Coralville covers - The Iowa State Bar Association

Transcription

2014
2014 Nuts
Nuts &
& Bolts
Bolts Seminar
Seminar
Coralville
Coralville
TRANSACTIONAL TRACK
Estate Planning
2:45 p.m.- 3:45 p.m.
Presented by
Janice Kerkove
Bradley & Riley
2007 First Ave. SE
Cedar Rapids, IA 52406
Phone: 319-861-8763
THURSDAY,
THURSDAY, OCTOBER
OCTOBER 30,
30, 2014
2014
NUTS & BOLTS OF
ESTATE PLANNING
October 30, 2014
Janice J. Kerkove
[email protected]
Copyright © 2014 Bradley & Riley PC - All rights reserved.
Nuts & Bolts of Estate Planning
NUTS & BOLTS OF
ESTATE PLANNING
October 30, 2014
Janice J. Kerkove
[email protected]
Copyright © 2014 Bradley & Riley PC - All rights reserved.
ESTATE PLANNING –
IT’S MORE THAN JUST A WILL
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Last Will & Testament
Revocable Trust (optional)
Asset Titling
Beneficiary Designations
Financial Power of Attorney
Medical Power of Attorney
Living Will
Declaration re: Last Remains
BRADLEY & RILEY PC
ATTORNEYS AND COUNSELORS
www.bradleyriley.com
CREATE A GOOD DATA SHEET
• Personal information for clients & their children
– Identify any beneficiaries with special issues
– Identify children vs. step-children
• Financial information
– How is the asset titled?
– Is there a beneficiary designation?
• Identify who is to fill various fiduciary roles
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© 2014 Bradley & Riley PC
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Any obligations under a prenuptial agreement?
Any obligations under a dissolution decree?
Any significant future inheritances?
Is there genetic reproductive material in storage?
Do they want to give someone control over their
digital assets?
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FEDERAL ESTATE TAXES
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FEDERAL ESTATE TAX ISSUES
• Internal Revenue Code §§2001 – 2801
• Federal estate taxes based on value of estate
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• Federal estate tax exemption currently $5.34 million
(2014) for each taxpayer, indexed for inflation
• Federal estate tax exemption not used at first death
can be transferred to surviving spouse
– Requires timely filing of Federal 706 Estate Tax Return
• Large gifts made during lifetime decrease the federal
estate tax exemption available at death
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IOWA INHERITANCE TAXES
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IOWA INHERITANCE TAX ISSUES
• Iowa Code Chapter 450
• Taxes based on the relationship between decedent &
recipient & based on the value of Iowa assets
received by the recipient
• Gross estates of less than $25,000 exempt from
Iowa inheritance taxes
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• Lineal descendants & lineal ascendants exempt
• Brother, sister, daughter-in-law, son-in-law subject
to tax starting at 5% and ending at 10% marginal
rate
• Niece, nephew, other relatives, friends subject to tax
starting at 10% and ending at 15% marginal rate
• Step-children are exempt, step-grandchildren are
not exempt from Iowa inheritance taxes
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• Certain assets are exempt from Iowa inheritance tax
– Life insurance paid to a named beneficiary (not estate)
– IRA & qualified plan assets paid to a named beneficiary
who is subject to income tax
– Non-Iowa assets
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IOWA RESIDENT WITH REAL ESTATE
HOLDINGS IN OTHER STATES
• At least 15 states have decoupled from federal estate
tax system
– In those states, the state death tax exemption is fixed at an
amount that is lower than the current federal estate tax
exemption
– Minnesota, Illinois, Indiana, New York are a few of the
states that have decoupled
• Iowa and at least 5 other states have inheritance
taxes
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WILLS VS. REVOCABLE TRUSTS
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WHAT TYPE OF DOCUMENT?
• Should client’s primary method of distributing assets be
a Will or Revocable Trust?
• Will administration governed by Iowa Probate Code 633
• Trust administration governed by Iowa Trust Code 633A
BRADLEY & RILEY PC
WILL
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Cheaper to draft
Probate is required
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Will & Asset information part of
public record
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Does not take effect until death
REVOCABLE TRUST
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– Code establishes 2% Atty/Exec Fees
– Court Costs
– Bad for businesses that may need to
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be sold as part of the proceeding
– Need separate POA to deal with
incompetency issues
– Can be difficult to obtain
involuntary accounting from POA
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Court oversees process
Extensive case law as precedent
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More expensive to draft & fund
No probate required if all assets in
trust or have beneficiary designation
at time of grantor’s death
– Code establishes reasonable fee for
Atty/Exec
– No Court Costs
Maintains privacy of affairs
Easier transition for management of
affairs if client becomes incapacitated
– Easier to obtain involuntary
accounting from Trustee than POA
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Court involvement can be invoked if
necessary
Limited case law as precedent
Still need a Will
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WILL VS. REVOCABLE TRUST
• Cost Benefit Analysis
– Will the increased cost of drafting & funding a trust be
justified by the decreased costs of administration after the
client’s death?
• Probate required in every state client has real estate
– Timeshares are sometimes treated as real estate interest
– Mineral interests (oil/gas) usually treated as real estate
interest
BRADLEY & RILEY PC
PROVISIONS OF LW&T
Revoke prior Wills
Identify beneficiaries
Outline plan of distribution of assets
Outline plan for payment of administration expenses
& taxes
• Designate fiduciaries
• Draft for proper execution of the document
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IDENTIFY BENEFICIARIES
• List next of kin
• Does the client want the list of beneficiaries to
include beneficiaries born after execution?
include adopted children?
• Does the client want to exclude any beneficiaries?
– If yes, make that clear in the document
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OUTLINE PLAN OF DISTRIBUTION
• Tangible personal property
– Include option to leave separate writing
– Include a plan for resolving disputes
– Authorize Executor to donate/destroy items
• Special bequests
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Charities – any limitations on how used?
Godchild, Special Friends, Grandchildren
Digital assets
Genetic materials in storage
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OUTLINE PLAN OF DISTRIBUTION –
RESIDUARY ESTATE IF SURV. SPOUSE
• Distribute outright to surviving spouse?
• Hold in credit shelter trust for surviving spouse?
– Who is Trustee?
– What are distribution standards?
– Can distributions be made to any other beneficiaries?
• Hold in marital trust for surviving spouse?
– Who is Trustee?
– IRS requires mandatory distribution of net income to spouse
– IRS requires that spouse be given right to turn non-income producing
property into income-producing property
– Client decides on principal distribution standards for spouse
– IRS mandates no one else is entitled to principal during spouse’s
lifetime
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RESIDUARY ESTATE NO SURV. SPOUSE
• Distributed equally or some other percentage?
• What happens if beneficiary dies?
– Balance to surviving members of group?
