Apr 2017 AFR: 2.6%
Gift Annuity State Regulations

Iowa


Intestacy


General Definition

A decedent's intestate estate is any part of the estate not effectively disposed of by a valid will.

Order of Distribution

If the decedent dies intestate leaving a surviving spouse and leaving no issue or leaving issue all of whom are the issue of the surviving spouse, the surviving spouse will receive the following share:

  1. All of the estate in real property possessed by the decedent at any time during the marriage, which have not been sold on execution or by other judicial sale and to which the surviving spouse has made no relinquishment of right.
  2. All personal property that, at the time of death, was, in the hands of the decedent as the head of a family, exempt from execution.
  3. All other personal property of the decedent which is not necessary for the payment of debts and charges. Sec. 633.211.

The part of the intestate estate not passing to the surviving spouse, or if there is no surviving spouse, the entire net estate passes as follows:

  1. To the issue of the decedent per stirpes.
  2. If there is no surviving issue, to the parents of the decedent equally; and if either parent is dead, the portion that would have gone to such deceased parent will go to the survivor.
  3. If there is no person to take under either subsection 1 or 2 of this section, the estate will be divided and set aside into two equal shares. One share will be distributed to the issue of the decedent's mother per stirpes and one share will be distributed to the issue of the decedent's father per stirpes. If there is no surviving issue of one deceased parent, the entire estate passes to the issue of the other deceased parent in accordance with this subsection.
  4. If there is no person to take, and the decedent is survived by one or more grandparents or issue of grandparents, half the estate passes to the paternal grandparents, if both survive, or to the surviving paternal grandparent if only one survives. If neither paternal grandparent survives, this half share will be further divided into two equal sub-shares. One sub-share will be distributed to the issue of the decedent's paternal grandmother per stirpes and one subshare will be distributed to the issue of the decedent's paternal grandfather per stirpes. If there is no surviving issue of one deceased paternal grandparent, the entire half share passes to the issue of the other deceased paternal grandparent and their issue. The other half of the decedent's estate passes to the maternal grandparents and their issue in the same manner. If there are no surviving grandparents or issue of grandparents on either the paternal or maternal side, the entire estate passes to the decedent's surviving grandparents or their issue on the other side in accordance with this subsection.
  5. If there is no other person to take, the portion uninherited will go to the issue of the deceased spouse of the intestate, per stirpes. If the intestate has had more than one spouse who died in lawful wedlock, it will be equally divided between the issue, per stirpes, of those deceased spouses. Sec. 633.219.

If there is no taker under Iowa law, the intestate estate echeats to the State of Iowa. Sec. 633.219(6).

Will Qualifications


Common Law or Community Property

Iowa is a common law, elective share state. Sec. 633.236.

Capacity

Any person of full age and sound mind may dispose by will all of the person's property. Sec. 633.264. Full age is considered 18 years, unless if married at an early age. Sec. 633.3(18).

Drafting

To be valid, all wills and codicils must be in writing, signed by the testator, or by some person in the testator's presence and by the testator's express direction writing the testator's name, and declared by the testator to be the testator's will, and witnessed, at the testator's request, by two competent persons who signed as witnesses in the presence of the testator and in the presence of each other. Sec. 633.279(1).

Any person who is sixteen years of age, or older, and who is competent to be a witness generally in this state, may act as an attesting witness to a will. Sec. 633.280.

No will is invalidated because attested by an interested witness; but any interested witness must, unless the will is also attested by two competent and disinterested witnesses, forfeit so much of the provisions therein made for the interested witness as in the aggregate exceeds in value, as of the date of the decedent's death, that which the interested witness would have received had the testator died intestate. No attesting witness is interested unless the witness is devised or bequeathed some portion of the testator's estate. Sec. 633.281.

An attested will may be made self-proved at the time of its execution, or at any subsequent date, by the acknowledgment by the testator and the affidavits of the witnesses, each made before a person authorized to administer oaths and take acknowledgments under the laws of this state, and evidenced by such person's certificate, under seal, attached or annexed to the will. Sec. 633.279(2).

Beneficiaries

Where the title to property depends upon priority of death, and there is no sufficient evidence that the persons have died otherwise than simultaneously, the property of each person shall be disposed of as if the person had survived. Sec. 633.523.

Modifications

A will can be revoked in whole or in part only by being canceled or destroyed by the act or direction of the testator, with the intention of revoking it, or by the execution of a subsequent will. When done by cancellation, the revocation must be witnessed in the same manner as the making of a new will. No will, nor any part thereof, which be in any manner revoked, or which will be or become invalid, can be revived otherwise than by a re-execution thereof, or by the execution of another will or codicil in which the revoked or invalid will, or part thereof, is incorporated by reference. Sec. 633.284.

