Probate cases are often troubling times for families. Not only is a person going through the loss of a loved one, but the probate process is often confusing and stressful. Sometimes, this process can go on for several years. The estate will usually be closed within three years. What happens if an issue relating to the estate happens after the estate is closed? What if new assets are discovered which need to be distributed? Iowa law allows estates to be reopened under certain circumstances. This article will discuss:
- What is the probate process?
- When can someone reopen a will to challenge accounting or distribution?
- When can an estate be reopened regardless of time?
- What if new property is discovered?
- Will an estate be reopened if there is a claim of fraud against the personal representative?
What is the general probate process?
When someone dies, their estate enters probate. A personal representative will pay any debts of the estate and distribute any property to the beneficiaries. If the person left behind a will, the property and assets will be distributed to beneficiaries as outlined in the will. If the person did not leave behind a will, the property is distributed under a statutory process called intestacy. In either case, the personal representative accounts for all known assets and distributions, and files a final report with the court. This process is usually completed within three years, and all payments and distributions are made within that time.
When can someone reopen an estate to challenge accounting or distribution?
Usually a person cannot reopen a will after probate is finished. However, the Iowa Probate Code does provide exceptions. These exceptions are in Iowa Code Chapter 633, sections 488 and 489.
Section 633.488 has to do with reopening the estate to question the personal representative’s final accounting and distributions. As mentioned above, the personal representative is responsible for distributing assets and preparing a final accounting. Within five years from entry of the order approving the personal representative’s final report, some people my apply to reopen the estate to question the accounting and distributions. In order to file an application under section a person must have been:
- Absent at the time the final report was approved, and the final accounting settled;
- Adversely affected; and
- Not given notice of the settlement of the estate.
The court may then reopen a hearing on the report and accounting. The court may open a new accounting or order a new redistribution of the property. If someone to whom property was distributed already sold it, the purchaser will not be held liable. Someone to whom property was distributed will also not be liable for more than they received.
This section has been used to reopen an estate to allow a personal injury plaintiff to recover from a deceased defendant. If a personal injury case was pending against someone when they died, the plaintiff may recover against the estate (see section 633.415). If the plaintiff is entitled to funds from the estate, but was not served notice of the closing of the estate, it can reopen under section 633.488.
When can the estate be reopened with no time limitation?
An estate can be reopened without at any time restraints under section 633.489. The court may reopen an estate under section 633.489 if:
- Other property not known of during probate is discovered;
- Any necessary act remains unperformed;
- There is any other proper cause for reopening it.
As there is no time limitation under section 633.489, parties who do not wish the estate reopened will argue that the petitioner’s claim actually falls under section 633.488 (if more than five years have passed).
There has been more caselaw involving section 633.489. District courts (the courts who first hear the case) exercise discretion in determining what qualifies as “any other proper cause.” This section has governed situations where plaintiffs seek to change or readminister the estate’s administration in a way not contemplated during probate. For instance, in one case, property was found buried underneath one of the decedent’s properties. As this property was not contemplated during probate, the estate was reopened. Section 633.489 has also been applied to reduce improperly awarded executor’s fees when they were improperly calculated due to mistake.
Section 633.488 only allows the court to hold another final report hearing, order new accounting, or order redistribution amongst the beneficiaries. Section 633.489 allows the administrator to perform transactions and other substantial acts, as may be deemed necessary by the court.
Will an estate be reopened due to fraud by a personal representative?
A personal representative is the fiduciary primarily responsible for administering the estate, paying debts and distributing property. Iowa Code allows for specifically states that other time bars or limitations on rights do not prevent an action against a personal representative for fraud. The court will probably not reopen an estate due to fraud by the personal representative. The court has reasoned that recovering damages from the personal representative does not necessitate reopening the estate. It has been reopened under very limited circumstances for mistakes by the personal representative, but the court has distinguished mistake cases from fraud cases.
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