Settling Small Estates (IA)

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:

1. Ensure any will has been properly filed with the court
2. Prepare a Small Estate Affidavit (see below)
3. Obtain possession of estate assets by presenting the affidavit to current custodians
4. Settle the estate in the normal way (pay debts, distribute remaining assets)
5. 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).

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:

1. Submit to the court a Petition for a Small Estate Administration (see below)
2. The court may require you to obtain a bond
3. Upon approval, the court will issue you Letters of Administration
4. Provide the court with an estate inventory (consider using the EstateExec Inventory Report), and file a statement that the estate is a small estate
5. Use your "Letters" to collect estate assets
6. Pay any taxes owed, and prepare a final accounting (consider using the EstateExec Accounting Report)
7. Submit a Closing Statement to the court, and notify all interested parties as specified by the court
8. 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
9. If any real estate changed hands, notify the county recorder (IA Code § 633.480)
10. 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.