– Balance to lineal descendants?
• Per stirpes vs. per capita
• Trust for any beneficiaries who may be minors at the
time of inheritance
• Trusts for any beneficiaries who have special issues
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OUTLINE PLAN FOR PAYMENT OF
ADMINISTRATION EXPENSES
• Consider liquidity issues
– Does the probate estate have sufficient liquid assets to pay
mortgage, utilities, property taxes, attorney fees, executor
fees, appraisal costs, funeral expenses, court costs, and
other expenses of administration?
– Should a portion of life insurance be paid to estate to
provide necessary funds?
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• Who should be charged with administration
expenses?
– Default rule is administration expenses paid by residuary
unless document states otherwise
– Residuary share vs. equitable allocation
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DEATH TAXES
• Who pays federal estate taxes
– Default rules is tax paid by residuary share unless
document states otherwise
– Residuary vs. equitable allocation
• Charities not subject to federal estate tax
• Surviving spouse usually not subject to federal estate tax (if
document properly drafted)
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DEATH TAXES
• Who pays Iowa inheritance taxes
– Default rule is beneficiary pays unless document states
otherwise
• If Estate pays, adjustment required to “gross up” beneficiary’s
share for inheritance taxes paid by Estate
• What if beneficiary receiving non-probate asset?
• What is beneficiary is receiving non-liquidate asset (real estate)?
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DESIGNATE FIDUCIARIES
• Guardians for minor children
– Special considerations if naming married couples
• Trustees for any trusts created under LW&T
– Specify powers granted to Trustees
• Executor of LW&T
– Waiver of bond?
– Power of sale?
– Authority over digital assets?
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DRAFT FOR PROPER EXECUTION
• Client & two disinterested witnesses sign in the
presence of each other
• Client, two disinterested witnesses, and notary sign
Self-Proving Affidavit
– If no self-proving affidavit, must find at least one of the
witnesses after date of death
– If unable to find witnesses, then client died intestate
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WHERE WILL ORIGINAL BE STORED?
• Very difficult to admit Will to probate if original
document cannot be found
– Law presumes that Will was revoked
– Can only admit copy if presumption can be overcome
• Keep record of where client will be storing original
– Lock box at __________ branch of ________ bank
– Fireproof safe at office
– Gun safe at home
• Generally do not have clients deposit with Clerk of Court
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TITLING OF ASSETS
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TITLING ASSETS –
JOINT TENANCY
• Joint tenancy with rights of survivorship vs. tenants
in common ownership
• Joint tenancy ownership with rights of survivorship
overrides terms of Will or Trust
– Assets pass directly to the surviving joint tenant and are
never under the control of the Executor or Trustee
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TITLING OF ASSETS –
JOINT TENANCY
• If married couple has no federal estate tax concerns,
assets can be held in joint tenancy to avoid probate
at first spouse’s death
• If not a married couple or if there are federal estate
tax concerns, joint tenancy ownership is not
recommended
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JOINT TENANCY WITH NON-SPOUSE
• Beware of titling assets jointly with non-spouses
• Joint owner has immediate access to the joint
tenancy accounts – does not require client’s
permission to withdraw funds
• Asset becomes subject to claims from their creditors,
ex-spouse, etc.
• Asset automatically passes to surviving joint tenant there is no legal obligation for joint tenant to share
proceeds with other intended beneficiaries
• Can increase income tax liability when assets are
sold in the future
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BENEFICIARY DESIGNATIONS
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• Typically on Life Insurance, IRA’s, 401(k)’s,
annuities, 403(b)’s, etc
• In Iowa (and most other states), the beneficiary
designation overrides terms of Will or Trust
• Need to look at contract closely to determine what
happens if the beneficiary predeceases client
• Be sure beneficiary designation complements plan of
distribution under Will or Trust
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BENEFICIARY DESIGNATIONS –
ESTATE AS THE BENEFICIARY
• Provides liquid assets for payment of debts and
expenses
• Provides funding for credit shelter trust if other
assets are not sufficient
• May allow creditors to access proceeds
• May subject proceeds to Iowa Inheritance Tax
• May be included in calculating court costs, attorney
fees, etc.
• May be adverse income tax consequences
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SPOUSE AS BENEFICIARY
• Under old Iowa law, ex-spouse received proceeds if
beneficiary designation was not changed after the
divorce
• Iowa law now nullifies ex-spouse and ex-spouse’s family
members as beneficiaries after a divorce
– Only applies to non-ERISA assets
– Must follow the appropriate notification procedures in Iowa
Code 598.20A before funds are paid out
• Assets received by spouse under beneficiary
designation/joint tenancy do not count against spouse’s
right to claim 1/3 of estate Iowa Code 633.238
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MULTIPLE CHILDREN AS BENE’S
• Important to determine what happens if a child
predeceases the owner
• Default plan rules usually call for distribution to the
surviving children
• Most clients prefer that lineal descendants of
deceased child take which requires adding of “per
stirpes” language to the designation
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TAX DEFERRED ASSETS
• Beneficiary designations on IRA’s or qualified plans
should be properly drafted to provide beneficiary
with flexibility to obtain maximum deferral/stretch
for income tax purposes
• If client has charitable bequests, consider making
the charities the beneficiaries of tax-deferred
accounts as the charities will not pay income tax
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POD/TOD
• POD designations used on bank accounts
• TOD designations used on brokerage accounts,
savings bonds or stock – Iowa Code Chapter 633D
• Cannot be used in Iowa for real estate holdings
• Designates beneficiary who is to receive asset upon
death of owner - designation is revocable
• Beneficiary has no rights to asset until client’s death
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POD/TOD
• Asset passes to designee outside of probate
• Beneficiary has no obligation to share with other
intended beneficiaries
• Beneficiary may not be required to use funds for
funeral, burial, taxes, or other administration
expenses
• If most assets pass by joint tenancy ownership or
beneficiary designation, then no assets available for
personal representative to pay administration
expenses, including carrying costs of real estate, etc.
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FINANCIAL POWER OF ATTORNEY
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• Designates Attorney-in-Fact to control assets and
pay bills if client becomes incapacitated or needs
assistance due to physical limitations.
• Avoids time and expense of court proceedings to
establish and administer conservatorship.
• Help client choose carefully! Attorney-in-Fact has
substantial power and limited supervision.
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• Iowa Uniform Power of Attorney Act (IUPOA)
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Replaces existing Iowa Code Chapter 633B
Enacted as Senate File 2168
Signed by the Governor on April 10, 2014
Effective July 1, 2014
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• Purpose of Uniform POA Act
– Provide comprehensive guidelines for creation and use of
Powers of Attorney.
– Prevent and address potential abuses of Powers of
Attorney.
– Has currently been adopted in 15 states.
