Do you need a will?
Nearly everyone should have a will to assure their property is distributed as they wish after they die. A will also controls the way in which heirs receive their bequests to take advantage of substantial tax savings. Good estate planning can result in a will that can save thousands of dollars in federal estate taxes. Wills should be reviewed from time to time to take into account changes in law as they occur. That’s where your lawyer’s advice can mean big savings to your estate and its heirs.
What is a will? How is a will different from an estate plan?
A will is a written document that directs the distribution of your property at death, states who will care for and distribute that property, and names someone to care for your minor children. Each state has its own requirements for legal wills. An estate plan is a set of documents that includes your will and any additional documents created to plan for your death or disability. Such documents might include a trust, powers of attorney, or a living will.
What happens if I die without a will?
If you die without a valid will, you have no control over where your property goes. Instead the laws of the State of Iowa make that decision. According to these laws, your property will be distributed to your relatives in a certain manner based upon your relationship (blood or marriage) to those persons.
Who may make a will?
In Iowa, a valid will must comply with these requirements: (1) the maker (testator) must be at least 18 years of age or married, (2) the maker must be of "sound mind,” (3) the will must be written and signed by the maker in the presence of at least two competent witnesses, at least 16 years of age, who also sign the will in the presence of the maker and each other, and (4) the maker must tell the witnesses that it is his or her will. Although not legally required, the will can be self-proved at the time it is made if the maker and the witnesses sign affidavits describing how the will was executed. Then it will not be necessary to find the witnesses and have them testify about the execution of the will when the will needs to be proven. Although not legally required, the assistance of an attorney is recommended to ensure that the will is valid and your estate will be distributed as you desire.
What is an executor?
The executor is the person you desire to carry out the provisions of your will. You will need to name the executor of your will. It is also a good idea to name an alternate executor as a substitute in case your first choice is unable to serve. If you do not name a person who is willing and able to serve as executor, the court will appoint an executor for you.
What are the restrictions on disposing of property under a will?
Generally, Iowa law allows you to distribute your property as you wish. However, there are some significant restrictions. You may not completely exclude a spouse from receiving any of your estate. Even if you attempt to cut your spouse out of the will, the law will allow your spouse to take a certain percentage of the assets.
How long is a will valid?
A will that meets all of the requirements described earlier is good until it is changed or revoked by the maker. Changed circumstances (such as marriage, divorce, birth, adoption, death, or changes in tax laws) may require an addition or correction. These changes may be reflected in a document called a codicil. This allows for the changes without redoing your entire will. The codicil must comply with the same requirements as the original will. However, you may need to completely redo the will if the changes are substantial ones. Wills may be changed as often as their makers wish, as long as they are of sound mind.
How can a will be revoked?
A will can be revoked by being canceled or destroyed by the maker or at the maker’s direction, with the intention of revoking it. A will can also be revoked by executing another will. A will that is revoked by cancellation must be witnessed in the same manner as in the making of a new will. The maker cannot revive a will which has been revoked except by re-executing the will or by executing another will or codicil.
When is a will effective?
A will goes into effect upon the death of the maker, when it is filed for probate. Property owned by the maker is not affected until the will is probated.
What is probate?
Probate is a formal court procedure that occurs after the death of the maker of a will and serves the following purposes: (1) it allows the transfer of clear title to real estate you owned at your death which was not held in joint tenancy with someone else who had the right of survivorship, (2) it allows your will to be established as your official will in order to dispose of your estate, and (3) it allows your estate to be distributed to your intended beneficiaries after the payment of all debts and charges against your estate, and cuts off further claims by your creditors against the property distributed. It may be possible to avoid probate; however, whether or not the court system is used, certain documents must be filed and taxes paid to properly finalize the deceased’s affairs. For these reasons, a lawyer should be consulted.
Does a will create increased probate expenses?
No, and it may even save probate expense because less court involvement is required. Careful estate planning through a will can save your estate and beneficiaries substantial administration costs and taxes.
What kinds of property are not covered by a will?
Money from your life insurance policy will go to the people you have named as beneficiaries on the policy, no matter whom you have chosen to receive property in your will, unless you designate your estate as the beneficiary.
Money from your retirement plan will go to the people you have named in the plan, with or without a will, unless you fail to name anyone or the person named does not survive you.
Property owned as joint tenants
You may own real estate, bank accounts, or other property with another person(s) as joint tenants. Your co-owners will inherit your share, no matter whom you have named as heirs in your will.
Property you have placed in a living trust during your lifetime will go to the trust’s beneficiary, with or without a will.
It is advisable to make a will even if your estate consists of the above kinds of property. For example, if you receive a lottery ticket as a birthday present, your will would cover your unexpected winnings. Or, holding property in joint tenancy may, in some circumstances, actually increase taxes and expenses. A lawyer can design a will and estate plan that will save your heirs time and money later.
Is a will expensive?
The cost of a will can vary depending on the complexity of the will and the extent of your assets. The expense is normally minimal compared to the benefits you and your beneficiaries receive from having a will-devised estate plan.