What are your fees?

This depends on the matter that we are handling for you.  There are many matters that we handle on a flat fee basis, and we can provide those fees to you.  Other matters, such as reviewing a contract, will likely be handled on an hourly basis.  Most times we can provide to you an estimate on the amount of time a matter will take and provide our hourly fee after consulting with you.  We also handle some litigation matters on a contingency fee basis.  All of these matters will be addressed with you at the time of our initial consultation and will be contained in an engagement agreement.

What business structure should I choose?

Before starting a  business, you must decide how your business will be structured.

If you do not form a formal business entity, your business will either be a sole proprietorship (with one owner) or a general partnership (with more than one owner). Legally, you and your business will be the same “person,” so if your business has debts or is sued, you are personally liable for those obligations.

To limit this liability, you can form a business entity such as a corporation, limited liability company or limited liability partnership. Owners of these business entities do not risk all their personal assets if the business cannot meet its financial obligations. Their losses are generally limited to the amount they have invested in the company. 

Other options include a limited partnership, in which some partners are fully liable for business obligations and others are not, and a nonprofit corporation.

We will assist you in weighing your options and guide you in choosing your business entity carefully.  This choice is important because it will affect the way your business is owned, managed and taxed.

What do I need to know about choosing a name?

You probably already have ideas about the name you’d like for your new business. There are legal issues to consider before you start ordering signs and business cards.

Iowa has laws about the names that new business entities can use.  In general, you cannot choose a name that another business is already using. In addition, may be risky to choose a name that might infringe on another business’s registered trademark. If you believe you want to trademark a business name, you will want to choose a name that meets the criteria for trademark protection. We can assist you in navigating the laws regarding naming a business, as well as trademarking the business name.

What should be in my operating agreement or bylaws?

Initially, an operating agreement is adopted by a limited liability company, and bylaws are adopted by corporations.  Corporate bylaws and LLC operating agreements provide important guidelines for operating your business. These documents explain such things as how decisions will be made, when and how shareholder meetings are held, how to handle ownership changes, and how shares of stock are issued.  We can assist you with preparing operating agreements and bylaws that meet the unique needs of your business.

How do I protect my intellectual Property?

All small businesses potentially have trademarks that they use to identify the business and distinguish it from others. Your business name, logo, labels, slogans and packaging can all be trademarks, but you must take steps to protect them. You may decide to register a trademark with the U.S. Patent and Trademark Office. 
Businesses also may have copyrights in any original works of authorship, including such things as photographs, brochures and websites. Copyright protection is particularly important if you are in a creative field. And if you have an invention, you may need to apply for a patent. We can help you identify your intellectual property, advise you on protecting it, and assist with copyright or trademark registration. For patents, you will need a patent lawyer whom we can provide you referrals.

What contracts does my business need?

Contracts protect your business by describing the rights and responsibilities of the parties to the agreement. A well-written contract can reduce the number of disputes that arise, ensure that you get paid for the work you do, and provide a clear remedy if one party doesn’t hold up its end of the deal. The types of contracts that you will need will vary depending on your business.  Your business will likely need contracts for routine transactions, to protect confidential information, to describe employment relationships, or for leases and other major transactions.

We are able to help you evaluate what contracts you will need, and draft or review those contracts.  We also recommend that you have us draft or review all major contracts. 

What other risks should I be guarding against?  

Every business faces a unique set of risks. While many risks can be minimized with contracts, entity formation and other proactive steps, others require insurance. As an attorney who has experience as a licensed commercial insurance agent, I can work with you and your insurance agent to recognize and minimize these risks. As your attorney, we strive to become a trusted business advisor who you can rely upon assist you in assessing your risks and identify ways to alleviate them. 

Obtaining business and legal advice from us as your business attorney will help you get your business off on the right foot. It is important to continue to communicate with us once your business is up and running. Communicating with us on a regular basis will help ensure that you are protecting yourself as your business grows and changes.

Do I need a buy-sell agreement?

A buy-sell agreement is a legally binding agreement between co-owners of a business that addresses the terms of a buyout if one owner voluntarily or involuntarily leaves the business.

We recommend that any business with more than one owner should consider a buy-sell agreement. If an owner dies, divorces, becomes disabled, desires to leave the business, or is removed from employment in the business, the business needs to be adequately prepared on what to do. A buy-sell agreement will provide a plan of action and minimize any problems that may pop up. Additionally, a buy-sell agreement can contain provisions to help limit who may become an owner of the business.  We can advise you on how to properly construct a buy-sell agreement and prepare or review the agreement on your behalf.



Probate and Estate Planning Questions

What are your fees?

