Anyone who owns property — a home, a car, a retirement account — can benefit from an estate plan. Planning for the future allows you to direct how and to whom your property will be distributed after your death. If you have no estate plan at all, your property will be distributed according to the laws of intestacy, without regard to family needs or your desires.
Clients generally have several objectives in estate planning. Obviously, you want to dispose of your assets according to your wishes. You may want to provide for minor children or other specific family members. It may be very important to minimize the cost or time associated with probate or to avoid making personal affairs public. Avoiding paying estate or inheritance taxes is probably always a goal, although most estates will be exempt from both Iowa and federal taxes. You may want to ensure that your favorite charity or institution receives a donation, or you may want to exclude certain persons from receiving anything.
The first and most basic estate planning tool is the last will and testament. A will gives you the right to determine who will receive your assets after your death. By exercising your privilege of making a will, you can select the personal representative of your estate who will administer your will and distribute your assets according to your wishes. You can use your will to nominate a guardian for minor children or direct that beneficiaries who are young will not receive their inheritance until they are experienced enough to handle the money.
Perhaps most importantly, you can also use your will to direct your assets to beneficiaries whom you choose, instead of those who are chosen for you by statute. You may have given significant gifts to one child and want to equalize the inheritance of your other children. You may have stepchildren who you want to share in your estate. Or, you may want to ensure that people outside your immediate family receive a bequest. Many clients are surprised to learn that a surviving spouse doesn’t inherit everything if the decedent had children from a prior marriage. A will allows you to remedy this potential problem.
The major benefit of a will is that it gives you control to direct the distribution of your estate according to your wishes. Everyone should have this basic estate planning tool.
Information provided by Ross Barnett, attorney for Abendroth and Russell Law Firm, 2560 73rd St., Urbandale, 278-0623, www.ARPCLaw.com.