Iowa

Iowa estates are heard in the District Court of the county where the deceased lived. The court
issues letters testamentary to the executor, or letters of administration where there is
no will, under Iowa Code chapter 633.

The inheritance tax is gone

This is the headline change and a great deal of Iowa material online has not caught up.

Iowa used to tax inheritances passing to anyone other than close family. The tax was phased out
over four years, with the rate cut by 20% annually from 2021, and it is fully repealed for
deaths on or after 1 January 2025. There is no Iowa inheritance tax and no Iowa estate tax.

If you are reading an Iowa guide that discusses tax classes, brothers and sisters at 5%, or
non-relatives at 10%, it predates the repeal. For a death in 2025 or later, none of it applies.

What the executor must do

• Publish and mail the notice to creditors; claims are barred after the statutory period.
• File a probate inventory — which matters more here than in most states, because the
  executor's own fee is calculated from it.
• Pay the debts and file the final income tax returns.
• File a final report and obtain an order of discharge.

Court costs

Iowa charges court costs calculated on the gross assets of the estate, payable from the estate.
Confirm the current scale with the clerk.

Before distributing

Let the creditor period run, settle the taxes, and file the final report. Distributing before
discharge leaves the executor personally exposed to a late claim.

An Iowa will must be in writing, signed by the testator (or by another at their direction
and in their presence), and witnessed by two competent people who sign in the testator's
presence. The testator must be 18 or older and of sound mind.

Iowa does not recognise holographic wills

A handwritten will is fine if two witnesses signed it. Unwitnessed, it is not valid in
Iowa — the handwriting counts for nothing on its own, and there is no emergency exception.

Iowa sits with Minnesota, Wisconsin and Illinois here rather than with Missouri's neighbours to
the south. Someone arriving from Nebraska, South Dakota or Oklahoma — all of which accept
holographic wills — will find the handwritten will in their drawer stopped working when they
crossed the border.

Make it self-proving

Attach a self-proving affidavit signed before a notary at the same time as the will. Without one,
a witness has to be found and produced after the death.

Waive what you can, and set the fee

Two clauses are worth including. Waive bond, and say something about the executor's
compensation — Iowa's statutory schedule is a ceiling calculated on the probate inventory, and a
will can set expectations more sensibly than a formula can.

The inheritance tax no longer shapes the drafting

Iowa wills were long drafted with an eye to which beneficiaries would be taxed. With the
inheritance tax repealed for deaths from 2025, that consideration has gone. An older Iowa will
built around tax classes may now contain provisions that do nothing — worth a review.

Also

• Name an alternate executor.
• A surviving spouse has an elective share whatever the will says.
• Review after a marriage, divorce, birth or a move to Iowa.

Yes, and Iowa expresses it as a ceiling on a reasonable fee rather than an entitlement.

The statutory schedule

Under Iowa Code § 633.197 the personal representative is allowed reasonable fees not in excess
of the following commissions, computed on the gross assets of the estate as listed in the
probate inventory:

Confirm the current figures against the statute.

Two things follow from the wording

First, the schedule is a maximum, not a rate you may simply claim. The fee must also be
reasonable for the work actually done, and an estate settled in four months does not attract the
ceiling merely because it was large.

Second, the base is the probate inventory. Get the inventory right — it fixes your own fee as
well as reporting the estate. Assets that never enter the inventory, such as jointly held property
or an account with a named beneficiary, generate no commission at all.

Extraordinary services

Where the estate required work beyond the ordinary — litigation, a business to wind up, farmland
to manage through a season — the court may allow additional compensation on application. That
is the route to use rather than stretching the schedule.

How it is approved

Fees are claimed in the final report and allowed by the court. Beneficiaries may object.

Tax

Compensation is taxable income; an inheritance is not. With the Iowa inheritance tax now
repealed, there is no state death tax for a fee to be deducted against — so a family executor who
is also a beneficiary usually gains nothing by taking one.

An Iowa executor is reimbursed from the estate for the reasonable expenses of administration,
separately from the statutory fee. They appear in the final report, so document as you go.

Normally claimable

• Funeral, burial or cremation, the headstone, and a reasonable reception.
• Court costs, certified letters, certified death certificates, and publication of the notice to
  creditors.
• Attorney's fees, and accountant's fees for the final Form 1040 and any Form 1041.
• Appraisals for the probate inventory, which matters more here than elsewhere because the
  inventory is the base for the executor's own fee.
• Valuation of farmland, grain in storage, livestock, machinery and crop inputs, which turn up
  in a large share of Iowa estates.
• On a farm, the genuine costs of carrying the operation through to harvest where that serves
  the estate — seed, fertiliser, fuel, custom work, drying and storage. Abandoning a growing crop
  is usually the worse decision.
• Carrying costs on estate property until sale: insurance, property tax, utilities, security,
  maintenance, lawn care and snow removal.
• Winterising a property so an empty house survives an Iowa January.
• Cleaning, clearing, storing, moving and shipping contents.
• Travel on estate business at a reasonable rate.
• Bond premiums where the will did not waive bond.

Normally not claimable

• The executor's lost wages, meals near home, or personal spending.
• Costs run up for one beneficiary's convenience rather than the estate's.
• Improvements beyond preparing a property for sale as it stands.
• Anything without a receipt.

The rule that decides it

Open an estate bank account and run every payment through it. Since the inventory fixes your
fee and the final report has to reconcile to it, sloppy records cost you twice.

Most Iowa estates are administered by a family member with a lawyer retained for the filings. A
bank trust department or an attorney serving as executor earns its cost in specific cases —
and in Iowa the answer is more often a farm manager than a full corporate fiduciary.

Consider a professional when

• The estate includes a working farm. This is the Iowa case, and it has two halves: the
  land, which has to be valued and divided between farming and non-farming children, and the
  operation, which has a crop in the ground and cannot pause while the family decides. A farm
  management company handling the operation, alongside a family executor, is often the right
  structure.
• There is farmland held in an entity, or a lease arrangement between family members that has
  to be unwound or continued.
• The estate holds an operating business or rental property.
• There is conflict among the beneficiaries, or a will contest looks likely.
• A beneficiary is a minor or incapacitated, so a trust runs for years.
• The named executor lives out of state — common where children have left the state — and
  cannot attend a county courthouse or walk the ground.

What it costs

Corporate fiduciaries charge a negotiated percentage, referenced to the § 633.197 ceiling, usually
with a minimum annual fee. Farm managers charge a percentage of farm income, which is a different
and often better-targeted arrangement. Attorneys bill hourly. Ask for all of it in writing.

Middle ground

Appoint a family member, waive bond in the will, and let them retain an Iowa probate attorney
and, where there is land, a farm manager — both at the estate's expense.

A named executor who does not want the job can decline before letters issue.