When is Probate Necessary in Iowa?
Why We Have to Deal
(and “Thanks” to the Brits)
The word "probate" is confusing. And, quite honestly, doesn't sound pretty being said or heard out loud. If I could use a different word, I would. I don't like things to be confusing or intimidating for a person. But unfortunately it is the word we are stuck with. It originated in England so thank your friends across the pond.
Probate Court
In Iowa, there are several courts within the district court. There is criminal court, family law court, juvenile court, civil court, small claims court, and many others. Included is probate court. Probate is confusing because it is used in different ways. It can be used as a noun and verb. And sometimes it is misused altogether.
Probate as a Noun
Here, probate is used as place (courtroom) and jurisdiction (proper court to hear the claim). Each court is responsible for specific legal issues. The probate court primarily handles guardianships, conservatorships, and estates. Being "in" probate court doesn't mean someone has died, it can be other things.
Probate as a Verb
Probate is used to describe the process for submitting a last will and testament ("will") to the court to have it admitted as the actual will of a decedent. Probate is Latin for "test, prove, examine". This is the first step in starting an the estate through the court. Or otherwise known as probating the estate - a verb.
Probate Without a Will
When there isn't a will, it is still goes through the probate process. This is because there are a full set of laws for the probate court to follow if someone dies without a will. These are called intestate laws.
Moving On
My description might have caused you to be more confused, so I'll get to the reason you opened my blog post in the first place.
When is probate necessary in Iowa?
The short answer is when there are assets that do not automatically transfer by contract (e.g. life insurance) or by law (home held in joint tenancy). The court oversees the transfer of these assets to protect the interest of the deceased person.
Test Your Situation
Look at an asset or something of value and ask if there is a document that says who gets this next?
Example: Is your bank account a joint account? Then it transfers by contract to the joint account holder.
Second bank account example: Is your bank account only in your name and you have a payable on death (POD) designation? Then it transfers by contract to the person named in the POD.
A common question I get is: “Does a will avoid probate?”
Not always. Using the bank account example above but add the fact that it is a money market account. If you have an account in your name with no POD and your will says the money in your accounts goes to your children, it will have to go through probate if the amount in the account is greater than $50,000. The bank is required by law to hold the funds until an executor is appointed and then the funds go to the estate account. And the money doesn't all go the kids. It is used to pay court costs, attorney fees, creditors and then it goes to the children.
When you are seduced by Legal Zoom for your will.
Many people are embarrassed that they don't have a will. Many times to avoid embarrassment they will do a work-around and do it online to avoid talking to an attorney.
An attorney can look at your assets and tell you the steps to take now to avoid probate in the future. They want to help you. An attorney knows all of the stress and turmoil that is a result of an estate in probate. The risk of do-it-yourself paid forms is that no one explains to you how your assets will transfer at death and whether there are potential problems with certain accounts being subject to probate.
More on when is probate necessary
Here are a few examples you can use to apply to your situation. And the examples are regardless of the existence of a will.
Real estate titled in one person's name (see your deed) = probate.
Savings bonds totaling >$50,000 and no payable on death certificate = probate.
Individual stocks totaling >$50,000 and no transfer on death certificate = probate.
Retirement accounts with no named beneficiary = probate.
Life insurance with the estate named as beneficiary or no one named as beneficiary = probate.
Investment accounts (e.g. IRAs) with no named beneficiary = probate.
Single-owned bank accounts with >$50,000 and no payable on death certificate = probate.
These are the most common circumstances that require probate in Iowa even if there is a will.
I hope that I can help you with your will and to review your estate planning situation. Don't think about what you have in your bank account and the debt you have and believe that you don't need estate planning You likely have assets that cannot be liquidated right now but would be a nice sum of money for inheritance.
Send me a message and mark "immediately" if you need information ASAP.
Or book your appointment now and have your Will done in 2.5 hours or less with my exclusive Will in a Day program.
NOTE: This post is specific to the laws of Iowa. Every law has their own probate/estate laws. An attorney must be licensed in the state to provide legal advice regarding that state's laws.
