries other than the decedent’s estate, are excluded from the calculation of fees and court costs. And most importantly, no fees can be paid unless approved by the probate court.

However, there are some people who benefit from placing all of their assets into a revocable living trust. Generally, these persons own real estate outside the State of Iowa and have substantial assets (i.e., in excess of $1 million). Since the preparation of the trust documents and transferring all assets into the trust are time-consuming, the cost of doing so far exceeds the cost of a Will, sometimes 5-10 times more expensive. I usually am able to prepare a revocable living trust and transfer one’s assets into it for approximately $2500. However, the more assets there are, the higher the expense in pursuing this planning device. In any event, you are entitled, without obligation, to receive a specific written estimate of the fee likely to be charged for all legal services you need and want.

For 2011 and 2012, the Federal estate tax applies if one's assets including life insurance exceed $5 million. With appropriate tax planning, a married couple can shelter twice this amount from the Federal estate tax. So, for most people, this tax is not a concern.

Iowa is one of only a few states that has a state inheritance tax that is imposed on the money one receives as an inheritance from an Iowa decedent. However, spouses, children, grandchildren, parents, stepchildren and other lineal descendants can inherit an unlimited amount without having to pay the Iowa inheritance tax. Instead, only persons who are more removed relationally from the decedent have the tax imposed on their inheritance. This includes siblings, uncles, aunts, nieces, nephews, and in-laws. The highest tax rate which may be assessed currently is 15%. No inheritance tax is imposed on any money left to charity.

With no advance planning, you would need to have someone appointed by the court to be your legal representative to make decisions for you. Personal decisions, such as where you would live and what kind of care you would receive, are left to a guardian who must report annually to the court about your circumstances.

Financial decisions would be handled by a conservator who must report annually to the court on the status of your assets, all receipts and disbursements, and changes in your investments.

There are ongoing fees and expenses associated with guardianships and conservatorships, including annual bond premiums to guarantee that the conservator will properly handle your assets and report to the supervising court. Depending on the overall value of the assets under management, these annual fees and expenses can run into many hundreds of dollars if not more.

To avoid court supervision and the costs involved in a conservatorship, I recommend a General/Durable Power of Attorney designating primary and alternate trustworthy persons to handle your assets if and when you would be unable to do so yourself. The cost of such a POA is about $200. If your need for this document goes beyond the usual POA provided, you are entitled, without obligation, to receive a specific written estimate of the fee likely to be charged before the document is prepared.

If you have a marketable home in a good location and within a reasonable price range, you may benefit from using me to handle all of the paperwork. Unlike a real estate agent, I cannot charge a commission based upon the selling price. Instead, I simply charge for my time which generally amounts to less than $1000. Again, you are entitled to receive, without obligation, a specific written estimate of the fee likely to be charged for my representing you in selling your home on your own.

Having sold my own home a few years ago and having represented many FSBO clients, I may be able to save you money as compared with usual property listing services.

More and more people are establishing their own businesses, especially in today’s economy. I can help you decide which of the following legal entities would be right for you:

• Sole proprietorship
• General partnership
• Limited partnership
• Corporation
• Limited liability company

Depending on how many people are involved and what your plans are, we can discuss the most cost-effective, appropriate business organization for you.