Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
Under Iowa law, an executor must verify the estate’s available funds before paying any creditor. Confirming resources protects the executor from personal liability and ensures compliance with probate procedures.
1. Inventory and Appraisal
Within 90 days of appointment, the executor must file an inventory listing all assets and their values. See Iowa Code § 633.245. This step establishes the estate’s total resources.
2. Identify Liquid Assets
Separate cash or bank account balances from non-liquid property (real estate, investment accounts). Review bank statements, brokerage accounts, and safe-deposit contents. Confirm clear title on vehicles or property sales that generate cash.
3. Assess Creditor Claims
Iowa Code § 633.371 sets a four-month deadline for general creditors to file claims after notice. See Iowa Code § 633.371. Confirm which claims are allowable and their priority. Funeral expenses, taxes and administrative costs receive top priority under Iowa Code § 633.346.
4. Calculate Available Funds
Subtract priority debts and known administrative expenses from the estate’s liquid sum. If funds cover all approved claims, the executor may distribute payments. If funds fall short, the executor must follow Iowa’s order of payment and obtain court guidance before partial distributions.
5. Obtain Court Approval When Needed
If the estate lacks sufficient assets to satisfy all claims, file a petition for instructions or seek approval for a partial distribution. The court can direct priorities and authorize sale of non-liquid assets to generate cash.
By confirming available estate funds before settling claims, an executor avoids overpayment, adheres to statutory priorities, and fulfills fiduciary duties under Iowa probate law.
Helpful Hints
- Keep detailed bank and brokerage statements handy for each asset.
- Maintain a running ledger of income, expenses and distributions.
- Review creditor claims promptly to spot incomplete or invalid submissions.
- Use probate software or spreadsheets to track assets and liabilities.
- Consult the court clerk if you’re unsure about available funds or payment priorities.