In this article, we discuss how an executor, the individual or entity responsible for managing the assets of a decedent’s probate estate, should handle the real estate assets of the deceased individual. We will discuss inventory of assets, when real estate goes through probate in Iowa, and the process the executor should follow when distributing real estate in Iowa. We will also explain how to find what real estate the deceased person owned, what to do with the real estate during the administration of the assets, and the notice of probate for real estate in Iowa.
Inventory of Assets
With help from the attorney, it is the executor’s responsibility to inventory all the assets of the decedent, including all property. In Iowa, the personal representative or executor must file a report and inventory of all the property of the decedent within 90 days of being qualified. An extension can be granted by the court as needed. The executor should not take this responsibility lightly as the inventory will be verified by an attorney under penalty of perjury. Once the property is properly inventoried it will be appraised, sometimes by a certified appraiser depending on the category of property. Also of this information will be available for creditors. If the property is to be sold to pay debts it will be listed at fair market value. If the property is exempt from probate or cannot be used to pay debts it should still be inventoried.
Finding All the Real Estate Owned By the Decedent
Every estate is different and depending on the size of the estate the number of different pieces of real estate owned by the decedent can be numerous. Also, depending on the type of real estate—personal or investment—the ownership of a given piece of property may be ambiguous. If an explicit will or trust is not present the personal representative should begin by searching for items such as a deed, mortgage papers, or real estate tax bill. The personal representative can also search through the decedent’s income tax return for mortgage deductions or real estate tax deductions. The attorney can also run a title search for the decedent’s name or any name’s associated with a trust containing the property of the decedent.
What Real Estate Should Go Through Probate In Iowa?
Generally, if a piece of real estate property was owned individually by the decedent and is not listed under a trust or jointly owned it will go through probate. Property covered under a trust will be distributed according to the terms of the trust. If the property is jointly owned, for example, a married couple jointly owns their home, and the deed states the other person has rights of survivorship over the property, it will pass directly to the other person without going through probate.
How Should an Executor Distribute Real Estate In an Iowa Probate Estate?
If a will or trust is present that explicitly states what to do with the real estate property it should be followed. Assuming that the estate’s creditors have been satisfied, if there is no will or trust, or the will and trust do not explicitly state what to do with the real estate property, the usual action would be to sell the property at fair market value and distribute the funds to the beneficiaries. The funds should be distributed according to the terms of the will or in line with Iowa intestate law if no directions exist. However, before selling any real estate it’s best to get input from the heirs and/or beneficiaries.
They may have already reached a more amicable distribution of the real estate property, such as having one person inherit the property, but receiving less monetary funds. One or more of the heirs may also want to purchase the property directly from the estate. This can help when paying down debt owed by the estate. In any of these situations, the executor should get a signed copy of the agreement between all the heirs/beneficiaries.
How to Handle the Decedent’s Real Estate During the Administration Process
In the state of Iowa, the personal representative is required to take control and possession of all the decedent’s personal property. The personal representative should continue to upkeep property under the estate not already owned by the beneficiaries, jointly owned, or that which passes outside of probate directly to the beneficiaries. If the will directs the personal representative to take control of property currently occupied by a beneficiary or heir, he or she can legally do so, or if the property is needed to satisfy any debts.
Notice of Probate for Real Estate In Iowa
If the executor does not sell or transfer the decedent’s real estate property during the administration of the estate the executor must send a notice of probate to the County Recorder’s office in the region in which the real estate is located. The executor should also determine if the mortgage on any property going through probate has an acceleration clause before selling or transferring the property.
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