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• Non-Applicability of IUPOA
– Acts completed by the Agent prior to July 1, 2014.
– Powers of Attorney coupled with an interest of the agent in
the transaction that is the subject of the power (i.e.
Limited POA given for the benefit of a creditor).
– Healthcare Power of Attorney.
– Proxy or other delegation of voting rights or management
rights with respect to an entity.
– Power created on a form prescribed by government,
governmental subdivision, governmental agency for a
governmental purpose.
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• Applicability of IUPOA
– Applies to all Financial POAs created on or after July 1,
2014.
– Applies to all judicial proceedings concerning a power of
attorney commenced on or after July 1, 2014.
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• Applicability to prior documents/proceedings
– Generally applies to POAs created before July 1, 2014,
unless otherwise provided in the Act. But see Iowa Code
633B.107, the meaning and effect of a POA created before
July 1, 2014, is to be interpreted under the law that was in
effect at the time the POA was created
– Generally applies to judicial proceedings commenced
before July 1, 2014, unless court finds that application of
the IUPOA would substantially interfere with conducting
the proceedings or the rights of interested persons.
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• Validity of Documents under IUPOA
– POAs executed on or after July 1, 2014, are valid if
executed in compliance with IUPOA.
• Must be notarized
– POAs executed before July 1, 2014, are valid if execution
complied with state law in effect at the time of execution.
• Notarization was not required, but commonly practiced
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• Old Iowa POA Law
– Very little statutory law in Iowa.
– Agent referred to as Attorney-in-Fact.
– Document contained a laundry list of transactions Agent
was authorized to transact.
– Notarization was typically used, but not required.
– Iowa Bar Form was typically used, but not required.
– Affidavit procedure used for agent to verify their authority.
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• New Iowa UPOA Law
– Now have comprehensive statutory law in Iowa.
– Agent now referred to as Agent.
– Comments to the Uniform Act and cases decided in other states
who have adopted the Uniform Act will be helpful guidance.
– Laundry list of transactions no longer required, refer to the
statute to confirm Agent’s authority.
– Notarization is now required.
– Certification procedure now used for Agent to verify their
authority.
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• Agent can be granted General Authority by:
– Granting Agent general authority to do all acts that
principal could do pursuant to Iowa Code §633B.201
– Incorporating by reference the provisions set forth in
§633B.204 - §633B.217
– Providing detailed itemization of the authority granted
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• Grant of General Authority includes:
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§633B.204 Real Property.
§633B.205 Tangible Personal Property.
§633B.206 Stocks and Bonds.
§633B.207 Commodities and Options.
§633B.208 Banks & Other Financial Institutions.
§633B.209 Operation of Entity or Business.
§633B.210 Insurance & Annuities.
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§633B.211 Estates, Trusts & Other Beneficial Interests.
§633B.212 Claims & Litigation.
§633B.213 Personal & Family Maintenance.
§633B.214 Governmental Benefits, Civil & Military Service
Benefits.
– §633B.215 Retirement Benefits.
– §633B.216 Taxes.
– §633B.217 Gifts.
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• Grant of General Authority not sufficient for all
transactions.
• Agent may not perform certain transactions, as set
forth in Iowa Code §633B.201 unless:
– POA expressly grants the authority
– Exercise of such authority is not prohibited by another
statute, agreement or instrument
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• Specific Authority expressly required for the following:
Create, amend, revoke, terminate Revocable Trust.
Make a gift in excess of federal annual exclusion amount.
Create or change rights of survivorship.
Create or change beneficiary designation.
Delegate authority granted under POA.
Waive principal’s right to joint and survivor annuity.
Exercise fiduciary powers that principal has authority to
delegate.
– Disclaim property, including a power of appointment.
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• Even if Specific Authority expressly granted, an
agent who is not closely related to the principal may
not directly or indirectly create in the agent an
interest in the principal’s property by gift, right or
survivorship, beneficiary designation, disclaimer, or
otherwise
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• Powers of Co-Agents
– Under old Iowa law, Co-Agents required to act in concert
unless document specifically specified otherwise.
– Under UIPOA, majority of Co-Agents are authorized to act
on behalf of principal unless document specifies otherwise
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• Nomination of Guardian & Conservator
– Under old Iowa law, nomination of Guardian &
Conservator was completed through separate standby
Petitions.
– Under new IUPOA, standby Guardians and Conservators
may also be nominated in the Financial Power of Attorney
document.
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• Accounting of Agent’s Acts
– Under old Iowa law, accounting could only be obtained by
principal, principal’s conservator or personal representative.
– Under IUPOA 633B.114(8), accounting can be requested by
principal, principal’s conservator, another fiduciary acting for
principal, a governmental agency having authority to protect
welfare of principal, personal representative of deceased
principal.
– Clients often to choose to name additional parties (i.e. children
of principal) who are entitled to request an accounting
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• Invoking Judicial Intervention
– Under old Iowa law, judicial intervention could only be
obtained by principal, principal’s conservator or personal
representative.
– Under IUPOA 633B.116, there is an extensive laundry list
of interested persons who have authority to invoke court
jurisdiction to construe a power of attorney or review an
agent’s conduct
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• Iowa Statutory Financial Power of Attorney Form can be
found at §633B.301 and on Iowa Docs
– Statutory form is not popular with practitioners and will likely
be revised in the future
– Statutory form does not lend itself to automated generation of
documents
– Statutory form should only be used in very simple situations
• Agent’s Certification Form can be found at §633B.302 .
• These forms are not mandatory and may be revised as
necessary.
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LIVING WILL
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LIVING WILL
• Life-Sustaining Procedures Act
• Iowa Code Chapter 144A
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LIVING WILL
• Executed at any time by a competent adult.
• Document must either be notarized or witnessed by
two adults.
• Becomes effective if patient is in terminal condition
and is unable to make their own medical decisions.
• Provides directions on use or withdrawal of lifesustaining procedures.
• May be revoked at any time, without regard to
mental or physical condition.
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LIVING WILL
• Definition of Terminal Condition
– Incurable or irreversible condition that, without
administration of life-sustaining procedures, will, in the
opinion of the attending physician, result in death within a
relatively short period of time.
– State of permanent unconsciousness from which, to a
reasonable degree of medical certainty, there can be no
recovery.
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LIVING WILL
• Definition of Life-Sustaining Procedures
– Any medical procedure, treatment, or intervention,
including resuscitation, which utilizes mechanical or
artificial means to sustain, restore or supplant a
spontaneous vital function, and when applied to a patient
in a terminal condition, would only serve to prolong the
dying process.
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LIVING WILL
• Witnesses to Living Will
– Signed by 2 adult witnesses in the presence of each other
and the declarant.
– At least one witness must be unrelated (not a relative by
blood, marriage, or adoption within the third degree of
consanguinity).
