Avoiding Probate in Iowa

Probate court proceedings (when a deceased person's assets are transferred to the people who inherit them) can be long, costly, and confusing. It's no wonder so many people take steps to spare their families the hassle. Different states, however, offer different ways to avoid probate. Here are your options in Iowa.

Living Trusts

In Iowa, you can make a living trust to avoid probate for virtually any asset you own—real estate, bank accounts, vehicles, and so on. You need to create a trust document (it's similar to a will), naming someone to take over as trustee after your death (called a "successor trustee"). Then—and this is crucial—you must transfer ownership of your property to yourself as the trustee of the trust. Once all that's done, the property will be controlled by the terms of the trust. At your death, your successor trustee will be able to transfer it to the trust beneficiaries without probate court proceedings.

Joint Tenancy With Right of Survivorship

If you own property with someone else as joint tenants with "right of survivorship," then the surviving owner automatically owns the property when the other owner dies. No probate will be necessary to transfer the property, although of course it will take some paperwork to show that title to the property is held solely by the surviving owner. Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts, or other valuable property together. In Iowa, each owner, called a joint tenant, must own an equal share. (Iowa Code § 557.15 (2024).)

There's another form of joint ownership called "tenancy in common." In a tenancy in common, a co-owner's share doesn't go to the other owners. Instead, a deceased person's share of the property passes to their heirs and generally will require probate. If a jointly owned property doesn't clearly state the owners are married, that it's a joint tenancy, or that there's a right of survivorship, then the property will be considered a tenancy in common. (Iowa Code § 557.15 (2024).)

Payable-on-Death Designations for Bank Accounts

In Iowa, you can add a "payable-on-death" (POD) designation to bank accounts such as savings accounts or certificates of deposit. You still control all the money in the account—your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank without probate court proceedings. (Iowa Code § 424.805 (2024).)

Transfer-on-Death Registration for Securities

Iowa lets you register stocks and bonds in transfer-on-death (TOD) form. People commonly hold brokerage accounts this way. If you register an account in TOD (also called beneficiary) form, the beneficiary you name will inherit the account automatically at your death. No probate court proceedings will be necessary; the beneficiary will deal directly with the brokerage company to transfer the account. (Iowa Code § 633D.9 (2024).)

Transfer-on-Death Deeds for Real Estate

Iowa doesn't allow real estate to be transferred with transfer-on-death deeds.

Transfer-on-Death Registration for Vehicles

Iowa doesn't allow transfer-on-death registration of vehicles.

Simplified Probate Procedures

Even if you don't do any planning to avoid probate, your estate might qualify for Iowa's simplified "small estate" probate procedures. For more details, see Probate Shortcuts in Iowa.

For more on avoiding probate, see 8 Ways to Avoid Probate, by Mary Randolph (Nolo).