What does probate mean?
“In probate”. “Outside of probate”. Is probate bad? Where is probate? What does probate mean?
Hope Wood is your legal sherpa for probate to guide you through these questions.
Probate sounds scary and you will be hard pressed to find someone that has good things to say about their experience in probate. The people who have a positive probate experience have said that their loved one had everything organized in advance. This doesn’t happen by accident. In most cases, the loved one had a Last Will and Testament that was prepared by an attorney and had their assets in order for a seamless transfer of inheritance. If this sounds complicated and expensive, then you are among the majority of people contemplating an estate plan.
I promise creating a Last Will and Testament and estate plan (asset transfer plan) is affordable and straightforward. Seven years ago, I created a program called Will in a Day® to provide a convenient and low stress option for your Last Will and Testament, Powers of Attorney (including Living Will), and asset transfer plan all for a flat fee. You can provide a positive experience for your loved ones when you have your estate documents in place and assets set up for a seamless transfer to a beneficiary. Learn more about Will in a Day® and book a virtual, in-person or in-home appointment.
Now, back to our regularly scheduled program about probate.
What is probate?
Probate is the court-supervised process to transfer or sell certain assets of a decedent. The court uses Iowa Code Section 633 called “Probate Code”. Or for a small estate with assets valuing less than $200,000, the court uses Iowa Code Section 635. More about small estates in Iowa at this link.
Where is probate?
If you have heard the phrases “in probate” and “outside of probate”, then where is probate? Probate is a court case. Most counties in Iowa have judges that cover all types of court cases - juvenile, civil, criminal and family to name a few. Probate cases are not as common to the public which is why the word “probate” is unfamiliar.
What does “in probate” mean?
“In probate” can mean one of two things. (1) the person’s estate is being supervised by the court and there is a court case for that person, e.g. “Estate of Elvis Presley”; or (2) a specific asset of the decedent is subject to court-supervision and is part of the court case in probate court.
The assets that are often “in probate” are:
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 totaling >$50,000 = probate.
Life insurance with the estate named as beneficiary or no one named as beneficiary totaling >$50,000 = probate.
Investment accounts (e.g. IRAs) with no named beneficiary totaling >$50,000 = probate.
Single-owned bank accounts with >$50,000 and no payable on death certificate = probate.
What does “outside probate” mean?
Outside of probate typically means the asset is not subject to court-supervision to transfer or be sold. If there is a surviving joint owner, then that asset is outside of probate because it transfers by law to the surviving joint owner. If an asset has a payable on death (POD) named with the account or a beneficiary designation (life insurance, retirement, investment), then that asset is outside of probate because it transfers by contract to the person named as the successor owner. Court supervision is not required when there is a POD or named beneficiary.
What if some assets are “in probate” and some are “outside probate”?
Assets that are “in probate” and subject to court-supervision to transfer or be sold depends on the type of asset. See above for the list. In general, if there is no real estate to transfer and the sum of the deceased assets is $50,000 or less, an eligible person can use a small estate affidavit, rather than going through probate.
If there are assets that are “in probate” and require court-supervision to transfer or be sold, other assets can still be “outside of probate”. The assets that are “outside of probate” and do not require court-supervision can transfer to the named beneficiary or surviving joint owner without being part of the probate case. Note: all assets of an estate are required to be listed with their values in the inventory filing of a probate case.
Is probate bad in Iowa?
Probate is not a bad thing; it assures that all of your assets transfer to the correct beneficiary. However, it comes with many disadvantages.
Assets “in probate” may be claimed by a creditor to pay debts of the decedent.
Inheritance is delayed due to statutory waiting periods.
Attorney fees reduce inheritance distributions by up to 2% of the total assets - calculated on assets in and out of probate.
Court costs calculated on the assets “in probate”.
A probate case is a public record.
All assets “in probate” and “outside of probate” are required to be listed in the inventory filing of a probate case.
Tell me more about Small Estate Affidavits in Iowa
Iowa Code 633.356 establishes the requirements for a small estate affidavit. Complying with these requirements can be overwhelming — and often involve communication with a bank or financial company.
If you don’t want to wade through the mess, I can help you prepare an Iowa small estate affidavit for a flat fee. Please take a moment to review my fees and/or request legal services for a small estate affidavit.
Learn more about Probate in Iowa
I have a list of frequently asked questions on Iowa probate at this page. I also have a blog called “When is probate necessary in Iowa” that provides a checklist of what assets are “in probate” and transfer “outside of probate”
And don’t forget to take care of your own assets
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