{"id":15346,"date":"2023-06-15T11:50:09","date_gmt":"2023-06-15T16:50:09","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=15346"},"modified":"2023-06-15T11:50:09","modified_gmt":"2023-06-15T16:50:09","slug":"smart-estate-planning-for-iowa-retirees","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/smart-estate-planning-for-iowa-retirees","title":{"rendered":"Smart Estate Planning for Iowa Retirees"},"content":{"rendered":"
Effective estate planning is an essential part of your end-of-life plan and shouldn\u2019t be ignored. Not having an estate plan can lead to confusion about your wishes, as well as emotional stress for your family. <\/strong><\/p>\n As retirees in Iowa embark on the next chapter of their lives, planning for the future is essential. More than 1 out of 4 Americans<\/a> say inflation has caused them to see a greater need for estate planning, yet 2 out of 3 Americans do not have any type of estate planning document in place.<\/span><\/p>\n Whether you have significant wealth or modest assets, creating an estate plan can help provide peace of mind and help to fulfill your wishes. This blog will examine the critical elements of intelligent estate planning for Iowa retirees. Here\u2019s what you should know.<\/span><\/p>\n Estate planning is one of the most important things you can do for yourself and your family. It helps you proactively manage your financial assets and healthcare decisions during your lifetime, and after passing.<\/span><\/p>\n Estate planning involves creating various legal documents, such as wills, trusts, and powers of attorney, which help determine the distribution of your assets. Think estate planning is only for the uber-rich? Anything you own is considered an asset. Your car, jewelry, home and even your family heirlooms are considered assets. So essentially, estate planning is for everyone.<\/span><\/p>\n Planning for when you\u2019re no longer here also offers peace of mind and helps facilitate a smooth and efficient transfer of wealth. By taking control of your affairs, you can help to leave a lasting impact that aligns with your values and protects your family\u2019s future. Let\u2019s take a deeper look at what you can expect.<\/span><\/p>\n A will<\/a> is a legal document specifying how a person\u2019s assets and belongings should be distributed after death. Wills are <\/span>the foundation of any estate plan. Consequently, retirees should also consider establishing a trust. Trusts offer additional benefits such as privacy, probate avoidance, and asset distribution flexibility. Several types of trusts are commonly used for various purposes. Here are some of the most common:<\/span><\/p>\n These are just a few examples of the many types of trusts available. Each trust has its specific purpose and benefits, and it\u2019s essential to consult with your financial advisor to help determine the most appropriate type of trust for your particular situation.<\/span><\/p>\n In Iowa, there is an inheritance tax that beneficiaries are responsible for paying on their inherited assets. However, the tax only applies to specific categories of inheritors, and for individuals, <\/span>two types are relevant:<\/span><\/a><\/p>\n However, it\u2019s important to note that certain relations are exempt from paying inheritance tax when they inherit money from a deceased relative. If your relationship to the deceased person falls within any of these categories, regardless of the size of your inheritance, you will not owe any inheritance tax.<\/span> Iowa is currently planning to repeal the inheritance tax by the year 2025 completely.<\/span><\/a><\/p>\n One significant benefit for Iowa retirees is that there is no gift tax. However, it\u2019s important to note that the federal gift tax still applies. For <\/span>2023, the federal gift tax allows a per-year exemption of $17,000 for each gift recipient<\/span><\/a>. If you give a single individual more than $17,000 in a single year, reporting that gift to the Internal Revenue Service (IRS) is necessary. Filing requirements apply in such cases to help ensure compliance with federal gift tax regulations.<\/span><\/p>\n Proper estate planning can help minimize estate taxes and help ensure your beneficiaries receive the maximum amount of your assets. Consult with a knowledgeable estate planning professional<\/a> to explore strategies like gifting, charitable giving, and trusts that can help reduce your tax liability.<\/span><\/p>\n With the progression of age, many retirees may need to consider long-term care options. Planning for potential long-term care expenses, such as housing, is essential in preserving your estate for future generations. Exploring options like long-term care insurance, Medicaid planning, and the use of irrevocable trusts can help alleviate the financial burden associated with long-term care.<\/span><\/p>\n As a retired individual, establishing healthcare<\/a> and financial powers of attorney is paramount. A healthcare power of attorney allows you to designate someone you trust to make medical decisions on your behalf if you become incapacitated.\u00a0<\/span>Similarly, a financial professional such as a Fiduciary<\/a> helps you appoint someone to manage your financial matters when you cannot do so yourself. It is crucial to select reliable individuals for these roles carefully and clearly define their responsibilities to help ensure your wishes are honored and your best interests are safeguarded.<\/span><\/p>\n Taking proactive steps to establish healthcare and financial powers of attorney and planning for long-term care empowers retirees to help them make informed decisions about their well-being and financial security in the face of potential incapacity or care needs.<\/span><\/p>\n Estate planning is not a one-time task. Life is constantly changing<\/span>, and your estate plan should adapt accordingly. Reviewing your plan<\/a> after significant life events such as deaths, divorces, or changes in financial circumstances is essential. U<\/span>pdating beneficiary designations is another vital aspect of estate planning.<\/span><\/p>\n Retirement accounts, life insurance policies, and other assets with designated beneficiaries pass outside the probate process. Ensuring these designations reflect your wishes is essential to help avoid potential conflicts. Take proactive steps to help ensure your assets are titled correctly. Keeping an open line of communication with your Fiduciary<\/a> is necessary. They can help ensure that your plan remains up-to-date and aligned with your (sometimes evolving) wishes.<\/span><\/p>\n By collaborating with a<\/span> Fiduciary advisor <\/span><\/a>with experience in estate planning, you can help to effectively identify tax-efficient strategies to help minimize your tax burden and help ensure the distribution of your assets aligns with your needs.<\/span><\/p>\nWhy You Should Have An Estate Plan<\/strong><\/h4>\n
Will and Trust<\/b><\/h4>\n
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Estate and Gift Taxes<\/b><\/h4>\n
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Healthcare and Financial Powers of Attorney<\/b><\/h4>\n
Regularly Review and Update Your Plan<\/b><\/h4>\n
Working With an Iowa Fiduciary\u00a0<\/b><\/h4>\n