Beneficiary Assignment of Spendthrift Trust Interest

iowa court of appeals issued opinion beneficiary assignment

On July 21, 2001, the Iowa Court of Appeals issued an opinion in the case of A.Y. McDonald Industries, Inc. vs.  Michael B. McDonald, No. 20-0766 (Iowa Ct. App. July 21, 2021). The Defendant, Michael B. McDonald, began his employment with the Plaintiff in 1983.  During the time Michael was the manager of payroll for executive compensation, he misappropriated significant Company funds to himself.  Due to the misappropriation, he was terminated in May 2012.  Later in 2012, Michael signed a Restitution Agreement and promissory note to repay the Plaintiff the amount of $2,538,500.  Pursuant to the Restitution Agreement, Michael was

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Trust Case Decided By Iowa Supreme Court

wills and trusts in iowa

On April 5, 2019, the Iowa Supreme Court issued an opinion in the case of Serena Konrardy and Carrie Rigdon n/k/a Carrie Burmeister vs. Vincent Angerer Trust and DeWitt Bank & Trust Company, as Trustee of said Trust. The Trust provided that on the death of the Trustor, equal shares would be established for each of the Trustor’s five siblings.  Each share was to be placed in individual trusts for the sibling and the spouse of a deceased sibling.  If both a sibling and the sibling’s spouse had died, the Trust directed the trustee to distribute the Trust share to

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Business Tax Update: Business Meals Still 50 Percent Deductible

iowa business tax law meal entertainment

The Internal Revenue Service recently issued a Notice (Notice 2018-76) regarding the deductibility of business meal expenses under the new Tax Act.  The Notice may be relied on until proposed regulations are published.  The Notice provides that most business meal expenses will be 50 percent deductible as long as a separate invoice is provided for the food.  The new Tax Act prohibits the deduction of entertainment expenses.  It has been unclear until this Notice whether business meals involving a client or a potential client would fall into the entertainment expense category.  As such, until the proposed regulations are published, a

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New Law Allows Consumers to Freeze Accounts at Credit Bureaus for Free

how do I freeze my credit

Consumers now have the power to freeze their accounts at the three Credit Bureaus for free, effective September 21, 2018, due to the Regulatory Relief, Economic Growth and Consumer Protection Act which was passed in May of 2018. In addition, consumers are allowed to unfreeze their accounts for free.  Consumers who are interested in placing a freeze on their Credit Bureau accounts should contact the three major reporting agencies, Experian, TransUnion, and Equifax.  In addition, consumers should also notify the National Consumer Telecom & Utilities Exchange (NCTUE) to have their account frozen.   NCTUE is the reporting agency used when individuals

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Recent Changes to the Iowa Small Estate Statute

probate assets, small estate administration

Chapter 365 of the Iowa Code contains the Small Estate Statute. Recent legislation was passed which has made changes to the Chapter. The current statute is applicable to an estate if the value of the probate assets are $100,000.00 or less. One of the changes made in the legislation is to increase the maximum value of probate assets for an estate to qualify for small estate administration to $200,000.00 effective for estates of decedents dying on or after July 1, 2020. The new change in the maximum value of probate assets, combined with the increase in the amount for distribution

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New Health Care Options For Iowans

health care for small business

The Governor recently signed SF 2349 into law. The purpose of the law is to assist Iowans who are having difficulties purchasing health insurance on the individual market. First of all, the law allows Iowa Farm Bureau to offer new “health benefit plans” to its members. The plans are not defined as insurance and as such they are exempt from the Affordable Care Act Requirements and Iowa Insurance Division Regulation. Such plans will be self-funded and will be administrated by Wellmark Blue Cross and Blue Shield. It is projected that the plans will cost $5,000.00 per year for family coverage.

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Understanding Pre-Need Funeral Arrangements

pre-funeral planning costs

This month’s article discusses the sale of pre-need funeral arrangements which are sold by funeral homes and cemeteries.  The contract is entered into whereby the customer selects the various features of a funeral and the various details regarding the final disposition of the body. Under Iowa law, such pre-need contracts can be cancelled by the customer within three days after signing the contract if you change your mind.  The contract can require either a lump sum payment or a series of installment payments.  If you elect to pay in installments, it is important to verify what happens in the event

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Be Wary of Transfer on Death and Payable on Death Accounts

The use of transfer on death and payable on death registrations for bank and investment accounts has increased dramatically.  Banks and investment firms are pushing their clients to sign the forms claiming that the forms will eliminate the need for probate administration. Chapter 633D of the Iowa Code deals with transfer on death registrations which applies to investment accounts.  The Act allows the owner to designate the beneficiary of the account in the event of the owner’s death.  The beneficiary form may be cancelled or changed at any time by the owner without the consent of the beneficiary.  The Act

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Supreme Court Case on Iowa Inheritance Tax Exemptions

inheritance tax code iowa

The Iowa Supreme Court, on November 17, 2017, issued an opinion interpreting a definition utilized in an inheritance tax exemption.  The Court points out that for many years prior to 1997 the Iowa inheritance tax had an unlimited exemption for any share of the estate passing to the surviving spouse, limited exemptions for lineal descendants and lineal ascendants and no exemption for step-children.  In 1997, the Legislature eliminated inheritance tax on property passing to parents, grandparents, great grandparents, children, stepchildren, grandchildren and great grandchildren among others.  In 2003, the Legislature added a definition for “stepchild” which defined “stepchild” as the

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When Gifting to Charity Make Sure to get Written Acknowledgements

donations to charity tax rules des moines

Many individuals regularly make gifts to qualified organizations to receive tax-deductible contributions.  Pursuant to the IRS rules, a taxpayer who makes a single donation of $250.00 or more to a qualified charity must have an written acknowledgement from the Organization for each single donation of $250.00 or more or an written acknowledgement from the Organization setting out the date and amount of each contribution in excess of $250.00. The $250.00 amount set out above does not mean that you add up all contributions to see if you reach the $250.00 limit.  The $250.00 threshold is only reached when you make

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