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Frequently Asked Questions About Estate Planning
At Janssen Law, PLC, we understand that estate planning can leave you and your family with many questions. Common questions we receive include:
- 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?
There are certain elements you want to include 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 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, but 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 like a will does.
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 $5 million. Iowa does not have its own estate tax, though it does have an inheritance tax.
Generally, the inheritance tax applies to estates valued 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 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.
In intestate succession, most of your property still goes to your closest family members. 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.
At Janssen Law, PLC, we can help you:
- Organize your finances and assets
- Draft and establish planning documents
- Avoid conflict and consequences
We can help you plan for the future, so you can focus on the present.
Have More Questions? We Are Here To Help.
Our experienced attorneys are prepared to guide you through the entire estate planning process. If you have more questions, we welcome the opportunity to help you find the answers. Call 515-421-9068 or contact us online to schedule a free consultation with us today at our Des Moines offices.