How to keep assets out of probate in Iowa: wills vs. beneficiary designations (FAQ)

Short answer: A will alone will not keep assets out of probate. In Iowa, beneficiary designations (life insurance, retirement accounts), payable‑on‑death (POD) or transfer‑on‑death (TOD) arrangements for financial accounts, joint‑owner rights with survivorship, and properly funded trusts are the common ways to transfer assets outside probate. Each method has tradeoffs. To ensure you and your children inherit what you want without probate, you must coordinate estate documents, account titles, and beneficiary forms.

What is probate in Iowa?

Probate is the court process to collect a deceased person’s assets, pay debts, and distribute the remainder according to a will or Iowa law if there is no will. Iowa’s probate rules and procedures are in the Iowa Code, chapter 633. For a general overview, see the Iowa Code chapter on probate: Iowa Code, Chapter 633 (Probate), and the Iowa Judicial Branch probate resources: Iowa Courts.

Which assets normally avoid probate?

Assets that typically pass outside probate include:

• Assets with beneficiary designations: life insurance proceeds, annuities, and retirement accounts (IRAs, 401(k)s). Those transfer to the named beneficiary regardless of the will. Many retirement account distributions are also governed by federal rules (plan documents and ERISA) in addition to state law.
• POD/TOD bank or brokerage accounts: accounts titled to the deceased with a payable‑on‑death or transfer‑on‑death beneficiary generally transfer directly to the named person without probate.
• Joint ownership with right of survivorship: property jointly owned with rights of survivorship (for example, a bank account or real estate titled as joint tenants) generally passes automatically to the surviving owner.
• Trust assets: assets owned by a revocable living trust at death are distributed per the trust without probate (because the trust is the owner, not the deceased personally).

What passes through probate?

Assets titled solely in the decedent’s name with no beneficiary designation — for example, a bank account in one person’s name only, a personal vehicle titled only to them, or real estate owned solely without survivorship — typically must go through probate before distribution. The will only controls assets subject to probate.

Can a will control beneficiary‑designated assets?

No. Beneficiary forms and contract designations (life insurance, retirement accounts, many TOD/POD forms) usually override a will. If your will says one thing but your beneficiary form names someone else, the beneficiary form controls for that asset. That’s why coordination matters.

Examples to show how this works (hypotheticals)

Example 1 — Married couple, two children: If a house is titled as joint tenants with right of survivorship, the surviving spouse becomes the sole owner instantly at the first spouse’s death. That avoids probate, but it means the children won’t receive an immediate share of the house at the first death unless title was arranged differently.

Example 2 — Retirement account: A parent names their children as beneficiaries of an IRA. When the parent dies, the IRA flows to the named children outside probate even if the will says the spouse should get everything. To change who receives the IRA, you must change the IRA beneficiary designation.

Example 3 — Trust: A couple funds a revocable living trust and transfers their home, accounts, and some investments into the trust. When one spouse dies, the successor trustee can distribute trust assets per the trust without court probate.

Practical steps to design your plan in Iowa

1. Make an asset inventory: list bank accounts, investment accounts, retirement plans, life insurance policies, real estate, and business interests. Note current titles and beneficiary designations.
2. Review and update beneficiary forms: confirm each life insurance policy and retirement account lists the intended beneficiary and contingent beneficiaries. Update forms when circumstances change (marriage, divorce, births).
3. Check account titling: consider POD or TOD registration for bank or brokerage accounts where appropriate. Joint tenancy avoids probate but may have unintended tax or creditor consequences.
4. Consider a revocable living trust: a properly funded trust can avoid probate for assets titled to it. The critical step is transferring ownership of the assets into the trust during your lifetime.
5. Coordinate documents: make sure wills, trust provisions, account titles, and beneficiary designations align. Conflicting instructions create confusion and may force probate or litigation.
6. Get professional help: consult an Iowa estate attorney to implement and review the plan. They can draft deeds, trusts, and beneficiary language tailored to your goals and Iowa law.

Key advantages and tradeoffs

• Avoiding probate saves time and cost for many estates, but not always. Small estates may have simplified probate options in Iowa.
• Joint ownership can be simple but may expose assets to the other owner’s creditors or create tax/succession problems.
• Beneficiary designations are powerful and must be kept current.
• Trusts offer control and privacy but require effort and expense to set up and fund.

Useful Iowa resources

• Iowa Code, Chapter 633 (Probate): https://www.legis.iowa.gov/docs/code/633.pdf
• Iowa Judicial Branch (court information and local probate contacts): https://www.iowacourts.state.ia.us/
• U.S. Department of Labor — employee benefits and retirement plan rules (for federal retirement/ERISA issues): https://www.dol.gov/agencies/ebsa

Helpful Hints

• Write down every account number and where documents are kept. Executors and successors need quick access.
• Don’t assume a will controls everything. Check beneficiary forms first.
• Coordinate jointly owned property titles with your overall inheritance plan to avoid unintentionally cutting out children or a spouse.
• Make beneficiary updates part of life event checklists (marriage, divorce, birth, death).
• If you create a trust, make sure you retitle assets into the trust—an unfunded trust won’t avoid probate.
• Revisit your plan every 3–5 years or after major life changes to keep it current.

Next step: If your goal is to pass specific assets to your spouse and children without probate, gather your asset inventory and beneficiary forms, then consult an Iowa estate planning attorney. They can draft documents and retitle assets to match your goals and Iowa law.

Disclaimer: This article is for general information and education only. It does not constitute legal advice. For advice about your particular situation under Iowa law, consult a licensed Iowa attorney.