Chapter 635 of the Iowa Code sets forth a provision dealing with the administration of small estates. In order to qualify for a small estate, the gross value of the probate assets of a decedent must not exceed $100,000.00. Probate assets do not include life insurance proceeds and retirement plan benefits if such items pass by designation of beneficiary form. The provisions for fees for the personal representative and the attorney for the estate are different from the regular probate provisions set out in Chapter 633 of Iowa Code. Under the small estate statute, the fees for the personal representative shall not exceed 3 percent of the gross value of the probate assets of the estate unless the personal representative itemizes the personal representative’s services to the estate. The personal representative’s attorney shall be paid reasonable fees as approved by the Court or as agreed in writing by the personal representative and such writing shall be executed by the time of the filing of the probate inventory. By contrast, the maximum attorney fee for a personal representative under the regular Probate Chapter shall not exceed 2 percent of the gross value of the probate assets of the estate. Likewise, the maximum attorney fee under the regular probate Chapter cannot exceed 2 percent of the gross value of the probate assets of the estate. However, under the regular probate Chapter, extraordinary fees are available for specific services.
The other significant change from the regular probate Chapter is that under the small estate statute, the estate can be closed by the filing of a closing statement with proof of service of the same upon the parties in interest. If there are no objections after 30 days, the estate can be closed pursuant to the closing statement. Such process is simpler than the closing of an estate under the regular probate Chapter.
Prior to the adoption of the small estate chapter, it was difficult to find an attorney to handle the administration of an estate valued at less than $100,000.00 due to the 2 percent cap on fees. The new small estate chapter allows for greater flexibility regarding attorney and personal representative fees.
By – James D. Beatty