Estate Planning for All Ages and Stages
Hope Wood JD has provided a guide for when you should start and what you should do for your estate plan.
When do I need estate planning?
Common life events that may indicate that you need to adjust your estate plan:
When you start living on your own.
When you get your first retirement account, get your first home, or start a business.
When you are in a committed relationship, got married, had children, got divorced, or are estranged from family members.
When you want to take care of your pets after death.
When you are retiring or have retired, have gotten an unanticipated medical diagnosis, or need to plan for a loved one with a disability.
At what age should I start my estate plan?
Once you turn 18 years old, certain aspects of estate planning should be done. As life changes, your estate plan should evolve and change with it.
Does my young adult need an estate plan?
Yes! Although a young adult may not have many assets, once someone turns 18, they are legally an adult, and their parents can no longer act independently on their behalf. Financial and Healthcare decisions are the sole responsibility of the newly minted adult, but if they ever become incapacitated or legally impaired, having completed Power of Attorney forms can prevent the need to create a court-supervised Guardianship or Conservatorship. A Last Will and Testament or other asset planning may be appropriate if the young adult has a retirement or investment account, is estranged from their parent(s), or is likely to receive an inheritance at a young age.
What Estate Plan do I need if I’m married?
When it comes to estate planning for married couples, there are two primary goals. Goal #1: Avoid probate for the surviving spouse. Goal #2: Make a plan for both spouses dying at the same time. Let’s go through a few scenarios.
Married, no children, and own a home
Marriage is a legal relationship that creates certain rights, but even with these rights, it doesn’t guarantee that assets automatically transfer to the surviving spouse. Without proper planning, the surviving spouse may have to go through probate just to obtain legal title to assets they have a marital right to own. An asset overview (a discussion of how assets are owned and how they are transferred) can prevent headaches down the road.
After achieving the first goal of providing for the surviving spouse, the question then becomes what you want to happen if both spouses have died. Real Estate, in particular, can be a difficult asset to plan for at this step. In Iowa, probate is needed to transfer real estate with no living owner, even if there is a Last Will and Testament. A Will alone is still helpful, making probate less time-consuming and organized, but probate could be avoided if the real estate is owned by a Revocable Trust. With a Revocable Trust, ownership of Real Estate is transferred into the Trust be a real estate deed. That way, after the Grantors (name for the people who create the trust) die, the Real Estate doesn’t have to go through Probate to transfer because the Trust is a legal entity separate from the Grantors.
Married with minor children
Two of the primary planning points for couples with minor children are, in the event of a simultaneous death, who would be in charge of the children's physical care and custody (Guardian), and who would be in charge of managing the money for the children (Trustee). Having a plan for who will serve as the Guardian and the Trustee can prevent disputes and provide clear direction for the living. To achieve these goals, a Will in a Day® package may be the most appropriate at this time; a Revocable Trust has additional benefits, but can be added to your estate plan later in life. In Wills for parents of minor children, we include language known as a Testamentary Trust, which lays out the plan for the Trustee to hold the assets and use them for the Child’s benefit until the Child reaches the age the parents specify, at which point the Child receives their inheritance outright. A Testamentary Trust cannot own assets during your lifetime; therefore, it does not avoid probate if there is an asset that requires court supervision to transfer. The best plan to avoid probate is a Revocable Trust.
Second Marriage with children from a former marriage
Blended families can face unique estate planning challenges. Sometimes, what is equitable isn’t always an equal distribution of assets to all children across the board. Planning to provide for the step-parent should they survive the birth parent, while still providing for children, Guardianship where there hasn’t been an adoption, or making sure step-children are treated like legal children are just some of the considerations. In these situations, a Revocable Trust is usually the best estate planning option.
LGBTQ+ Considerations
While Marriage is culturally an emotional commitment to a partner, marriage is ultimately a legal relationship. Legal relationships are defined by laws, and laws can change. Additional planning in a Last Will and Testament and a Revocable Trust can be undertaken to preserve spousal rights and parent-child relationships, helping guard against change.
