Revocable Trust for Single Individual
(Separate Share Trusts for Children) (IA)

Summary

This template is a revocable trust for use in Iowa by a single individual. It contains provisions for the creation of separate share trusts for the benefit of the individual's children upon the settlor's death. This template includes practical guidance, drafting notes, and alternate and optional clauses. Iowa does not have a domestic partner relationship statute. The word partner is used in this will to allow for a will to a committed relationship with someone else. The use of the term partner here has no special meaning in Iowa law and does not entitle the partner to any of the benefits that a spouse might have, including rights to take against the will, rights to allowance for surviving spouse, tax exemption for purposes of Iowa inheritance tax or the federal estate tax marital deduction. This should be reviewed in every case as a bequest to a non-relative partner can generate Iowa inheritance tax until January 1, 2025. Also, if the estate is subject to federal estate tax, it can have federal estate tax consequences. These matters should be discussed with the client. Upon the settlor's death, the trust assets pass to equal separate trusts for the settlor's children (or the issue of a deceased child). Separate share trusts may be desirable when the settlor wants each of their children (or issue of a predeceased child) to share equally in the settlor's estate, and when the settlor wants to provide for management of estate assets until their children reach a certain age. Otherwise, the settlor's children would receive outright gifts upon reaching age 18. This template provides for two stages of payouts, but can be modified to provide for additional stages. All distribution provisions should be carefully crafted to reflect the client's wishes. A revocable trust (also known as a "living trust" or "inter vivos trust") is typically used as a will substitute to avoid probate. The revocable trust also includes elements of disability planning as assets can be managed by the successor trustee without an adjudication of incapacity. However, because the settlor retains power over the trust assets, revocable trusts do not provide asset protection or estate tax savings. In addition to the creation of the trust, the settlor will need to fund the trust with all of their individually owned assets in order avoid probate. To assist your client with funding, once they give you a completed questionnaire, you should provide a checklist and/or letter to help them understand the additional action required to coordinate the estate plan beyond executing the documents. This includes, for example, recording new deeds for real property, updating beneficiary designations with investment, retirement, checking, and savings accounts, and more. To ensure that all of the settlor's assets are properly transferred to the intended beneficiaries, a revocable trust should be used together and coordinated with a pour over will (see Will for Individual with Spouse or Partner (Pour Over to Inter Vivos Trust) (IA). For a more basic revocable trust, see Revocable Trust for Individual with Spouse or Partner (Basic) (IA).