– Attending physician and employees of the attending
physician cannot serve as witness.
• Prefer use of notary instead of 2 witnesses to avoid
increased chance of litigation.
BRADLEY & RILEY PC
LIVING WILL
• Applicability of Living Will
– Attending physician concludes that patient is in a terminal
condition.
– Diagnosis is confirmed by another physician.
– Notation is made in medical record that Living Will is now
applicable.
– Effectiveness delayed if patient is pregnant with fetus that
could develop to point of live birth with continued
application of life-sustaining procedures.
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LIVING WILL
• Old Living Will
– Definition of life-sustaining procedures changed on April
23, 1992.
– After that date, definition of life-sustaining procedures
includes hydration and nutrition administered through IV
or NG tube.
– Living Will documents signed prior to April 23, 1992, do
not allow the withdrawal of food and water provided
through artificial means.
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WHAT IF NO LIVING WILL?
• No presumption for or against life-sustaining
procedures based on failure to execute Living Will.
• Must be consultation and written agreement
between attending physician and alternate decision
makers who must be guided by the express or
implied intentions of patient.
• If legal guardian has been appointed for the patient,
court order is required prior to withdrawal of lifesustaining procedures.
BRADLEY & RILEY PC
IF NO LIVING WILL –
ALTERNATE DECISION MAKERS
1st: Person designated under health care POA.
2nd: Legal guardian of patient.
3rd: Spouse of patient.
4th: Adult children (majority of children who are
reasonably available for consultation).
5th: Parents of patient.
6th: Adult siblings of patient.
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MEDICAL POWER OF ATTORNEY
DURABLE POA FOR HEALTH CARE
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• Iowa Code Chapter 144B
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• Designates another person as agent to make health
care decisions when patient is no longer able to
make those decisions on their own.
• Takes effect when patient can no longer make their
own medical decisions.
• Covers more situations than Living Will.
• Can be revoked at any time, without regard to
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• Requirements for Validity:
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Written designation.
Explicitly authorizes agent to make health care decisions.
Notarized or signed by 2 witnesses.
Same witness limitations as described for Living Will.
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• Ineligible Decision Makers under Medical POA:
– Attending physician cannot serve as agent.
– Employee of the attending physician cannot serve as
agent, unless the individual is related to patient by blood,
marriage, or adoption within the 3rd degree of
consanguinity.
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• Legal Effect of Designation:
– Designated agent has authority to make decisions if
principal is unable, in the judgment of attending
physician, to make their own health care decision.
– Designated agent has duty to act in accordance with
desires of the patient as expressed in the Medical POA or
otherwise made known to agent at any time.
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– If patient’s desires are unknown, agent has duty to act in
the best interests of the patient, taking into account the
patient’s overall medical condition and prognosis.
– Agent can be removed if district court determines that
agent is acting contrary to wishes of the patient.
– If patient has Living Will and Medical POA, provisions of
Living Will take priority.
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RELATED MEDICAL DOCUMENTS
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MEDICAL DIRECTIVES
• Optional document that supplements the Medical
Power of Attorney and Living Will.
• Provides specific instructions to Agent regarding
medical decisions to be made under specific
circumstances.
• Client should complete with input of personal
physician.
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DNR ORDERS
• Iowa Code Chapter 144D
• Do Not Resuscitate Orders (DNR) orders can only be
completed by or for individuals who are determined
to be near the end of life.
• DNR Orders must be completed with the assistance
of physician.
– Attorneys cannot draft DNR Orders.
• Iowa law has provisions allowing DNR Orders to be
portable between facilities.
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DISPOSITION OF LAST REMAINS
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• Iowa Code Chapter 144C
• Iowa Final Disposition Act
– Applies to all deaths occurring on or after July 1, 2008 and
to all declarations executed on or after that date.
– Gives an individual the ability to designate who will be in
charge of making funeral and burial decisions for the
individual following his or her death.
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• Order of Priority for Decision Makers:
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Designee (then alternate designee) in declaration;
Surviving spouse (provided not legally separated);
Surviving adult children (majority rules);
Surviving parents;
Surviving adult grandchildren (majority rules);
Surviving adult siblings (majority rules);
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– Surviving grandparents (majority rules);
– Persons in next degree of kinship under rules of intestate
succession (majority rules);
– Person who represents that he/she knows the decedent’s
identity and who signs an affidavit verifying decedent’s
identity and assuming responsibility/expense;
– County medical examiner (if responsible for remains).
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• Designee(s) jump to front of the line.
• Designee has obligation to act in good faith and in a
manner that is reasonable under the circumstances.
• Default decision makers apparently have no
obligation to act in good faith and in a manner that
is reasonable under the circumstances
– See In re Estate of Whalen, 827 NW2d 184 (Iowa
Supreme Court 2013).
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• Reasonable under the circumstances means
consideration of what is appropriate in relation to the
Decedent’s:
– Finances;
– Cultural or family customs; and
– Religious or spiritual beliefs.
• Reasonable under the circumstances also may include,
but is not limited to, consideration of the Decedent’s:
– Preneed funeral, burial, or cremation plan; and
– Known or reasonably ascertainable creditors.
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• Requirements for Valid Designation:
– Must be in written form that substantially complies with
language in Chapter 144C.6;
– Must be contained in or attached to a durable power of
attorney for health care;
– Must be dated and signed by declarant; and
– Must be witnessed by 2 individuals or notarized.
BRADLEY & RILEY PC
• Declaration MAY include
– The location of an agreement for prearranged funeral services
or funeral merchandise;
– Cemetery lots owned by or reserved for the declarant; and
– Special instructions regarding organ donation.
• Declaration CAN NOT include:
– Directives for final disposition of the declarant’s remains (i.e. I
want to be cremated and ashes spread in the Pacific Ocean); nor
– Arrangements for ceremonies planned after the declarant’s
death.
BRADLEY & RILEY PC
THANK
YOU
Follow up questions can be directed to Janice Kerkove at
[email protected] or (319) 861-8763.
Cedar Rapids
2007 First Avenue SE
PO Box 2804
Cedar Rapids, Iowa 52406
Ph: 319.363.0101
Fax: 319.363.9824
Iowa City
Tower Place
One South Gilbert
Iowa City, Iowa 52240
Ph: 319.466.1511
Fax: 319.358.5560
BRADLEY & RILEY PC
30
ESTATE PLANNING –
IT’S MORE THAN JUST A WILL
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Last Will & Testament
Revocable Trust (optional)
Asset Titling
Beneficiary Designations
Financial Power of Attorney
Medical Power of Attorney
Living Will
Declaration re: Last Remains
BRADLEY & RILEY PC
• Personal information for clients & their children
– Identify any beneficiaries with special issues
– Identify children vs. step-children
• Financial information
– How is the asset titled?