Probate Process


Naming of Personal Representative

Letters testamentary may be granted to one or more persons found to be qualified. Preference for appointment shall be in the following order:

  1. The person designated in the will;
  2. Any beneficiary named in the will, or a person nominated by the beneficiaries;
  3. Any creditor of the deceased, or a person nominated by such creditor;
  4. Such other person as the court may find to be qualified. Sec. 633.294.

Submission of Will

After being informed of the death of the testator, the person having custody of the testator's will must deliver it to the court having jurisdiction of the testator's estate. Every person who willfully refuses or fails to deliver a will after being ordered by the court to do so will be guilty of contempt of court. The person shall also be liable to any person aggrieved for the damages which may be sustained by such refusal or failure. Sec. 633.285.

Notifications

On admission of a will to probate, the executor, as soon as letters are issued, must cause to be published once each week for two consecutive weeks in a daily or weekly newspaper of general circulation published in the county in which the estate is pending and at any time during the pendency of administration that the executor has knowledge of the name and address of a person believed to own or possess a claim which will not or may not be paid or otherwise satisfied during administration, provide by ordinary mail to each such claimant at the claimant's last known address, and as soon as practicable give notice, except to any executor, by ordinary mail to the surviving spouse, each heir of the decedent and each devisee under the will admitted to probate whose identities are reasonably ascertainable, at such persons' last known addresses, a notice of admission of the will to probate and of the appointment of the executor, in which will be included a notice that any action to set aside the probate of the will must be brought within the later to occur of four months from the date of the second publication of the notice or one month from the date of mailing of this notice or thereafter be forever barred, and in which will be included a notice to debtors to make payment, and to creditors having claims against the estate to file them with the clerk within four months from the second publication of the notice, or thereafter be forever barred. Sec. 633.304.

Inventory

Within ninety days after qualification by the personal representative, unless a longer time is granted by the court, the personal representative shall file with the clerk a report and inventory of the property of the decedent, so far as the same has come to the knowledge of the personal representative. The report and inventory must be verified or affirmed under penalty of perjury. It must include the following information:

  1. Name, age and residence of decedent.
  2. Date of death.
  3. Whether decedent died testate or intestate.
  4. Name and post office address of the personal representative.
  5. Name and post office address of the surviving spouse, if any.
  6. Name, relationship and post office address of each beneficiary under the will (if the decedent died testate) or of each heir (if the decedent died intestate). If any persons take by representation, the personal representative shall list the deceased person through whom those persons take and shall also list the persons taking under that deceased person.
  7. If the decedent died testate, the name and address of each child, if any, born to or adopted by decedent after execution of the will.
  8. Legal descriptions and estimated values of all the real estate of the decedent in the state of Iowa.
  9. Legal descriptions and estimated values of all real estate of the decedent outside of the state of Iowa.
  10. Personal property regarded as exempt from execution, with estimated values.
  11. All other personal property of the decedent, with estimated values.
  12. A listing of all other items, with estimated values, which are subject to Iowa inheritance tax or federal estate tax.
  13. A report concerning any reductions in the amount of unified credit available for federal estate tax purposes. Sec. 633.361.

Elective Share, Exempt Property and the Family Share

When a married person dies testate as to any part of the person's estate, the surviving spouse will have the right to elect to take against the will. Sec. 633.236. If the surviving spouse elects to take against the will, the share of such surviving spouse will be:

  1. One-third in value of all the legal or equitable estates in real property possessed by the decedent at any time during the marriage, which have not been sold on execution or other judicial sale, and to which the surviving spouse has made no relinquishment of right.
  2. All personal property that, at the time of death, was in the hands of the decedent as the head of a family, exempt from execution.
  3. One-third of all other personal property of the decedent that is not necessary for the payment of debts and charges. Sec. 633.238.

All personal property which in the hands of the decedent as head of a family would be exempt from execution, which is bequeathed or set aside to the surviving spouse is exempt in the hands of such surviving spouse Sec. 633.332.

The court, as it deems reasonable, will allow an amount for the proper support of the surviving spouse for the period of 12 months following the death of the decedent. When the application is not made by the personal representative, notice of hearing upon the application must be given to the personal representative. The court will take into consideration the station in life of the surviving spouse and the assets and condition of the estate. The allowance may also include such additional amount as the court deems reasonable for the proper support, during such period, of dependents of the decedent who reside with the surviving spouse. Such allowance to the surviving spouse will not abate upon the death or remarriage of such spouse. Sec. 633.374(2).

Debts and Distributions

All claims against a decedent's estate, other than charges, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract or otherwise, are forever barred against the estate, the personal representative, and the distributees of the estate, unless filed with the clerk within the later to occur of four months after the date of the second publication of the notice to creditors or, as to each claimant whose identity is reasonably ascertainable, one month after service of notice by ordinary mail to the claimant's last known address. Sec. 633.410.

