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The following article provides a number of options Iowans can take to avoid probate, including:

  • Joint Ownership to Avoid Probate
  • Living Trusts to Avoid Probate
  • Payable-on-death Bank Accounts
  • Transfer-on-death Registration for Securities
  • Simplified Probate Procedures

Probate court proceedings, where a deceased person’s assets are transferred to people, can be a costly, time consuming and sometimes hostile. In Iowa, there are a number of different things people can do prior to their passing to make the process easier and less costly for everyone involved.

The following article provides a number of options Iowans can take to avoid probate, including:

  • Joint Ownership to Avoid Probate
  • Living Trusts to Avoid Probate
  • Payable-on-death Bank Accounts
  • Transfer-on-death Registration for Securities
  • Simplified Probate Procedures

Joint Ownership

If a property is owned jointly with someone else and the ownership includes what is known as the “right of survivorship,” then the owners who survive after one passes will automatically inherit the property interest of the deceased owner upon death. This does require some paperwork to show that the title now belongs to the surviving owner(s), but it does completely avoid probate to transfer the property.

In Iowa, the right of survivorship is automatic for assets owned in joint tenancy. Property owned in joint tenancy automatically passes to the surviving owners upon the death of one of the owners. No probate is necessary. This works well for couples, even if they aren’t married, allowing them to have real estate, bank accounts, vehicles or other assets together. InIowa, each joint tenant (owner) has an equal share to the entirety of the property.

Living Trusts

In Iowa, you can create a living trust to avoid probate for most assets you can own with someone else (real estate, bank accounts, vehicles, etc.).  To create a living trust, you need to name a trustor (the person managing the assets) and the trustee(the person benefitting from the assets). Then, you have to transfer ownership of the property to the trust. At your death, the successor trustee will be able to benefit from the property without it going through probate court proceedings.

For more information, see the article about Living Trusts in Iowa

Payable-on-death bank accounts

Iowa allows for payable on death designations to bank accounts including savings accounts and certificates of deposit. How it works is that you will own these accounts and maintain full control of them. Upon your death, the beneficiary named will be able to claim the money immediately with the bank without going through probate proceedings.

Transfer-on-death registration for securities

Iowa allows its citizens to register stocks and bonds on a transfer-on-death form. It is fairly common for people to hold their brokerage accounts this way. If you register an account with a transfer-on-death form(also called a beneficiary form), the beneficiary you name will inherit the account automatically upon your death. No probate proceedings will be necessary. The beneficiary will be able to reach out to the brokerage directly to have the account transferred to their name.

Transfer-on-death real estate, vehicles in Iowa

In Iowa, transfer-on-death deeds or registration is not allowed for real estate or vehicles.

Simplified probate procedures, affidavits

Even if you don’t do any of these things, your estate may still qualify for streamlined procedures to simplify or outright eliminate the need for probate. The main qualification is that your estate value must be below a certain threshold.

For more information on these shortcuts, head to the dedicated article on Simplifying Probate in Iowa.

 

Posted 
March 12, 2021
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