Iowa Fiduciary

Iowa Fiduciary Services Part 4: Estate Planning

The COVID-19 Pandemic has changed the nation’s perspective on many things, and estate planning is definitely one of them. Here’s why planning for the unexpected has never been more important.

Chances are you’ve spent plenty of time pondering how much money you’ll have available at retirement. But what have you done to plan for your estate? The sad truth is that most of us — some 70% of adult Americans — have neglected to write a will. However, COVID-19 has significantly increased the demand for estate planning.’s 2021 Wills and Estate Planning Study found that middle- and older- aged adults are less likely to have a will now than they were just one year ago, while younger adults are 63% more likely to have one this year than they were pre-pandemic.

Shockingly, 18-34 year-olds are now 16% more likely to have a will than those in the 35-54 age group. The younger generation was also the most likely to cite COVID-19 as the reason they started taking estate planning seriously. While Estate Planning is something we know we should do, we somehow manage to postpone until later in the future. The more we postpone planning, the more we could potentially pass over an important opportunity to protect the lifestyle you’ve worked hard to create.

Many people might feel they can wait until they become seriously ill, old or infirm to decide on how to divide their assets, set up a trust or legally decide whom to leave the house to. It’s better to plan ahead and utilize an Iowa Fiduciary to help you plan for any scenario with estate planning. Here’s what you need to know and how to create an estate plan in the state of Iowa.

What Makes A Good Estate Plan?

Many people believe that if they have a will, their estate planning is complete, but there is much more to a solid estate plan. A plan that is tailored to your family’s specific needs – with clear instructions and limited uncertainty – is the best way to make sure that your assets, savings, jewelry, car and home are distributed to the people you want to receive these items. 

A good plan should be designed to avoid probate, save on estate taxes, protect assets if you need to move into a nursing home, and appoint someone to act for you if you become disabled. A lot of times people assume they can simply download a document online, when in reality, it’s more complex than meets the eye.

To help avoid family confusion, stress and conflict after your passing, first begin by gathering the following documents for your Fiduciary:

  • List of all your bank accounts, investment accounts, credit card information
  • A copy of your will, living will, power of attorney and other estate planning documents
  • A list of your debts (Mortgage, lines of credit, loans)
  • A list of income streams (Life insurance, pensions, annuities)
  • Digital Assets ( Computers/Mobile devices, passwords to bank accounts, email/social media, and any online subscriptions. 

Armed with this base information, we/your chosen Fiduciary can get a better understanding of your financial picture and create a custom estate plan to address your specific needs.

Estate, Inheritance, and Gift Taxes

A big part of maximizing what you leave behind is minimizing taxes. Federal taxes on gifts and estates can be among the highest assessed on any financial transaction. In addition, some states levy their own estate or inheritance taxes.

Both estate and gift taxes usually have exemption limits, meaning you can give up to a certain amount without incurring tax. Many people use the gift tax exemption to transfer assets while they are still living, as part of their strategy to maximize what their beneficiaries receive. Depending on your unique situation, the IRS has many useful resources to help you navigate your estate planning journey:

COVID-19 Relief for Estate and Gift
Learn about the COVID-19 relief provisions for Estate & Gift.

Frequently Asked Questions on Estate Taxes
Find some of the more common questions dealing with basic estate tax issues.

Gift Tax
If you give someone money or property during your life, you may be subject to federal gift tax.

Frequently Asked Questions on Gift Taxes
Find some of the more common questions dealing with gift tax issues as well as some examples of how different types of gifts are treated.

Filing Estate and Gift Tax Returns
Learn when to file estate and gift taxes, where to send your returns, and get contact information if you need help.

What’s New – Estate and Gift Tax
Stay up to date with the tax law changes related to estate and gift taxes.

Deceased Taxpayers – Probate, Filing Estate and Individual Returns, Paying Taxes Due
Information to help you resolve the final tax issues of a deceased taxpayer and their estate.

You Do Not Need To Be Rich To Need A Will

Many people think that they don’t need a will since they don’t have an ‘estate’, but wills and trusts are not only for the rich. If you’ve got a family and a home — not to mention a savings account — you should definitely have one. They are safeguards for anyone who wants to ensure their loved ones are cared for should the unexpected happen.

There are many good reasons to have an estate plan if you don’t necessarily deem yourself “wealthy”:

  • You can be clear about who gets your assets. You can decide who gets what and how much.
  • You can keep your assets out of the hands of people you don’t want to have them (like an estranged relative).
  • You can identify who should care for your children. Without a will, the courts will decide.
  • Your heirs will have a faster and easier time getting access to your assets.
  • You can plan to save your estate money on taxes. You can also give gifts and charitable donations, which can help offset the estate tax.

So no, you don’t have to be rich to need an estate plan. The goal of an estate plan is to provide security for you and your family. When you think of it that way, wealth has nothing to do with it at all.

Understanding Your Options

Although estate planning can be a complex task, a well-informed plan can make a big difference in what is left for your loved ones. Be clear about who would be making decisions on your behalf. Introduce your designated power of attorney for property to your professional advisors such as your trusted Iowa Fiduciary. Discuss your wishes with everyone present and ensure all conversations are properly documented so that your attorney and Fiduciary will all be on the same page should the time come when you are unable to manage your affairs on your own.

For more information on Fiduciary services and Estate Management in the state of Iowa, reach out to your trusted Iowa advisors at Johnson Wealth Income Management here today.

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