With a new year come changes to legislation. This article will cover recent changes to estate and probate law in 2021, including:
- Changes in Transfers of Real Estate in Iowa
- What is a Directed Trust in Iowa?
- Guardian and conservator law changes since January 1, 2020
Changes in Transfers of Real Estate
The Iowa State Legislature modified a Iowa Law as it relates to the transfer of real estate. A “transfer” under Iowa Law, for the purposes of real estate disclosures, is the transfer or conveyance by sale, exchange, real estate contract, or any other method by which real estate and improvements are purchased, if a property includes at least one but not more than four dwelling units. A written disclosure usually must be given by the transferor to the person interested in being transferred the real property.
However, there are certain exceptions to who must do this. A transfer by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust did not necessitate these disclosures. Effective in 2020, this section was amended to say: “This exemption shall not apply to a transfer of real estate in which the fiduciary is a living natural person and was an occupant in possession of the real estate at any time within the twelve consecutive months immediately preceding the date of transfer.” Therefore, if the executor or the will actually lived in the house they still must make the required disclosure statements if they wish to transfer their property. These disclosures must include information relating to the condition and important characteristics of the property, including significant defects in the structural integrity.
What is a Directed Trust in Iowa?
The legislature created provisions for the creation of directed trusts. In traditional trusts, the trustee is the only party responsible for managing and diversifying investments. In directed trusts, the trustee is responsible for administrative duties, but another party manages the underlying assets and is responsible for how the investments perform. The new law creates methods for appointing trust directors and protectors through the creating instrument, who have fiduciary powers. A fiduciary who is excluded from liability incurred by complying with the wishes of the trust director. If a trust protector is appointed in the originating instrument, it may have certain powers, such as removing and appointing trustees and trust directors, terminating the trust, vetoing trust distributions, modifying terms of power granted by the trust, and other duties.
Further Implementation of Changes to Guardian and Conservator Law
One of the most significant changes to Iowa Probate Law in recent years involves changes to Guardian and Conservator law in Iowa. These changes were implemented January 1, 2020. A major shift was made to transfer minor guardianships from Probate Court to Juvenile Court. Minor and adult conservatorships, along with adult guardianships, remain in the Probate Court’s jurisdiction.
The Court now requires a professional evaluation for the proposed protective person (formerly “ward”) and lists new background check requirements for the proposed guardian. The guardian and conservator are also required to file initial care plans within 60 days of appointment, which provide a detailed plan of action in the guardianship of the proposed person. In 2020, the legislature required guardians and conservators who were appointed prior to January 1, 2020 to file initial care plans along with their required annual report. The Court must approve these plans for both guardians and conservators. The guardian or conservator must receive authority from the court before exercising several powers.
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