In probate matters the Iowa Code generally limits fees to 2% of the gross value of the assets of the estate.  There are exceptions to these limits, but generally this is the maximum amount that can be obtained as a fee in probate.  Some estate plans can be handled with a flat fee, while other plans will be billed on an hourly basis.  The fees will be discussed and decided upon at the initial consultation.  

Estate, Gift, and GST taxes.

The federal government imposes taxes on gratuitous transfers of property made during lifetime (gifts) or at death (bequests/devises) that exceed certain exemption limits. Gift taxes are imposed on transfers during lifetime that exceed the exemption limits, and estate taxes are imposed on transfers at death that exceed the exemption limits. The generation-skipping transfer (GST) tax is imposed on transfers to grandchildren and more remote descendants that exceed the exemption limits so transferors cannot avoid transfer taxes on the next generation by "skipping" a generation. The GST tax is levied in addition to gift or estate taxes and is not a substitute for them.

In December 2017, Congress increased the gift, estate, and GST tax exemptions to $10 million through 2025. With indexing for inflation, these exemptions are $11.4 million for 2019. An individual can transfer property with value up to the exemption amount either during lifetime or at death without paying any transfer tax. 

Transfers between spouses and to certain trusts for spouses, made during lifetime or at death, may be made without the imposition of any tax.  These transfers also do not use any exemption. This is known as the “unlimited marital deduction.”

The $10 million inflation adjusted estate tax exemption is "portable" between spouses beginning 2011 so that a surviving spouse may take advantage of a deceased spouse's unused exemption (DSUE) through lifetime gifts by the surviving spouse, or at the surviving spouse's later death.

The state of Iowa does impose an inheritance tax on certain beneficiaries.  Surviving spouses, parents, grandparents, great-grandparents, and other lineal ascendants are entirely exempt. The same is true for children—biological and legally-adopted—stepchildren, grandchildren, great-grandchildren, and other lineal descendants. Iowa will not impose an inheritance tax on these beneficiaries.

Charitable, religious, educational, and veterans organizations as defined in sections 170(c) and 2055 of the Internal Revenue Code are also entirely exempt from the Iowa inheritance tax. This includes public libraries, public art galleries, hospitals, humane societies, and municipal corporations. Also, bequests for the care of cemetery lots within the state of Iowa, and bequests for religious services not in excess of $500.00 are entirely exempt from the inheritance tax.

Any other beneficiary not listed above, including siblings, nieces, nephews, cousins, and friends, are taxed on the entire share passing from the estate to that person.

What happens if you die without a will?

If you die intestate (without a will), Iowa has laws that will determine who receives your property by default. Typically the distribution would be to your spouse and children, or if none, to other family members.  A will allows you to alter the state's default plan to suit your personal preferences. It also permits you to exercise control over a myriad of personal decisions that broad and general state default provisions cannot address.

What does a will do?

A will provides for the distribution of certain property owned by you at the time of your death, and generally you may dispose of such property in any manner you choose.  Your right to dispose of property as you choose, however, may be subject to forced laws that may prevent you from disinheriting a spouse and, in some cases, children. For example, Iowa has spousal rights of election laws that permit a spouse to claim a certain interest in your estate regardless of what your will (or other documents addressing the disposition of your property) provides. Your will does not govern the disposition of your property that is controlled by beneficiary designations or by titling and so passes outside your probate estate.  Such assets include property titled in joint names with rights of survivorship, payable on death accounts, life insurance, retirement plans and accounts, and employee death benefits.  These assets pass automatically at death to another person, and your Will is not applicable to them unless they are payable to your estate by the terms of the beneficiary designations for them. Your probate estate consists only of the assets subject to your will, or to a state’s intestacy laws if you have no will, and over which the court may have authority.  This is why reviewing beneficiary designations, in addition to preparing a will, is a critical part of the estate planning process.  It is important to note that whether property is part of your probate estate has nothing to do with whether property is part of your taxable estate for estate tax purposes.

Wills can be of various degrees of complexity and can be utilized to achieve a wide range of family and tax objectives. If a will provides for the outright distribution of assets, it is sometimes characterized as a simple will. If the will creates one or more trusts upon your death, the will is often called a testamentary trust will. Alternatively, the will may leave probate assets to a pre-existing inter vivos trust (created during your lifetime), in which case the will is called a pour over will. Such pre-existing inter vivos trusts are often referred to as revocable living trusts. The use of such trusts or those created by a will generally is to ensure continued property management, divorce and creditor protection for the surviving family members, protection of an heir from his or her own irresponsibility, provisions for charities, or minimization of taxes.

Aside from providing for the intended disposition of your property upon your death, a number of other important objectives may be accomplished in your will.

