Heir Rights (IA)
As an heir, you likely have questions about the inheritance process in IA, and your rights.
Overall, if you are entitled to receive an inheritance, you have the right to expect to receive that inheritance ... eventually. While some states attempt to put deadlines on estate settlements, an average estate takes 16 months to settle, and some take years (see Inheritance Timing).
Rights Under IA Probate
Most estates are settled by an executor appointed by the court (often a family member), under a court-supervised process known as probate. The executor has significant discretionary power, but he or she has a fiduciary duty to act in the best interests of the estate, to follow the law, and to distribute estate proceeds to the rightful heirs.
However, IA estates must satisfy obligations according to priority (for example, debts take precedence over distributions), so in some cases your inheritance will be less than expected, or even be completely consumed by other estate priorities (which must generally affect all potential heirs proportionately). See Estate Expenses, Fees, and Taxes for more information, and note that for your protection, estate executors must document all estate transactions and make these records available to the courts ... and in some states, must proactively deliver these records in a Final Accounting to the heirs as well.
Your rights as an heir include:
- Notice: Many states have laws that require an estate executor to notify you of the death and the estate proceeding if you are mentioned in the will, if there is no will and you are entitled to inherit by intestate succession, or even if there is a will that doesn't mention you, but you would have been entitled to inherit by intestate succession (i.e., you are an "heir-at-law").
- Estate Information: Many states require the executor to provide you a copy of the estate inventory, as well as a Final Accounting (what happened to the inventory, what estate expenses were incurred, etc.). If the estate is undergoing probate, and the state does not require that the executor directly supply you the information, you can simply make a public records request for the reports filed with the court.
- IA Family Entitlements: If you are a surviving spouse or dependent child, you likely have additional rights that go beyond anything mentioned in the will or mandated by the laws of intestate succession. Surviving family members often have the right to remain living in the family home for a certain period of time, to automatically receive certain personal possessions, to receive a living allowance from the estate while it is being settled, and to receive certain minimum amounts (see IA Family Entitlement details for your state).
- Reasonable Timeframe: Unless the asset is one that automatically transfers on death (such as an IRA with a named beneficiary), you can expect the process to take 12-18 months on average, and sometimes considerably longer (see Inheritance Timing). An executor has a duty to settle an estate in a reasonable timeframe, but most states are very lenient about such timeframes, and there are legitimate reasons that some estates take years to settle. On the other hand, some executor simply cannot handle the task, or unreasonably delay, and those can be grounds to ask the court to remove the executor and appoint someone else.
- Court Objections: If the estate undergoes probate (and most do), you have the right to object to the probate court about anything you think is being done incorrectly or improperly. You can object to the appointment of a particular executor, you can object to the validity of a will, you can object to particular distributions (not just your own), you can object to sales of assets, you can object to how long things are taking ... in fact, you can object to almost anything. You just need to make sure you have valid grounds for doing so, and it's important to realize that settling an estate is a difficult task that takes time. See Court to find your particular court.
- Lawsuits: If the probate judge does not respond to your objection as desired, or if there is no probate proceeding, then you can file a civil lawsuit against the estate. Such lawsuits can be expensive, and should be considered only as a last resort.
Additional considerations:
- Expectations: Please keep in mind that although a will may be specific about an intended inheritance, other factors can sometimes intervene to modify or even entirely invalidate the inheritance. See IA Rules of Inheritance for details.
- Inheritance Taxes: Some states have inheritance taxes for which the executor has the responsibility of paying, out of your share, before giving you your remaining inheritance. If your executor is using EstateExec, it will tell him or her if such taxes apply.
- Executor Discretion: Unless the inheritance is a specific bequest, the executor may have some discretion in deciding how to give you your share of an estate. The executor may decide to liquidate assets and give you all cash (and cash equivalents), or the executor may mix and match assets to equal your share. You have to the right to ask for your share to be given in a certain form, but the executor does not have to respect your wishes. For this reason (and others), it is advisable to try to retain a good relationship with the executor (see Working with Executors).
- Inheritance Receipts: When you receive an inheritance, the executor will likely ask you to sign a receipt, which can be required. However, the executor will often ask you, as a condition of receiving the proceeds, to waive any rights you may to decide to sue the estate or the executor in the future. Such waivers are best practice for an executor, but heirs are not required to waive their rights, so the decision is up to you. It may be best to sign anyway, to preserve the relationship and to receive your inheritance in a timely manner, but your ultimate recourse is to either convince the executor to drop the waiver, or object to the court.
IA Small Estate Rights
Most states have laws enabling small estates to be settled without full probate, sometimes without any court involvement at all. In such cases, there may be no formally appointed executor, and the heir can directly collect any inheritance to which he or she is entitled, by providing appropriate documentation to the current asset holders.
In Iowa, small estates can completely bypass probate via small estate affidavit, or simplify it via summary administration. Regardless of estate size, probate is not required if an estate contains only assets exempt from probate.
Small Estate Affidavit
If an Iowa estate has a gross value <$50,000, you can use the small estate process to settle the estate with no court involvement.
Requirements
To use the small estate process, the following conditions must be true:
- The estate assets had or have a combined a gross value <$50K
- The estate contains no real property (i.e., real estate)
- At least 40 days have passed since the death
In determining the gross value of the estate, you should ignore any unsecured debts (but do subtract things like liens and mortgages). Do not include any assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.
Process
To use the small estate process:
- Ensure any will has been properly filed with the court
- Prepare a Small Estate Affidavit (see below)
- Obtain possession of estate assets by presenting the affidavit to current custodians
- Settle the estate in the normal way (pay debts, distribute remaining assets)
- If everything goes smoothly, no court involvement will ever be required
Affidavit
You can use this Small Estate Affidavit Form provided by the OpenDocs project, or create your own.