– Is there a beneficiary designation?
• Identify who is to fill various fiduciary roles
BRADLEY & RILEY PC
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Any obligations under a prenuptial agreement?
Any obligations under a dissolution decree?
Any significant future inheritances?
Is there genetic reproductive material in storage?
Do they want to give someone control over their
digital assets?
BRADLEY & RILEY PC
FEDERAL ESTATE TAXES
BRADLEY & RILEY PC
• Internal Revenue Code §§2001 – 2801
• Federal estate taxes based on value of estate
BRADLEY & RILEY PC
• Federal estate tax exemption currently $5.34 million
(2014) for each taxpayer, indexed for inflation
• Federal estate tax exemption not used at first death
can be transferred to surviving spouse
– Requires timely filing of Federal 706 Estate Tax Return
• Large gifts made during lifetime decrease the federal
estate tax exemption available at death
BRADLEY & RILEY PC
IOWA INHERITANCE TAXES
BRADLEY & RILEY PC
• Iowa Code Chapter 450
• Taxes based on the relationship between decedent &
recipient & based on the value of Iowa assets
received by the recipient
• Gross estates of less than $25,000 exempt from
Iowa inheritance taxes
BRADLEY & RILEY PC
• Lineal descendants & lineal ascendants exempt
• Brother, sister, daughter-in-law, son-in-law subject
to tax starting at 5% and ending at 10% marginal
rate
• Niece, nephew, other relatives, friends subject to tax
starting at 10% and ending at 15% marginal rate
• Step-children are exempt, step-grandchildren are
not exempt from Iowa inheritance taxes
BRADLEY & RILEY PC
• Certain assets are exempt from Iowa inheritance tax
– Life insurance paid to a named beneficiary (not estate)
– IRA & qualified plan assets paid to a named beneficiary
who is subject to income tax
– Non-Iowa assets
BRADLEY & RILEY PC
IOWA RESIDENT WITH REAL ESTATE
HOLDINGS IN OTHER STATES
• At least 15 states have decoupled from federal estate
tax system
– In those states, the state death tax exemption is fixed at an
amount that is lower than the current federal estate tax
exemption
– Minnesota, Illinois, Indiana, New York are a few of the
states that have decoupled
• Iowa and at least 5 other states have inheritance
taxes
BRADLEY & RILEY PC
WILLS VS. REVOCABLE TRUSTS
BRADLEY & RILEY PC
WHAT TYPE OF DOCUMENT?
• Should client’s primary method of distributing assets be
a Will or Revocable Trust?
• Will administration governed by Iowa Probate Code 633
• Trust administration governed by Iowa Trust Code 633A
BRADLEY & RILEY PC
WILL
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Cheaper to draft
Probate is required
REVOCABLE TRUST
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– Code establishes 2% Atty/Exec Fees
– Court Costs
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Will & Asset information part of
public record
– Bad for businesses that may need to
•
be sold as part of the proceeding
•
Does not take effect until death
– Need separate POA to deal with
incompetency issues
– Can be difficult to obtain
involuntary accounting from POA
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•
Court oversees process
Extensive case law as precedent
•
More expensive to draft & fund
No probate required if all assets in
trust or have beneficiary designation
at time of grantor’s death
– Code establishes reasonable fee for
Atty/Exec
– No Court Costs
Maintains privacy of affairs
Easier transition for management of
affairs if client becomes incapacitated
– Easier to obtain involuntary
accounting from Trustee than POA
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•
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Court involvement can be invoked if
necessary
Limited case law as precedent
Still need a Will
BRADLEY & RILEY PC
WILL VS. REVOCABLE TRUST
• Cost Benefit Analysis
– Will the increased cost of drafting & funding a trust be
justified by the decreased costs of administration after the
client’s death?
• Probate required in every state client has real estate
– Timeshares are sometimes treated as real estate interest
– Mineral interests (oil/gas) usually treated as real estate
interest
BRADLEY & RILEY PC
PROVISIONS OF LW&T
Revoke prior Wills
Identify beneficiaries
Outline plan of distribution of assets
Outline plan for payment of administration expenses
& taxes
• Designate fiduciaries
• Draft for proper execution of the document
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BRADLEY & RILEY PC
IDENTIFY BENEFICIARIES
• List next of kin
include beneficiaries born after execution?
include adopted children?
• Does the client want to exclude any beneficiaries?
– If yes, make that clear in the document
BRADLEY & RILEY PC
OUTLINE PLAN OF DISTRIBUTION
• Tangible personal property
– Include option to leave separate writing
– Include a plan for resolving disputes
– Authorize Executor to donate/destroy items
• Special bequests
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Charities – any limitations on how used?
Godchild, Special Friends, Grandchildren
Digital assets
Genetic materials in storage
BRADLEY & RILEY PC
RESIDUARY ESTATE IF SURV. SPOUSE
• Distribute outright to surviving spouse?
• Hold in credit shelter trust for surviving spouse?
– Who is Trustee?
– What are distribution standards?
– Can distributions be made to any other beneficiaries?
• Hold in marital trust for surviving spouse?
– Who is Trustee?
– IRS requires mandatory distribution of net income to spouse
– IRS requires that spouse be given right to turn non-income producing
property into income-producing property
– Client decides on principal distribution standards for spouse
– IRS mandates no one else is entitled to principal during spouse’s
lifetime
BRADLEY & RILEY PC
RESIDUARY ESTATE NO SURV. SPOUSE
• Distributed equally or some other percentage?
• What happens if beneficiary dies?
– Balance to surviving members of group?
– Balance to lineal descendants?
• Per stirpes vs. per capita
• Trust for any beneficiaries who may be minors at the
time of inheritance
• Trusts for any beneficiaries who have special issues
BRADLEY & RILEY PC
• Consider liquidity issues
– Does the probate estate have sufficient liquid assets to pay
mortgage, utilities, property taxes, attorney fees, executor
fees, appraisal costs, funeral expenses, court costs, and
other expenses of administration?
– Should a portion of life insurance be paid to estate to
provide necessary funds?
BRADLEY & RILEY PC
• Who should be charged with administration
expenses?
– Default rule is administration expenses paid by residuary
unless document states otherwise
– Residuary share vs. equitable allocation
BRADLEY & RILEY PC
DEATH TAXES
• Who pays federal estate taxes
– Default rules is tax paid by residuary share unless
document states otherwise
• Charities not subject to federal estate tax
• Surviving spouse usually not subject to federal estate tax (if
document properly drafted)
BRADLEY & RILEY PC
DEATH TAXES
• Who pays Iowa inheritance taxes
– Default rule is beneficiary pays unless document states
otherwise
• If Estate pays, adjustment required to “gross up” beneficiary’s
share for inheritance taxes paid by Estate
• What if beneficiary receiving non-probate asset?
