Is It Illegal to Skip Probate in Iowa? What Grandchildren Can Do If Left Out

This question came to us from one of our users in Iowa:

My grandpa passed in 2017 and his wife 2022.  The family of his wife took care of all the belongings and accounts and gave us no information on anything.  There was a house and other belongings.  They didn't file probate.  Is this illegal and should I do something.  I am the grandchild.

Usually, probate is required. However, there are some significant exceptions, including if the deceased individual’s estate was small enough to qualify for a Small Estate Affidavit, or if the deceased individual utilized any number of probate alternatives before their death. If neither of these is true, this may be an indication of fraud, and a lawsuit may be required to remedy the situation. 

What is probate? 

Probate is the default legal method for transferring legal Ownership of a deceased individual’s assets to their beneficiaries, for paying the deceased individual’s debts, and for filing the deceased individual’s final taxes. Probate describes the process for resolving the deceased individual’s estate, whether they died testate or intestate. 

Testate vs. Intestate 

Testate is a legal descriptive term that is used to describe when someone dies with a validly written, executed, and witnessed will that the probate court finds sufficient to dictate the probate process.

Intestate is a legal descriptive term that is used to describe when someone dies with an invalid will, with a will that cannot be located, or without ever having made a will. When a person dies intestate, the probate court is forced to rely on the state’s default probate rules for determining beneficiaries and for determining how the estate is distributed. 

Is probate necessary? 

In most cases, probate is required in Iowa. However, there are a few exceptions where probate is not required. The most common exception is if the estate is valued at less than $50,000.00 and includes only personal property.

Smaller estates that fit this definition can be resolved with a small estate affidavit, which must state that an individual is entitled to certain assets and that the assets paid each of the following amounts received (or will be paid from the assets): 

• Any debt owed for benefits received by the deceased individual to the Iowa Department of Human Services; 
• All taxes owed to the Iowa Department of Revenue; and 
• All debts owed by the deceased individual to creditors. 

Reasons to avoid probate: 

• Cost – It can be costly, accumulating a great deal of attorney fees and court fees. These fees can ultimately exceed 4% of the value of the estate.  
• Time – It can be time-consuming, as many decisions will require hearings and decisions by the court. The average length of probate is nine to twelve months, but it can take even longer. 
• Hostility – It can cause increased hostility between the beneficiaries. Our court system is inherently adversarial. Oftentimes, court decisions will result in winners, losers, and hurt feelings. With beneficiaries often being family members, such proceedings can have a harshly negative impact on family dynamics. 
• Public – It is very public. Probate files, such as the will itself and a complete inventory of the estate, become public court records that can be generally accessed. 

What legal mechanisms can be used instead of probate? 

Many instruments can be utilized to avoid the probate process, including: 

• Revocable Living Trust: A revocable living trust is, in many ways, a substitute for a will. It involves the individual creating a trust, setting aside assets in the trust, granting the trust legal title to the assets, and naming beneficiaries to the trust. Because it is revocable, the individual can continue to add assets to the trust and take back assets from the trust during their lifetime. Once the creator of the trust dies, all assets currently in the trust are permanently locked in as trust property. The title is then transferred from the trust to the beneficiaries. Because the trust legally owns all of the assets of the trust, it becomes unnecessary for probate to deal with the distribution of the assets. However, any of the decedent’s assets that were not in the trust at the time of their death may have to go through the probate process. 

• Designated Beneficiaries: In Iowa, you can designate certain bank accounts, such as savings accounts and certificates of deposit, as “payable-on-death.” During the individual’s lifetime, they name a beneficiary to the account but continue to use these accounts and maintain complete control over them. Then, when the individual dies, control of these accounts is immediately transferred by the bank to the beneficiary without the need for probate. A very similar process can be performed with stocks and bonds. The individual fills out a “transfer-on-death form”, registers the stocks and bonds you are designating, and names a beneficiary. Upon death, the beneficiary can reach out to the brokerage directly to transfer these into their name. 
• Joint Ownership: This is also known as “joint tenancy” or “joint tenancy with right of survivorship.” Joint Ownership involves two or more individuals taking Ownership of property together. They both have equal legal rights to the property. With the “right of survivorship,” when one joint owner passes away, the other joint owner automatically takes total Ownership of the property, free and clear of the deceased joint owner’s interest. 

How can I tell if probate has occurred? 

As mentioned, probate files are generally public records. They can be searched online using the Iowa Courts Online Electronic Docket Record Search tool. 

How soon after an individual’s death must probate be opened? 

Generally, in Iowa, probate must be opened within five years of the death of an individual. 

What are the consequences of failing to complete probate? 

Failure to complete probate can result in severe difficulties for beneficiaries down the road. It can cause taxes of the deceased individual to go unpaid, it can result in legal title to personal property not having been properly transferred, and it can make the transfer of title to real property nearly impossible. 

What if it appears that probate was never opened, yet the title to the property was still transferred? 

This can either be the result of one of the probate alternatives we have previously described, or it could be an indication of fraud committed by one of the would-be beneficiaries. If there has been fraud, it may be necessary to initiate a lawsuit to remedy the situation. 

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Designed for general information use only. The content above does not constitute legal advice or the formation of an attorney/client relationship.