Iowa: Can an Estate Recover Money an Heir Withdrew from a Deceased Parent’s Bank or Credit Card Accounts? | Iowa Probate | FastCounsel
Get Matched
IA Iowa Probate

Iowa: Can an Estate Recover Money an Heir Withdrew from a Deceased Parent’s Bank or Credit Card Accounts?

August 14, 2025 6 min read

Detailed Answer — What Happens If an Heir Withdraws Money from a Deceased Parent’s Bank or Credit Cards in Iowa?

Short answer: In Iowa, money or charges taken from a deceased person’s accounts after death usually belong to the estate, not to an heir. The estate’s personal representative (executor or administrator) can usually recover funds taken without authority through probate court or civil actions for conversion or unjust enrichment. Criminal charges are also possible in some cases. Whether recovery is straightforward depends on how the account was titled (individual, joint, or payable-on-death), whether the person had authority, and how long has passed.

Why this matters

When someone dies, their assets become part of the estate unless they pass outside probate (for example, by joint tenancy, designated beneficiary, or POD/TOD accounts). Only the appointed personal representative has legal authority to collect assets, pay debts, and distribute property under Iowa probate law. Unauthorized withdrawals by an heir can disrupt that process and may be unlawful.

Key legal principles under Iowa law

Common situations and how Iowa law treats them

1) Account was in the decedent’s sole name

If an heir withdrew funds from an account titled only in the deceased parent’s name after death, those funds are generally estate assets. The personal representative can demand return and, if refused, sue the heir in probate or civil court for conversion or unjust enrichment. The bank may be liable if it allowed the withdrawal after notice of death, depending on the facts.

2) Account was joint or had a named beneficiary/POD

Funds in a true joint account with right of survivorship or in a payable-on-death (POD) account pass directly to the surviving joint owner or designated beneficiary and typically bypass probate. Those transfers usually are valid, and the estate cannot recover those funds from the surviving joint owner or POD payee except in limited cases (fraud, lack of capacity, or evidence the joint account was a convenience account). Reviewing account titling and agreement language is critical.

3) Credit cards

Credit card accounts are obligations of the decedent’s estate. The estate must pay valid debts from available assets before distributions. Family members or heirs are not personally liable for the deceased’s credit card debts unless they co-signed the account or are otherwise contractually liable. If an heir used a decedent’s credit card after death without authority, the estate can seek recovery for unauthorized charges and may report the use to the card issuer and, if appropriate, law enforcement.

4) Small estates and informal procedures

Iowa provides simplified or small-estate procedures that can make recovery faster and cheaper for smaller estates. The appropriate route depends on the estate’s size and whether a personal representative has been appointed. See Iowa Code Chapter 633 for simplified administration options: Iowa Code Chapter 633.

Practical steps to recover funds

  1. Confirm account ownership and timing. Obtain account statements showing the decedent’s death date and the withdrawal(s).
  2. Check for joint ownership or POD beneficiaries. If present, those transfers may be lawful.
  3. Notify the bank or card issuer in writing and provide a copy of the death certificate. Ask the institution to freeze remaining funds and provide records of withdrawals.
  4. If an estate representative exists (executor/administrator), they should demand return in writing. The representative has the authority to bring suit on behalf of the estate.
  5. If no representative exists, consider petitioning the probate court to appoint one or use a small‐estate procedure to collect assets and recover funds.
  6. If the person refuses to return funds, the estate can sue for conversion, unjust enrichment, or breach of fiduciary duty, or pursue criminal referrals where appropriate.

Possible defenses an heir might raise

  • They were a joint owner or designated beneficiary.
  • The decedent gave them permission before death to withdraw money.
  • They believed (in good faith) they were paying an estate expense or debt.
  • The withdrawal occurred before the decedent’s death.

Evidence that helps recovery

Maintain bank and credit card statements, correspondence, text messages, or emails about account access or permission to use funds. Records showing the date of death, timing of withdrawals, and account titling are crucial.

When criminal charges might apply

If an heir intentionally takes money after learning of the death, Iowa law may allow criminal prosecution for theft or related property offenses. The decision to pursue criminal charges rests with prosecutors and depends on evidence and circumstances. See Iowa Code Chapter 714 for property crimes: Iowa Code Chapter 714.

Time limits and urgency

Statutes of limitations for civil recovery apply. Different claims (conversion, unjust enrichment, probate claims) may have different deadlines. Acting quickly preserves evidence and legal rights. See Iowa Code Chapter 614 for limitation periods: Iowa Code Chapter 614.

When to consult an attorney

Consider an attorney if the amount taken is substantial, the facts are disputed, or the heir claims a joint account or prior permission. An attorney can help petition the probate court for appointment, draft demand letters, negotiate with banks, and file civil claims or criminal referrals if needed.

Disclaimer

This article explains general Iowa legal principles and practical steps. It is for educational purposes only and is not legal advice. For advice about a specific situation, consult a licensed Iowa attorney.

Helpful Hints

  • Act quickly. Freeze accounts and gather documents as soon as possible.
  • Get a certified copy of the death certificate—banks and card issuers will request it.
  • Check account titles carefully: sole owner, joint tenancy, or POD makes a legal difference.
  • Keep written records of all communications with heirs, banks, and card issuers.
  • If you are the named personal representative, follow Iowa probate procedures to avoid personal liability for improper distributions. See Iowa Code Chapter 633: Iowa Code Chapter 633.
  • Don’t destroy or alter account statements or other documents—preserve them for court or settlement discussions.
  • If the withdrawal was small and the other party cooperates, consider mediation or a demand letter before filing suit.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.