Quick overview

If a person dies without a will in Iowa, any money they owned at death — including leftover proceeds from a recent sale of property — generally becomes part of their probate estate. The court appoints an estate administrator, the administrator pays valid debts and expenses, and any money left after that is distributed to the decedent’s heirs according to Iowa’s intestacy rules.

Detailed answer: step‑by‑step under Iowa law

1. Do the proceeds belong to the estate?

Yes. If the decedent owned the funds in their name alone (or title did not pass automatically to another person), sale proceeds are estate assets. They must be handled through the probate process unless a non‑probate transfer applies (for example, payable‑on‑death (POD) designations, joint tenancy with right of survivorship, or an account beneficiary).

2. Who manages the proceeds?

The county probate court appoints an administrator (sometimes called a personal representative) to collect estate assets, including sale proceeds, and to manage the estate. The administrator files paperwork with the probate court, provides notice to creditors, inventories assets, and handles accounting.

3. Paying debts, taxes, and expenses

The administrator must use estate funds to pay funeral expenses, administration costs, valid creditor claims, and any estate or income taxes before distributing money to heirs. Only after these obligations are satisfied can the remaining proceeds be distributed.

4. Intestate distribution (who gets what)

When there is no will, Iowa law sets the order of heirs and how property is divided. The basic rules are:

• Surviving spouse has primary rights to the estate in many common situations.
• If the decedent had surviving children, parents, or more distant relatives, the estate may be divided among the spouse and those descendants according to Iowa’s intestacy scheme.
• If there are no surviving relatives, the estate may escheat to the State of Iowa.

These rules are set by Iowa statutory law governing decedents’ estates and intestate succession. For the statutory framework, see Iowa Code, chapter governing decedents’ estates: Iowa Code (searchable) and the probate provisions (see the Decedents’ Estates chapter available from the Iowa Legislature). For practical court procedures and forms, see the Iowa Judicial Branch probate resources: Iowa Courts.

5. Small‑estate options and simplified procedures

If the total estate value (including the sale proceeds) falls below a statutory threshold, Iowa law may allow simplified procedures such as a small‑estate affidavit or summary administration. Those procedures can avoid full probate, let heirs obtain funds faster, and reduce court costs. The availability and exact requirements depend on the current Iowa law and the size of the estate.

6. Timing and practical steps

1. Secure the proceeds: place funds in a safe account or escrow and avoid personal distributions.
2. Contact the county probate court to open an estate and to learn the local filing process and fees.
3. Identify and notify heirs and creditors as required by court rules.
4. Obtain appointment as administrator (or ask the court to appoint one). The administrator will gather assets, pay valid claims, and petition the court to distribute remaining funds.

When the proceeds might not go through probate

Not all funds pass through probate. Examples that avoid probate include:

• Accounts with named beneficiaries (POD, TOD).
• Property held in joint tenancy with right of survivorship.
• Trust assets distributed under trust terms.

If one of these non‑probate mechanisms covers the sale proceeds, that money passes directly to the named beneficiary or joint owner instead of being distributed under intestacy.

How to protect your position if you are holding the proceeds

If you are a bank, escrow agent, seller, buyer, or family member holding leftover proceeds, do not disburse funds until you know whether probate or a non‑probate claim applies. Verify whether anyone has title and whether a probate estate exists or a beneficiary claim is on file. The county probate clerk can explain local procedures for releasing or preserving funds.

Helpful links to Iowa resources and statutes

• Iowa Code — main site (search chapters and sections): https://www.legis.iowa.gov/law/iowaCode
• Iowa Courts — probate and estate administration resources and forms: https://www.iowacourts.gov/

Helpful Hints

• Do not spend or distribute leftover proceeds until you confirm the legal route (probate vs. beneficiary/joint owner).
• Open a probate estate promptly if the proceeds belong to the decedent’s estate; delays can complicate creditor claims and distribution.
• Gather important documents: death certificate, sale closing paperwork, bank statements, deeds, and any beneficiary designations.
• Check whether the account or property had a payable‑on‑death designation or joint ownership that avoids probate.
• If the estate seems small, ask the probate clerk about small‑estate affidavits or simplified procedures to save time and cost.
• Keep careful records of all payments and receipts; administrators must provide accounting to the court and heirs.
• If family members disagree or the estate is complex, consider hiring an attorney who handles probate in Iowa to help navigate the process.