A small estate affidavit must include:
- The decedent’s name, social security number, and date and place of death
- Statements that each of the above requirements are true
- A description of the assets being claimed (consider attaching the EstateExec Inventory Report)
- The name, address, tax identification number, and relationship to the decedent of each successor, and whether any successor is under a legal disability
- A statement that you request that the described property be paid, delivered, or transferred to or for the benefit of each successor
- A statement that each claiming inheritor is entitled to payment or delivery of the property in the listed percentages
- A statement that no debt is owed to the Department of Human Services for Medicaid benefits; or if debt is owed, that the debt will be paid to the extent of funds received via the affidavit
- A statement that no inheritance or other taxes are owed to the Department of Revenue; or if debt is owed, that the debt will be paid to the extent of funds received via the affidavit
- A statement that creditors, if any, will be paid to the extent of funds received via affidavit
- A statement that you affirm, under penalty of perjury, that the affidavit is true and correct
Have the affidavit notarized, and attach a copy of the death certificate and the will (if any).
See IA Code § 633.356.
Small Estate Administration
A simplified form of probate is available for small estates if they don't qualify for the above affidavit process, or if you simply want court involvement so that enforcement and protection are a bit more formalized.
Requirements
You can use small estate administration if the combined gross value of assets subject to probate is <$200,000 (<$100,000 for deaths before 7/1/20). In determining the value of the estate, you should value assets as of the date of death, and subtract any secured liens or mortgages (but not general unsecured debt). Do not include any assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.
Process
To settle an estate via summary administration:
- Submit to the court a Petition for a Small Estate Administration (see below)
- The court may require you to obtain a bond
- Upon approval, the court will issue you Letters of Administration
- Provide the court with an estate inventory (consider using the EstateExec Inventory Report), and file a statement that the estate is a small estate
- Use your "Letters" to collect estate assets
- Pay any taxes owed, and prepare a final accounting (consider using the EstateExec Accounting Report)
- Submit a Closing Statement to the court, and notify all interested parties as specified by the court
- If no actions or proceedings involving the estate are pending in the court 30 days after the above notifications, distribute the estate according to the closing statement
- If any real estate changed hands, notify the county recorder (IA Code § 633.480)
- Close the administration by filing an affidavit that the required notification were made, and a statement of asset distribution by the personal representative
Petition
The petition must:
- State the name, date of death, and domicile of the decedent
- State the name and address of any surviving spouse, and the name and relationship of each beneficiary in a testate estate, or known heirs in an intestate estate
- State whether the decedent died intestate or testate, and, if testate, the date the will was executed
- Provide an estimate for the amount of personal property and estate income, and state that the assets have an aggregate value <$200,000 (<$100,000 before 7/1/20)
- Include the name and address of the proposed executor
Attach a copy of the death certificate and the will (if one exists).
Closing Statement
A Closing Statement must:
- State that, to the best knowledge of the personal representative, the gross value of the probate assets does not exceed $200,000 ($100,000 for deaths before 7/1/20)
- Include an accounting (consider using the EstateExec Accounting Report) and proposed distribution of the estate
- State that a copy of the closing statement and a notice of an opportunity to object to and request a hearing has been sent to all interested parties
- State that the estate has been fully administered and will be distributed to persons entitled if no objection is filed to the closing statement and the accounting and proposed distribution within 30 days after any required notices
- State whether all statutory requirements pertaining to taxes have been complied with, including whether federal estate tax due has been paid, whether a lien continues to exist for any federal estate tax, and whether inheritance tax was paid or a tax return was filed in this state
Note that under this approach, personal representative fees cannot exceed 3% of the gross value of the probate assets of the estate, unless the personal representative itemizes the personal representative's services to the estate and the court agrees that the proposed fees are reasonable.
Estate Settlement Considerations
Before paying any debts or making any distributions, be sure to account for any Family Entitlements in IA, which typically have priority over everything except expenses of the last illness, funeral charges, and any estate administrations expenses.
Even if the estate does not go through probate, you may still be entitled to IA Executor Compensation, and this compensation also has priority over most estate debts.
Estate debts have priority over most distributions in turn, so before distributing assets you should resolve any estate debts. If the estate makes any distributions beyond amounts set aside for family entitlements, unpaid creditors have the right to sue the recipients for repayment using those excess distributions. Consequently, even if the settlement process does not require you to publish a Notice to Creditors, you may want to follow IA probate rules for finding estate debts, since doing so may limit the time creditors have to pursue repayment.
If estate solvency is uncertain, an executor should consider going through official probate for the increased creditor protection it offers. Alternately, such uncertainty can sometimes persuade creditors to forgive a portion of debts, since they will want to avoid legal expenses as well, and may prefer to get something rather than nothing.
See also Making Distributions.
Court
In Iowa, the local District Court handles wills and estate probate.
Estate Debts
Finally, note that as an heir, you are NOT responsible for paying the debts of the IA estate out of your own funds. You do NOT inherit responsibility for paying the debts of parents, for example. If the estate is insolvent (i.e., cannot pay all its bills), then creditors simply end up with less than owed, or even nothing ... as do you.
If an estate ends up being insolvent, and you somehow received a distribution anyway (perhaps through a small estate process), some states allow creditors to sue you to reclaim any amounts they are still owed. So you can't inherit a debt outright, but if you receive a distribution that the estate needed to pay its bills, you may be forced to pay out some or all of that distribution.
Additional Information
For more information about inheritances in general, see EstateExec Heir Guide.
In case you're interested, heir rights in other states can be found here:
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