Bradley & Riley PC

Financial institutions regularly confront questions on how to distribute property following the death of an account holder. A handy Iowa law creates a simplified procedure for property distribution where the decedent has a small estate. In short, the successor in interest to the decedent's property may present a Small Estate Affidavit to the financial institution in exchange for receipt of the property. The Small Estate Affidavit should be attractive to many clients of financial institutions because it saves time and expense compared to formal estate administration.

For an estate to be eligible, the decedent must have personal property with a gross value of no more than $25,000, and may not own any real property (unless held as joint tenants with full rights of survivorship). The Affidavit can be used regardless of whether the decedent dies with a will in place. If a will exists, it should be attached to the Affidavit.

Once forty days have passed from the death, the successor in interest to the decedent's property may present to the financial institution a Small Estate Affidavit. In the Affidavit, the successor must affirm that the decedent's estate meets the threshold requirements above, that the successor is the rightful successor to the property, and that no other people have the right to claim ownership of the property.

One particularly beneficial aspect of the Small Estate Affidavit is that it allows financial institutions to rely in good faith on the statements made in the affidavit. Institutions have no duty to inquire into the truth of any statements it may contain. Further, institutions may choose to require the successor to provide the institution with evidence of ownership or a reasonable bond before turning over the property if the institution could have lawfully imposed similar requirements on the decedent. It is important to note that institutions must comply with the demand contained in a validly executed affidavit. Unreasonable failure to comply could subject the institution to attorney's fees.

More details on the Small Estate Affidavit can be found in Iowa Code § 633.356.

For questions about Small Estate Affidavits or other Probate matters, please contact Mark Van Heukelom.

Categories: Estate Planning Law

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