  • You may designate a guardian for your minor child or children if you are the surviving parent and thereby minimize court involvement in the care of your child.  Also, by the judicious use of a trust and the appointment of a trustee to manage property funding that trust for the support of your children, you may eliminate the need for bonds (money posted to secure a trustee’s properly carrying out the trustee’s responsibilities) as well as avoid supervision by the court of the minor children’s inherited assets.

  • You may designate an executor (personal representative) of your estate in your will, and eliminate their need for a bond.

  • You may choose to provide for persons whom the state’s intestacy laws would not otherwise benefit, such as stepchildren, godchildren, friends or charities. 

  • If you are acting as the custodian of assets of a child or grandchild under the Uniform Gift (or Transfers) to Minors Act (often referred to by their acronyms, UGMA or UTMA), you may designate your successor custodian and avoid the expense of a court appointment.

What does a will not do?

A will does not govern the transfer of certain types of assets, called non-probate property, which by operation of law (title) or contract (such as a beneficiary designation) pass to someone other than your estate on your death. For example, real estate and other assets owned with rights of survivorship pass automatically to the surviving owner. Likewise, an IRA or insurance policy payable to a named beneficiary passes to that named beneficiary regardless of your will.

How do I sign a will?

Wills must be signed in the presence of 2 witnesses and certain formalities must be followed or the will may be invalid. A later amendment to a will is called a codicil and must be signed with the same formalities. Be cautious in using a codicil because, if there are ambiguities between its provisions and the prior will it amends, problems can ensue. The will may refer to a memorandum that distributes certain items of tangible personal property, such as furniture, jewelry, and automobiles, which may be changed from time to time.

We are able to help you evaluate what contracts you will need, and draft or review those contracts.  We also recommend that you have us draft or review all major contracts. 

What is a Trust?

Trusts are legal arrangements that can provide incredible flexibility for the ownership of certain assets, thereby enabling you and your heirs to achieve a number of significant personal goals that cannot be achieved otherwise. The term trust describes the holding of property by a trustee, which may be one or more persons or a corporate trust company or bank, in accordance with the provisions of a contract, the written trust instrument, for the benefit of one or more persons called beneficiaries. The trustee is the legal owner of the trust property, and the beneficiaries are the equitable owners of the trust property.  A person may be both a trustee and a beneficiary of the same trust.

If you create a trust, you are described as the trust's grantor or settlor.  A trust created by a will is called a testamentary trust, and the trust provisions for such a trust are contained in your will. A trust created during your lifetime is called a living trust or an inter vivos trust, and the trust provisions are contained in the trust agreement or declaration. The provisions of a living trust or inter vivos trust (rather than your will or state law default rules) usually will determine what happens to the property in the trust upon your death.

A trust created during lifetime may be revocable, which means it may be revoked or changed by the settlor, or irrevocable, which means it cannot be revoked or changed by the settlor.  Either type of trust may be designed to accomplish the purposes of property management, assistance to the settlor in the event of physical or mental incapacity, and disposition of property after the death of the settlor of the trust with the least involvement possible by the probate (surrogate or orphan’s) court.

Trusts are not only for the wealthy. Many young parents with limited assets choose to create trusts either during life or in their wills for the benefit of their children in case both parents die before all their children have reached an age deemed by the parents to indicate sufficient maturity to handle property (which often is older than the age of majority under state law). Trusts permits the trust assets to be held as a single undivided fund to be used for the support and education of minor children according to their respective needs, with eventual division of the trust among the children when the youngest has reached a specified age. This type of arrangement has an obvious advantage over an inflexible division of property among children of different ages without regard to their level of maturity or individual needs at the time of such distribution.

What is jointly held property?

If you own property with another person as joint tenants with right of survivorship, that is, not as tenants in common, the property will pass directly to the remaining joint tenant upon your death and will not be a part of your probate estate governed by your will (or the state’s laws of intestacy if you have no will). It is important to note that whether property is part of your probate estate has nothing to do with whether property is part of your taxable estate for estate tax purposes.

Frequently, people (particularly in older age) will title bank accounts or securities in the names of themselves and one or more children or trusted friends as joint tenants with right of survivorship. This is sometimes done as a matter of convenience to give the joint tenant access to accounts to pay bills.  It is important to realize that the ownership of property in this fashion often leads to unexpected or unwanted results. Disputes, including litigation, are common between the estate of the original owner and the surviving joint tenant as to whether the survivor's name was added as a matter of convenience or management or whether a gift was intended. The planning built into a well-drawn will may be partially or completely thwarted by an inadvertently created joint tenancy that passes property to a beneficiary by operation of law, rather than under the terms of the will. In some instances, a power of attorney document giving the trusted person the power to act on your behalf as your agent with regard to the account in order to pay bills will achieve your intended goal without disrupting your intended plans regarding to whom the account will ultimately pass.

