Very Small Estates in Iowa

Dealing with the loss of a loved one is undeniably tough and filled with significant emotions and responsibilities. During this time, it can be unclear how personal property changes hands and what needs to be done.

As you search the internet for answers, you find information that doesn’t apply to your situation. After spending hours online, you still don’t have answers to your questions.

This article is an “if this, then that” on very small estates in Iowa, an area where Hope Wood JD is ready to help. We receive questions every day about how to transfer assets.

When it is determined the Probate process is not required to transfer assets, there are still steps to do.

This article is not intended to be legal advice. Please contact an attorney for advice on your specific situation.

IF THIS THEN THAT – FAQs

If there are accounts . . .

without a joint owner or named beneficiary that total less then $50,000.00 AND there is no real estate subject to probate . . .
then you can use a Small Estate Affidavit to have the funds transferred under the terms of the Will, of if there isn’t a Will, then to the heirs-at-law as determined by Iowa law, all pursuant to Iowa Code Section 633.356.

If there is an automobile, mobile home, camper or trailer . . .

without a joint owner AND probate is not needed to transfer other assets of the estate . . .
then you can complete an affidavit with the county treasurer where the decedent resided. If there is a Will, download the affidavit to transfer title. If there is not a Will, download the affidavit to transfer the title.

If there is a Will . . .

and you are in possession of the Will and it appears to be the original (not a copy) . . .
then you are required to file the Will with the Clerk of Court in the county where the decedent resided, pursuant to Iowa Code Section 633.285. The clerk of court can help you file the Will if you go in person to the county courthouse. The Will is required to be filed even if probate is not needed.

If there is real estate with a surviving joint owner . . .

and the deed contains the language “rights of survivorship” . . .
then the property transfers by operation of law and does not require probate. If the deed does not include the language “rights of survivorship”, consult an attorney to determine your rights as an owner.

To update the ownership, the surviving joint owner records, with the county recorder, a legal document called an “Affidavit of Surviving Spouse” or “Affidavit of Surviving Co-Owner”. This document is needed if the property is sold and is often prepared during the closing process. It is also needed if the surviving owner refinances the mortgage or applies for a home equity line of credit.

If there is real estate with no surviving owner . . .

and it doesn’t need to be sold or transferred in the next 5 years AND probate is not required . . .
then five years from the date of death it can be transferred to the heirs-at-law using a “Title Standard 9.8 Affidavit”. The property taxes are still required to be paid. Visit the website of the county treasurer where the real estate is located to determine if the property taxes are paid up. If there is not a mortgage on the property, then the property taxes must be paid by an individual to avoid losing the property to the tax sale process.

If there is real estate with a mortgage . . .

then the mortgage must be paid each month to avoid foreclosure. Notify the mortgage holder right away about owner’s death so you receive notices in the mail about the mortgage. If the person(s) inheriting the property intends to sell it, the mortgage will be paid off as part of the closing process.

If the decedent is required to file taxes . . .

for their final year of income . . .
then wait for the 1099s from the year of death to arrive in the mail by January 30 of the following year and provide them to a tax preparer. If you are unsure whether taxes must be filed, contact a tax preparer. It is ideal if you have a copy of the prior year’s income tax return to provide to them.

If there are creditors of the decedent . . .

then the creditors must pursue payment from the assets of the decedent. This can be done by the creditor petitioning the court for probate administration, or if there is already a probate case open then by filing a claim against the estate assets.

Unless a surviving beneficiary has agreed in writing to be personally liable for the debt, they are not required to pay it. If there are insufficient funds from probate assets to pay a creditor, they can claim payment from the designee of payable on death (POD) and transfer on death (TOD) accounts within two years from the date of death.

If the estate has assets such as real estate and debts are greater than the assets, the heirs should consult an attorney about the benefit of opening probate versus the risk of a creditor opening the estate.

If the decedent was on Medicaid . . .

and they received Title 19 health insurance between the ages of 55-65 and/or had nursing home care paid for by medicaid . . .
then the assets of the decedent, excluding life insurance payable to an individual, is all subject to a claim by Iowa Estate Recovery. The most common asset subject to a claim is real estate. Iowa Estate Recovery can petition the court for probate administration to recover payment from the assets of the estate. An heir who is living in the home can contact Iowa Estate Recovery to apply for a hardship waiver. If the waiver is approved, the amount owed to Iowa Estate Recovery is delayed until that heir’s passing, when the hardship no longer exists, or when the real estate is sold. The heir should consult an attorney about the benefits of petitioning for probate administration versus having Iowa Estate Recovery petition for administration.

Hope Wood JD can help

Hope Wood JD offers the following flat-fee package:

• Drafting, execution, and instruction for a Small Estate Affidavit.

• Instructions on how to complete a Car Title Transfer.

• Guidance for Assets Transfer when Probate is not required.

• Clarification of Tax Filing Requirements.

• Advice on handling different types of Creditors.

The package includes legal advice and services for a 3-month period.

Get started with Hope Wood JD by completing an intake.