Title Options

What Is an Iowa Title Opinion?

When someone buys real estate in Iowa, one of the most important parts of the closing process is making sure the buyer receives good (“merchantable”) title to the property.  A title opinion is a written legal opinion prepared by an attorney after reviewing the abstract of title. The abstract is a history of the property’s ownership, mortgages, easements, liens, court filings, and other recorded matters affecting the real estate.

The attorney’s job is to review the abstract and identify any issues that may need to be corrected before closing. Common title issues include unreleased mortgages, judgment liens, estate or probate issues, incorrect legal descriptions, missing signatures, unpaid taxes, easements, or other defects in the chain of title.  The title opinion will usually list requirements that must be satisfied before the buyer, lender, or Iowa Title Guaranty can confirm proceeding with the transaction.

In Iowa, title opinions remain a key part of real estate transactions because Iowa commonly uses the abstract-and-title-opinion system rather than relying only on title insurance. A title opinion does not guarantee that no title problem exists, but it provides an attorney’s professional review of the public record and helps the parties address issues before money changes hands and deeds are recorded.

Whether you are buying, selling, refinancing, or transferring Iowa real estate, it is important to allow enough time for the abstract to be continued and reviewed.  Catching title issues early can help avoid closing delays and reduce the risk of problems after the transaction is complete. 

As always, (**disclaimer**) you should always seek legal advice for your specific situation and the issues presented herein are for informational purposes only. 

To Probate or Not To Probate?

To Probate or Not To Probate?

When people hear the word “probate,” the immediate reaction is often to avoid it at all costs.  But that instinct is not always the right approach.  Probate, particularly under Iowa Code Chapter 633, is not simply a bureaucratic hurdle—it is a structured legal process designed to ensure the orderly transfer of assets after death while protecting the rights of everyone involved.  Rather than asking how to avoid probate, a better question is: what outcome are we trying to achieve—simplicity, fairness, protection, or proper administration of an estate?

At its core, probate gives someone (Administrator or Executor) the legal authority to act on behalf of a deceased person.  Without that authority, no one can sign deeds, transfer titles, access accounts, or resolve outstanding obligations.  Probate also provides court oversight, ensuring that fiduciaries act properly, creditors are paid, and taxes are handled.  While it is true that probate involves some cost and is a matter of public record, those trade-offs come with meaningful protections, including fee caps, court supervision, and defined timelines that can bring finality to the estate. 

Many people attempt to avoid probate using tools like transfer-on-death (TOD) or payable-on-death (POD) designations.  While these tools can be useful in limited circumstances, they come with significant risks.  Avoiding probate can unintentionally strip away protections for surviving spouses, heirs, and creditors.  For example, assets passing outside probate may bypass a surviving spouse’s statutory rights or prevent heirs from receiving their fair share.  It can also create situations where no one is accountable for managing or reporting assets, increasing the likelihood of disputes, confusion, or even litigation.  For example, what if one child pays for the decedent’s funeral costs; without probate, such child may have difficulty being reimbursed for such payment.

Ultimately, avoiding probate should not be the goal in and of itself.  Probate is a time-tested system that provides structure, accountability, and legal protections during what is often a difficult time for families.  While there are situations where minimizing probate makes sense, doing so without a comprehensive estate plan can create more problems than it solves.  A thoughtful approach, rather than a blanket strategy of avoidance, is the best way to ensure assets are transferred efficiently and fairly.

As always, (**disclaimer**) you should always seek legal advice for your specific situation and the issues presented herein are for informational purposes only.  

Joint Tenancy vs. Tenants in Common

Joint Tenancy vs. Tenants in Common: What’s the difference? 

When two or more people own real estate together in Iowa, the law generally recognizes two common forms of ownership: tenants in common and joint tenancy. Understanding the difference is important because each structure affects what happens to the property during the owners’ lifetimes and after one of them dies.

Tenancy in common is the most common form of co-ownership. Under Iowa law, each owner holds a separate ownership interest in the property, which may or may not be equal.  For example, one owner might hold a 50% interest while two others each hold 25%.  Each owner has the right to use the entire property, but their share is considered their individual asset. That means an owner can sell, transfer, or leave their interest to heirs through a will.  When a tenant in common dies, their share does not automatically go to the other co-owners—instead it passes through their estate to their heirs or beneficiaries, generally through probate administration.

Joint tenancy, by contrast, includes what is known as the “right of survivorship.” This means that when one joint tenant dies, their interest in the property automatically transfers to the surviving owner or owners, without going through probate.  Joint tenancy typically concerns equal ownership shares and must be clearly stated in the deed creating the ownership.  Because of the survivorship feature, this form of ownership is often used by married couples or close family members who want the property to pass automatically to the surviving owner.  One important aspect of Joint Tenancy ownership is that such interest automatically passes to the other joint tenant(s) even if your Will states a different outcome.

What if the conveyance document is silent?  This is where things can get interesting.  In Iowa, generally the default is Tenants in Common.  However, there are some limited exceptions the Iowa legislature has established through statute where Joint Tenancy is the default.  Because these structures can affect estate planning, taxes, and future control of the property, property owners should consider their goals carefully, confirm such deeds coordinate with their estate plan, and consult an attorney before deciding which form of ownership is best for their situation.

As always, (**disclaimer**) you should always seek legal advice for your specific situation and the issues presented herein are for informational purposes only. 

Life Estates

Life Estates

Today I wanted to give a brief summary on “Life Estates”, what they are, and some pros and cons.  Under Iowa law, a life estate is a form of property ownership that allows one person (the “life tenant”) to use and occupy real estate for the duration of their life, while ownership automatically passes to another person or persons (the “remaindermen”) upon the life tenant’s death.  Life estates are commonly used in estate planning to allow parents to remain in their home for life while ensuring that the property transfers to children without going through probate.  When the life tenant dies, the transfer occurs by operation of law, typically requiring only an affidavit and updated title records.

While the life tenant has the right to possess and use the property, those rights are not unlimited.  The life tenant is generally responsible for ordinary maintenance, property taxes, and insurance, and may not commit “waste,” meaning actions that substantially damage or reduce the value of the property.  Importantly, the life tenant cannot sell or mortgage the property without the consent of the remaindermen, since each holds a legally recognized interest in the property.

From a tax perspective, a retained life estate can be particularly attractive.  Because the property is typically included in the life tenant’s taxable estate at death, the remaindermen generally receive a step-up in basis to the property’s fair market value as of the life tenant’s date of death.  This can significantly reduce or eliminate capital gains tax if the property is later sold. However, life estates can also affect Medicaid eligibility, creditor rights, and long-term care planning.  Furthermore, once a deed is executed, you cannot “un-do” a life estate deed transfer without the life tenant and the remaindermen (and their spouses!) executing documents transferring back their interests; and the transfer to and back to the grantor are considered gifts (see last Legal Briefs article).  As with most areas of the law, the details matter, and anyone considering a life estate should seek legal advice tailored to their specific goals and circumstances.  While they can be a useful tool, the circumstances are usually fairly limited.

As always, (**disclaimer**) you should always seek legal advice for your specific situation and the issues presented herein are for informational purposes only.