• What is beneficiary is receiving non-liquidate asset (real estate)?
BRADLEY & RILEY PC
DESIGNATE FIDUCIARIES
• Guardians for minor children
– Special considerations if naming married couples
• Trustees for any trusts created under LW&T
– Specify powers granted to Trustees
• Executor of LW&T
– Waiver of bond?
– Power of sale?
– Authority over digital assets?
BRADLEY & RILEY PC
DRAFT FOR PROPER EXECUTION
• Client & two disinterested witnesses sign in the
presence of each other
• Client, two disinterested witnesses, and notary sign
Self-Proving Affidavit
– If no self-proving affidavit, must find at least one of the
witnesses after date of death
– If unable to find witnesses, then client died intestate
BRADLEY & RILEY PC
WHERE WILL ORIGINAL BE STORED?
• Very difficult to admit Will to probate if original
document cannot be found
– Law presumes that Will was revoked
– Can only admit copy if presumption can be overcome
• Keep record of where client will be storing original
– Lock box at __________ branch of ________ bank
– Fireproof safe at office
– Gun safe at home
• Generally do not have clients deposit with Clerk of Court
BRADLEY & RILEY PC
TITLING OF ASSETS
BRADLEY & RILEY PC
TITLING ASSETS –
JOINT TENANCY
• Joint tenancy with rights of survivorship vs. tenants
in common ownership
• Joint tenancy ownership with rights of survivorship
overrides terms of Will or Trust
– Assets pass directly to the surviving joint tenant and are
never under the control of the Executor or Trustee
BRADLEY & RILEY PC
JOINT TENANCY
• If married couple has no federal estate tax concerns,
assets can be held in joint tenancy to avoid probate
at first spouse’s death
• If not a married couple or if there are federal estate
tax concerns, joint tenancy ownership is not
recommended
BRADLEY & RILEY PC
JOINT TENANCY WITH NON-SPOUSE
• Beware of titling assets jointly with non-spouses
• Joint owner has immediate access to the joint
tenancy accounts – does not require client’s
permission to withdraw funds
• Asset becomes subject to claims from their creditors,
ex-spouse, etc.
• Asset automatically passes to surviving joint tenant there is no legal obligation for joint tenant to share
proceeds with other intended beneficiaries
• Can increase income tax liability when assets are
sold in the future
BRADLEY & RILEY PC
BRADLEY & RILEY PC
• Typically on Life Insurance, IRA’s, 401(k)’s,
annuities, 403(b)’s, etc
• In Iowa (and most other states), the beneficiary
designation overrides terms of Will or Trust
• Need to look at contract closely to determine what
happens if the beneficiary predeceases client
• Be sure beneficiary designation complements plan of
distribution under Will or Trust
BRADLEY & RILEY PC
ESTATE AS THE BENEFICIARY
• Provides liquid assets for payment of debts and
expenses
• Provides funding for credit shelter trust if other
assets are not sufficient
• May allow creditors to access proceeds
• May subject proceeds to Iowa Inheritance Tax
• May be included in calculating court costs, attorney
fees, etc.
• May be adverse income tax consequences
BRADLEY & RILEY PC
SPOUSE AS BENEFICIARY
• Under old Iowa law, ex-spouse received proceeds if
beneficiary designation was not changed after the
divorce
• Iowa law now nullifies ex-spouse and ex-spouse’s family
members as beneficiaries after a divorce
– Only applies to non-ERISA assets
– Must follow the appropriate notification procedures in Iowa
Code 598.20A before funds are paid out
• Assets received by spouse under beneficiary
designation/joint tenancy do not count against spouse’s
right to claim 1/3 of estate Iowa Code 633.238
BRADLEY & RILEY PC
MULTIPLE CHILDREN AS BENE’S
• Important to determine what happens if a child
predeceases the owner
• Default plan rules usually call for distribution to the
surviving children
• Most clients prefer that lineal descendants of
deceased child take which requires adding of “per
stirpes” language to the designation
BRADLEY & RILEY PC
TAX DEFERRED ASSETS
• Beneficiary designations on IRA’s or qualified plans
should be properly drafted to provide beneficiary
with flexibility to obtain maximum deferral/stretch
for income tax purposes
• If client has charitable bequests, consider making
the charities the beneficiaries of tax-deferred
accounts as the charities will not pay income tax
BRADLEY & RILEY PC
POD/TOD
• POD designations used on bank accounts
• TOD designations used on brokerage accounts,
savings bonds or stock – Iowa Code Chapter 633D
• Cannot be used in Iowa for real estate holdings
• Designates beneficiary who is to receive asset upon
death of owner - designation is revocable
• Beneficiary has no rights to asset until client’s death
BRADLEY & RILEY PC
POD/TOD
• Asset passes to designee outside of probate
• Beneficiary has no obligation to share with other
intended beneficiaries
• Beneficiary may not be required to use funds for
funeral, burial, taxes, or other administration
expenses
• If most assets pass by joint tenancy ownership or
beneficiary designation, then no assets available for
personal representative to pay administration
expenses, including carrying costs of real estate, etc.
BRADLEY & RILEY PC
BRADLEY & RILEY PC
• Designates Attorney-in-Fact to control assets and
pay bills if client becomes incapacitated or needs
assistance due to physical limitations.
• Avoids time and expense of court proceedings to
establish and administer conservatorship.
• Help client choose carefully! Attorney-in-Fact has
substantial power and limited supervision.
BRADLEY & RILEY PC
• Iowa Uniform Power of Attorney Act (IUPOA)
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Replaces existing Iowa Code Chapter 633B
Enacted as Senate File 2168
Signed by the Governor on April 10, 2014
Effective July 1, 2014
BRADLEY & RILEY PC
• Purpose of Uniform POA Act
– Provide comprehensive guidelines for creation and use of
Powers of Attorney.
– Prevent and address potential abuses of Powers of
Attorney.
– Has currently been adopted in 15 states.
BRADLEY & RILEY PC
• Non-Applicability of IUPOA
– Acts completed by the Agent prior to July 1, 2014.
– Powers of Attorney coupled with an interest of the agent in
the transaction that is the subject of the power (i.e.
Limited POA given for the benefit of a creditor).
– Healthcare Power of Attorney.
– Proxy or other delegation of voting rights or management
rights with respect to an entity.
– Power created on a form prescribed by government,
governmental subdivision, governmental agency for a
governmental purpose.
BRADLEY & RILEY PC
• Applicability of IUPOA
– Applies to all Financial POAs created on or after July 1,
2014.
– Applies to all judicial proceedings concerning a power of
attorney commenced on or after July 1, 2014.
