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Probate court proceedings, where a deceased person’s assets are transferred to people, can be costly, time-consuming, and sometimes hostile. In Iowa, people can do several different things prior to their passing to make the process easier and less costly for everyone involved.
Probate court proceedings, where a deceased person’s assets are transferred to people, can be costly, time-consuming, and sometimes hostile. In Iowa, people can do several different things prior to their passing to make the process easier and less costly for everyone involved. Read our article for a full explanation on the probate process in general.
The following article provides many 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
What is 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 pass will automatically inherit the property interest of the deceased owner upon death. This requires some paperwork to show that the title belongs to the surviving owner(s). However, it does altogether 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. In Iowa, each joint owner has an equal share of the entirety of the property.
What is a Living Trust in Iowa?
In Iowa, you can create a revocable 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 benefiting from the assets). Then, you have to transfer ownership of the property to the trust. At your death, the successor trustee will benefit from the property without going through probate court proceedings.
For more information, see the article about Living Trusts in Iowa
Does Iowa Have Payable-on-death Bank Accounts?
Iowa allows for payable on death designations to bank accounts, including savings accounts and certificates of deposit. It works that you will own these accounts and maintain complete 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 relatively common for people to hold their brokerage accounts this way. Suppose you register an account with a transfer-on-death form (also called a beneficiary form). In that case, the beneficiary you name will inherit the account automatically upon your death. No probate proceedings will be necessary. The beneficiary will reach out to the brokerage directly to have the account transferred to their name.
Transfer-on-death Real Estate for Vehicles in Iowa
In Iowa, transfer-on-death deeds or registration is not allowed for real estate or vehicles.
What are Simplified Probate Procedures and 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 primary 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.
This article provided an overview of probate court proceedings in Iowa and some common issues with avoiding probate. If you need help understanding your rights, contact an experienced Iowa attorney at 630-324-6666 or fill out our confidential contact form and a member of our team will be in touch.