What Estate Plan do I need if I’m Single?
In many ways, estate planning for a single individual can be more complex than for a married individual, but that makes the planning all the more important. For example, with a Married person, there is a legal assumption that the spouse is the de facto decision maker in instances where you can’t make decisions; when you’re single, there isn’t that assumed person, and a guardianship or conservatorship would be needed.
Single with Assets
When someone dies without a Will in the State of Iowa, the distribution of assets is controlled by statute. When there is no spouse and no children, the next inheritors are the individual’s parents, then siblings, then nieces and nephews, then grandparents, then aunts and uncles, and so on. Often, younger single people want their siblings or nieces and nephews to benefit before their parents. Older single people may prefer giving to charitable beneficiaries over distant relatives. But, without proactive planning, assets end up where the State’s default plan determines.
Single and in a committed relationship
Whether your person is a life partner or a committed relationship, sharing your life with someone without the legal protections and the legal rights of marriage requires intentional planning to ensure your loved one receives the assets you want them to have. If someone dies without a Will in Iowa, inheritance goes first to a spouse, then to biological or adopted children, then to parents, and so on. Without proper asset titling or an estate plan stating otherwise, someone without that legal status as a spouse will not inherit the assets. Depending on your Estate plan goals and assets, a Last Will and Testament may be sufficient, but a Revocable Trust may be more appropriate.
Single after divorce with Minor Children
After the divorce process, we understand the last thing you want to do is deal with another attorney. However, setting up your estate plan to be compliant with the terms of your divorce while still providing for your kids shouldn’t be left to chance. Anywhere where your former spouse was a designated decision maker may no longer be appropriate. And although legal parental rights must be given priority, your Estate Planning documents can designate who you would prefer to be the guardian if their other legal guardian is otherwise unable or unwilling to care for your child. Unlike Guardianship, who you designate as the Trustee of Financial assets is wholly independent of your former spouse.
LGBTQ+ Considerations
Under Iowa Code Section 144C, the default decision maker for burial decisions closely mirrors the intestate pattern. When there is no spouse or children, the decedent's parents are the next decision-makers. If the decedent’s parents aren’t alive, it would fall to the siblings, then the grandparents. If that isn’t who you want making decisions, it is important to plan ahead. A Designee appointed under a Power of Attorney for Final Disposition of Remains has priority in making funeral and burial decisions. Having these conversations is important to protect the memories of the deceased as they want to be remembered. In addition to burial decisions, if you want your assets to go to specific relatives or chosen family, a Last Will and Testament may be sufficient, but a Revocable Trust may be more appropriate.
What Estate Plan do I need if my Child or Intended Beneficiary is on government benefits?
Many government benefits are means-tested, meaning a person can own only so many assets or earn only so much money to qualify for the program. Supplemental Needs Trusts or alternative planning may be needed to ensure an inheritance can be received without making them ineligible for government benefits. When talking to an attorney about your estate plan, be sure they are informed of whether your child or beneficiary is receiving SSI, SSDI, a government waiver, or other means-tested program.
What Estate Plan do I need if I own a Business?
When starting a business, one of the last things people plan for is what happens to the business when the owner dies. Business Succession planning can include amending an operating agreement and executing an estate plan that outlines who will take over the business or who will be in charge of winding up or selling the business. Business ownership going through probate can delay the court process and make it more expensive. Ideally, business ownership would avoid probate by using language in its operating agreement or a Revocable Trust.
How do I get started?
Hope Wood, JD, has the perfect option for you. An in-person or virtual consultation with an experienced estate planning attorney is at your fingertips. Schedule a trust consultation today. In the consultation, you will receive legal advice about your specific estate plan. At the end of the consultation, you will receive a flat fee price if you want to hire Hope Wood JD for your estate planning. Even if you don’t hire us for your estate plan, you will leave the consultation with a wealth of knowledge about your estate circumstances and what is in your best interest.
