The Feb 4 IC AM Rotary meeting speaker was Jim Houghton, Attorney, speaking about wills and trusts.
Announcements:  The Feb 1 can sorting went well even though there was a small number of sorters and the can count was lower than average (due to time of year and lack of students in town).  The total earned was about $480.  The sorters noted that the new location works well with our new storage trailer so set-up and take-down is easier.  There is also better lighting.  It remains to be seen whether the new location will attract as many recyclable items than before.  AM Rotary is looking for host families for next school year.  The first family's attendance area will determine which high school in ICCSD will be the host school.  Hosts do not need to be Rotarians, just able to welcome a student from another country as a family member for anywhere from 3 months to 10 months.  Contact Liz Nichols at 319-359-0656 for more information or to express interest.  Deadline for initial application is Feb 28.
 
Speaker: Jim Houghton, Attorney with Anderson & Houghton Law Office in Iowa City, specializes in estate planning.  There are many myths about wills and estate disposition.  It is true that if you die without a will rules that are written into state law will determine the disposition of the estate.  It will not go to the state unless no living relative is found.  Otherwise there is a defined order that the state uses for disposition of property that has not been covered with a will or trust.  Another popular question about wills is the impact on taxes.  At this point the estate tax does not kick in for federal taxes until a single estate reaches $13 million or $26 million for a couple.  Iowa has recently eliminated estate taxes.  People ask whether it is better to gift property prior to death.  In some cases, possibly, yes, but stocks and real property are given a step up in basis if they are sold shortly after the death of the owner.  If several months go by before the sale of this property, however, the heirs lose the advantage of the step up of basis. 
 
It is always a good idea to name an executor in the will.  Outside estate executors are entitled to the 2% of the estate value as a fee, but the fee is taxable. If the estate needs to be probated then an attorney will also be involved and that attorney may also take up to 2% of the value of the estate as a fee.  Many attorneys will only charge for their time because so much of most estates will be transferred automatically without probate (life insurance, IRAs, 401ks).  Many people will opt to put their estate into a revocable trust during their lifetime.  The use of a trust does not affect tax consequences, but it does save on the costs of probate.
 
Anyone giving substantial gifts while they are alive should complete a gift tax return to keep track of these gifts given during life.  They will come off of that relatives portion of the remaining estate after death and is deducted from the $13 million total allowance.  The total that may be gifted per year per person is $19,000.  It does not need to be gifted to relatives only.
 
It is also advisable to avoid adding a child or other heir to the title of your home to streamline transfer at death because legal issues that impact that child/heir will impact the property, including divorce, bankruptcy or a judgment.