Probate! What is it?
Probate! What is it? When a family member dies, what happens to the estate; the bank and savings accounts, the stock and bond accounts, the real estate, insurance, trusts, annuities, business interests, and other assets? It all depends on probate.
Probate! What is it?
Nolo Law for All says “Probate is a legal process that takes place after someone dies. It includes:
- proving in court that a deceased person’s will is valid (usually a routine matter)
- identifying and inventorying the deceased person’s property
- having the property appraised paying debts and taxes, and
- distributing the remaining property as the will (or state law, if there’s no will) directs.
If deceased did not have a Will, then the property will be distributed according to Iowa law.
What Does Probate Mean?
Not all estates must go through probate. If an estate falls below a certain threshold, it is considered a “small estate.” It doesn’t require court supervision to be settled. Click here to find out Iowa’s small estate threshold and procedure.
Not all assets are subject to probate. Some kinds of assets transfer automatically at the death of an owner with no probate required. The most common kinds of assets that pass without probate are:
- Joint Tenancyassets-when one joint tenant dies
- Tenancy by the Entirety or Community Property With Right of Survivorship
- Beneficiary Designations-retirement accounts and life insurance policies have named beneficiaries.
- Payable on Death Accounts/Transfer on Death Accounts-bank and brokerage accounts can have designated beneficiaries, too. The account owner can fill out forms to designate who should receive the account assets after their death.
If a decedent has created a Living Trust to hold his or her’s largest assets, the estate won’t go through probate, unless the assets left outside of the trust add up to more than Iowa’s small estate limit.
How about estate taxes and inheritance taxes?
Currently, there are only 6 states that have an inheritance tax. Iowa is one of them. Iowa does not have an estate tax. The inheritance tax is based on the value of the property that a beneficiary receives from a person who died.
According to Melissa O’Rourke at Iowa State University, “Iowa inheritance tax is generally not due if all estate assets are held solely in joint tenancy with right of survivorship between husband and wife alone, and not as tenants in common, or all assets are passing by a will or a trust to beneficiaries who are a surviving spouse or parents, grandparents, great-grandparents, children ( legally adopted children and biological), stepchildren, grandchildren, great-grandchildren or other lineal ascendants or descendants. The estate must file and pay all necessary state and federal taxes including the final income tax return of the deceased and any real estate or personal property taxes owed by the deceased.”
An inheritance tax is imposed after the transfer of assets. Therefore, with the imposition of an inheritance tax, the beneficiary pays the tax, not the estate.
Disclosure: Estate taxes, wills, and probate are areas that need the expertise of a lawyer who specializes in these areas. Always seek professional advice.
Even before the property has cleared probate in Iowa, the heirs may decide to quickly dispose of the property. That’s how Harmony Property Solutions, LLC can help. The heirs may not want to bring the house up to today’s standards. Today’s buyers want quartz counter tops, the latest stainless appliances, and wine coolers. The heirs may not have the money for deferred maintenance issues or renovation. Your family may have no inclination to spend time renting, or staging and showing the house. The heirs may live in another city and don’t have the time or money to travel back and forth to the Cedar Rapids area.
We will send you FREE information about How to Sell Your House Fast.
Harmony Property Solutions, LLC is here to help homeowners out of any distressed situation.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Just the simple truth about your home and how we can help you sell it fast to resolve any situation.
Harmony Property Solutions, LLC is part of a nationwide group of thousands of investors who are helping tens of thousands of homeowners every year. We may not be the “traditional” route, but we CAN help, and we can do it quickly!
Give us a call today at 319-343-6773 to let us know how we can help YOU.
Photo by Melinda Gimpel on Unsplash