Disclaimer: This content is for educational purposes only and does not constitute legal advice.
Detailed Answer
Under Iowa law, a personal representative (PR) has a fiduciary duty to collect, manage, and distribute estate assets responsibly. Opening a separate estate bank account helps satisfy key statutory duties and avoids commingling personal and estate funds.
1. Fiduciary Duty and Asset Preservation: Iowa Code §633.41 requires a PR to take possession of all estate assets and preserve them. By placing funds in a dedicated estate account, the PR demonstrates proper care and segregation of assets: Iowa Code §633.41.
2. Inventory and Accounting Requirements: Within 90 days of appointment, the PR must file an inventory with the court identifying all estate assets under Iowa Code §633.512. A separate estate account simplifies tracking liquid assets when preparing inventories and subsequent accountings: Iowa Code §633.512.
3. Final Accounting and Court Approval: Before closing the estate, the PR must file a final accounting under Iowa Code §633.516. A dedicated account provides a clear record of receipts, disbursements, fees, and distributions, making it easier to obtain court approval: Iowa Code §633.516.
4. Practical Considerations: Opening an estate account under the name “Estate of [Decedent Name], by [Your Name], Personal Representative”—and obtaining an Employer Identification Number (EIN) from the IRS—helps banks distinguish estate funds from personal funds. Many Iowa banks offer fiduciary account packages that waive fees.
Overall, while Iowa statutes do not explicitly mandate a separate bank account, doing so is a best practice that aligns with statutory duties and streamlines reporting to the court and beneficiaries.
Helpful Hints
- Open the account promptly after receiving your Letters of Appointment from the clerk of court.
- Use the estate’s EIN—don’t use your personal Social Security number.
- Clearly label all checks, deposits, and withdrawals with estate identifiers.
- Keep detailed records of every transaction, including bank statements and receipts.
- Coordinate with your probate clerk to confirm any local bank requirements or fee waivers.
- Consult a probate attorney if you encounter complex asset situations or creditor claims.