When someone dies in Iowa, their property enters the probate process. This means a person’s assets, with some exceptions, will become part of a probate estate. Certain things will need to be paid out of the estate. These include debts owed by the deceased person. Once these payments are made, the remainder of the estate will be transferred to the appropriate persons. If the person died leaving behind a will, the distributions will be made according to the will. If the person did not leave behind a will, the property will be distributed through a process set out in the law, called intestate succession.
A person (or persons) is appointed to be responsible for administering to the estate. The person who is responsible for managing the estate, distributing the estate’s assets, paying off the estate’s debts and other responsibilities under the Iowa Probate Code is called a personal representative. The two kinds of personal representatives in Iowa are called administrators and executors.
This article will discuss
- What are administrators and executors?
- Who may be a personal representative?
- What notices do personal representatives have to give?
- Filing inventory of the estate
- The responsibility to review claims by creditors
- Classifications of debts to be paid by personal representative
- Actions against the decedent prior to their death.
- Maintenance of the exiting property
- Filing taxes and final report.
What is an administrator in an Iowa probate case?
A person who dies without a will is said to have died “intestate”. Their property will be distributed according to specific laws governing these kinds of situations. An administrator will be appointed by the court to lead this process. The deceased person’s family will have priority in being appointed as administrator of the estate. The administrator is a fiduciary, meaning they must act in the best interests of the estate.
What is an Executor in an Iowa probate case?
In Iowa, an executor is a person appointed by the court to manage the estate of a deceased person who left behind a will. The executor is also a fiduciary, with the responsibility of acting in the best interests of the estate. The court prefers to appoint a person designated to be executor in the will. If the will does not designate an executor, the court will prefer a beneficiary designated in the will, or someone selected by the beneficiaries. The court could also appoint a creditor of the deceased person, or any other qualified person to act as executor.
Who may be personal representative?
An administrator or executor may be an adult who is a resident of the state of Iowa, unless that person is incompetent, or unsuitable for another reason determined by the court. However, the court could appoint a person not living in the state of Iowa, as long as there is an additional representative appointed in the state of Iowa.
Is the personal representative responsible for giving notice to anyone?
If a person died intestate, the administrator must publish notice of their appointment for two consecutive weeks in a daily or weekly newspaper in the county in which the probate case is filed (usually the county where the deceased person lived). If the administrator knows of people to whom the deceased person owed a debt, referred to as the estate’s creditors, the administrator will sometimes need to provide them with notice at their last known address, if the debt will not be paid from the estate. The administrator must also provide the department of human services notice of the matter, that they have six months to say the deceased person owed money to the department. If the department does not say the deceased person owed it money within six months, they will be prevented from ever bringing a claim against the estate.
The executor is also responsible for publishing notice of the probate case for two consecutive weeks in a newspaper in the county where the estate is pending.
Likewise, if the executor knows of someone who may say the estate owed them debt, the executor will also need to provide them notice by mail, if the debt will not be paid from the estate. The executor must also mail notice to the surviving spouse, and any other known persons who are beneficiaries of the estate, that the probate case has begun and that they were appointed as executor. These letters provide deadlines for challenging the will, a notice to people who owe the estate a debt to make payment, and notice to creditors to file any lawsuits against the estate to file them within four months or miss their chance forever. The four months begins when the notice is last published in the newspaper. The executor must also provide notice to the department of human services, that if they do not claim the decedent owed them payments within six months, they cannot bring any claims in the future.
The personal representative will also mail the surviving spouse a written notice of the spouse’s right to request a spousal allowance as set out in the Iowa Probate Code, and an elective share. These are monetary benefits the spouse is entitled to from the estate. Within four months, the spouse may also ask for temporary support to be paid out of the estate. This support may also cover the deceased person’s dependents living with the spouse.
Sometimes the surviving spouse does not have legal guardianship of a decedent’s children, such as if they were born from a different relationship. In these situations, the personal representative notifies legal guardians of the children of their right to claim personal allowances. The personal representative is responsible for paying these allowances.
What does the personal representative do to keep track of the property?
The personal representative collects and files with the court an inventory of the property of the estate. This inventory lists all known property, the value of the property, and information of those involved in the case. This list can be supplemented if new information becomes available. The personal representative should create a new bank account for the estate, separate from their individual bank account.
Sometimes the personal representative may have to start, or defend against a lawsuit on behalf of the estate. In these circumstances, the personal representative will be allowed expenses from the estate, including reasonable attorneys fees. The personal representative will also gather the assets of the deceased person and transfer them into an estate account. If any of the documents provided to the personal representative are relevant to any issue in the probate proceedings, the personal representative must produce them.
The assistance of an accountant is often important at this stage.
Is the personal representative responsible for reviewing claims by creditors?
The personal representative will review claims by creditors to determine whether they are valid. The personal representative may negotiate with the creditors to settle the deceased person’s debts.
If the personal representative himself or herself has a claim against the estate, a temporary administrator is appointed, and the personal representative files a claim as any other creditor.
If there was a lawsuit against the deceased person prior to his or her death, the case may continue, with any judgment being a judgment against the estate. The personal representative will arrange to provide representation of the estate in that case, if none already exists. Any required counterclaims under the Iowa rules of civil procedure will also be filed by the personal representative.
How does the personal representative distribute the property??
The title to a person’s real or personal property passes to the people it was devised to under the will, or under intestacy laws. However, all property is subject to the personal representative, and to the court. Any property will be sold to pay the debts and charges of the estate. However, there are certain exemptions, such as the homestead exemption, which allows the surviving spouse to continue living in a home designated a “homestead,” and not subject to being sold to repay debts. Also, if the property would be exempt in a regular debt collection case against the deceased person, the spouse could also claim it as exempt.
Is there a specific order in which debts are paid?
The order in which debts are paid by the personal representative are:
- Court costs
- Other costs of administration of the estate
- Reasonable funeral and burial expenses
- All debts and taxes having preference under the laws of the United States
- Reasonable and necessary medical and hospital expenses of the last illness
- All taxes having preferences under the laws of this state
- Any debt for medical assistance in a nursing facility
- All debts owing to employees for labor performed during the 90 days next preceding the death of the decedent
- All unpaid support payments
- All other claims allowed
These groups of debts are referred to as “classes.” Debts in the same class do not have priority over each other. Within the first four months, the personal representative will pay the costs of the funeral, burial, and last illness. Prior to expiration of four months after the date of the second publication of notice to creditors, the personal representative will pay other debts against the estate as the court orders.
Is the personal representative responsible for maintaining property?
The personal representative is responsible for taking care of any real estate and personal property. With the court’s approval the personal representative may sell, mortgage, exchange, or lease real property if it is in the best interest of the estate. Any interested party who may be harmed from these sales may contest these transactions prior to the transfer of title of the real estate
Once taxes, debts, and other fees are paid, the beneficiaries can receive the property owed to them under the will or intestacy process.
Taxes and Final Report
The personal representative will file a final report at the end of the probate case. Upon filing a final report, the personal representative must complete a final accounting of all property it had control over, and a detailed accounting of all cash receipts and disbursements. The final report must also contain a statement as to whether all statutory requirements pertaining to claims have been complied with, and a statement as to whether all debts have been paid and whether there are any liens remaining on property. Other statutory requirements of the final report are listed in Iowa Code section 633.477.
Upon final settlement of the estate, within three years after the second publication, the court enters an order discharging the personal representatives’ responsibilities.
.avif)
.svg){kind=small}