Many of these problems also are applicable to institutional revocable trusts and "pay on death" forms of ownership of bank, broker, and mutual fund accounts and savings bonds. Effective planning requires knowledge of the consequences of each property interest and technique.

In many instances, consumers prepare wills believing that the will governs who will inherit their assets when in fact, the title (ownership) of various accounts or real property, for example, as joint tenants, or beneficiary designations for IRAs, life insurance and certain other assets control the distribution of most or even all assets. This is why merely addressing your will is rarely sufficient to accomplish your goals.

What is a revocable trust?

The term "revocable trust" is generally used to describe a trust that you create during your lifetime.  A revocable trust can help you manage your assets or protect you should you become ill, disabled or simply challenged by the symptoms of aging. Revocable trusts are written to permit you to revoke or amend them whenever you wish to do so.  These trusts do not help you avoid estate tax because your power to revoke or amend them causes them to continue to be included in your estate.

These trusts do help you avoid probate, which may not always be necessary depending on the cost and complexity of probate in your estate.

You also can create an "irrevocable" living trust, but this type of trust may not be revoked or changed, and such a trust is almost exclusively done to produce certain tax or asset protection results, which are beyond the scope of this summary.

A revocable trust is legally in existence during your lifetime, has a trustee who currently serves, and owns property which (generally) you have transferred to it during your lifetime. While you are living, the trustee (who may be you, although a co-trustee might also be named along with you) is generally responsible for managing the property as you direct for your benefit. Upon your death, the trustee is generally directed to either distribute the trust property to your beneficiaries, or to continue to hold it and manage it for the benefit of your beneficiaries. Like a will, a revocable trust can provide for the distribution of property upon your death. Unlike a will, it can also (a) provide you with a vehicle for managing your property during your lifetime, and (b) authorize the trustee to manage the property and use it for your benefit (and your family) if you should become incapacitated, thereby avoiding the appointment of a guardian for that purpose.

What is a power of attorney?

A power of attorney gives one or more persons the power to act on your behalf as your agent. The power may be limited to a particular activity, such as closing the sale of your home, or be general in its application. The power may give temporary or permanent authority to act on your behalf. The power may take effect immediately, or only upon the occurrence of a future event, usually a determination that you are unable to act for yourself due to mental or physical disability. The latter is called a "springing" power of attorney.  A power of attorney may be revoked, but written notice of revocation should be provided to the person named to act for you.

The person named in a power of attorney to act on your behalf is commonly referred to as your "agent" or "attorney-in-fact." With a valid power of attorney, your agent can take any action permitted in the document. Often your agent must present the actual document to invoke the power. For example, if another person is acting on your behalf to sell an automobile, the motor vehicles department generally will require that the power of attorney be presented before your agent's authority to sign the title will be honored. Similarly, an agent who signs documents to buy or sell real property on your behalf must present the power of attorney to the title company. Similarly, the agent has to present the power of attorney to a broker or banker to effect the sale of securities or opening and closing bank accounts. However, your agent generally should not need to present the power of attorney when signing checks for you.

Why would anyone give such sweeping authority to another person? One answer is convenience. If you are buying or selling assets and do not wish to appear in person to close the transaction, you may take advantage of a power of attorney. Another important reason to use power of attorney is to prepare for situations when you may not be able to act on your own behalf due to absence or incapacity. Such a disability may be temporary, for example, due to travel, accident, or illness, or it may be permanent.

If you do not have a power of attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act for you. If a court proceeding is needed, you may not have the ability to choose the person who will act for you.  A power of attorney allows you to choose who will act for you and defines his or her authority and its limits, if any. In some instances, greater security against having a guardianship imposed on you may be achieved by you also creating a revocable living trust.

Who should be your agent?

You may wish to choose a family member to act on your behalf. Many people name their spouses or one or more children. In naming more than one person to act as agent at the same time, be alert to the possibility that all may not be available to act when needed, or they may not agree. The designation of co-agents should indicate whether you wish to have the majority act in the absence of full availability and agreement. Regardless of whether you name co-agents, you should always name one or more successor agents to address the possibility that the person you name as agent may be unavailable or unable to act when the time comes.

There are no special qualifications necessary for someone to act as an attorney-in-fact except that the person must not be a minor or otherwise incapacitated. The best choice is someone you trust. Integrity, not financial acumen, is often the most important trait of a potential agent.

What is the probate process?

Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries. The basic job of administration and accounting for assets must be done whether the estate is handled by an executor in probate or whether probate is avoided because all assets were transferred to a living trust during lifetime or jointly owned.  I