In any estate in which the assets are, or appear to be, insufficient to pay in full all debts and charges of the estate, the personal representative shall classify the debts and charges as follows:

  1. Court costs.
  2. Other costs of administration.
  3. Reasonable funeral and burial expenses.
  4. All debts and taxes having preference under the laws of the United States.
  5. Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending at the decedent's last illness.
  6. All taxes having preferences under the laws of this state.
  7. Any debt for medical assistance paid pursuant to the Code.
  8. All debts owing to employees for labor performed during the ninety days next preceding the death of the decedent.
  9. All unpaid support payments and all additional unpaid awards and judgments against the decedent in any dissolution, separate maintenance, uniform support, or paternity action to the extent that the support, awards, and judgments have accrued at the time of death of the decedent.
  10. All other claims allowed. Sec. 633.425.

Payment of debts and charges of the estate must be made in the order above, without preference of any claim over another of the same class. If the assets of the estate are insufficient to pay in full all of the claims of a class, then such claims must be paid on a pro rata basis, without preference between claims then due and those of the same class not due. Sec. 633.426.

Estate/Inheritance Tax


Iowa's estate tax was repealed effective March 16, 2009.

Iowa has an inheritance tax. Spouses, lineal descendents, lineal ascendants and charitable organizations are all exempt from the tax. However, other beneficiaries such as siblings, nieces, nephews, cousins and in-laws must pay the tax. The tax applies to any decedent's estate if the value is more than $25,000. The tax rates depend on the beneficiary. If the beneficiary is a brother, sister (or half brother or sister), son-in-law or daughter-in-law then the beneficiary will pay tax on his or her share of the estate at a rate of 5-10% (depending on the size of the share). If the beneficiary is an uncle, aunt, niece, nephew, foster child, cousin, brother-in-law, sister-in-law, step-grandchild or some other individual then the beneficiary will pay tax on his or her share of the estate at a rate of 10-15% (depending on the size of the share). If the beneficiary is a firm, corporation or society organized for profit then the beneficiary will pay tax on its share at a rate of 15%. If the beneficiary is a foreign charitable organization then the foreign charity will pay tax on its share at a rate of 10%. Unknown heirs pay tax on their shares at a rate of 5%. Code of Iowa §450.10

Income Tax Charitable Deductions and/or Credits


Iowa allows a taxpaying resident to deduct itemized charitable gifts in the same manner as the IRS. Iowa Admin Code R. §701-41.5. However, a charitable tax deduction is disallowed for a taxpayer who claims a school tuition organization tax credit in accordance with IOWA ADMIN CODE R. §701-42.30(422) deduction for contributions to the injured veterans grant program in accordance with IOWA ADMIN CODE R. §701-40.68(2), or a credit for the from farm to food donation tax credit in accordance with IOWA ADMIN CODE R. §701-41.5(17).

Iowa offers a tax credit for residents who make an endowment gift to a qualified Iowa community foundation. For tax years beginning on or after January 1, 2010, the credit is equal to 25% of a taxpayer's endowment gift to an endow Iowa qualified community foundation approved by the Iowa department of economic development. For the 2012 calendar year and subsequent calendar years, the total amount of endow Iowa tax credits is $6 million; the maximum amount of tax credit authorized to a single taxpayer is $300,000 ($6 million multiplied by 5%).Iowa Admin Code R. §701-42.24.

Gift Annuity Requirements


Iowa, a "notification" state, regulates the issuance of charitable gift annuities under Iowa Code Secs. 508F.1 through 508F.8.

To qualify, charities must have been in continuous operation for at least three years (or be a successor/affiliate of an organization that meets this condition) and have a minimum value of unrestricted assets (cash, cash equivalents or publicly traded securities) equal to the lesser of: (i) $300,000; or (ii) five times the face amount of total outstanding annuities (not including the funding assets of the gift annuities).

The issuance of qualifying charitable gift annuities does not constitute engaging in the business of insurance in Iowa. Failure to comply with state law may result in a civil penalty not to exceed $1,000 for each annuity issued by the charitable organization that does not qualify.

Notification Process

Written notification must be given to the Iowa Insurance Division on the date it enters into its first qualified charitable gift annuity agreement. The notice must contain the signature of an officer or director of the charity, identify the name and address of the organization, include a copy of the IRS letter granting the charity tax-exempt status and certify that the charity is a bona fide charitable organization and that the annuities offered are qualifying charitable gift annuities as defined by state law.

Disclosure Language

State disclosure language must be included in a written gift annuity agreement. The required language must be in a separate paragraph in type no smaller that that generally used in the annuity agreement:

"A qualified charitable gift annuity is not insurance under the laws of this state and is not subject to regulation by the commissioner or protected by an insurance guaranty fund or an insurance guaranty association."

Reserve Requirements

Iowa does not require an issuing charity to hold any amount in reserve.

Annual Filing Requirements

Once notification is given to the state, no further reporting is required.

State Contact Information

Wayne Lecher
Iowa Insurance Division
601 Locust St., 4th Floor
Des Moines, Iowa 50309
Phone: (515) 281-4271


State Forms

None
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