BRADLEY & RILEY PC
• Applicability to prior documents/proceedings
– Generally applies to POAs created before July 1, 2014,
unless otherwise provided in the Act. But see Iowa Code
633B.107, the meaning and effect of a POA created before
July 1, 2014, is to be interpreted under the law that was in
effect at the time the POA was created
– Generally applies to judicial proceedings commenced
before July 1, 2014, unless court finds that application of
the IUPOA would substantially interfere with conducting
the proceedings or the rights of interested persons.
BRADLEY & RILEY PC
• Validity of Documents under IUPOA
– POAs executed on or after July 1, 2014, are valid if
executed in compliance with IUPOA.
• Must be notarized
– POAs executed before July 1, 2014, are valid if execution
complied with state law in effect at the time of execution.
• Notarization was not required, but commonly practiced
BRADLEY & RILEY PC
• Old Iowa POA Law
– Very little statutory law in Iowa.
– Agent referred to as Attorney-in-Fact.
– Document contained a laundry list of transactions Agent
was authorized to transact.
– Notarization was typically used, but not required.
– Iowa Bar Form was typically used, but not required.
– Affidavit procedure used for agent to verify their authority.
BRADLEY & RILEY PC
• New Iowa UPOA Law
– Now have comprehensive statutory law in Iowa.
– Agent now referred to as Agent.
– Comments to the Uniform Act and cases decided in other states
who have adopted the Uniform Act will be helpful guidance.
– Laundry list of transactions no longer required, refer to the
statute to confirm Agent’s authority.
– Notarization is now required.
– Certification procedure now used for Agent to verify their
authority.
BRADLEY & RILEY PC
• Agent can be granted General Authority by:
– Granting Agent general authority to do all acts that
principal could do pursuant to Iowa Code §633B.201
– Incorporating by reference the provisions set forth in
§633B.204 - §633B.217
– Providing detailed itemization of the authority granted
BRADLEY & RILEY PC
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§633B.204 Real Property.
§633B.205 Tangible Personal Property.
§633B.206 Stocks and Bonds.
§633B.207 Commodities and Options.
§633B.208 Banks & Other Financial Institutions.
§633B.209 Operation of Entity or Business.
§633B.210 Insurance & Annuities.
BRADLEY & RILEY PC
§633B.211 Estates, Trusts & Other Beneficial Interests.
§633B.212 Claims & Litigation.
§633B.213 Personal & Family Maintenance.
§633B.214 Governmental Benefits, Civil & Military Service
Benefits.
– §633B.215 Retirement Benefits.
– §633B.216 Taxes.
– §633B.217 Gifts.
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BRADLEY & RILEY PC
• Grant of General Authority not sufficient for all
transactions.
• Agent may not perform certain transactions, as set
forth in Iowa Code §633B.201 unless:
– POA expressly grants the authority
– Exercise of such authority is not prohibited by another
statute, agreement or instrument
BRADLEY & RILEY PC
• Specific Authority expressly required for the following:
Create, amend, revoke, terminate Revocable Trust.
Make a gift in excess of federal annual exclusion amount.
Create or change rights of survivorship.
Create or change beneficiary designation.
Delegate authority granted under POA.
Waive principal’s right to joint and survivor annuity.
Exercise fiduciary powers that principal has authority to
delegate.
– Disclaim property, including a power of appointment.
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BRADLEY & RILEY PC
• Even if Specific Authority expressly granted, an
agent who is not closely related to the principal may
not directly or indirectly create in the agent an
interest in the principal’s property by gift, right or
survivorship, beneficiary designation, disclaimer, or
otherwise
BRADLEY & RILEY PC
• Powers of Co-Agents
– Under old Iowa law, Co-Agents required to act in concert
unless document specifically specified otherwise.
– Under UIPOA, majority of Co-Agents are authorized to act
on behalf of principal unless document specifies otherwise
BRADLEY & RILEY PC
• Nomination of Guardian & Conservator
– Under old Iowa law, nomination of Guardian &
Conservator was completed through separate standby
Petitions.
– Under new IUPOA, standby Guardians and Conservators
may also be nominated in the Financial Power of Attorney
document.
BRADLEY & RILEY PC
• Accounting of Agent’s Acts
– Under old Iowa law, accounting could only be obtained by
principal, principal’s conservator or personal representative.
– Under IUPOA 633B.114(8), accounting can be requested by
principal, principal’s conservator, another fiduciary acting for
principal, a governmental agency having authority to protect
welfare of principal, personal representative of deceased
principal.
– Clients often to choose to name additional parties (i.e. children
of principal) who are entitled to request an accounting
BRADLEY & RILEY PC
• Invoking Judicial Intervention
– Under old Iowa law, judicial intervention could only be
obtained by principal, principal’s conservator or personal
representative.
– Under IUPOA 633B.116, there is an extensive laundry list
of interested persons who have authority to invoke court
jurisdiction to construe a power of attorney or review an
agent’s conduct
BRADLEY & RILEY PC
• Iowa Statutory Financial Power of Attorney Form can be
found at §633B.301 and on Iowa Docs
– Statutory form is not popular with practitioners and will likely
be revised in the future
– Statutory form does not lend itself to automated generation of
documents
– Statutory form should only be used in very simple situations
• Agent’s Certification Form can be found at §633B.302 .
• These forms are not mandatory and may be revised as
necessary.
BRADLEY & RILEY PC
LIVING WILL
BRADLEY & RILEY PC
LIVING WILL
• Life-Sustaining Procedures Act
• Iowa Code Chapter 144A
BRADLEY & RILEY PC
LIVING WILL
• Executed at any time by a competent adult.
• Document must either be notarized or witnessed by
two adults.
• Becomes effective if patient is in terminal condition
and is unable to make their own medical decisions.
• Provides directions on use or withdrawal of lifesustaining procedures.
• May be revoked at any time, without regard to
BRADLEY & RILEY PC
LIVING WILL
• Definition of Terminal Condition
– Incurable or irreversible condition that, without
administration of life-sustaining procedures, will, in the
opinion of the attending physician, result in death within a
relatively short period of time.
– State of permanent unconsciousness from which, to a
reasonable degree of medical certainty, there can be no
recovery.
BRADLEY & RILEY PC
LIVING WILL
• Definition of Life-Sustaining Procedures
– Any medical procedure, treatment, or intervention,
including resuscitation, which utilizes mechanical or
artificial means to sustain, restore or supplant a
spontaneous vital function, and when applied to a patient
in a terminal condition, would only serve to prolong the
dying process.
BRADLEY & RILEY PC
LIVING WILL
• Witnesses to Living Will
– Signed by 2 adult witnesses in the presence of each other
and the declarant.
– At least one witness must be unrelated (not a relative by
blood, marriage, or adoption within the third degree of
consanguinity).
