Frequently Asked Questions About Estate Planning
At Janssen Law, PLC, attorney Dallas Janssen understands that estate planning can leave you and your family with many questions. Find brief answers below to these common questions he receives:
- What does a will generally include?
- How are wills and trusts different?
- How do estate taxes work?
- What if I do not make an estate plan?
- Why should I consult an estate planning attorney?
What does a will generally include?
You want to include certain elements in your will to avoid conflict between family members and ensure that your will is valid. The fundamental aspects of a will include:
- Identification of family: One of the most important things is to clearly outline the members of your family who will be beneficiaries.
- List of property: This does not have to be an exhaustive list of your assets, as you can make general statements of who should receive property. However, it is helpful to list items that you wish specific beneficiaries to inherit.
- Bequests: General or specific bequests are gifts from your estate. They can include cash or specific property, such as your home.
- Executor: It is important to determine who will execute the wishes in your will and distribute property.
- Guardianships: If you have any minor children, your will should also establish a legal guardian who will be responsible for your children if you are unable to care for them.
How are wills and trusts different?
Both wills and trusts legally transfer property to beneficiaries after death. It is a common misconception that trusts are tools used mainly by wealthy families – anyone can establish a trust.
The main differences between trusts and wills include:
- Number: Where you can only have one will at a time, you can make as many trusts as you wish. This is because trusts can cover specific topics, such as who will take care of your pets.
- Time of effect: Wills go into effect after death, while trusts can go into effect whenever you decide.
- Probate: Trusts do not have to go through the probate process, but wills do.
It is still important to create a will, but trusts can provide additional support in your whole estate plan.
How do estate taxes work?
The federal government collects an estate tax on property passed on after death, but only if the estate is valued over a certain amount. In 2022, the amount is $12.06 million. This exemption amount will sunset in 2025. On Jan. 1, 2026, the exemption drops to $6.2 million. Iowa does not have its own estate tax, though it does have an inheritance tax.
Generally, the inheritance tax applies to estates valued at over $25,000 or if parts of the estate are left to larger organizations. Unlike estate taxes, an inheritance tax does not apply to the entire estate but only to what a beneficiary receives. That means that the beneficiary is responsible for paying the tax.
The inheritance tax amount is different for every individual, so it is helpful to consult an experienced lawyer who can help you understand your situation.
What if I do not make an estate plan?
If you pass on without making a will, then the state will take over and distribute your assets by intestate succession laws. The term “intestate” simply refers to passing away without a will.
Most of your property still goes to your closest family members in intestate succession. However, creating a will allows you to have control over what those family members receive.
There are many assets not impacted by intestate succession, including:
- Property inherited through a trust
- Retirement pensions
- Jointly owned property
Why should I consult an estate planning attorney?
Preserving your legacy and your wishes is important to you and your family. An estate plan can help you do just that, but it is essential to do it right. There are many details involved in the estate planning process, and it can be difficult to know where to start. A knowledgeable estate planning attorney can guide you through every step of the process and reduce your stress.
Dallas can help you:
- Organize your finances and assets
- Draft and establish planning documents
- Avoid conflict and consequences
He can help you plan for the future so that you can focus on the present.
Have More Questions? Dallas Janssen Is Here To Help.
At Janssen Law, PLC, attorney Dallas Janssen is prepared to guide you through the entire estate planning process. When you have more questions, he welcomes the opportunity to help you find the answers. Call 844-879-2839 or contact the firm online to schedule a free consultation with him today at his Des Moines office.