– Attending physician and employees of the attending
physician cannot serve as witness.
• Prefer use of notary instead of 2 witnesses to avoid
increased chance of litigation.
BRADLEY & RILEY PC
LIVING WILL
• Applicability of Living Will
– Attending physician concludes that patient is in a terminal
condition.
– Diagnosis is confirmed by another physician.
– Notation is made in medical record that Living Will is now
applicable.
– Effectiveness delayed if patient is pregnant with fetus that
could develop to point of live birth with continued
application of life-sustaining procedures.
BRADLEY & RILEY PC
LIVING WILL
• Old Living Will
– Definition of life-sustaining procedures changed on April
23, 1992.
– After that date, definition of life-sustaining procedures
includes hydration and nutrition administered through IV
or NG tube.
– Living Will documents signed prior to April 23, 1992, do
not allow the withdrawal of food and water provided
through artificial means.
BRADLEY & RILEY PC
WHAT IF NO LIVING WILL?
• No presumption for or against life-sustaining
procedures based on failure to execute Living Will.
• Must be consultation and written agreement
between attending physician and alternate decision
makers who must be guided by the express or
implied intentions of patient.
• If legal guardian has been appointed for the patient,
court order is required prior to withdrawal of lifesustaining procedures.
BRADLEY & RILEY PC
IF NO LIVING WILL –
ALTERNATE DECISION MAKERS
1st: Person designated under health care POA.
2nd: Legal guardian of patient.
3rd: Spouse of patient.
4th: Adult children (majority of children who are
reasonably available for consultation).
5th: Parents of patient.
6th: Adult siblings of patient.
BRADLEY & RILEY PC
BRADLEY & RILEY PC
• Iowa Code Chapter 144B
BRADLEY & RILEY PC
• Designates another person as agent to make health
care decisions when patient is no longer able to
make those decisions on their own.
• Takes effect when patient can no longer make their
own medical decisions.
• Covers more situations than Living Will.
• Can be revoked at any time, without regard to
BRADLEY & RILEY PC
• Requirements for Validity:
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Written designation.
Explicitly authorizes agent to make health care decisions.
Notarized or signed by 2 witnesses.
Same witness limitations as described for Living Will.
BRADLEY & RILEY PC
• Ineligible Decision Makers under Medical POA:
– Attending physician cannot serve as agent.
– Employee of the attending physician cannot serve as
agent, unless the individual is related to patient by blood,
marriage, or adoption within the 3rd degree of
consanguinity.
BRADLEY & RILEY PC
– Designated agent has authority to make decisions if
principal is unable, in the judgment of attending
physician, to make their own health care decision.
– Designated agent has duty to act in accordance with
desires of the patient as expressed in the Medical POA or
otherwise made known to agent at any time.
BRADLEY & RILEY PC
– If patient’s desires are unknown, agent has duty to act in
the best interests of the patient, taking into account the
patient’s overall medical condition and prognosis.
– Agent can be removed if district court determines that
agent is acting contrary to wishes of the patient.
– If patient has Living Will and Medical POA, provisions of
Living Will take priority.
BRADLEY & RILEY PC
RELATED MEDICAL DOCUMENTS
BRADLEY & RILEY PC
MEDICAL DIRECTIVES
• Optional document that supplements the Medical
Power of Attorney and Living Will.
• Provides specific instructions to Agent regarding
medical decisions to be made under specific
circumstances.
• Client should complete with input of personal
physician.
BRADLEY & RILEY PC
DNR ORDERS
• Iowa Code Chapter 144D
• Do Not Resuscitate Orders (DNR) orders can only be
completed by or for individuals who are determined
to be near the end of life.
• DNR Orders must be completed with the assistance
of physician.
– Attorneys cannot draft DNR Orders.
• Iowa law has provisions allowing DNR Orders to be
portable between facilities.
BRADLEY & RILEY PC
BRADLEY & RILEY PC
• Iowa Code Chapter 144C
• Iowa Final Disposition Act
– Applies to all deaths occurring on or after July 1, 2008 and
to all declarations executed on or after that date.
– Gives an individual the ability to designate who will be in
charge of making funeral and burial decisions for the
individual following his or her death.
BRADLEY & RILEY PC
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Designee (then alternate designee) in declaration;
Surviving spouse (provided not legally separated);
Surviving adult children (majority rules);
Surviving parents;
Surviving adult grandchildren (majority rules);
Surviving adult siblings (majority rules);
BRADLEY & RILEY PC
– Surviving grandparents (majority rules);
– Persons in next degree of kinship under rules of intestate
succession (majority rules);
– Person who represents that he/she knows the decedent’s
identity and who signs an affidavit verifying decedent’s
identity and assuming responsibility/expense;
– County medical examiner (if responsible for remains).
BRADLEY & RILEY PC
• Designee(s) jump to front of the line.
• Designee has obligation to act in good faith and in a
manner that is reasonable under the circumstances.
• Default decision makers apparently have no
obligation to act in good faith and in a manner that
is reasonable under the circumstances
– See In re Estate of Whalen, 827 NW2d 184 (Iowa
Supreme Court 2013).
BRADLEY & RILEY PC
• Reasonable under the circumstances means
consideration of what is appropriate in relation to the
Decedent’s:
– Finances;
– Cultural or family customs; and
– Religious or spiritual beliefs.
• Reasonable under the circumstances also may include,
but is not limited to, consideration of the Decedent’s:
– Preneed funeral, burial, or cremation plan; and
– Known or reasonably ascertainable creditors.
BRADLEY & RILEY PC
• Requirements for Valid Designation:
– Must be in written form that substantially complies with
language in Chapter 144C.6;
– Must be contained in or attached to a durable power of
attorney for health care;
– Must be dated and signed by declarant; and
– Must be witnessed by 2 individuals or notarized.
BRADLEY & RILEY PC
• Declaration MAY include
– The location of an agreement for prearranged funeral services
or funeral merchandise;
– Cemetery lots owned by or reserved for the declarant; and
– Special instructions regarding organ donation.
• Declaration CAN NOT include:
– Directives for final disposition of the declarant’s remains (i.e. I
want to be cremated and ashes spread in the Pacific Ocean); nor
– Arrangements for ceremonies planned after the declarant’s
death.
BRADLEY & RILEY PC
THANK
YOU
Follow up questions can be directed to Janice Kerkove at
[email protected] or (319) 861-8763.
Cedar Rapids
2007 First Avenue SE
PO Box 2804
Cedar Rapids, Iowa 52406
Ph: 319.363.0101
Fax: 319.363.9824
Iowa City
Tower Place
One South Gilbert
Iowa City, Iowa 52240
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Coralville covers - The Iowa State Bar Association

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